Global carmakers are reassessing electrification strategies amid unexpected strength in internal combustion demand and shifting policy support from the US and Europe. Analysts say reversals could reshape investment plans and lead to billions in write downs while firms seek more gradual transition paths.
According to the FT, the global automotive industry is broadly revising its plans for electrification due to the persistent demand for internal combustion engine cars and reduced support for the transition in both the United States and Europe.
Last week Honda scrapped its plan to phase out ICE vehicle production completely by 2040 and warned of potential losses of around $16 billion over the next two years due to the review of its electrification strategy.
Additionally, Mercedes-Benz, Ford, Stellantis, and Volvo Cars have scaled back their ambitions to produce fully electric vehicles.
Rolls-Royce, under the BMW brand, also changed course, saying it would continue to produce cars with traditional engines after 2030.
Bentley, Lotus, Audi, and Porsche have already scaled back their plans to transition to electric vehicles, either fully or partially, over the next decade.
Electrification Trends and Market Response
Lamborghini, a Volkswagen unit, recently abandoned plans to release its first fully electric car by 2030, saying the new model would be a plug-in hybrid.
In the context of US policy following the return of the Trump administration, federal tax credits for electric-vehicle buyers were scrapped, spending on charging infrastructure was reduced, and emissions targets for transport were eased.
The EU also lowered its emissions ambitions, underscoring a broad shift in the strategies of global manufacturers.
According to the FT, changes in strategies around model launches and investments have led to a reduction in global automotive industry expenditures by roughly $75 billion over the past year.
It was also reported that BMW unveiled at an event in Munich a new electric car for 2026 with a range of up to 900 km.
Ultimately, the global electrification market continues to adapt to rising demand for ICE vehicles, while manufacturers seek a balance between the pace of transition and economic viability, which will shape their future strategies.
