Crashing EV sales cause headaches for big banks (2024)
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The ongoing collapse of the electric vehicle (EV) market is causing problems for banks that had pledged to make more loans to achieve what they referred to as decarbonizing their portfolios. As EV sales dry up, auto manufacturers are rethinking EV manufacturing plans, forcing their bankers to rethink their own strategies:
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A slowdown in EV adoption has potentially huge implications for the energy transition. It also has ramifications for the many financial institutions that have pledged to decarbonize the loans and investments they make. For lenders such as Bank of America Corp., HSBC Holdings Plc and JPMorgan Chase & Co. that have committed to reduce emissions associated with their financing activities in high-carbon sectors, the auto industry seemed to have a relatively clear path. Unlike certain hard-to-abate industries where getting to net zero relies on scaling up nascent technologies, a widely held assumption was that government incentives and consumer demand for EVs could be counted upon for a smooth transition. By extension, banks could just sit back and wait to hit their targets without much effort. But now, recent statements from many of the world’s biggest auto manufacturers have given bankers cause to question that strategy.[1] |
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- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
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Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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