De-Electrification?
The Great $60bn EV Reset
Why OEMs & Tier suppliers are having to roll-back, retrench, and recalibrate their EV investments
What’s happening
Not only are OEMs having to adjust to global vehicle volumes still remaining structurally below pre-Covid volumes, particularly in some regions and segments, OEMs have an even more immediate concern ahead of them.
Across the board, major OEMs are reporting major write-downs on their previously bold investments into electric vehicle production, plants, and new vehicle platforms. This is having a severe impact upon balance sheets, financial resilience, and likely future investments in platforms, plants, and overall strategy.
This profound “reset” reflects a critical, industry-wide recalibration which aims to align the automotive industry with the slower-than-anticipated EV market-driven demand, rather than regulatory targets which have been imposed from governments.
To be clear, the longer-term transition to electrification remains inevitable in most - if not all – regions, however, it is clearly not going to be an orderly progression and in actuality, will widely vary by region, consumer segment, and vehicle type - and will not be the smooth, linear trajectory that many predicted over the next 10-20 years.
In the here-and-now, in most regions - particularly the US - we are witnessing the automotive industry being forced to retrench, roll-back, and write-down significant EV investments.
Major OEM EV write-downs
| OEM | Write-Down | Details |
|---|---|---|
| Stellantis | $26.5bn |
• Scaling down the EV supply chain due to demand not meeting the expectations of the "Dare Forward 2030" plan unveiled in March 2022. • Selling its 49% stake in a Canadian battery JV with LG Energy Solution. • Platform impairments and product cancellations including the previously announced Ram 1500 BEV. • Quality provisions: revised assumptions for warranty claims in North America and Europe and costs associated with residual values for discontinued models. • Stellantis is also reviving diesel production through Europe. |
| Ford | $19.5bn |
• Scrapping the fully electric F-150 Lightning (and replacing with a new EREV), plus a next-generation electric truck codenamed the T3, as well as planned electric commercial vans. • Special charges for repurposing its Tennessee and Ohio facilities away from pure EV production. • Ford ending its JV with SK On for battery production in the US. • Also redirecting battery production away from EV to energy storage solutions. |
| General Motors | $6bn | • Elimination of a planned Michigan facility initially designated for EV production, which will now build the Escalade and full-size pickups. |
| VW/Porsche | $6bn |
• Delay of the software-led Scalable Systems Platform (SSP). • Delay of electric 911 until the 2030s. • Postponement of Porsche K1. |
| Honda | $1.7bn | • Impairments on EVs sold in the U.S. and scrapping some EV development. |
| Nissan | $1.0bn | • Part of a wider $11bn restructuring plan. |
| Total | $60bn |
Why is this occurring?
Demand not meeting expectations. Whilst EV sales have steadily increased reaching 20.7 million unit in 2025, a 20% year-on-year increase, this slower than expected growth in consumer demand has been restrained by high EV purchase prices, and whilst range anxiety has eased, this has been replaced by charging anxiety, due to the slow roll-out of a highly fragmented and unreliable charging infrastructure.
The fall in residual prices makes leasing companies raise their monthly premiums (to reduce their potential losses), which results in a slower uptake of new EV leases. At the same time, the relatively lower price of used EVs has made new EVs look less attractive for consumers. Lease companies have also started offering innovative used EV leases, affecting new EV sales.
Under automotive OEM lobbying, in part justified by slower than expected consumer demand, the EU has agreed to relax its 2035 ICE ban, and now only 90% of new vehicles sold will have to be zero emission by 2035.
US scrapping EV purchase incentives. President’s Trump antipathy to green targets has resulted in the elimination of the $7,500 federal tax credit from 30th September 2025, and also reduced urgency around fuel economy standards.
Chinese competitors flooding the west with cheaper EVs. China introduced a purchase tax for electric vehicles in early 2026. China also has EV overcapacity, and due to their market for EVs becoming saturated they are increasingly looking to export-led growth particularly by BYD, Xpeng and Geely to ‘dump and pump’ into western markets with cheaper EVs, and clearly this is impacted the west’s legacy automakers who cannot compete upon price alone.
What will be the impact on automotive manufacturing & logistics?
Clearly the slower than anticipated transition to EVs has huge ramifications, particularly for the battery supply chain ecosystem, component flows, and supporting logistics services.
Delayed, deferred, or cancelled EV investments will cascade down the supply chain. Furthermore, whilst western OEMs are resetting, each and every delay allows China to get further ahead in the EV race in terms of lower price, volumes, and technology, and catching up is looking increasingly out of reach for many western legacy OEMs.
OEMs will rapidly roll back to ICE, even diesel, hybrid and PHEV, and extended range EVs (EREV/ REEV) e.g. Ford and Honda and Nissan, and as we have witnessed, cut back on new EV platforms, models, and pull out of strategic EV JVs. OEMs will also have to shift to more flexible multiplatform powertrain platforms, investments, and future strategies.
Tier 1 suppliers will slow their investment in new powertrain development, as many Tier suppliers are already under severe financial stress. Tier suppliers such as battery companies (and also OEM – battery company J-Vs) will delay, defer or downgrade their investments e.g. Automotive Cells Company (ACC) dropping plans to build gigafactories in Italy and Germany, and / or redirect to energy storage applications. Tier 2’s and 3’s further upstream in the value chain will also pull-back on investment and J-Vs with auto companies. There are also likely to be ripples amongst the technology providers such as software, connectivity, or cloud players that feature more strongly in EVs.
Inbound supply chains logistics flows, and also FVL flows will be majorly impacted, investment curtailed, and ambition scaled back in response to these major changes, in conjunction with the intensifying cost pressures OEMs and Tier suppliers are passing on to logistics providers.
There will inevitably be some restructuring, and possibly even mergers and acquisitions (M&A) within OEMs, Tier suppliers, and also within the automotive logistics space.
OEM write-offs will weigh heavily upon future investment strategy. This ‘sunk’ or ‘stranded’ capital expenditure (Capex) based upon false demand assumptions will have significant impacts upon the future financial strategies of OEMs and suppliers. That inevitably means that remaining capital will be limited, and the appetite for risk, will be more limited next time around. This reset will decide who has the capital to survive the EV transition and build the next platform. OEM write-offs will also inevitably impact other areas of investment for example in terms of sustainability, AI, software defined vehicles, or autonomous vehicles.
Full electrification will occur in time, but not quite at the pace or trajectory once anticipated. The EV reset is essential to help automotive stakeholders navigate that journey and will inevitably impact every area of the automotive supply chain, inbound as well as outbound, in addition to supporting logistics services.
