The global auto industry now faces around $70 billion in charges and write-downs related to electric vehicles (EVs), as several major automakers abandon earlier, more aggressive electrification plans.
This is a clear indicator that the first wave of investment in electric vehicles for some of the world’s largest car companies has resulted in a far worse financial outcome than originally promised, with billions of dollars now being written off as programs are canceled, delayed or redesigned.
Accordingly Automotive NewsIn 2025, U.S. buyers registered 1.3 million electric vehicles, representing 7.8 percent of new light vehicle registrations, down slightly from 8.0 percent in 2024.
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In Australia, electric vehicle penetration is at a similar level – but with very different market dynamics. Local electric vehicle deliveries totaled 103,269 units in 2025, accounting for 8.3 percent of all new vehicle deliveries.
Globally, the scale of the EV reset ranges from Honda’s expected loss of US$1.9 billion (AUD2.68 billion) by the end of March to Stellantis’ approximately US$26 billion (AUD36.69 billion).
There are various factors behind depreciation. The most obvious is slower-than-expected overall demand for electric vehicles from everyday consumers, as well as price sensitivity, charging and range concerns, and policy environments that have become less supportive.
- General Motors: More than US$7 billion (AUD9.88 billion) in charges related to electric vehicles for 2025 and product and manufacturing changes
- Ford: US$20.9 billion (AU$29.49 billion) pivot away from larger, more expensive electric vehicles, with additional fees and cash costs on top
- Stellantis: Charges of 22 billion euros (US$26 billion, A$36.69 billion) related to a major strategic realignment
- Honda: Electric vehicle-related write-downs, including $1.7 billion (A$2.40 billion) in the nine months to December 31, with the total expected to reach $1.9 billion (A$2.68 billion) by the end of March
The changing U.S. political landscape has led to a shift away from electric vehicles, and many brands are repurposing production facilities once dedicated to electric vehicle production. For example, production of the Chevrolet BrightDrop electric delivery truck was stopped at a factory near Detroit and gasoline-powered trucks were built instead.
Ford has now created one of the most famous pivots. The company has discontinued the Ford F-150 Lightning electric pickup and is moving to a longer-range model with a gasoline engine that charges the battery. The company will replace the all-electric F-150 Lightning with a range-extended model that uses a gasoline engine as a generator.
Ford is also said to have canceled its future three-row electric crossover SUVs and plans to spend about $7 billion (A$9.88 billion) in fees and about $5.5 billion (A$7.76 billion) in cash expenses this year and next in connection with the strategy changes.
Stellantis expected to incur $22 billion ($26 billion, A$36.69 billion) in fees, calling it a “reboot of its business.”
This figure includes $17.5 billion (A$24.70 billion) related to canceled vehicle programs and platform disruptions, and $2.5 billion (A$3.53 billion) related to the electric vehicle supply chain overhaul.
“We are readjusting our electric vehicle product roadmap and supply chain to reflect much more real customer demand and a shift in regulation after initially overestimating the speed of electrification adoption across regions.” Stellantis’ new CEO, Antonio Filosa, told the media back in June.
Honda’s electric vehicle-related depreciation totaled $1.7 billion (A$2.40 billion) in the nine months ended December 31 and is expected to rise to $1.9 billion (A$2.68 billion) by the end of the fiscal year in March.
The Japanese giant is also negotiating compensation with GM as the company discontinues its Honda Prologue and Acura ZDXEV programs.
“We need to conduct a fundamental review of our strategies to restore our competitive strength,” Executive Vice President Noriya Kaihara said last week as Honda released its latest quarterly results.
Still, the US and Australia are very different automotive markets. While our American allies sell significantly more new cars per year (16 million) and therefore have far more influence over manufacturers over what they have to produce, Australia is open to Chinese OEMs while the US is not.
In 2025, Chinese-made vehicles in our market increased to 252,928 deliveries, representing 20.4 percent of the total Australian market and moving China into second place overall as a country of origin.
These are not only Chinese-made cars, but also brands such as Tesla, which only sells Chinese-made vehicles in Australia.
In terms of pure EV volume, the Australian market is increasingly dominated by Chinese brands:
- Tesla sold 28,856 electric vehicles in 2025
- BYD sold 25,287 electric vehicles, with only 3,569 units separating the two brands
With the introduction of affordable electric vehicles such as the Atto 1 and Atto 2, BYD could actually become Australia’s best-selling electric vehicle brand in 2026.
Furthermore, in Australia’s increasingly fragmented new car market, we have become a testing ground for many Chinese brands, who are taking advantage of our relative size, easy access and lack of tariffs to test their products on Western tastes before moving into larger and far more expensive markets.
Even if the billions of dollars spent on the transition to electric vehicles have not yet been proven, that does not mean that manufacturers are abandoning the technology – quite the opposite.
GM has re-launched the Chevrolet Bolt with a starting price of less than US$30,000 (A$42,337), at a time when the average new vehicle in the US sells for about US$50,000 (A$70,562).
Ford is focusing on smaller, cheaper electric vehicles and is targeting a $30,000 (AUD$42,337) mid-size electric pickup truck due in 2027.
“I believe this is the right allocation of capital,” CEO Jim Farley said recently. “It’s a combination of partnerships where it makes sense, efficient investments in partial electrification… and actually tapping into the EV market at the core of the market in our home market where there isn’t a lot of competition.”
Given the success that Chinese OEMs have had in our market, it could serve as an example for the rest of the world that while US and European brands (excluding Tesla, of course) have so far failed to gain a foothold in electric vehicle sales, this may say more about their product and price than consumer demand and taste.
