Reason by Joe Lancaster 10.15.2025
It seems like the current market for electric vehicles is entirely the creation of government policy.Sales of electric vehicles (E.V.s) surged in August and September as buyers took advantage of a federal tax credit before it expired. Now, automakers expect to sell fewer E.V.s—and lose money on them—for the rest of the year.
It raises the question, Is the American E.V. market just a creation of government policy?
"General Motors said it is reducing its electric-vehicle manufacturing capacity and booking a $1.6 billion charge on its EV business as demand sinks," reports The Wall Street Journal's Sharon Terlep. "In a regulatory filing, the company said that EV sales are expected to fall with the end of government-funded subsidies and regulatory mandates that fueled EV growth."
This was a monumental shift within just a few years: In 2021, General Motors CEO Mary Barra announced the auto giant would phase out all gas-burning vehicles by 2035.
Under the Biden administration, the Environmental Protection Agency (EPA) adopted emissions rules that would effectively require more than half of all new vehicles produced by 2032 to be electric. The agency rescinded those rules in March, after President Donald Trump reentered office.
In September, Congress ended a Biden-era program providing a $7,500 tax credit for purchasing an electric vehicle. Motorists apparently flocked to dealerships ahead of the program's sunset date, but analysts expected demand to plummet once the credit went away. "The demise of the tax credit will probably bring the party to an end," Neal E. Boudette wrote last month in The New York Times. "Sales of electric models are expected to plummet in the last three months of the year and then remain sluggish for some time."
More:
https://reason.com/2025/10/15/g-m-takes-1-6-billion-loss-after-electric-vehicle-subsidy-goes-away/?nab=0
