Are electric vehicles dead in the US?

Ford meanwhile said it had cut its commitment to purchase EV credits by a whopping $1.5 billion.

Now that the pressure to hit 50% EV sales by 2030 in the US has been removed and California’s ability to set an even tougher goal has been stripped out, car makers such as Ford, GM and Stellantis can focus on more profitable ICE vehicles. 

The imperative to develop and sell more EVs has been removed almost completely. “That was really creating a lot of heavy discounting behavior,” GM’s Jacobson said. “[Car makers] weren't interested in selling EVs as much as they were interested in creating credits that were otherwise going to potentially be short going forward.”

Ford, GM and Stellantis in particular are going back to doing more of what they know best: selling high-displacement pick-ups and SUVs for big profits.

For example, Stellantis under new CEO Antonio Filosa has brought back the Hemi V8 engine for the Ram pick-up, with production starting “very soon” Filosa promised at the end of July.

This came as it delayed its electric and range-extender Ram pick-ups to 2026 and 2027 respectively.

Others are following suit. Honda has reportedly killed a five- and seven-seat electric SUV, while Nissan has axed two electric saloons planned for sale in the country.

This is what Trump  – a long-time critic of EVs and any reduction of CO2 emissions in general – wanted. 

In July, the US Environmental Protection Agency (EPA) proposed to rescind the 2009 Greenhouse Gas Endangerment Finding, which stated that a combination of greenhouse gases “threaten the public health and welfare of current and future generations”. With that cancelled, the EPA would no longer be allowed to regulate the CO2 output of new vehicles. 

One argument the EPA put forward was that “complying requires manufacturers to design and install new and more expensive technologies, thereby increasing the price of new vehicles”.

EVs are more expensive in the US than new cars overall. Price guide Kelly Blue Book calculates the average transaction price (ie with discount) at $57,734 in May, compared with $48,799 for all cars.

However, Trump’s stated desire to lower prices is at odds with the impact of trade tariffs, which is hurting both homegrown and import brands.

“We are still expecting prices to move higher through the summer as the inflationary impact of tariffs begins to hit,” said Erin Keating, analyst at Blue Book parent company Cox Automotive.

While the pressure has been removed to sell EVs of any kind, American car companies realise that electric drivetrains aren't going away. At some point, they will have to make them profitably or lose out to those who can.

“We really see the Chinese companies like Geely and BYD as a competitive set for our next generation of EVs, not the global OEMs,” Ford CEO Jim Farley said on the company’s second-quarter earnings call.

Chinese EVs are as good as banned in the US, due to high tariffs, but few believe that will last forever.

Ford went on to announce a forthcoming range of affordable EVs based on a new Universal EV platform, starting with a mid-size, double-cab pick-up that will arrive in 2027, priced at $30,000 (around £22,000).

Farley described the innovative manufacturing method and reduced complexity as “a Model T moment”, suggesting Ford was once again reinventing car production. 

“We believe the only way to really compete effectively with the Chinese over the globe on EVs is to go and really push ourselves to radically re-engineer and transform our engineering, supply chain and manufacturing process,” Farley said.

Small (or what the US thinks as small) and cheap is the new mantra for future EV success. “The pure EV market in the US seems to us very clear: small vehicles used for commuting and around town,” Farley said.