THE Australian Energy Market Operator (AEMO) has added to the recent woes of the battery electric vehicle market by dramatically reducing, almost by half, the projected take-up of BEVs in the Australian car market.

AEMO said in its latest forecast document, the 2024 Electricity Statement of Opportunities (ESOO), that the lower than expected uptake of BEVs by Australian car buyers would take pressure off power generators to meet EV charging demand.

The lower expectation for BEV sales comes at a time when Australians are seeking to avoid the inconvenience of charging point shortages, queues and long waiting times and on-going range anxiety by buying hybrids in record numbers.

So far this year more hybrids have been sold than were sold in all of 2023 (99,652 YTD July 2024 vs 98,439 FY 2023).  Pure hybrids do not make demands of the power grid. They simply use electricity generated on board as an energy recovery system for internal combustion engines.Hybrids can halve the fuel consumption of ICE vehicles taking them down to 4-6l/100km with commensurate reductions in emissions and, of course, CO2.

AEMO said that it was now expecting that there would be four million BEVs needing to be charged from the grid and/or rooftop solar by 2O34. Last December AEMO was forecasting seven million BEVs requiring charging by then.

AEMO said that because BEVs would have longer life cycles, this would lead to slower demand for new BEVs than anticipated and therefore slower EV uptake by Australians. 

The ESOO report said: “Growth in the EV forecast is tempered relative to the 2023 ESOO to reflect updated road transport data from the Bureau of Infrastructure and Transport Research Economics (BITRE) that shows longer vehicle lifetimes, leading to lower new sales and slower EV uptake. 

“Further, the New Vehicle Efficiency Standard (NVES) – legislated in May 2024 and to apply from 1 January 2025 – provides flexibility in meeting emissions reductions, and the updated forecast better recognises emissions reductions opportunities in non EV sales, resulting in lower forecast EV sales than previously anticipated.”

Meanwhile the Wall Street Journal reported last week that General Motors and Samsung have put on hold plans to build a battery plant in Indiana with the start date to commence building the factory now pushed out to 2027. 

This follows an announcement in June that GM will scale back electric vehicle production through the end of calendar year 2024 as demand in North America slows.GM said it will slash production by up to 50,000-100,000 units over the remainder of calendar year 2024 and is now expected to build as few as 200,000-250,000 units for the entire calendar year as EV market penetrations trend lower than anticipated.

GM had been forecasting 300,000 sales from its range of brands – including Cadillac, Chevrolet, GMC and commercial van unit BrightDrop. 

Across town in Dearborn, Ford announced that it was cutting capital expenditure for EVs from 40 per cent of capex to 30 per cent of capex. 

It said it was delaying the launch of its next-generation all-electric pickup truck and announced that its planned three-row SUV would now be a hybrid, not all-electric. The company has warned markets that as a result of the changes it may have to take a $US1.9 billion ($A3 billion) write-off on its EV development programs.

In October 2023 Ford postponed about $US12 billion (SA18 billion) in planned spending on new EV manufacturing capacity and in June this year, Ford rolled back requirements for its dealership electric vehicle (EV) certification program which was costing dealers more than a million dollars in EV charging installations. 

According to The Detroit News the program, which was announced last year, was paused last month and now Ford has scrapped the program altogether. 

The decision came after Ford completed a dealership tour in which it heard from more than 1000 dealerships during 11 meetings. 

Marin Gjaja, Ford’s Model e EV business division chief operating officer, told The Detroit News that the program was introduced amid a spike in demand for EVs during the pandemic. He said EV sales haven’t grown as quickly as expected as customers remain concerned about their price, access to charging stations and how an EV would change their lifestyle.

“We’re getting into the tough innings,” Mr Gjaja told the newspaper. “We’re getting into the early majority-customer, one who isn’t in it just for technology and willing to pay a premium. They want a practical, usable vehicle. 

“They need to really understand the value for them. And it’s just a very different sale. … We need Ford and our dealers pulling together to help bring the market along.”

Ford has also abandoned plans to have selected US dealers selling EVs.  Now all of Ford’s US dealers will sell EVs in an effort to boost volume sales.