It’s kind of a rocky time in the electric-vehicle world right now, and I’m not just talking about the United States.
Sure, we’ve got our own things to contend with here, like the erosion of the Inflation Reduction Act's tax credit programs for building and buying EVs. Even in China, where EVs are king, things are looking a little rocky for brands that are longstanding. Meanwhile, pickup trucks reign supreme here in America, but nobody has figured them out quite yet.
Welcome back to Critical Materials, the daily roundup of some of the biggest news stories in today’s automotive world. For today, we look at how EV trucks just aren’t taking off, Nio seeks to reduce costs to reach profitability, while Toyota makes a deal to vertically integrate.
Here we go, folks.
30%: Electric Trucks Are Flopping
Even if you're pro-EV, I think it’s okay to call it now: people aren’t really digging electric trucks.
Automotive News today has outlined just how badly the things are flopping in a new report that just frankly looks at the numbers here. Lots of brands, Tesla and Ford included, had high hopes for their EV pickups, yet they’ve failed to capture a significant amount of market share.
The Cybertruck’s reservation holder list surpassed a full million after the truck was originally announced in 2019. Musk himself predicted sales of over 250,000 per year.
Now, the Cybertruck can barely manage 40,000 per year. A far cry from the 250,000 per year goals, yet this model is still one of the most successful EV pickups in the market. Ford’s F-150 Lightning has a similar story, with reservation holders not turning into buyers, and sales not being all that strong.
Automotive News says that the reason is just that these trucks aren’t up to the task of doing what needs to be done. Truck buyers buy them because they want to push the limits of their trucks (even if they don’t, regularly), and EV trucks kind of fall flat on their face when asked to do many things a traditional truck can.
Load it up with stuff, or tow, or drive it to multiple work sites (while doing the former things) and customers feel like the truck just can’t do it. Add in the worry about charging infrastructure and expensive up-front costs, and we’ve got a match made in hell. From the story:
The reason trucks were first built back in the 1920s with the Ford Model T chassis and the reason they’re the bestselling vehicles now is because most people buy trucks to get work done,” said Karl Brauer, executive analyst at iSeeCars. While not every pickup owner is a heavy user, it’s still why they buy a truck, he said.
“Generally speaking, electric drivetrains are the worst for getting things done. If you load up the bed, hook up the trailer, go to a bunch of worksites or on vacation, they have limited range and when it’s time to refuel, it’s a big pain in the ass,” Brauer said.
High prices and worries over public charging have also battered EV trucks, analysts said. Pickup buyers are less sensitive to fuel economy, Brauer said, because their primary focus is utility or adventure. And while EV pickups are more efficient, they also carry a higher up-front price.
Perhaps utility is only one facet of why these things are flopping. For a lot of folks, the price is what keeps these trucks on the lot; the two best-selling EV trucks (F-150 Lightning and Cybertruck) were both advertised with a $40,000 starting price, and neither has ever got that close. I reported on this back in 2023 for The Verge, specifically with Ford, in which the huge price jump put some buyers out of the market for the truck entirely.
Especially here in America, many automakers live and die by their truck sales. Long-term, they need to figure this conundrum out.
60% Nio Really Needs To Cut Costs
Nio’s battery swap tech and well-resolved model line are generally fantastic. Its latest earnings report shows that things aren’t doing all that hot for the brand, unfortunately. The brand is aiming to reach a break-even point by the end of the year. To do that, it’s got to cut some costs. Namely, research and development. CEO William Li may cut R&D spending by as much as 25% to make this all happen.
From Bloomberg:
Expenses may drop to between 2 billion yuan ($278 million) to 2.5 billion yuan per quarter, or a 20% to 25% decrease from last year, the Chinese electric-vehicle maker said on its earnings call Tuesday.
Chairman William Li expects to see cost-control efforts materialize from the second quarter, after first-quarter revenue missed estimates despite seeing higher deliveries.
He also said the firm has made “major improvements” in restructuring its logistics and streamlining its teams to enhance productivity.
Nio has done a lot of stuff within the past 18 months or so. It’s launched Onvo and Firefly, two sub-brands meant to cater to lower-cost, higher-volume segments in and out of China. It has launched a new flagship model called the ET9, and just freshened its volume-selling ES6 and ET5 with new tech and some self-developed chips. Still, the brand is desperate for profitability. Even before this earnings call, there’s been quite a bit of reorganization amongst the management of its sub-brands.
It’s not clear if it’s paid off yet, though. Its first quarter earnings results have widened to $832 million, which is larger than the $710 million originally predicted.
90% Toyota Buys Toyota (Industries)
Toyota really wants to vertically integrate and have more control over the pieces and parts it interacts with. Recently, it’s been in talks to buy out Toyota Industries—a company run by the same Toyoda family that predates and birthed the Toyota car company that we know and love today. It’s also a big supplier for Toyota, the car company.
Well, officially, Toyota Motor Corporation has put in a bid to take the whole company private for the cost of $33 billion. Wildly, some insist that this is a bit undervalued, mostly because of Toyota Industries’s real estate dealings.
Whatever the case, the idea is that the acquisition will help Toyota as a whole move bolder, and faster. From Automotive News:
“The buyout of Toyota Industries would promote the trend toward going private, which I hope will become more popular, and would reduce the number of unique parent-subsidiary listings in Japan, which is a good thing,” said Aki Matsumoto, a corporate governance expert and executive director at the advisory Metrical Inc. in Tokyo. “Any reduction in the number of listed companies would improve the quality of the Japanese stock market.”
Taking Toyota Industries off the market also keeps it firmly in friendly hands, he said.
“If there is a risk of the group companies being acquired by other companies by reducing cross shareholdings, the stance is that ‘Toyota Motor Corporation must not be acquired,’” he said.
In its final form, Toyota Fudosan will hold 99.5 percent voting rights in the holding company that fully owns Toyota Industries. Akio Toyoda will hold 0.5 percent voting rights, Kon said.
Toyoda’s involvement does not signify a management buyout, he said. Toyoda is not expected to be a director of the holding company. The idea is to streamline decisions, make bolder investments and pursue long-term strategies, the companies said.
Toyota has been criticized with respect to how slow it has been to adapt to a changing automotive landscape, especially with regard to new technologies.
Perhaps this acquisition could put them on track to becoming the Japanese version of BYD. The deal is expected to officially go through in December.
100% Slate Is An Affordable Truck. Can It Work?
Maybe Slate Trucks can figure this problem out.
Its low price, said to be around $25,000 before any tax credits, and refreshingly spartan aesthetic have turned it into the darling of cheap EV hopefuls here in the U.S. Slate says it’s got more than 100,000 people who have placed a deposit, but Tesla and Ford both attracted stunning levels of pre-order refundable deposits, too. Yet, neither brand converted all those deposits into actual sales.
Is this the answer to the EV truck conundrum? And what about bigger trucks too?
Contact the author: Kevin.Williams@InsideEVs.com
