The automotive industry is changing and so are the consumer trends automakers rely on to turn a profit. Motor Authority has reported that experts are predicting 2018 will be the year sales of internal combustion engines (ICE) vehicles peaked. That’s not to say the ICE will disappear overnight; however, there is a confluence of factors that could reduce ICE sales going forward. Automakers are already planning for both a sales slowdown and the some kind of electric vehicle sales upswing set to hit roadways in the future. GM is discontinuing the Chevrolet Volt hybrid; however, the automaker is planning to introduce 20 new electric vehicles by 2023.
Analysts, suppliers and automakers alike have nevertheless expressed concern over a lack of strong EV sales, however.
The biggest elephant in the room is the anticipated decline in total new vehicle sales. New-car sales have exploded around the world over the last few years thanks to a global economy slowly recovering from the 2008 recession, and a Chinese market surge. However, some hiccups could end the sales bonanza such as the ongoing trade war between the U.S. and China, which includes billions in tariffs.
General Motors understands this dilemma. Late last year, the Detroit automaker announced a massive reorganization that includes discontinuing several models, laying off thousands of workers, and proposing to close five North American assembly plants to prepare for a market contraction and the transition to electric vehicles. GM isn’t alone with its focus on EVs—other automakers such as BMW, Audi, Mercedes-Benz, Porsche, and Volvo are pouring resources into the technology with plans to release new EVs in the next few years.
Consumers in China are already moving toward electric vehicles. In the first 10 months of 2018, China saw a decline in overall car sales. However, sales of zero-emission vehicles nearly doubled, mostly due to regulatory intervention. But even experts are unsure about the future of the Chinese automotive market.
There was a considerable outcry from unions, politicians, and employees when GM announced its restructuring last November. The company is raking in massive profits while announcing a plan to shrink its workforce. It’s not a good look from a PR standpoint, but the automaker knows the industry is rapidly changing, and 2018 could be the year the ICE peaked.
Comments
This is the USA (not China) we don’t want electrical run cars most of us anyway. The peak of “ICE” is a joke right…? Vehicle sales peak and valley and after the last few years it will be valley for the next few years. Then it will peak again.
Likely your ancestors were probably the ones Henry Ford was talking about when he said, ” If I had asked people what they wanted, they would have said faster horses.” At one point in time, gas stations didn’t exist. Now, about 100 years later, we have 168,000 stations nationwide. The USA is no longer the largest car market in the world, so the electric push from all other nations makes our future inevitable.
I own an EV up here in Canada. You couldn’t give me a gas car today. It costs me 1/10th the amount to own than my old car did. My monthly energy costs went for $150 for gas to $35 for electricity. No tuneups, no oil changes, no transmissions to service. Even the brakes last 20x as long because you only need them in emergencies and to stop the car rolling at 10mph. Batteries? Already proven in real world fleets of taxi’s and buses to last for over 400,000 miles with proper charging etiquette. Your car today has over 2000 moving parts in its drive train under extreme heat pressure and explosive forces. And EV has less than 20 in its drive train.
But the sound and feel is terrible! There’s no rumble, vibration, smell of performance! Just a refrigerator to ride in back and forth to work.
Might as well get on a train to get to work!
My guess is at least 10 year cycle. Sure lease vehicles are 3 years but nobody owns anything, just renting. I predict that gas prices will quickly rise now that the USA consumer is now maxed out once again on the ICE. With the lack of any breaks for electric vehicles and the fact that charging station infrastructure in rural areas is lacking, electric will be slow to come. Tesla is primed for what is to come.
As long as gas is around $2.00 to $2.50 in the USA all is good. However wages are slow to increase and large vehicles need GAS. When the energy pigs get the gas prices back up to $4.00 this will turn quickly. Are you all watching OPEC cut, here we go again
is tesla primed for a $7500 cost disadvantage?
during the next recession, you think people are going to be enthusiastic buyers of a BEV vehicle that costs 2x as much as an ICE vehicle?
I think they already split that at least. So YES they are !
And twice as much ? For the same vehicle ? GM at least has nothing even close to the appeal of a Tesla.
Remember when all the OLD GM guys were laughing at Tesla because the Cadillac CT6 had self driving tech. CANCELLED !! How many Tesla were sold ? How many Tesla were cancelled ?
” O ” but wait, And wait, and wait, and wait, and wait, and wait.
If there is a US citizen out there that thinks an American automaker has a chance of catching Tesla or even better yet passing them good luck. Maybe a China designed or Australian designed or Korean designed but an American designed. Even if they could design a great competitive vehicle the money people will squash it to BLAH.
Good luck though, I cant wait, and wait, and wait, and wait, and wait.
GM pay attention CUSTOMERS are calling ! !
you mean tesla lowered their price due to the decrease in the tax credit. that means demand wasn’t high enough. it was falling.
when the credit gets cut again, do you expect tesla to cut prices again to support demand?
I think you are wrong again. Sales were and are increasing and yes they lowered there price in lieu of the tax credit news.
When the tax credits are cut again I expect Tesla to do what is necessary to remain the largest mass produced electric automobile company on earth and in space.
Do you really think GM is in a better position going forward ? A better ran company ? And if so based on what ? GM has been in the auto industry for 100 years, tax incentives, government contracts, BIG OIL support, tax payer bankruptcy, and losing more market share as we speak. What has Tesla done, build, and build, and build.
i don’t think gm is in a better position when it comes to EVs. but thankfully, they don’t rely solely on EVs to stay afloat.
i think any manufacturer that can take advantage of the tax credit is in a better position.
but you seem to think tesla is “primed” for such a predicament going forward. maybe they are but $7500 is a lot of money to turn down if you are the one buying.
if demand is increasing sufficiently, why cut the price?
Why would Tesla open patent there battery technology. Why does he want to go to Mars. Why did he send a car in space. Why did they cut the price. When you figure out what goes on in Elons mind you let me know.
Why would Tesla open patent there battery technology?
i don’t think anyone took him up on the offer. there’s your answer.
Why does he want to go to Mars.?
everyone has a dream.
Why did he send a car in space?
it was that or something else of equivalent mass.
Why did they cut the price?
you already know my opinion. i was asking for yours.
OK my opinion on why they cut there price it to show the CUSTOMER that Tesla is willing to work with the CUSTOMER in order to retain the CUSTOMER LOYALTY so that going forward as auto markets continue to tighten Tesla will be a TEAM player. A team with the CUSTOMER, loyalty goes both ways.
After you sell your product ” whatever ” when the market is ” saturated ” with said product and you can no longer sell any. It is CUSTOMER SERVICE that will retain loyalty. Currently GM has ZERO CUSTOMER service.
So again it is my opinion that Tesla lowered there price to offset the tax increase for the sole purpose of WORKING WITH THE CUSTOMER.
Remember a reputation was never created by the WORDS ” I could have done that”
WORDS by GM, You just wait, and wait, and wait, and wait.
Pay attention GM the CUSTOMER is calling !!
If the tesla motor company is so great then why haven’t they posted a profit?
Think it drops from $7500 to $3750, initially. (Not $7500 to $0). GM’s in the same position – punished for relative success.
The truth is the new auto market has peaked. There will be little growth in the auto industry that is why profitability has come to the head of the pack.
Now we will see slow growth in the EV market that could speed up depending on advancements to come. But with the EV segment being next to nothing any growth will be significant.
ICE will be around for a good while yet. Only legislation could drive it out sooner.
I agree ICE will be around a good long time. Even with legislation how do you cover rural areas without ICE. I would love to live where you could charge an EV every town where you buy gas but it will take a good long time. I do not think it will take 100 years however.
As long a gas is cheap and most electric cars look like dork mobiles, ICE cars will be fine. As stated by others, we have more likely reached peak vehicle sales overall, not ICE. Electric cars are getting hit by this as well.
The electric market is barely a drop in the bucket compared to ICE. so a 1-5% increase in the electric market will appear as a huge increase to the market, especially when compared to a contracting new vehicle market overall.
During the recession people had to hold onto their cars longer, sales fell. When things got better we all replaced them, causing greater growth numbers percentage wise than would have been, and now that many of us have updated, the cycle will turn down again. The whole point of saying ICEVs have hit a peak, is that when larger numbers of buyers come back in the next few years, more compelling BEVs will be very competitive and take sales. A trend already showing, as when overall ICE sales decline the BEV sales increase by a similar amount. That’s not coincidence. It’s also a fact that many BEV owners like myself swear we will never buy ICE again. Period.
do I believe EV will be part of the future sure, but a lot has to happen before it will be a main player. for one the feds will have to require standardized charging systems instead of the mish mash system out there now. Second they will have to increase the size of all rest area’s along the interstate highways and install charging stations. third the feds will have to give tax credits to private companies to install charging stations in their parking lots. and the most importin thing is they will have to figure out how to collect tax’s to maintain and build our roads. until all these things are addressed EV’s will be a very small percentage of auto sells