The Electric Vehicle Collapse: Wow, That Was Quick!

Manhattan Contrarian ^ | 17 Dec, 2025 | Francis Menton

[MtnClimber]

It was less than three years ago — early 2023 — that I was writing about the then-universal government and industry line that electric vehicles (EVs) would soon be taking over the American car market. In April 2022 the Biden Administration had adopted aggressive vehicle mileage standards intended to be achievable only through rapid transition to EVs. Our “climate leader” states, California and New York, had then adopted regulations in August and September 2022, respectively, mandating a phase-out of sales of combustion vehicles, to culminate in 2035, after which only EVs would be allowed. In a post in January 2023, I linked to the websites of Ford and GM, where they both touted their grand plans for rapid conversion of their companies to the manufacture of mostly or entirely EVs. At that time, Ford was claiming that it would “lead America’s shift to EVs,” and would achieve 50% of its sales in that category by 2030. GM bragged about its “path to an all-electric future” by 2035.

In a post on February 23, 2023, I expressed skepticism.

It seems like all the smart people have made up their minds that the future of automobiles belongs to electric vehicles. . . . So, are electric vehicles about to sweep the country and become the dominant form of transportation? I bet against it.

Here was my reasoning:

This is just a specific instance of the general principle that it is always wise to bet against central planning of the economy. EVs may be a successful niche product for a small number of wealthy consumers, but the idea that they will fully replace gasoline powered cars in short order is the dream of central planners, who think they can implement their dream by coercion. Central planning never works, and won’t work this time either.

The past few weeks have brought a lot of news on the EV front. The short version is that even I would not have predicted how quickly and completely the EV fantasy has collapsed.

The background, of course, is that the second Trump administration took prompt steps on re-entering office to end the huge federal support that had been propping up EV sales. The large tax credit for EV purchases was ended by the One Big Beautiful Bill Act, signed on July 4 and effective after September 30, 2025. On December 3, the administration announced the roll-back of the vehicle mileage standards known as “CAFE,” to levels at which combustion vehicles can comply.

The collapse of EV sales began immediately with the end of the tax credit. On October 31, trade publication Inside EVs reported on the first month’s results after the end of the credit:

Both J.D. Power and S&P Global Mobility estimate that October's EV market share plummeted to around 5% in the U.S., from a record high of over 12% in September. The battery-powered share of sales also dropped significantly on a year-over-year basis, from over 8% in October 2024. The last time EVs made up 5% of U.S. vehicle sales was in early 2022. According to S&P Global Mobility, some 64,000 new electric vehicles were sold in October. That's an epic drop from September, when Americans bought or leased nearly 150,000 EVs as they scrambled to cash in on the expiring $7,500 incentive.

The big automakers were quick to realize that they had to do a pivot. On December 15 the Wall Street Journal reported that Ford would take a massive charge of $19.5 billion to write down its EV investments:

Ford Motor said Monday it expected to take about $19.5 billion in charges, mainly tied to its electric-vehicle business, a massive hit as the automaker retrenches in the face of sinking EV demand. The sum is among the largest impairments taken by a company and marks the U.S. auto industry’s biggest reckoning to date that it can’t realize its electric-vehicle ambitions anytime soon.

The $19.5 billion is in addition to some $13 billion of operating losses that Ford has incurred over the past 3 years trying to compete in the EV business, even with the huge government subsidies:

Ford . . . has lost $13 billion on its EV business since 2023. . . .

Over at GM, the write-down is smaller, but the change of direction is no less stark. From NBC News, October 16:

On Tuesday, General Motors reported it was taking losses totaling $1.6 billion related to planned changes to its EV rollout. The company attributed some of the change to President Donald Trump’s elimination of the $7,500 in EV purchasing incentives enacted by President Joe Biden.

Nor is the collapse of EV sales limited to Ford and GM. From the NBC piece, as to Tesla:

Plunging sales at Tesla — still the U.S. leader in EV sales — are also contributing to the weakening outlook. Its second-quarter sales dropped almost 13%, and CEO Elon Musk has warned of some “rough quarters” ahead for the company.

And a comparable phenomenon is occurring in other countries, although under differing regulatory and policy regimes. From the Wall Street Journal, October 14:

The Rest of the World Is Following America’s Retreat on EVs. Canada, U.K. and European Union back off electric-vehicle targets as economic reality sets in and even China shows cracks. . . . Carmakers argue the EV business model is an unprofitable proposition given still-high battery costs, spotty car-charging networks and dwindling government subsidies. Incentive programs have ended or have been pared back across Europe and in the U.S. and Canada.

Let’s face it, this was always ill-conceived central planning, and it was never going to work. I went back to the links that I had included to the Ford and GM websites in my January 2022 post. Both links remain active, but the excited talk about leading the way to an all-EV future has been scrubbed from both. Instead, if you go there, you will find, in the case of GM, further links to follow if you want to buy yourself an EV; and in the case of Ford, general news about the company. Reality has returned.

[rlmorel]

I wholly agree-and that is wonderful part of the engine that drives a capitalist economy.

And I am not knocking Tesla per se-I am knocking the current state of EV technology.

That second video is painful to watch-I am glad that the guy ended up paying that smaller amount out of pocket, but...they want to force EV’s on everyone (or at least DID want to, before the Trump Administration stepped in!) and while can see this guy doing what he did...imagine EVERYONE driving EVs having to go through that goat rodeo! ARGH!

I admired his persistence.

But we do agree on where there is a hole that needs filling, in a profit-driven economy, someone will find a way to fill that hole. (I don’t think that would extend to upgrading infrastructure and energy generation plants...)

[rlmorel]

But I do have to say-I did not think something like SpaceX was possible “to fill a hole” but...it did. So there are certainly profit-motive related things that are a lot bigger than I would have thought.

[metmom]

Thank you, and you have a Merry Christmas as well.

[marktwain]

Thank you. Wonderful, fact filled post. I enjoyed it.

[Recompennation]

Well son of a bitch joe biden said that Solyndra was a “big f’ing deal” and that cost us 535 million$.
That tingly leg sales pitch is a tell, winner picking remains a free market function.

[from occupied ga]

What you end up with is restricted travel outside your home area. This is by intent. The Democrats never met a tax they didn’t like or a freedom that they didn’t want to destroy.

[from occupied ga]

Battery technology will never get to the energy density of gas/diesel ever.

the amount of energy you can get in a battery depends on the strength of the electron donor and the electron acceptor AND it has to be a reversible reaction. Lithium is about as good an electron donor as you can get, though the much cheaper but heavier sodium could work. Theoretically you could react lithium with fluorine or some compound thereof and get more energy, but then you have a hard time getting the fluorine to give up its electron. It may be possible to get another 10-15% by fiddling with the battery internal structure, but that’s about it. Lion batteries have about 200Whr/kg but gasoline has 9500Whr/kg ie gas carries 47.5 times as much energy as a lithium battery. Battery cars today are just better versions on the battery cars of the late 19th century with the same fundamental limitations.

[GOPJ]

...this was before Tesla was even a thing. I strongly suggested to the group that if EVs were ever going to be a thing on the marketplace, it would only work properly if battery sizes and configurations could be standardized enough so that when one’s battery charge was depleted, the car owner would go to a battery charge location which was setup so that the depleted battery was exchanged with a fully charged one. If the car and the battery exchange station was designed properly, the entire exchange could be done in a matter of minutes.

...

That's a flat out brilliant idea - an 'Elec Station' could swap out batteries in less time than it would take to fill a tank with gas..solving another problem with EV's. I'm impressed. Where's Elon Musk when we need him?

[GOPJ]

Battery cars today are just better versions on the battery cars of the late 19th century with the same fundamental limitations.

All good points especially the last...pure fun. That said, the direction of technology is always smaller, faster, cheaper or from a different direction... Years ago a friend who knew a lot about computers for the time he lived in - explained there was an absolute limit to how much data a floppy could hold...which was true and also not relevant today. Maybe a type of 'transformer' is needed to make energy taken from the air convert it to usable energy for a car. Where is Nikola when we need him?

[Recompennation]

All you say for EV sounds so good.
But,
250 wh per mile at 60 mph is only 20 horse power. This rate of work will sustain/generate a force to overcome rolling resistance, aero drag, gradient load of only 125 pounds force at 60 mph. Definitely not droop proof hill climber ability , more roller coaster friendly give back benifitted.
This modicum of miserly prowess is ok for tuned conditions such as low Cd, flat country vehicles but to draw broad winner /loser ICE /EV conclusions lets the real world work rates that ICE is proven for vanish as if not a factor.
The moral is nothing is free you have to pay to play.
It all comes down to a -— Load the wagon, worry about the mule thingy.
And don’t take this wrong I have nothing against people who have the inclination, time and money to EV , unless it impedes a rate of work thing for the rest of us.

[from occupied ga]

I can’t speak about some totally unknown energy storage system, but part of my background was a thorough grounding in thermodynamics and chemistry. although a long time ago. Lithium is the best electron donor element at -3.05v sodium isn’t quite as good at -2.71. Lithium atomic weight = 7 sodium 23. One way to make EVs less expensive is to substitute much less expensive sodium for lithium, but it is not as good an electron donor, so you need more of it specifically 3.05/2.71 more of it. And also since each atom of sodium is about three times heavier than lithium you need 23/7 more weight. Altogether the sodium component would weigh about 3.7 times as much as the lithium component.

A Tesla model S weighs about 4600 lb. That’s more than my old Ford Econoline long wheelbase van weighed. Of which i think 138 lb is actually lithium and the battery overall is about 1300 lb. Going to sodium would be 511 lb adding about 373 lb to the overall weight of the car bringing it to 4973. Since all other factors being equal increasing the mass of the car increases the energy needed to move the car you’d need 4973/4600=1.081 times as much energy so your range would decrease by about 8%. Not a disaster, but another irritation. I personally think there are so many negatives to EVs I’ll never buy one, but I can see a niche market for a commuter car charge at home at night as long as it’s not your main means of transportation.

[from occupied ga]

Lithium runs $80,000/mt. Sodium about $2,000/mt going by that a Tesla model S has about $5,000 worth of lithium, and the sodium equivalent would have about $463. A considerable saving probably worth the 8% drop in range.

[ROCKLOBSTER]

...engine that powers a generator....Sort of an iteration of the Volt concept.

See: Prius.

[hecticskeptic]

Thanks! As these things go, it was important to get that or some other such concept out there since once the industry heads in a different direction it becomes way too difficult to change course....

[ROCKLOBSTER]

way to go was a small ICE powerplant used as a generator not a motivator.

And that's why some enterprising individual (Republican) should start producing the EV "travel/charging trailer".

A small trunk-height, aerodynamic unit with an appropriate sized generator and some extra room for fuel and luggage or stuff.

Those unsold EVs should be going dirt cheap soon, and if the charging trailer is reasonable, it should be a good deal for a certain market. You probably could sell it (or the patent) to the dealerships to be offered as an accessory.

[ROCKLOBSTER]

Where can I get an atomic transmission?

Virtually all cars already have them. (guaranteed to explode on you eventually)

That's why most otherwise perfectly good looking cars are in the junkyard, waiting to be crushed.

[Dr. Sivana]

See: Prius.

Less complicated. The Prius does use some engine power and energy from braking to charge batteries, but the ICE engine will still move the car. The Mazda approach is simpler. The ice engine is not connected to a drivetrain.

[sport]

It should not have lasted that long. If as a people, we had not been dumbed down so far, it would not have.

[EVO X]

NY has mandated all new School bus purchases be EVs, even if the school district is on the shores of Lake Erie.

https://www.westernjournal.com/new-york-parents-furious-state-mandated-electric-buses-leave-kids-without-heat-frigid-temperatures/

[Pontiac]

But we do agree on where there is a hole that needs filling, in a profit-driven economy, someone will find a way to fill that hole. (I don’t think that would extend to upgrading infrastructure and energy generation plants...)

You may not be aware that there are several smallish companies working on Small Modular Reactor plants to provide electric power. They seem to be very close to building pilot plants.

Trump is supporting their efforts by trying to streamline regulations.

I guess we have to bend the knee to the environmentalist in some way. I don't object to practical solutions to environmental issues.