Legacy Carmakers Pump the Brakes on EVs as Internal Combustion Engines Get a Second Wind
The internal combustion engine was supposed to be riding into the sunset — instead, it’s getting a Hollywood comeback. With US EV demand stalling, tariff costs rising, and Chinese competition heating up, legacy automakers are refueling their faith in gas and hybrid models. The pivot comes as President Trump scraps EV tax credits and eases emissions rules, slowing the very transition they once raced to lead.
- FordF CEO Jim Farley described the shift as “a multibillion-dollar opportunity,” while General MotorsGM commits $900M to develop cleaner V8 engines for trucks and SUVs.
- Analysts at AlixPartners slashed their 2026 US EV forecast to just 7% of sales, with gas vehicles commanding 68% and hybrids capturing 22%.
The long game gamble: Analysts warn this renewed love affair with petrol carries long-term risks, as Chinese automakers now dominate global EV production — accounting for roughly two-thirds of worldwide sales. However, companies like ToyotaTM and BMWBMWYY look vindicated in their “multi-pathway” approach — with Toyota’s hybrid-first strategy fueling record sales of 7.4M units through August. Still, AlixPartners’ Mark Wakefield cautions that legacy brands could “wake up as very regional companies, relevant in the US only” — severely limiting their global potential.