By Al Root
The EV winter is here, brought on by poor planning, overly ambitious sales targets, and changing government policies.
The EV reset is proving painful for the industry, with asset write-downs piling up.
On Thursday, Honda Motor announced losses of up to 2.5 trillion yen ($15.7 billion), which are "associated with the reassessment of automobile electrification strategy."
"In order to respond flexibly to the rapid changes in the current business environment, Honda is making progress in the reorganization of its strategic framework and reestablishment of its competitive strengths, " reads part of its news release. In short, that's fewer EVs, more hybrids, and a better balance of better products on offer to consumer demand.
The write-downs hardly qualify as a surprise. Ford Motor has announced $19.5 billion in EV-related charges. General Motors has taken $7.6 billion in charges, warning there will be more to come. Chrysler's parent, Stellantis, has announced $20 billion in charges.
That totals more than $60 billion in losses, an enormous number. The combined market value of GM, Ford, Stellantis, and Honda is roughly $180 billion.
Write-downs are a function of several things. For starters, Tesla's success from 2020 to 2023, with deliveries more than tripling, led the industry to believe demand for EVs was sky-high at almost any price point.
Rivian's November 2021 IPO also helped. Shares shot up to almost $180, giving the EV start-up a market value of almost $160 billion at the time. Today, Rivian is valued at about $21 billion.
Rivain's sky-high valuation was predicated on the assumption that American would buy 3 million EVs in 2025 and 8 million by 2030. Projections like that caused traditional auto makers to rush into the market, committing billions to product development and battery plants, fearing a smaller market for gasoline-powered cars that made them all their money.
Things just didn't turn out that way, setting up what has been described as an EV winter, a time of slow sales, making it difficult to earn a return on a new investment.
Americans bought 1.3 million EVs in 2025, flat with 2024. EVs accounted for roughly 8% of new U.S. car sales in 2025, about half the rate of EV sales in Europe and one quarter the rate in China.
Chinese policies heavily incentivize EV purchases, and the charging infrastructure is more developed. The Trump administration has rolled back several EV-friendly policies, including the September elimination of the $7,500 EV purchase tax credit. With that gone, sales could fall 50% in 2026, leaving the industry awash in unused EV capacity.
Toyota Motor might be tempted to say 'I told you so' to the industry. It went slower on all-electric cars and hasn't taken a write-down yet.
If there is a silver lining for the auto industry, it's that EVs didn't make money, and the stocks haven't been destroyed by the current EV woes.
Coming into Thursday trading, GM stock returned 31% over the past five years. Still, that trails the S&P 500's 85% gain. Ford stock has returned 20%. Stellantis stock has lost investors 45%, but that is because of inventory and quality issues in its traditional car business.
Tesla stock has essentially kept up with the market for the past five years, despite its own declining EV sales. Tesla pivoted to AI to offset EV weakness. Investors are likely glad it did.
As for GM and Ford, they can continue to sell gasoline-powered cars and trucks that made them all of their profits anyway.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 12, 2026 10:47 ET (14:47 GMT)
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