Insight
US EV slowdown – A deep dive into what’s influencing our revised Q1 electrification forecast
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
An analysis of: - How the early sunset of the US$7,500 federal subsidy has severely eroded the cost competitiveness of BEVs in the market within the volume passenger vehicle segments - How the complete collapse of the regulatory “sticks” driving electrification in the US, the low probability of any of these “sticks” being reinstated any time soon, and the severely low margins on BEV programs have cumulatively eroded the actual “need” to push drivetrain electrification - How the compression of the addressable market – from one upheld by subsidies to one reliant on buyers willing to pay a premium – has severely diminished the supply pipeline. - Why BEV demand strength has been progressively weakening for years even beyond these new pricing and supply developments based on loyalty data
Table of contents
- The $7,500 federal subsidy was key to BEV competitiveness and the new ‘backfilled’ OEM/dealer subsidies are not enough to bridge the cost gap
- Litigation will not change the reality that there will be virtually no regulatory pressure on carmakers to sell BEVs for the rest of this decade
- Legacy brands are seeing the economics of their BEVs, already under pressure from backfilled subsidies, get disproportionately impacted by tariffs as well
- With the financial case for selling BEVs weakened, the status of the supply pipeline has moved from ‘strong to ‘concerning’
- Declining BEV loyalty rates combined with a severely compressed supply pipeline mean that forward-looking demand will not necessarily remain supported by return-to-market BEV owners
- Gas price spikes from the Iran conflict will not be able to reverse the EV slowdown by themselves
- Despite the overwhelming headwinds, manufacturers will continue to push BEV production, albeit at lower volumes than before
Tables and charts
This report includes the following images and tables:
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BEV premium over an equivalent ICEJan 2026 xEV EMI premia over ICELegacy brand BEV statistics by assembly location and battery source
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xEV model contribution margin estimates - Compact SUV/crossoverStatus of currently available BEV models in the USCY2025 BEV sales within volume segments by model typeCY2025 US BEV sales by models categorised by risk/discontinuation statusStatus of previously announced US market BEV modelsBEV loyalty rate - Disposal/replacement
What's included
This report contains:
