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U.S. automakers are trimming their outlook for electric vehicles amid lingering consumer doubts, a pullback in federal support and a challenging economic landscape that is affecting all auto sales.
On Tuesday, General Motors reported it was taking losses totaling $1.6 billion related to planned changes to its EV rollout. The company attributed some of the change to President Donald Trump’s elimination of the $7,500 in EV purchasing incentives enacted by President Joe Biden. The credit officially expired Sept. 30.
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“Following recent U.S. government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow,” GM said in a filing.
Rival Ford has delayed plans to build out an EV plant in Tennessee. It told Reuters last week it would be “nimble in adjusting our product launch timing to meet market needs and customer demand while targeting improved profitability.”
Plunging sales at Tesla — still the U.S. leader in EV sales — are also contributing to the weakening outlook. Its second-quarter sales dropped almost 13%, and CEO Elon Musk has warned of some “rough quarters” ahead for the company.
The changes threaten to leave the United States behind in what many still consider the future of automobiles. In July 2024, EV sales officially overtook sales of conventional autos in China. There and in nearby countries, the cost of an electric vehicle has been falling more rapidly than in the United States, thanks largely to increased competition from the Chinese manufacturers that now dominate the global EV market. However, other Western countries are also rethinking previous EV commitments, including Canada and the United Kingdom, both of which have signaled relaxing electrification targets, partly in response to new pressures sparked by Trump’s trade war.
