An auto supplier that manufactures electrified propulsion systems, among others, has closed a factory in Detroit because of the drop in demand for electric vehicles.
In a statement cited by CBS, Dana Inc. said that the closure decision was the result of an “unexpected and immediate reduction in customer orders driven by lower demand for electric vehicles, which has rendered continued operations at the plant no longer viable.” Some 200 workers at the plant will be laid off.
The Dana facility may be the first of many casualties of the change in federal policies towards electric vehicles. Fully supported by the previous administration, with billions in subsidies for both buyers and manufacturers, the sector fell out of grace this year with the change of the guard at the White House, with the Trump administration axing the buyer incentive for electric cars as of the end of September.
The move prompted a rush to buy EVs in the third quarter, leading to a whopping 40.7% jump in EV sales on the second quarter, which saw a dip, by the way. The third-quarter sales number also represented a solid 29.6% annual increase.
This was the last hurrah, it seems, at least for the time being, as large carmakers continue losing money on their EVs and would likely breathe a sigh of relief at the opportunity to let go f their electrification ambitions in the absence of subsidies.
Ford lost $1.3 billion on its EVs in the second quarter and has projected its total EV-related losses could hit $5.5 billion for the full year.
GM and Stellantis are also losing money on every EV they make, even though, per the latest Kelley Blue Book numbers, GM, along with Volkswagen, enjoyed a more than twofold increase in EV sales in the third quarter.
By Irina Slav for Oilprice.com
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