The rollback of electric vehicle (EV) policies in the U.S. is reverberating globally. Major nations including Canada, the European Union (EU), and the UK are either flexibly adjusting their EV adoption targets or effectively scaling them back. Meanwhile, China and Japan are responding to this new reality in their own distinct ways.
The Wall Street Journal (WSJ) reported on Tuesday that Canadian Prime Minister Mark Carney has suspended the mandatory EV sales policy slated for next year. Carney stated that the restructuring of Canada’s automotive industry is underway, adding that the suspension of EV mandates in 2026 is part of this process. The government plans to reassess existing policies and explore ways to promote more affordable EVs.
Bowing to pressure from the automotive industry, the EU has decided to expedite its review of the previous commitment to ban new internal combustion engine vehicle sales by 2035. Volkswagen, grappling with the enormous costs of transitioning to electric vehicles, announced plans to cut 35,000 jobs, sending shockwaves through European political circles. In response, the EU initiated strategic dialogues with the automotive sector, signaling a more flexible approach to emissions regulations.
In the U.S., General Motors reported a staggering 1.6 billion USD loss due to sluggish EV sales. The company has been aggressively lobbying for regulatory relief on EVs this year and has cautioned about potential further losses as it adjusts its production capacity.
Automakers argue that consumer adoption of EVs is lagging behind expectations. They contend that government incentives aimed at encouraging EV purchases, such as subsidies, are not translating into improved profitability for companies.
Nissan Americas Chairman Christian Meunier offered a sobering perspective that EVs can be a good solution for the future, but it cannot force them on consumers. Now is the time for realism.
While China remains the world’s largest EV market, fierce competition is eroding profitability. Global management consulting firm AlixPartners predicts that most of the 118 EV brands in China will not survive beyond the next five years.
Japan is charting a different course, avoiding EV turmoil with a strategy centered on hybrid leadership. Toyota has long focused on gas-electric hybrid vehicles instead of pure EVs. Former Chairman Akio Toyoda questioned the feasibility of a global pivot to EVs, describing himself as part of a silent majority skeptical of the rapid transition.
The WSJ noted, however, that the reality overseas is not as dramatic as in the U.S. In America, EV sales have fallen short of expectations, and significant federal tax benefits and fuel economy regulations have been dismantled. The 7,500 USD tax credit for EV buyers has vanished, along with penalties for failing to meet fuel economy standards.
General Motors and the U.S. automotive industry, which had set ambitious goals to establish all-EV lineups by 2035, successfully lobbied to strip California of its authority to set its own emissions standards this year. This move has effectively stalled the primary driver of U.S. electric vehicle investment.
According to the WSJ, AlixPartners now projects that the share of EV sales in the U.S. will only reach 18% by 2030, a stark halving of estimates made just two years ago.
