AMU
May 22, 2026
AMU: Automakers step back from EVs in favor of hybrids, gas-powered vehicles
Written by Stephanie Ritenbaugh
This piece was first published by Aluminum Market Update (AMU), SMU’s nonferrous sister publication. To learn about AMU, visit their website or sign up for a free trial.
Honda is restructuring its automobile business, discontinuing the launch of three electric vehicle models in North America, and focusing on hybrid models as EV demand has not met forecasts.
It is the latest automaker to scale back EV targets in favor of hybrids and traditional, albeit more efficient, internal combustion engine (ICE) vehicles. General Motors, Ford Motor Co. and Toyota have also retreated from electrification targets as North American consumers have not adopted EVs as quickly as hoped and the Trump administration removed tax incentives for EV purchases. Honda also cited tariffs as a contributing factor.
Toshihiro Mibe, Honda’s president and CEO, said on last week’s earnings call that Honda believes hybrids will “continue to be the key to addressing environmental challenges until around 2030, when EVs will be more popular.”
Ford said in December it would take a $19.5 billion writedown as it scaled back its EV programs.
General Motors also took a significant hit last year when it reassessed its EV position, which included switching its Orion Assembly facility in Michigan from EV to ICE vehicle production. In the second half of 2025, the Detroit automaker recorded $7.6 billion in EV-related charges. In the first quarter of 2026, GM recorded another $1.1 billion in EV-related charges, driven mainly by contract cancellations and supplier commercial claims.
GM said on its Q1 2026 earnings call that its share of US EV sales reached 13%, up from about 10% in December 2025, but the gain came during a broader EV market contraction, with Cox Automotive estimating total US EV sales fell 27% year over year in the first quarter of 2026. GM-brand first-quarter EV sales also declined from the prior year period, though by a less severe 19%, allowing the automaker to gain market share as several competing brands posted steeper declines.
‘Path of least resistence’
Before the second Trump administration, many automakers were banking on an electrified future, supported by federal and state tax incentives for consumers. But many of those tax breaks are gone. Despite soaring gas prices tied to the Iran conflict, the EV market is not seeing a boom in sales. Sure, people are interested in fuel-efficient vehicles, but they’re still opting for hybrids or gas-powered vehicles.
In April, the EV market softened following March’s rebound, according to Cox Automotive, with new EV sales declining amid broader weakness in overall vehicle demand. Used EV sales, however, increased, supported by improving inventory availability and a growing pool of off-lease vehicles, Cox found.
New EV sales tallied 76,889 in April, a drop of 6.2% month over month and 23.1% year over year. Used EV sales clocked in at 42,080, up 3% month over month and up 16.7% year over year.
“For many consumers, the path of least resistance remains improved efficiency within familiar powertrains,” Cox Automotive reported. “April’s results point to an EV market settling into a more normalized pace and one shaped increasingly by affordability, availability and disciplined inventory management across segments.”
Automakers still seeking aluminum
Aluminum demand in light vehicles is expected to increase through 2030, according to CRU Group. But exactly how that will take shape is changing.
In a recent presentation, CRU Senior Analyst David Leah described an automotive market in which manufacturers are becoming more selective with aluminum usage as manufacturing efficiency and vehicle design gain importance.
CRU estimates global aluminum demand in light vehicles will have increased at a 6% compound annual growth rate between 2020 and 2030, with BEV accounting for a larger share of demand growth.
