The Feb. 15, 2024, Wall Street Journal (“EV Revolution Gets A Reality Check: Buyers Don’t Prove as Eager as Makers”) detailed what has become of the electric vehicle (EV) “revolution.” The detailed reporting by Mike Colias, Nora Eckert and Sean McLain once again stopped me in my tracks. OK, I’ll admit it. I do go looking for stories on this absurd and crazy exuberance over battery-powered cars, with surprisingly little care for what happens up or downstream. 

As we’ve said before, the train has left the station. At this point, my hope is that a Harvard Case Study will soon examine the mistakes of the 2020s and that those lessons will be taught in business, history, political science and economic curricula alike. 

The Wall Street Journal article covered how the reality of EVs sharply turned in just a matter of months and included context from a dealer who went all-in – on their major automaker’s directive. 

Executive Summary

The rest of this article is essentially a paraphrased excerpt of a larger 2,300-word article. I’d encourage you to read the full article yourself for more complete context of this ongoing saga. 

The words that follow are a mere summary of nuggets that our ag equipment readership can relate to, including the penalty for blindly following a major-line manufacturer in a quest for keeping the peace or chasing market share bonuses. Most of the words below are in the WSJ writers’ own words, or very closely paraphrased.

Wall Street Journal Excerpts

Last summer, dealers warned of unsold EVs clogging their lots. Ford, GM, Volkswagen and others shifted away from their wild EV investments. Similarly, the dealers who’d been begging for faster EV shipments began turning them away.

Warning signs began to appear, and by mid-January 2023, Tesla slashed the price on certain models by more than 20%. Among other chain reactions, used-car dealers who carried Tesla Model 3s and Model Ys saw values plummet by the thousands.

Speaking to analysts in May, Ford CEO Jim Farley shrugged off the pricing pressures, saying they weren’t representative of the real EV interest. In fact, the upbeat Farley reiterated plans to expand the output of his Lightning F-150 electric trucks.  

Around that time, auto dealer Mickey Anderson noticed the EVs accumulating on his lots in Kansas, Nebraska and Colorado. At first, he and his fellow dealers thought the slower sales might be a fluke. But when the manufacturer meetings convened in the late spring and summer, dealers compared notes.

“We were worried,” Anderson recalled. “We went from wait lists to 6 months of supply, seemingly in a matter of weeks.” 

What had happened was a sharp receding of the size of those early adopters willing to splurge, while the next generation of potential buyers proved to be hesitant as they questioned the length of the charge and battery life expectancy. And the worries included charging times, repair costs and not having enough places to plug in, said dealers and corresponding surveys.  

Late last July,  GM Chief Executive Mary Barra told analysts that plenty of buyers still wanted the company’s EVs. “These vehicles are getting to the dealers’ lots, and if they’re not already sold, they’ve got a list of people who are waiting for them,” she said.

Two days later, Ford’s Farley reversed course from just a few weeks earlier. He told analysts that “the paradigm has shifted.” Although the public was still buying EVs, Ford’s pricing power was deteriorating compared with gas-engine models, he said, and the market for EVs would remain volatile. 

A Dealer’s Take 

Late last summer, a worried Detroit-based Ford dealer by the name of Ed Jolliffe saw, on his store’s computer system, that the factory planned to ship him a dozen Lightnings. Earlier, the dealership received 1-2 Lightnings at a time, and his salespeople had had no trouble finding buyers. 

Jolliffe spent roughly $500,000 installing EV fast chargers for the trucks. He was getting ready to rent a billboard along the nearby interstate declaring: “Fastest Chargers Downriver!” 

“We were all-in,” he said. So he swallowed hard and agreed to take the units.

The unraveling came swiftly. In a single month last fall, the average interest rate on an EV purchase jumped from 4.9% to 7%, making monthly payments even less affordable for some shoppers, said Tyson Jominy, vice president of data and analytics for J.D. Power.

In November, thousands of U.S. dealers signed a letter urging President Joe Biden to ease proposed regulations that would push the industry to sell more EV cars. “Last year, there was a lot of hope and hype about EVs,” the dealers wrote. “But that enthusiasm has stalled.” Some auto retailers say that they are now selling EVs at a loss to clear unwanted inventory. 

This sounded a bit like what Farm Equipment Hall of Famer Paul Wallem said about life as a dealer in the 1980s. That was a time, he said, when the dealerships weren’t driven by profit, but rather how much one could afford to lose.

Jolliffe, whose car dealership is a 25-minute drive from the Lightning plant, is struggling to understand what happened. On a recent weekday, he peeked out his window at 8 Lightnings and 4 Mach-Es. 

What do you think of how the auto dealers, just one step ahead of us, got caught up in this mess? Do you find warning signs to acknowledge? Or is this just another sad major-line tale?

For More Information, see ‘Technology Covenants: The Latest Lever to Thin Dealer Ranks’