By Eve Nowell 
The auto industry is now paying the price for its own overconfidence. After years of loudly predicting an electric future that never fully arrived, global automakers have written off roughly $55 billion after badly misjudging electric vehicle demand. This is not a market hiccup. It is a reckoning.
Scaling back electric vehicle investments has proven brutally expensive. Projects were rushed, factories were retooled, and lineups were rewritten based on assumptions that never held up in real showrooms. Now those assumptions are collapsing in public, on balance sheets, and in stock prices.
Stellantis delivered the clearest example yet. The company disclosed $26.2 billion in write-downs during the second half of 2025 after overestimating the pace of the energy transition. The financial hit wiped out more than 20% of its market value and sent shares to their lowest level in six years. This was not a rounding error. It was a strategic failure.
The fallout was immediate. Stellantis canceled the Ram 1500 REV electric pickup, dropped the Dodge Charger Daytona R/T EV, shelved the Charger Daytona SRT Banshee electric muscle car, and eliminated all plug-in hybrid Jeep and Chrysler models for the 2026 model year. These were not fringe experiments. They were cornerstone products built on aggressive projections that proved disconnected from reality.
Other automakers followed the same path into the same wall. Ford disclosed a $19.5 billion write-down tied to its EV operations, canceled electric models including the F-150 Lightning, and shifted fresh investment back toward gasoline and hybrid vehicles. General Motors announced a $6 billion charge related to reduced EV spending, including billions in supplier contract cancellations, on top of an earlier $1.6 billion write-down. Volkswagen Group absorbed a $6 billion hit tied to Porsche’s EV retreat, delaying or canceling electric models in favor of hybrids and combustion engines.
These losses did not happen in a vacuum. The expiration of the federal EV tax credit in late 2025, the rollback of fuel economy standards, and the cancellation of the EU’s 2035 EV mandate all exposed how fragile the industry’s forecasts really were. Automakers bet on regulation-driven demand that vanished faster than their product plans could adapt.
Meanwhile, competitors from China quietly gained ground. Chinese brands nearly doubled their European market share in one year and surged to almost 20% of new vehicle sales in Mexico, exploiting the chaos legacy automakers created for themselves.
This is what happens when strategy follows political winds and marketing optimism instead of consumers. The industry didn’t just misread demand. It ignored warning signs. Now the bill is due, and the retreat is no longer optional.
John Lloyd