Electric cars might not be the future after all.

Ford stock has struggled to sustain any momentum. So far this year, it has tumbled 15% as the iconic automaker continues to encounter hurdles. The one constant for Ford’s Sisyphean endeavors has been the persistent hemorrhaging of its electric vehicle business. Like other automobile manufacturers – well, except Tesla – the government’s vision of everyone falling in love with EVs has failed to materialize. Is the future electric, gas-powered, or hybrid?

All Ford One, and One Ford All

Ford released its third-quarter earnings, and the headline numbers were excellent. The company reported better-than-expected quarterly profit and sales. Yet it still was not enough for the forward-looking stock market, as shares tanked 6% during the Oct. 28 trading session. Traders were upset about the $1.2 billion loss for the EV division and a lower adjustment to the full-year earnings outlook to “about $10 billion.”

Of course, Ford’s elephant in the room is its EV business. While the company registered year-over-year cost improvements of $500 million, the carmaker admitted that the gains were offset by “expected industry-wide pricing pressure.” But, while some market observers may think EV was the death knell for the legacy automaker, Ford already saw the writing on the wall and quickly adapted to sluggish EV demand by shifting to the hybrid option.

Indeed, for the past year, Farley has repeatedly emphasized to the press and investors that hybrids are neither an interim solution nor a transitional option until widespread demand for EVs exists. According to the Ford CEO, hybrids and partial electrification are the profitable alternatives. General Motors hopped on the hybrid bandwagon, too.

Hybrids took six spots in Consumer Reports’ list of the top ten cars for 2024. Since motorists have understood the challenges of EV ownership, they are either returning to gas-powered automobiles or searching for new-generation substitutes, like hybrids.

Automakers Shifting Gears?

When President Joe Biden declared that electric vehicles would dominate half of new vehicle sales in the next decade, there was a lot of skepticism – and for good reason. Even if there were a newfound love for these cars, the power grid would fail to keep up. For now, the near-term effects of crashing EV sales are a blend of abysmal driving range, substantial battery costs, and poor infrastructure – like the lack of rapid charging stations.

Demand has improved recently because of all the subsidies, but automakers are not witnessing rocketing sales numbers. This past spring, Ford announced it would postpone EV production until 2027. It also recently confirmed that it would halt production of its F-150 Lightening, an electric pickup truck, until January. General Motors CEO Mary Barra agreed in a first-quarter earnings call that there has been a slowing pace of EV sales growth. While she anticipates it to improve, Barra told shareholders and analysts, “If demand conditions change, we’ll take advantage of our manufacturing flexibility … to build more internal combustion engine models and fewer EVs.”

The consternation is justified. In Canada, for example, a recent report from global data and analytics firm J.D. Power concluded that the pace of EV sales has been cut in half. Today, selling an electric vehicle in the Great White North takes about 55 days, compared to 51 days for a gasoline car. In the first quarter of 2023, it took an average of 22 days to sell an EV and 42 days to sell a gas-powered automobile.

Interestingly enough, carmakers demand governments do more to construct the necessary infrastructure and help bring prices down through tax credits. And yet, in the US, the federal government has poured billions of dollars into the industry. What more could Washington do to facilitate an orderly transition from the internal combustion engine to electric cars?

A Boondoggle?

Is the US government’s electric vehicle mandate a boondoggle? Even if the requirement were to flourish, using force to drive demand for a product does not necessarily indicate success for the item in question. The market is a better gauge in determining what the public wants rather than shoving it down their throats. If drivers aimed to purchase an electric automobile, they would voluntarily make that leap. It is comparable to a century ago when society concluded it would prefer a four-wheeled automobile over a four-legged horse to travel from point A to point B.