Can US automakers compete with Chinese EVs while focusing on gas guzzlers?

Subscribe to enjoy similar stories. American automakers want to boost their profits by selling high-margin gas guzzlers today, all while not falling behind on electric-vehicle technology. It will be difficult to do both.

Look at the list of regulatory changes this year, and it is all but impossible for U.S. automakers to not lean into selling big SUVs and trucks. Car manufacturers no longer face penalties for failing to meet federal fuel-economy standards, which are themselves also being revised to become less stringent.

The $7,500 tax credit for buying EVs expired. California no longer has the ability to set its own tailpipe-emissions standards, which were a big driver of EV investment. BloombergNEF estimates that 24% fewer EVs will be sold in the U.S.

in the fourth quarter of 2025 compared with a year earlier. It isn’t just the U.S. The European Union, U.K.

and Canada are all pulling back or rethinking their ambitious EV mandates. General Motors, Ford and Stellantis all have said they would shift their sales mix to more gasoline-powered vehicle models, which generate higher profits. They have laid off thousands of workers at EV factories, some of which have been idled.

After all, matching production to demand is crucial to a sector that does just-in-time manufacturing. Even one quarter of mismatched production can result in billions of dollars of losses, notes Tom Narayan, equity analyst at RBC Capital Markets. EVs have been a money pit for U.S.

automakers. Ford’s EV business for instance racked up operating losses of nearly $13 billion from 2021 to 2024, according to Visible Alpha. Ford said on Tuesday that it expects to take about $19.5 billion in charges that are mainly tied to its EV business.