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The countrys automotive future doesnt look as electric as carmakers had once hoped. But it doesnt mean the EV industry is entirely dead. On Monday, Ford Motor Co. announced that its taking major steps to pull back on its EV-focused business road map. The automaker is scrapping plans to produce a new electric truck, repurposing an EV battery plant to produce storage for the grid, and converting its fully electric F-150 Lightning into a hybrid. Its also planning to expand its gas and hybrid options. The strategy shift away from fully electric vehicles will cost the automaker $19.5 billion. Ford’s stock has been mostly flat since the news was announced, with shares trading down roughly 0.11% as of late Tuesday afternoon. The move may seem like an indictment against electric vehicles at large. It may also seem counterintuitive given that EV sales in the U.S. hit record highs this year. But experts say it illustrates the specific headwinds that EV makers have faced in the U.S. this year, and the challenges of scaling an emerging technology. Tax credits and tariffs Manufacturing vehicles in the U.S. has become increasingly expensive, due in part to higher labor costs, stricter environmental regulations, and supply-chain issues. And a more expensive manufacturing environment means more investment risk. In 2025, it became even more challenging. “A lot of things designed to mitigate that risk have been unwound, says Albert Gore, executive director of the Zero Emissions Transportation Association (ZETA), a coalition advocating for EV advancement. President Trump scrapped federal tax credits for EVs and enacted sweeping (and at times unpredictable) tariffs. He also rolled back fuel economy standards and generally added immense uncertainty to every investment decision in U.S. manufacturing. The cost of doing business in the U.S. has gone up significantly, Gore says. Ford’s announcement even speaks to this, noting that “regulatory changes” have affected its EV plans. Profitability concerns Ford’s situation in this landscape is unique in part because of the specific type of EV it offers. Fords flagship EV was its F-150 Lightning, a full-size pickup that came with a steep price. Though the F-150 Lightning was announced in 2021 with a price of $40,000, once production began, that cost increased. The 2025 F-150 started at around $55,000, though other versions came in even higher; the F-150 Lightning Platinum, for example, starts at around $85,000. Ford had been struggling with its EV profitability for a while; it was losing money on every EV it sold, even at the start of 2024. And though EV demand has been strongGore says that for the past 15 years, EV demand has far exceeded industry estimatesprice is an important component of that demand. In general, the U.S. auto market focuses on SUVs and trucks, which have higher average transaction prices than sedans. That impacts U.S. consumers, who have been facing increasing costs in multiple sectors, including groceries and electricity. It also makes it more challenging for U.S. companies to compete internationally. In 1960, about 52% of global automotive sales were U.S.-made vehicles. Today, its around 11%, and falling. Some of that is just because the rest of the world is growing its manufacturing, Gore notes. But some of it is the way that cars made here for this market have changed in a way that places them somewhat out of step with the rest of the world. Ford isnt totally giving up on EVs, though. The automakers changing strategy is specifically about no longer producing select larger electric vehicles where the business case has eroded due to lower-than-expected demand, high costs, and regulatory changes, the company has said. So while it has scrapped the F-150 Lightning, it still has plans to make smaller, affordable models, as well as expand its hybrid and extended-range EVs. EVs need scaleand China is dominating In order for EVs to be profitable, production needs to reach a certain scale. But these factorsvehicle type, as well as shifting trade and tax policieshinder automakers abilities to do so. And EVs are still somewhat nascent, at least compared to internal combustion vehicles. Manufacturing new power train vehicles is hard, Gore says, and particularly takes economies of scale that have been achieved over a century with internal combustion vehicles, but are just now starting to be achieved in the U.S. with electric vehicles, within the last seven years or so. About 1 out of every 4 vehicles sold around the world in 2025 will be an EV. But right now the market is dominated by China, which accounts for about 70% of global EV production. China has come to own the global EV industry in part because of its technological advancements, specifically around battery innovationand its ability to make ultra-affordable EVs. Some Chinese EVs start as low as $10,000; Ford CEO Jim Farley himself test-drove (and loved) a Xiaomi SU7, which retails for around $30,000. Chinas EV success reveals just how far behind the U.S. is when it comes to EV advancements. And though Chinas dominance isnt quite affecting the U.S. car marketformer President Biden imposed 100% tariffs on Chinese EVs as a way to protect American auto manufacturingit is having global impacts. The European Union is abandoning a ban on combustion vehicles after automaker pressure, Bloomberg reported on Tuesday, giving more time for automakers to go electric. The move comes as European carmakers face increased competition from China, as well as steep tariffs from the U.S. EV consumer sentiment is hitbut theres hope Another factor playing into the complicated EV landscape, particularly in the U.S., is the changing consumer sentiment around the technology. EV sales did hit a record high in the U.S. this year, but that was likely influenced by consumers racing to qualify for th federal tax credits before they expired at the end of September. A recent study by CDK Global found that EV interest among gas car drivers dropped 20%. When asked if they will buy an EV in the future, 31% of gas drivers said yes in 2024, compared with 11% in 2025. Interest even dropped among hybrid drivers, 54% of whom said in 2024 they would switch to an EV in the future, compared with 35% in 2025. Gore wasnt involved in that survey, but he points out that the conversation around EVs has become increasingly politicized. The rhetoric is, by its nature, extremely negative, and it’s loud, he says. That can affect EV adoption, particularly for a technology that needs to vie for mainstream appeal. Early adopters drove EVs initial surging growth, but then the industry has had to figure out how to attract everyone else who isnt as invested in being a front-runner. But Gore isnt concerned about the long-term appeal of EVs. “That’s something that has been absolutely consistent, that regardless of what anyones heard, the experience of driving an EV is overwhelmingly positive, and the same with owning one, he says. Though EV sales dipped 1% in North America this year compared with 2024, theyre still up 24% globally. Despite the challenges the EV industry faces in the U.S. and abroad, experts like Gore are positive that theres still plenty of market to reachand that continued advancement, particularly in battery technology, means electric vehicles make sense for the future. The U.S. EV industry has seen ups and downs before. And though it might be the right current move, economically, for automakers to pull back on EV plans, they risk falling behind if and when the market swings back. “For people who don’t [scratch their EV plans], I think the reward will be a much bigger market than a lot of companies,” Gore says.
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E-Commerce
Automakers Hyundai and Kia must offer free repairs to millions of models under a settlement announced Tuesday by Minnesota’s attorney general, who led an effort by dozens of states that argued the vehicles weren’t equipped with proper anti-theft technology, leaving them vulnerable to theft. Under the nationwide settlement, the companies will offer a free repair to all eligible vehicles at a cost that could top $500 million, Minnesota Attorney General Keith Ellison said. Hyundai and Kia must also outfit all future vehicles sold in the U.S. with a key piece of technology called an engine immobilizer and pay up to $4.5 million of restitution to people whose vehicles were damaged by thieves. The settlement was reached by 35 states, including California, New Jersey, New York, and Pennsylvania. The vehicles eligible for fixes date as far back as 2011 and as recently as 2022. About 9 million eligible vehicles were sold nationwide. Thefts of Hyundai and Kia vehicles soared in part because beginning in 2021, videos posted to TikTok and other social media demonstrated how someone could steal a car with just a screwdriver and a USB cable. Minneapolis reported an 836% increase in Hyundai and Kia thefts from 2021 to 2022. Ellison announced an investigation into the automakers in early 2023. Ellison said the two companies installed engine immobilizers on cars sold in Mexico and Canada, but not widely in the U.S., leading to car thefts, crimes and crashes that injured and even killed people, including teenagers. This crisis that we’re talking about today started in a boardroom, traveled through the Internet and ended up in tragic results when somebody stole those cars, Ellison said at a news conference. He was joined by Twin Cities officials, a woman whose mother was killed when a stolen Kia crashed into her parents vehicle and a man whose car was stolen nine times as recently as Monday night, and including seven times after a previous software fix. Under the settlement, Hyundai and Kia will install a zinc sleeve to stop would-be thieves from cracking open a vehicle’s ignition cylinder and starting the car. Eligible customers will have one year from the date of the companies’ notice to get the repair at an authorized dealership. The repairs are expected to be available from early 2026 through early 2027. In a statement, Kia said the agreement is the latest step it has taken to help its customers and prevent thefts. Kia is eager to continue working with law enforcement officers and officials at federal, state, and local levels to combat criminal car theft, and the role social media has played in encouraging it, and we remain fully committed to upholding vehicle security, the company said. The Associated Press emailed Hyundai for comment. Jack Dura, Associated Press
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E-Commerce
The U.S. stock market is drifting lower on Tuesday following mixed data on the economys strength, which did little to clear uncertainty about where interest rates may be heading. The S&P 500 fell 0.4% in afternoon trading and remains a bit below its all-time high set last week. The Dow Jones Industrial Average was down 271 points, or 0.6%, as of 1:53 p.m. Eastern time, and the Nasdaq composite was mostly unchanged. Treasury yields eased a bit, following a larger initial drop, after one report said the U.S. unemployment rate was at its worst level last month since 2021, but employers also added more jobs than economists expected. A separate report, meanwhile, said an underlying measure of strength for revenue at U.S. retailers grew more in October than economists expected. The mixed data initially sent Treasury yields lower in the bond market. The knee-jerk reaction seemed to be that the reports could encourage the Federal Reserve to see the slowing job market as the biggest threat to the economy, rather than high inflation, and cut interest rates further in 2026. But yields quickly recovered and then drifted up and down. What the Fed does with interest rates is a top driver for Wall Street because lower rates can give a boost to the economy and to prices for investments, even if they also may worsen inflation. A report coming on Thursday will show how bad inflation was last month, and economists expect it to show prices for U.S. consumers continue to rise faster than anyone would like. A report released on Tuesday after U.S. stocks began trading suggested price pressures are rising sharply, with average selling prices for businesses climbing at one of the fastest rates since the middle of 2022. The preliminary data from S&P Global also said growth for overall business activity slowed to its weakest level since June. Higher prices are again being widely blamed on tariffs, with an initial impact on manufacturing now increasingly spilling over to services to broaden the affordability problem, according to Chris Williamson, chief business economist at S&P Global Market Intelligence. In the bond market, the yield on the 10-year Treasury fell to 4.16% from 4.18% late Monday. The two-year Treasury yield, which more closely tracks expectations for the Fed, eased to 3.48% from 3.51%. Helping to keep the overall market in check were continued swings for stocks that have been caught up in the frenzy around artificial-intelligence technology. Oracle rose 2.4%, and Broadcom rose 0.1%. They both had dropped to sharp losses last week, even though both reported stronger profits for the latest quarter than analysts expected. But CoreWeave, which rents out access to top-of-the-line AI chips, fell 4.9%. Questions remain about whether all the spending underway on AI technology will produce the kind of profits and productivity that will make it worth the expense. Elsewhere on Wall Street, Pfizer fell 5.2% after giving a forecast for profit in 2026 that was below what some analysts expected. Its forecast for revenue next year, of between $59.5 billion and $62.5 billion, was close to analysts expectations. Kraft Heinz fell 0.1% after saying Steve Cahillane, who was most recently CEO of Kellanova, will join as CEO on Jan. 1. After Kraft Heinz splits into two companies, which is expected to happen in the second half of 2026, Cahillane will lead the one that will hold onto the Heinz, Philadelphia and Kraft Mac & Cheese brands. In stock markets abroad, indexes fell across much of Europe and Asia. Japans Nikkei 225 dropped 1.6% ahead of an expected hike to interest rates by the Bank of Japan later this week. Other markets in Asia also had some of the world’s sharper swings. South Koreas Kospi dropped 2.2%, while indexes fell 1.5% in Hong Kong and 1.1% in Shanghai. By Stan Choe, AP business writer AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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