After years of pumping cash into the sizzling electric-vehicle market, Tesla and other major automakers are facing a new dilemma: what to do when demand chills.
While the battery-powered vehicle market is still expanding, the pace of growth has slowed considerably. As a result, Tesla, the world’s EV leader, and legacy automakers that had been spending at breakneck speeds to build their electric car businesses, are now taking a more cautious approach to investments.
Companies have collectively committed about $100 billion across North America to create electric cars that don’t just appeal to luxury buyers and early adopters, but to the mass market. But high inflation and interest rates are making vehicle purchases difficult for everyday people, meaning it’s hard for EV makers to win their business. Auto executives have said they’re worried many consumers have hit their limit.