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US Auto Industry Faces Electric Vehicle Slowdown Amid Policy, Supply Struggles

Automotive

Business Honor
01 December, 2025

EV sales drop as tax credit ends; automakers adjust strategies, facing layoffs and supply issues.

The US automotive sector is facing challenges that risk the development of electric vehicles (EV). Recent law changes, tariffs, and supply chain issues have caused automakers to rethink their strategy, while some moving to hybrids and gasoline powered cars. The sudden end of the federal $7,500 tax credit for EV sales had a major impact. According to the report, EV sales dropped nearly 49% the previous month when the subsidy ended. Cox Automotive Director, Stephanie Valdez Streaty stated that without government help, the timeline for general EV adoption may be delayed.

Automakers are responding carefully. General Motors (NYSE:GM) and Rivian recently announced losses as EV sales slowed. Production has been impacted as well by disruptions to the supply chain like a temporary semiconductor shortage and a fire at a Ford aluminum supplier. Some businesses have even removed certain EV models from the US market.

Tesla, has shown resilience by experiencing a smaller sales decline and producing low cost versions of models in order to maintain momentum. This EV slowdown is a major challenge to the US auto industry's shift to cleaner transportation. Layoffs and model withdrawals suggests the difficulties, but businesses are adapting new ways to deal with the rising issues. Experts expect that advancements in EV infrastructure will set a comeback by the 2030s. Cities may see independent, EV’s connected to smart grids, which transforms transportation and energy use.