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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