America’s dream of an all-electric future is fading fast. With the federal EV tax credit gone and automakers facing uncertain regulations, electric vehicle sales are expected to plummet. Yet, despite grim forecasts, the auto industry isn’t giving up. Companies like Ford, GM, and Hyundai are still betting big on EVs—just more cautiously than before.
End of Federal Incentives Sparks a Sharp Slowdown
After years of hype about a fully electric future, the US auto industry is facing harsh reality. With the Trump administration ending the $7,500 federal tax credit for electric vehicles, sales are expected to nosedive in the coming quarters. The expiration of the credit triggered a final surge in purchases last quarter, as buyers rushed to cash in before the benefit disappeared. But analysts now expect sales to drop sharply — potentially halving from 10% to 5% of total US auto sales.
Tesla, Ford, and General Motors all recorded record-high EV sales last quarter, yet executives from both Ford and GM predict a steep decline ahead. GM’s CFO Paul Jacobson said “EV demand is going to drop off pretty precipitously,” while Ford’s CEO Jim Farley echoed that EVs would likely make up a much smaller portion of the market going forward.
Despite the downturn, Ford is still doubling down. The company recently announced a $5 billion investment in EV production, describing it as its “next Model T moment.” Hyundai, too, remains committed to its US EV expansion, building flexible production plants capable of switching between EVs and gasoline-powered vehicles depending on demand.
Regulation, Reality, and the Return of Gas Engines
The once-aggressive EV push was largely fueled by federal emissions standards under the Biden administration, which aimed for EVs to represent 50% of new US car sales by 2030. Those rules have since been rolled back, along with penalties for missing emissions targets. Meanwhile, states like California and New York had planned to ban new gas-powered vehicle sales by 2035, but that authority is now being contested in court following recent congressional action.
This political tug-of-war has forced automakers to balance innovation with pragmatism. Many are now prioritizing hybrid vehicles over all-electric ones. “There’s still an aggressive push for EVs,” said Wedbush analyst Daniel Ives, “but ICE [internal combustion engine] is no longer a four-letter word anymore.”
The shift reflects consumer reality. Even when incentives were active, demand for EVs didn’t grow as quickly as expected. “Customers weren’t adopting at the rate the government wanted,” GM’s Jacobson said. Still, automakers believe long-term EV demand will rise naturally as costs fall and technology improves.
Ford, for instance, plans to launch a $30,000 EV pickup by 2027 — nearly half the cost of its current F-150 Lightning model. Lower-cost battery production could make electric vehicles profitable while reducing dependence on labor-intensive gas engines.
While the road ahead looks rocky, industry leaders insist the EV revolution is far from dead. “We took inspiration from the Model T — the car that changed the world,” said Ford’s Chief EV Officer Doug Field. “Today marks another turning point for Ford and for the auto industry.”
Leave a Reply