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November 2025 U.S. Automotive Market Roundup
Source:芝能汽车 | Author:Brand Strategy Department | Published time: 2026-01-30 | 4 Views | Share:

Ford and the U.S. EV Industry: Strategic U-Turns and a Fractured Future

Last week, Ford, a stalwart of the U.S. traditional automotive industry, announced it would scale back the R&D and production plans for multiple electric vehicle models, accrue approximately 19.5 billion US dollars in related expenses, and shift its business focus to hybrid vehicles as well as a lineup of smaller, more affordable electric vehicles.
The once-unchallenged mantra – "Go all-in on pure EVs, or face extinction" – no longer holds true. In fact, numerous players in the U.S. market have begun to pivot their strategies.

  • General Motors (GM) recorded a 1.6 billion US dollar impairment on EV assets, with more potential write-downs to come. It has cut pure EV production and delayed the expansion of some factories. GM’s move clearly follows Ford’s lead: it has already abandoned its target of reaching 1 million pure EV production capacity in North America by 2025, and its future strategic direction remains unclear.

  • Stellantis has scrapped the plan for an all-electric Ram pickup truck, shifting its focus to more hybrid and gasoline-powered models – a pivot that was, in truth, inevitable given the challenges of the pure EV pickup segment.

  • Nissan has canceled its plan to produce EV sedans in the U.S. It is highly likely that Honda and Toyota will also adjust their U.S. EV strategies in the near future.

  • Hyundai and Kia, the South Korean automakers with heavy investments in North America, will also make strategic tweaks.

With nearly all major players scaling back their EV ambitions, market expectations for the development of the U.S. electric vehicle industry have been significantly downgraded. The critical question now is: where does the U.S. automotive industry go from here?

Part 1: Why the Sudden Wavering?

The most immediate issue is a collapsed EV market. Key policies such as the "One Big Beautiful Bill" terminated the federal EV tax credit of up to 7,500 US dollars on September 30, 2025. This led to a pre-termination sales surge in the U.S. EV market in Q3 2025 (114,000 units in July, 141,000 in August, and 141,000 in September), followed by a sharp slump in Q4 (79,000 and 65,000 units in the subsequent months). Plug-in hybrid electric vehicle (PHEV) sales also plummeted in tandem.
By contrast, hybrid vehicles (HEVs) have seen strong consumer demand, as they were unaffected by the tax credit expiration. Compounding the shift, relaxed Corporate Average Fuel Economy (CAFE) standards and exhaust emission regulations have eliminated fines for automakers and frozen funding for charging infrastructure development.
These policy changes have made it far easier for U.S. automakers to produce gasoline-powered vehicles. With modest investments in hybrid and PHEV lineups, they no longer face the existential pressure to go all-in on pure EVs.
Against this backdrop, Ford’s strategic pivot makes perfect sense.
Ford CEO Jim Farley has struck a pragmatic tone, stating that the company’s future goal is to achieve a 50% electrification rate (encompassing pure EVs, HEVs, and extended-range electric vehicles/EREVs), with pure EVs positioned exclusively as small, low-priced models.
Market forecasts for 2026 show a slowdown in demand for high-priced EVs in the U.S., which is expected to drop to a monthly sales volume of 60,000-80,000 units – translating to just over 800,000 units annually. Demand for hybrid vehicles, however, has remained steady at around 150,000 units per month, forming a market of over 2 million units per year. Ford’s hybrid sales have recently surged by 30%, and the company aims to lower its corporate average fuel consumption through a combined EV+HEV+EREV lineup – a move also designed to insulate it from future policy swings.
For Ford, the most significant move is the cancellation of its next-generation electric F-Series pickup truck (the T3 Project), originally set for production in Tennessee. Instead, Ford has launched a secret skunkworks project to develop an ultra-low-cost EV platform, with a mandate to match "BYD’s cost levels". The platform will rely on redesigned assembly processes, streamlined manufacturing, and partnerships with new suppliers to ensure profitability without relying on government subsidies.
This strategic shift has forced Ford to scale back its massive previous EV investments: battery factories in Michigan and Kentucky are being repurposed from EV battery production to energy storage – specifically, 20 gigawatt-hours (GWh) of lithium iron phosphate (LFP) energy storage batteries, with customers set to be power companies and data centers (with full operational capacity targeted for 2027).
Note: This push for an independent North American supply chain for energy storage is, in reality, unfeasible. Ford’s EV business has been mired in persistent, unmanageable losses:

  • Ford’s Model e division reported a 900 million US dollar loss from EV-related operations in 2021;

  • 2022, its first full year as an independent division, saw losses widen to 2.1 billion US dollars;

  • Losses surged to 4.7 billion US dollars in 2023;

  • 2024 losses continued to climb to 5.1 billion US dollars;

  • The first three quarters of 2025 brought an additional 3.6 billion US dollars in losses.

Excluding strategic restructuring write-downs, the Model e division’s cumulative losses stand at 16.4 billion US dollars – a figure comparable to the total cumulative losses of all Chinese new energy vehicle startups combined.

Part 2: Does the U.S. Automotive Industry Have a Future?

The U.S. EV tax credit policy, which had been in place for 17 years and was originally set to expire in 2032, was terminated seven years early. This has completely sapped the motivation of U.S. automakers to invest in EVs, leaving the U.S. EV penetration rate stagnating at around 5%.
Sales slumps have become widespread across the U.S. EV market:

  • Tesla’s sales fell 35% and 23% year-on-year in October and November 2025, respectively;

  • Kia’s EV6 and EV9 sales plummeted 71% and 68% year-on-year;

  • Ford’s Mustang Mach-E and F-150 Lightning saw two consecutive months of 61% year-on-year sales declines;

  • Honda’s Prologue recorded an 80% and 87% year-on-year drop in the same period.

Once the government withdrew EV subsidies, the U.S. EV market devolved into a niche segment. It is projected that U.S. EV sales and penetration rate will drop to 6% in 2026.
The core problem with U.S. EV policy is severe political division, leading to a lack of continuity and predictability. Successive administrations with a preference for gasoline-powered vehicles have completely overhauled industrial policy, upending previous EV initiatives.
Not long ago, the U.S. government was actively pushing electrification: investing in charging infrastructure, encouraging traditional automakers to transition to EVs, and setting a target for EVs to account for 50% of new car sales by 2030. This prompted Ford, GM, and other legacy automakers to pour billions into EV development.
Now, those policies have been fully reversed: EV purchase subsidies scrapped, emission standards relaxed, charging infrastructure funding cut, and the emission credit trading system completely eliminated. The EV industry, which had attracted massive investments, has been left to a state of survival of the fittest.
Compounding the issue, the U.S. pure EV market suffers from insufficient scale, with an average transaction price (ATP) of 59,200 US dollars – far above the U.S. new car market average of 47,500 US dollars. The significant price gap between EVs and gasoline-powered vehicles makes it nearly impossible to persuade U.S. consumers to opt for more expensive EVs.
Additional headwinds for U.S. EVs include:

  • The U.S. is the world’s largest oil producer, with a national average gasoline price of just 2.94 US dollars per gallon;

  • EVs experience faster residual value depreciation than gasoline-powered vehicles;

  • EV insurance costs are 20-30% higher;

  • Charging infrastructure remains inadequate.

With no fuel economy restrictions to contend with, traditional automakers can now confidently continue producing gasoline-powered vehicles without fear of regulatory penalties – and without the need to purchase emission credits from pure EV makers like Tesla.
EVs are unsellable, EV businesses are bleeding cash from massive upfront investments, and consumers prefer affordable gasoline-powered cars. Against this backdrop, what incentive do U.S. automakers have to continue investing in pure EVs?
That said, a new frontier is emerging for the U.S. automotive industry: AI-driven automotive intelligence, with Tesla leading the charge with heavy investments in artificial intelligence.
An analysis of Tesla’s patent filings reveals a clear shift in the company’s innovation focus – moving far beyond "the car itself".
Tesla filed approximately 4,200 patents between 2014 and 2024, with two distinct peaks in its R&D trajectory:

  1. 1.The first peak occurred in 2018, during the well-documented "Model 3 production hell". Patents at this stage focused primarily on manufacturing and industrial processes, centered on ramping up production and scaling manufacturing capacity.

  2. 2.The second, larger peak came in 2022, with a complete shift in R&D direction.

The share of traditional "automotive patents" (for chassis, suspension, and mechanical structures) has declined rapidly, replaced by patents related to AI hardware and software – including autonomous driving algorithms, neural network training, data annotation, simulation systems, and AI computing platforms.
Today, fewer than 10% of all Tesla’s patents are classified as traditional "automotive patents". By contrast, legacy automakers like Toyota and Volkswagen still focus their patent portfolios on core mechanical components such as chassis, suspension, and powertrains.
Elon Musk has fully bet Tesla’s R&D future on artificial intelligence, with autonomous driving and robotics becoming the company’s absolute core focus. Starting in 2023, a large number of Tesla’s new patents have been for electromechanical joints, linear actuators, and AI computing hardware – all clearly pointing to the development of humanoid robots.
Notably, Tesla’s revenue and profits still remain highly dependent on car sales, and growth in its automotive business is slowing.
This stands in stark contrast to Chinese automakers, which have achieved full integration of vehicle and electronic systems through years of iterative innovation – from electronic and electrical architectures to software development. Chinese EVs offer seamless synchronization between mobile phones and in-vehicle infotainment systems, with the entire digital lifestyle ecosystem connected around a user’s ID. By comparison, U.S. automakers are burdened with outdated development models, including their parts release systems, IT infrastructure, CAD design platforms, and especially software systems – all requiring massive resources to update and modernize.

Conclusion

Beyond Tesla, the U.S. automotive industry has achieved virtually no notable achievements in the pure EV segment. Looking ahead, investment in intelligence and AI is an inevitable trend for the U.S. industry – and it is simply no longer worthwhile to struggle with pure electric vehicles.