"In December, Ford took one of the biggest write-downs in history with a $19.5 billion charge on its EV business. As part of the move, the company killed its all-electric F-150 pickup truck and will retool it as an extended-range hybrid amid a broader shift away from EVs. General Motors, for its part, announced total EV-related charges of $7.6 billion, abandoning plans to build EVs at a Michigan factory that will now make gas-powered SUVs and pickups."
""We can't allocate money for things that will not make money," Ford CEO Jim Farley said in December when commenting on the EV pullback to Reuters. "As much as I love those products, the customers in the U.S. were not going to pay for them. And that was the end of that.""
"EV sales collapsed by 36% year over year in the fourth quarter, just after President Donald Trump ended the EV tax credit, according to data from Cox Automotive. With inflation back on the rise and the labor market softening, U.S. consumers seemed hesitant to fork over $55,000 on average for a new EV without the tax credit."
"The Iran war, initiated by the U.S. and Israel in February, has complicated that reasoning. The national average for gas prices stood at $4.51 as of Sunday, according to AAA, up 50% from late February. Globally, the average gas price was even higher at about $5.34 per gallon. This price shock, while inconvenient for U.S. automakers that have recently pivoted away from EVs, has handed Chinese carmakers like BYD the opportunity of a lifetime, experts say."
American automakers reduced EV commitments as EV demand weakened. Ford recorded a $19.5 billion EV write-down, canceled its all-electric F-150, and planned to retool it into an extended-range hybrid. General Motors announced $7.6 billion in EV-related charges and shifted a Michigan factory to gas-powered SUVs and pickups. EV sales fell 36% year over year in the fourth quarter after the EV tax credit ended. U.S. consumers faced higher inflation and softer labor conditions, making $55,000 average EV prices harder to justify. The Iran war drove gas prices sharply higher, with U.S. averages reaching $4.51 per gallon and global averages around $5.34, benefiting Chinese EV makers like BYD.
Read at Fortune
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