Detroit's major automakers, including General Motors, Ford, and Stellantis, face over $50 billion in losses as the electric vehicle market declines sharply after the expiration of a key federal tax credit.
Recent reports indicate a significant downturn in the electric vehicle (EV) market in the United States, with Detroit's three major automakers, General Motors, Ford Motor, and Stellantis, announcing total write-downs exceeding $50 billion. This alarming trend follows a steep decline in EV sales, which plunged over 30% in the fourth quarter of 2025 after the federal tax credit of $7,500 expired in September. The previously booming demand for electric cars appears to have been artificially inflated by this subsidy, suggesting that the market may not be as robust as previously thought.
The Wall Street Journal highlights that without this tax incentive, sales of prominent electric models, including Tesla’s Cybertruck and Ford's electric pickup, have slowed significantly. This abrupt deceleration can be attributed to the fading effects of the subsidy which had played a crucial role in driving consumer demand for electric vehicles. Enthusiasm for EVs dampened as consumers faced higher prices and less financial support, signaling a potential market correction.
In recent years, American automakers aggressively invested hundreds of billions of dollars into developing new electric vehicle lines, expecting a sustained boom in the sector. However, the recent downturn illustrates the volatile nature of the automotive industry and the challenges of transitioning to electric mobility in the face of changing economic conditions. As companies reassess their strategies in light of these losses, the future of the EV market in the US remains uncertain, with implications for manufacturing, employment, and consumer choice.
