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  • Writer's pictureJamal Saafir

Elon Musk Loses $28 Billion As Tesla Stocks Buckle and Toyota Chimes In: “People Are Finally Seeing

As reported by Fortune, Toyota’s chairman and former CEO, Akio Toyoda, a long-time nonbeliever in the electric vehicle fad — which was also a major catalyst for his stepping down from the top position at Toyota earlier this year, can now take solace in his stance on EVs. With Musk’s Tesla reporting dreadful third-quarter earnings last week, investors are coming to realize that EVs are not the “cat’s meow” in regard to profit. “People are finally seeing reality,” Toyoda said on Wednesday.

Akio Toyoda

Toyoda has held his position on electric vehicles for some time and has never fully embraced the concept that EVs are the only path for the automotive industry to reach carbon neutrality, saying, “There are many ways to climb the mountain.” Other major automakers are also pulling back on their EV rollouts. Lucid has reduced production by 30% while GM has delayed the launch of the Chevy Silverado EV by an entire year.

President Joe Biden has strongly bet on electric vehicles as part of his aspiring agenda to decrease United States carbon emissions and combat climate change, but the EV market is fluttering as high-interest rates sour customer demand for electric and other vehicles. That’s “preventing a lot of people from even getting into the market,” Jessica Caldwell, Head of Insights at Edmunds, told Fortune.

Though EV sales continue to grow, the pace has lost steam. In the first half of 2023, EV sales grew 49% from one year before, a slower rate than the 63% increase last year, the Wall Street Journal reported.

“We’re transitioning to a brand new technology. It’s expensive. It requires people to have a different relationship with their vehicle that has been largely unchanged for decades,” Caldwell said. “So to think that everything was going to roll out smoothly and we follow this nice adoption curve, it was a bit unrealistic.”

Elon Musk—Tesla CEO and owner of the social media platform X (formerly Twitter), just took a $30 billion loss to his net worth. EV leader Tesla posted its lowest quarterly earnings per share (EPS) in two years, coming in 10% lower than already negative analyst forecasts.

The stock market responded accordingly, as Tesla’s shares immediately dropped over 17% and the company’s market capitalization was reduced by $138 billion in just over two trading days.

“This is going to be a large speed bump in the road for automakers that I’m sure that they saw coming,” Caldwell said.

Toyota’s chairman Toyoda foresaw this day and advised the industry to hedge its bets on EVs through continual investment in hybrids, hydrogen-powered cars, and other alternative eco-friendly vehicles.

Ford has also been reluctant to go “all in” on EV investment, announcing that it would slow production of its F-150 Lightning pickup. Bill Ford, the great-grandson of the automaker’s founder Henry Ford, has described the oratory surrounding EVs as “heavily politicized.”

“Blue states say EVs are great and we need to adopt them as soon as possible for climate reasons,” Ford told the New York Times.

“Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it.”

General Motors also announced it would slow down EV production after making strong commitments to completely phase out gas- and diesel-powered vehicles by 2035. The company blamed lessened demand for EVs and coercion from the auto strike.

Jessica Caldwell, Head of Insights at Edmunds

But this blip is only “growing pains” for the inevitable dominance of EVs in the auto industry, Caldwell said.

“The industry is moving towards EVs—to deny that would probably be unwise,” Caldwell said. “It’s what that path looks like—that’s what’s undefined and is causing more confusion.”

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