The last couple of weeks of the year are typically a slow time in the auto business, at least on the corporate front.
But 2025 hasn’t been a regular year for the industry, especially when it comes to the status of electric vehicles.
Across the pond, the EU recently scrapped its 2025 EV mandate, an early Christmas gift to German automakers. This follows the Trump administration’s rolling back of Biden-era fuel economy standards in early December, paving the way for more gas-powered cars.
And this comes on the heels of the federal EV tax credit expiring at the end of the third quarter, meaning no more government support for EV sales in the US.
Altogether, there’s been a huge bottoming out in EV demand. And the Big Three automakers — Ford (F), GM (GM), and Stellantis (STLA) — have been caught in the crosshairs as they move away from massive EV investments and strategies, possibly leaving themselves on the back foot if EV demand increases.
Ford CEO Jim Farley and other executives at the Dearborn, Mich.-based automaker have had a busy end of the year.
On Dec. 15, Ford announced a series of moves in its electric vehicle business, pivoting to a hybrid and extended-range EV (EREV) strategy instead of focusing on full EVs. The company’s future EVs will be fewer and smaller, and that means Ford will take a planning and strategic hit of $19.5 billion in related charges.
Ford CEO Jim Farley speaks as US President Donald Trump makes an announcement from the Oval Office of the White House in Washington, D.C., on Dec. 3, 2025. (ANDREW CABALLERO-REYNOLDS / AFP via Getty Images) ·ANDREW CABALLERO-REYNOLDS via Getty Images
At the same time, Ford canceled the Lightning EV pickup in its existing form after it canceled a three-row EV SUV earlier in the year. Ford also said it won’t be building an electric commercial van that it had planned.
“We can’t allocate money for things that will not make money,” Farley said in an interview with Reuters. “As much as I love those products, the customers in the US were not going to pay for them. And that was the end of that.”
While a $19.5 billion charge is a huge sum of money, Wall Street and investors weren’t surprised. The stock actually climbed higher after the announcement.
“We view it as a decisive, strategic reset. Historically, Ford’s been a little slow to act on very important strategic items in terms of cutting losses early,” Nishit Madlani, auto sector lead and managing director at S&P Global Ratings, told Yahoo Finance. “It does give them long-term flexibility and near term we see the path towards less losses, because they’re going to be having less underutilized EV assets.”
The downside for Ford? In a few years, a new administration will be in place, and Ford may have to pivot again.
While the company has some “optionality” with hybrids like the Maverick and F-150 pickup, as well as existing EVs like the Mach-E, Madlani said Ford could conceivably be vulnerable to any upside from EV demand, should it arise.
“There’s no question that the demand environment is going to be challenging,” TD Cowen Analyst Itay Michaeli said to Yahoo Finance. “Companies generally expect EV adoption to hit about 5% to 7% of new vehicle sales over the very near term. But our message over the next couple of years is don’t sleep on the US EV market.”
The new 2027 Chevy Bolt is on display during the 2025 Los Angeles Auto Show at the Los Angeles Convention Center on Nov. 21, 2025 in Los Angeles, Calif. (Josh Lefkowitz/Getty Images) ·Josh Lefkowitz via Getty Images
On the flip side, there’s GM. The largest US automaker also bet heavily on EVs and is still plowing forward with vehicles like the new upcoming Chevrolet Bolt, which will cost around $35,000, and the range-topping Cadillac Celestiq EV, which tops out over $300,000.
But there have been hiccups, and the loss of EV tax credits, coupled with declining incentives to meet fleet fuel economy standards, means the EV business will struggle.
To that end, in late October, GM said it would take a $1.6 billion charge from a reassessment of its EV plans, with $1.2 billion in non-cash special charges resulting from adjustments to its EV capacity and the remaining $400 million in cash primarily related to contract cancellation fees and EV-related investments.
GM has also promised to release hybrids, a pivot from its original plan to skip the technology that CEO Mary Barra once viewed as transitional. Now GM is plowing $4 billion into building and transitioning factories to make more hybrids and gas-powered cars.
“We’re going to do the right hybrids that we think are important for our portfolio, but I also think we have a very strong EV portfolio and a very strong internal combustion [portfolio],” Barra said in an interview with Automotive News. “We’re going to be positioned to compete well, but also be good stewards of our owners’ capital and how we deploy R&D dollars.”
While GM’s charges are modest in comparison to Ford, S&P Ratings sees more pain ahead.
“I wouldn’t be surprised if [more charges] were to happen, and that’s only because after Q3 when they put out the $1.6 billion charge announcement, there was a pretty clear statement in their filing which said there could be more material announcements related to program cancelations, supplier charges, etc., very similar to what Ford announced,” Madlani said.
Chair and CEO of General Motors Mary Barra speaks onstage during the 2025 New York Times Dealbook Summit at Jazz at Lincoln Center on Dec. 3, 2025 in New York City. (Michael M. Santiago/Getty Images) ·Michael M. Santiago via Getty Images
Others on Wall Street believe GM is well-positioned, given that while EV demand is low at the moment, it could improve after hitting rock bottom.
“They still have a wide portfolio and enough capacity to adjust to market demand, and they’ll have, of course, new technologies as well,” Cowen’s Michaeli said.
The question is if and when that would be. In the meantime, GM’s operational prowess should help it get along in the post-EV tax credit world.
“The execution at GM has been way more consistent, which is the reason why their margins have been so much larger compared to Ford over the past seven, eight years,” Madlani said. “I think GM has been [more consistent in execution] under Mary Barra. We’ve seen as the tables turn, more decisive steps, more control over all the things that the industry throws at them, whether it’s supply chain shocks from bottlenecks that emerge, labor union negotiations, you name it.”
Stellantis CEO Antonio Filosa listens as U.S. President Donald Trump announces new fuel economy standards, in the Oval Office at the White House in Washington, D.C., Dec. 3, 2025. REUTERS/Brian Snyder ·REUTERS / Reuters
Stellantis has had fits and starts to its EV transition, and now that its EVs are finally coming out, the company is rejiggering its strategy.
New CEO Antonio Filosa now has the company making its once EV-only Dodge Charger accommodate gas engines and is killing off the base version of the EV for higher-trim versions. Stellantis’s Ram brand discontinued its Ram EV pickup and delayed its Ramcharger EREV to later in 2026. And the venerable Hemi V8, which had been discontinued, is now returning to the Stellantis lineup.
While the European-focused Stellantis will have more EV options in Europe, the company is scaling back in the US. The only other EV available for sale in the US is the Jeep Wagoneer S.
The All-New, All-Electric, Wagoneer S is on display during the 2024 LA Auto Show at the Los Angeles Convention Center on Nov. 22, 2024, in Los Angeles. (Josh Lefkowitz/Getty Images) ·Josh Lefkowitz via Getty Images
Part of the strategy to improve the brand overall is selling vehicles that consumers want at decent margins and bringing down costs from past initiatives like EV endeavors. The company said in late October that it expected to book one-time charges in the second half of the year from changes to its strategy, including a pivot back to hybrids after an earlier push into electrification, but it did not reveal the amount of those charges.
“We think that for [Stellantis] to get back towards levels of profitability we see at GM, it’s going to take a while,” S&P’s Madlani said, noting that Stellantis under Filosa has taken the steps needed to get on the right path.
Deutsche Bank is also positive on Stellantis’ recent moves in the US. “Stellantis has launched new ICE [internal combustion engine] product in the US to capitalize on the trend of prolonged combustion engine life and should benefit from a mix skew to ICE particularly in the US,” analyst Edison Yu wrote in a note published in early December.
Highlighting that production shift is a $13 billion investment in the US to build more gas-powered cars, including five new models.
Like Ford, Stellantis is betting heavily on more gas-powered cars and pulling back on EV investment, and it’s taking charges for those moves.
The question is what will happen if consumer tastes and technologies change (and there’s a new administration), and the automakers must change course again.
Some analysts say that the best strategy is to be flexible — place small bets on smaller EVs first, then invest as demand organically arises for larger electrified vehicles.
“After over-investing in luxury EVs and electric trucks, automakers are now pivoting toward the sub-$35,000 segment, think revamped Bolts and [Nissan] Leafs, to keep EV adoption alive,” said Scott Kunes, COO of Kunes Auto Group, an auto dealer chain.
Wall Street also agrees with a prudent approach, touting flexibility as a key tactic.
“Overall, ICE technology will be around for longer which is positive for mix of [original equipment manufacturers] but at the same time requires additional investments to keep the technology up to date and has caused write-offs on [EV] model lines,” Deutsche Bank’s Yu wrote. “We find that others like GM and Ford are increasingly promoting the narrative around flexible manufacturing.”
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Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
