Electric Car Registrations in U.S. Plunge 41% as Gas-Powered Vehicles Gain Traction
Honda cuts production of 3 EVs slated for the U.S. market and other car manufacturers adjust their production to the new market realities.
The Trump administration has worked to remove subsidies and regulations that favored electric vehicles (EVs) and to relax fuel‑economy and emissions rules that indirectly pushed automakers toward EVs.
Once those incentives disappeared, apparently so did the EV market. Internal Combustion Engine (ICE) vehicles gained traction, however.
Newly-released sales figures from the United States is starting to reveal just how much electric vehicle demand leaned on the federal EV tax credit that was discarded on September 30 last year. With that incentive now gone, the early numbers suggest the market is already feeling the adjustment, and it has not been a subtle one.
Data from S&P Global Mobility shared by Auto News show that 59,802 new EVs were registered in January, a massive 41 percent drop from a year earlier. Out of nearly 1.2 million vehicles registered that month, that leaves fully electric models with just a 5.1 percent share of the market, down from 8.3 percent a year earlier.
Meanwhile, gasoline vehicles quietly expanded their hold, rising 2.3 percentage points to claim 76.6 percent of registrations. Hybrids also edged upward, gaining 1 point to reach a 14.7 percent share.
Now that market forces are allowed to operate unimpeded by climate cultism, car manufacturers are revising business decisions. For example, Honda cancelled three planned battery-powered EV models that were going to be built and sold in the U.S. market.
Demand for EVs has pulled back in recent years as consumers have shown a preference for hybrid vehicles, while President Donald Trump’s administration has pulled back tax credits that helped incentivize EV purchases.
Honda’s move to pull back on its EV plans, as well as to write down the value of some of its operations in China, may cost as much as $15.7 billion, while the company also said it will report its first annual loss in nearly 70 years. The company’s cash outflows stemming from the writedowns will largely be due to the cost of compensating suppliers.
Honda first unveiled two concept models for its “Honda 0 Series,” including the Saloon sedan, at the CES trade show in Las Vegas in January 2024, and it had expected to roll out the series’ first vehicles this year, starting in North America.
Those plans have now been called off, with Honda canceling the Saloon along with the Honda 0 SUV and the Acura RSX.
Honda has taken a $4.3 billion hit due to the declining EV market in North America.
Honda Motor Co. has revised its financial forecast for the fiscal year ending March 2026, projecting a loss between 420 billion yen and 690 billion yen (approximately $2.6 billion to $4.3 billion). This adjustment comes after a strategic reassessment of its electrification plans, particularly in response to a slowdown in the North American electric vehicle (EV) market.
The Japanese automaker has decided to cancel some of its research and development and launch plans for electric vehicles manufactured in the United States. This strategic shift is expected to result in expenditures and losses of up to 2.5 trillion yen over the coming fiscal years. Previously, Honda had anticipated a profit of 300 billion yen for the 2025/26 fiscal year.
Honda is only one of many companies that have altered EV production plans. Kia, Nissan, VW, and Tesla have cut the production of certain models.
Torque News was one of the first outlets to shout out to the ethers that the Model S and X stopped selling a long time ago. Elon Musk recently confirmed that the models are now officially dead and that after Q2 ends, no more will be produced. Many anti-Musk EV fans have pretended that this was a signal of Tesla “leaving the auto business.”
That’s not our reading of a brand officially ending a pair of models that nobody had bought in years. Presently, Tesla has 62% U.S.-market EV market share, way up from one year ago. As the EV market dries up, the Model Y and Model 3 remain the only two successful EV models – ever – in the U.S. marketplace.
The American auto giants are aggressively adapting to new market conditions.
General Motors (GM) and Ford Motor are cutting billions in fixed costs, including laying off thousands of workers, and Chrysler parent Stellantis is taking even more drastic measures to reduce spending. According to Reuters, Ford Motor is taking a $19.5 billion write-down and is removing several electric-vehicle (EV) models from its line-up, as the auto industry retreats from battery-powered models in response to weakened EV demand and the Trump administration’s policies.
GM and Stellantis have already shifted more of their production to combustion engine vehicles, also taking financial hits. GM wrote down $1.6 billion in EV assets and indicated that more write-downs are expected. Due to the push for electric vehicles by Western governments, automakers overestimated their demand and are now making a detour to correct the costly error.
When the government finally stops picking winners and losers, reality reasserts itself with remarkable clarity.
The EV market’s collapse following the removal of federal subsidies isn’t proof of market failure but proof that market forces work exactly as they should. Auto manufacturers are now responding to genuine consumer preferences rather than activist fantasies about “carbon-free futures” held together by taxpayer dollars.
For too long, corporate strategies were warped by the delusions of green ideologues who neither understand basic economics nor the fundamental science behind energy production. Once the mandates and incentives were stripped away, demand recalibrated to match affordability, reliability, and everyday practicality, which are values far more enduring than climate cult slogans.
I have to wonder how many real opportunities for innovation were missed by car manufacturers who were forced to pander to the nonsense.
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Comments
It’s almost as if the customers didn’t want EVs.
If oil companies abandon California, then customers may have no choice but to abandon ICEVs and buy EVs instead. The collapse of fuel exports to presently importing countries, combined with California’s distance from Asian refineries, suggest imports won’t be an option, not in the short term at least.
The EV buyers can simply use California’s plentiful and inexpensive electricity.
There’s a role for EV but it is a small market. For a consumer that wants a low mileage 2nd vehicle basically only driven short distances for errands it could work. Could also be a primary vehicle for someone in a city with public transit used only occasionally maybe for a 3 day weekend trip out of the city to nearby countryside….if they have the charging infrastructure along the route and time to spend charging.
EV really don’t work for the vast majority of people as primary vehicle. The charging station infrastructure doesn’t exist to support it. Nor does the electric power system infrastructure exist to provide additional power, especially in the areas where they were most adopted; blue net zero jurisdictions which were simultaneously lowering their electricity generation capacity.
Not at the price they are at unless they are wealthy, I hated those tax subsidies because they primarily went to the wealthy or upper middle class who could have afforded the EVs without them.
For sure. EV are a luxury/status symbol, virtue signaling purchase. Especially without market distorting subsidies and mandates.
I live in a middle class suburb of Dallas and I will say that EV’s are extremely popular here. Our location hits that sweet spot for them I guess. Relatively affluent, suburban so cars can be garage-charged, and within a round trip of perhaps 60 miles of anywhere in the urban area. The other day on a 10? mile trip to Trader Joes and back I counted 16 EVs. 13 were Teslas, 2 were Rivians, and 1 was a Mercedes. I almost never see any Ford Mustangs (sic) and it’s even more rare to see anything from GM. I see far more Cybertrucks than you would expect, for some mysterious reason.. Finally, we live within 20 miles of a major Amazon warehouse and they have been using Rivian delivery trucks for at least 3 or 4 years now and regularly.
So, there are places where the Evs work. Having said that, outside our little Galapagos and a few more places like it, I think that EVs are pretty much doomed. Repair costs and consequently insurance are crazy because so many EVs get totaled. You may find a second buyer for a Tesla but not for any other make, and no one finds a third owner first because of battery worries, but also because a lot of third buyers aren’t going to have in-garage chargers.
I will be curious to see how many EV makers survive the next 10 years. Perhaps none.
Since the whole idea was to get people out of cars and into public transportation, everything is going to plan.
In a metro maybe but only if there’s a robust, reliable and safe public transportation system. Outside the major metropolitan cities the population density and dispersed layout of cites doesn’t really land itself to public transport. Older, compressed, population dense East Coast cities? Maybe. LA or ATL? Not so much.
Don’t forget the globalists plans to compact populations into small walkable spaces freeing up the majority of the land to lie fallow. At this point no one owns a car or much of anything else and public transportation is more than sufficient; Of course the same people want us to eat bugs. As for where they live and what they eat I’ll leave that as an exercise to my fellow peons.
Subsidizing a market, to effectively create it, is the antithesis of what the free market should be; it was government manipulation. It didn’t help that they really don’t measure up to ICE engines. Obama bin Biden were just trying to destroy the fossil fuel vehicle industry (and Commufornica is still trying).
Now, can you just imagine what wonders Elon could bring to the internal combustion engine if he desires? My mouth waters at the thought.
In other news, the near monopoly that the Chinese have on the rare earths needed for EVs takes a hit.
Micro economics – Supply and demand curves
Tax credits to encourage the purchase of EV’s artificially shift the demand curve up such that the buyer pays an inflated price which is offset by the tax credit. The net effect is almost all of the tax credit obtained by the buyer winds up in the hands of the seller via the artificially higher sales price.
Newness wears off. It’s the new thing until it isn’t.
Years ago, I worked for a beverage company when wine coolers exploded. There were projections that they would overtake beer in sales. They were bigger and bigger. They were crushing everything. They were taking over. Until they weren’t.
Amazing how people make totally different decisions when they’re not being bribed
Relaxing regulations to steer away from EV’s is not enough. The restrictions should be further reduced to allow a non-computerized model that will sell at half the price of today’s cars and whose most expensive repair will be under a thousand dollars. Don’t underestimate the effect of the crushing debt forced on people just for owning a car less than 10 years old.
‘I wish a Ford and Chevy
Would still last ten years
Like they should’
Are the Good Times Really Over
Merle Haggard
I have a 69 VW Type II (pickup). Fantastic vehicle. Simple, exquisite engineering. Maintainable indefinitely by shade tree mechanic. Reasonably fuel efficient, will keep up with traffic, sort of. A blast to drive. Payload of half ton or so—meets most of small pickup needs.
Make that vehicle today, sell for $25K or so and you would own the market.
No chance due to regulations.
To paraphrase the Bible, “The Computer ye shall always have with thee.”
There’s no going back from that.
Technology will save us! And if you’re not laughing, you didn’t get the joke.
There is another factor.
In my family, we have three Tesla’s. All commute vehicles. Driven about 50-75 miles per day.
Fantastic solution if 1) you have excess solar power and 2) no need to use for long trips.
If those conditions are met, it is a great vehicle. No engine
/transmission maintenance. Yes, the battery will die some day, but in this type of usage, that is a long way off. As long as the battery is more than 50 percent or so, good enough. Battery refurb solutions are emerging.
Need to take along trip? Pull a trailer? Extreme climate? Forget about it.
For commuting in traffic, the Tesla display is fantastic. Shows you all the traffic around you. Being old with a neck that no longer swivels, I am jealous.
I think is happening is that this market is saturated. Everyone for whom an EV makes sense has one.
No one in my family has any plans to get rid of their Tesla. No one has plans to buy another.
Unfortunately, a lot of Americans buy vehicles for their edge uses. They’ll spend 90% of their time commuting to & from work but buy a 1/2 ton truck for the 5% of the time they’re hauling two sheets of plywood.
This is true. Most of the time I only need to buy gas about once a month. However, I keep my gas car around because 5 or 6 times a year I make extended trips and I don’t feel like I should have to deal with a separate vehicle for that. I just want one that works for everything
Wholly agree. My guess is that at least 75 percent of the late model pick-ups on the road here (Socal) are “edge use”. These people are never going to buy a Tesla as a primary vehicle.
My point is that those for whom the Tesla class EV makes sense have largely bought one and are not likely to buy another any time soon.
So federal subsidies and tax rebates failed to get millions of people out of the wildly popular and successful internal combustion engined vehicles and into vehicles powered in the same way as a golf cart? And American automakers have lost BILLIONS of dollars re-tooling their factories to manufacture these golf-cart cars, which haven’t sold…and have now raised prices on the traditional ICE vehicles to make up for their losses?
It’s almost like government involvement in private industry has been an unmitigated disaster…but we’re told government is just here to help us all and save the planet.
funny how hard the “poor” fought for the EV //green world when they of all people could least/not afford it
anything to destroy the wht patriarchy for them
It’s inconceivable that Americans are starting to realize that eating bugs DOESN’T stop the weather.
There are two critical parts of marketing EVs that the watermelons could not overcome even with significant government market distortions.
1. Used EV sales. Most people sell or trade their current vehicle to purchase a new vehicle. There was pretty much no market for a used EV.
2. In the US for every passenger car sold there are 2-3 light truck sales. The current and short term future technologies cannot provide a useful light truck EV. There are many families who have a two vehicle household where one is a light truck.
One question I have not been able to find an explanation for is why doesn’t the current administration either abolish the CAFE requirement or reduce it by 90%.
And why do we still have a gas guzzler tax? When I bought my 2021 Challenger with a manual transmission I had to pay $1000 more as the manual mileage was enough less that it became a “gas guzzler”.
I will probably replacemy current gasoline powered vehicle with a plug i hybrid. My driving consists of a lot of less than 50 mile trips with a few trips of a hundred or more miles, often towing a travel trailer.
I have a Tesla solar roof, so the cost of shcargina battery is zero or very close to zero
Add it to the long list of Government overreach into areas where the politicians lack the capacity to understand the topic and create a bureaucracy to shovel out regulations and money without any rubric to measure costs and return on investment. It’s the intersection of the Dunning-Kruger effect and the law of unintended consequences that creates a Government form of Gambler’s ruin.
With the EPA, eliminating lead in gasoline and restricting hazardous waste dumping were big wins but the bureaucracy doesn’t go away, it can’t just stop so it bumbles along until it’s creating more problems than it solves. Shut it down after 30 years and stop funding when the original charter is complete.
What? Electric cars are a bust? Another Soviet five year plan down the crapper.
The one useful situation for EVs is self-driving for older people or people with bad vision. So a niche market for that would be great.
It’s presently impractical to make gasoline cars self-driving.
“The one useful situation
for EVs is self-driving for older people or people with bad vision. So a niche market for that would be great.That’s called Uber.
My wife (we are ahem “older”) keeps a car but hates to drive.
For less than the cost of car insurance, let alone a car payment, she can uber anywhere and everywhere. To be fair, we’re Amazon Prime addicts so a lot of the minor day-to-day trips have become unnecessary.
“It’s presently impractical to make gasoline cars self-driving.”
Why? I don’t see any technical reason.
“Once those [EV purchase] incentives disappeared, apparently so did the EV market.”
Do tell. Just so hard to believe free gubmint money was floating the EV boat. Who knew?