Dallas Fed: U.S. EV Industry in Reset as Demand Stalls


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- U.S. automakers are retracting ambitious 
electrification plans as stagnant consumer demand fails to support a $50 
billion manufacturing expansion by battery makers, the Federal Reserve Bank of 
Dallas said in a sector review this week.

   "Current sales of EVs are insufficient to justify the investments made in 
gigafactories, and the outlook does not suggest significant improvement anytime 
soon," the Fed stated in the report released Tuesday (3/3).

   Many third-party forecasters have markedly cut their demand projections for 
EVs in the U.S., the central bank noted. In acknowledging their difficulties, 
automakers have both reframed their EV sales goals and written off billions of 
dollars of capital investments tied to EVs and batteries.

   The industry recalibration follows the elimination of federal consumer 
subsidies for EVs by the Trump administration in September to shield demand for 
gasoline- and diesel-powered vehicles. Consequently, EV sales plunged from a 
peak of 163,0000 in September to around 63,000 by November, a chart in the Fed 
report showed.

   Despite the automotive slump, the report highlights that battery demand for 
the power grid and data centers remains a robust growth area through 2026. 
These utility-scale projects represent a critical pivot for manufacturers 
retooling for the energy storage market.




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