US EV Tax Credit Expiry Cuts Battery Makers' Plans
SkimNews Take
US producers pulling back EV capacity now risk ceding the fast-growing 36% international demand surge—outside the US and China—to Asian and European competitors already operating at scale there.
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- US federal tax credit for EVs, worth $7,500, expired in September 2025, contributing to a 6% YoY decline in U.S. plug‑in vehicle sales in January 2026.
- Global EV sales in January 2026 fell 6% YoY overall, but excluding the United States and China they rose 36% YoY, with BEVs up 37% and PHEVs up 34%.
- Federal Reserve Bank of Dallas researchers noted that more than 20 U.S. gigafactories announced between 2021‑2022, representing over $50 billion in potential investment, now lack sufficient EV sales to justify the projects.
- Ford has cut back its EV manufacturing plans while still promising an affordable electric pickup truck.
- GM has scaled back its EV output but continues to market electric vehicles as its “North Star” strategy.
- Stationary energy storage demand is rising, with lithium‑ion battery installations expected to stay strong throughout 2026, according to the Fed team.
- LFP batteries are being adopted by U.S. automakers such as Ford and GM to avoid cobalt supply issues and lower costs.
Why it matters: U.S. automakers and battery firms lose billions in projected gigafactory investments as EV sales slump, while stationary‑storage providers and used‑EV sellers benefit from continued lithium‑ion demand; the shift to LFP chemistries may cut material costs, but the overall market contraction threatens jobs linked to the stalled projects.
