Carmakers Rethink EV Strategies as UK Defies Global Slowdown
A $65bn (£51bn) reassessment of electric vehicle strategies is underway among global car manufacturers, a trend contrasting sharply with the UK’s continued embrace of EVs despite new taxes and policy adjustments.
Global EV Market Correction
Manufacturers across the US, Europe, and Japan have reported billions in writedowns over the past year as EV demand has fallen short of expectations, coinciding with shifts in US climate policy.
Stellantis recently took a $26bn charge after cancelling several fully electric models and reviving its 5.7-litre engine in the US, resulting in a $6bn drop in its market value. The group had previously aimed for 100% electric passenger car sales in Europe by 2030 and 50% in the US.
Ford disclosed a $19.5bn writedown after cancelling its electric F-150 pick-up, while General Motors reported $7.6bn in write-downs on its EV operations. Honda anticipates $4.5bn in annual EV-related losses, including $1.9bn in impairments, as it re-evaluates its strategy and ends its US EV partnership with GM.
“The EV market is dramatically changing,” said Honda executive vice-president Noriya Kaihara. “So we would need to monitor our sales volume trends and then we might have to take some [further] actions if needed.”
Following changes to US EV credits and emissions measures, industry analysts now predict electric vehicles will account for around five per cent of new US car sales in the coming years, half the current share.
Bernstein analyst Stephen Reitman noted that companies “got caught up in the kind of euphoria” surrounding Tesla’s valuations, “and they didn’t bring the customers with them,” citing concerns about pricing, range, and charging infrastructure.
HSBC autos analyst Michael Tyndall added that “the prospect of further one-off costs…give us reason to remain cautious.”
UK Market Bucking the Trend
The UK market, however, is moving in the opposite direction. More than two million cars were registered in 2025, the highest number since 2019, with battery electric vehicles accounting for 23.4 per cent of sales, according to the Society of Motor Manufacturers and Traders (SMMT). In October 2025, EVs reached a record 25.4 per cent of registrations.
Hybrid models also remain popular ahead of the 2030 ban on new petrol and diesel cars. Rental and fleet operators are increasingly adopting electric and low-emission vehicles, supported by clean air zones and company car tax incentives.
Policy support remains in place, although costs are increasing. From April 2028, electric car drivers will pay a new mileage-based Electric Vehicle Excise Duty (eVED) of 3p per mile, with plug-in hybrid drivers paying 1.5p per mile. A driver covering 10,000 miles annually would pay £300 under the new system.
Treasury minister Dan Tomlinson stated the charge “will ensure all car drivers contribute, but will still maintain critical incentives to switch to an electric vehicle.”
Frequently Asked Questions
What is eVED?
Electric Vehicle Excise Duty is a new mileage-based tax for electric car drivers in the UK, starting in April 2028. It will be 3p per mile.
Why are carmakers writing down EV investments?
Carmakers are writing down investments due to lower-than-expected demand for EVs and shifts in climate policy.
What percentage of new car sales were EVs in the UK in 2025?
Battery electric vehicles accounted for 23.4 per cent of new car sales in the UK in 2025.
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