For all the sturm und drang of reporting on electric car development this year, the market hit a quarterly record in the United States, and overall sales were basically flat year-over-year. Will 2026 be a disaster? I tend to think it won’t be.
At the very least, 2026 will eventually test a theory I espouse often in The Morning Dump, which is that there are EV buyers who are not being well-served by the market and will appear once there are more affordable vehicles. Some of those vehicles are coming, and in an environment with far fewer incentives, which will give us clearer data.
There’s a way to look at Stellantis as its own mad science experiment, and the data isn’t great. The new chief scientist is saying a lot of the right things, although it doesn’t sound like he’s going to change many of the variables just yet. The opposite of Stellantis might be Honda, which is a company with few brands that carefully works its way into new areas, like sport. Honda’s job is sport.
And, to wrap it all up, GM CEO Mary Barra doesn’t think people will plug in their plug-in hybrids.
Better EVs Are Coming
With the cancellation of the IRA tax credit for EVs, the market somewhat artificially expanded in Q3 and then predictably crashed in Q4. Overall? EV sales were down about 2% from 2024, which isn’t that terrible.
A lot of this decline was led by Tesla, which saw a 7% drop year-over-year, although it still makes up almost half of the EV market. GM was probably the biggest winner, growing 48%. The brand also has a range of vehicles, from the affordable Equinox all the way up to the mega expensive Cellestiq.
What will the market look like once the push-and-pull of the tax credit goes away? EV buyers are extremely loyal, so most EV buyers going back into the market are probably going to buy another one.
My contention has been that more affordable EVs will bring more buyers, but the caveat there is that they have to be from the right brands. The Equinox EV is great if people give it a chance. It’s a Chevy, so that’s a non-starter for some people. It’s also still slightly pricey without the tax credit for what you get.
“2025 unfolded largely as anticipated, with changes to federal EV incentives reshaping the demand patterns that drove record Q3 sales,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive. “Rather than signaling a retreat from electrification, this shift marks a structural transition toward a market increasingly driven by consumer choice. While 2026 will bring challenges, momentum remains grounded in market maturation: expanding model availability across price points, improving charging reliability, and continued advances in battery performance and cost.”
This year, the market is going to get fewer expensive two-row crossovers and more interesting cars. There’s the return of the Chevy Bolt, which starts below $30,000 without the credit. The new Leaf is a little more expensive, but it’s good. The BMW iX3 is going to slot in lower than BMW’s other popular EV offerings, and do so with 400 miles of range.
While I’m desperate to try the Rivian R3 when it launches, I do think the Rivian R2 might be a nice place for people considering a gas-powered or hybrid two-row crossover. At $45,000ish it seems like a good deal.
While I’m optimistic, that optimism is qualified a bit. I don’t think EVs will increase share or even beat 2025. I see a relatively flat year, which is consistent with the market overall. I do see hybrids taking a greater share, but mostly from ICE vehicles and not EVs.
The market is maturing and getting rid of vehicles that exist merely to have an EV option, like the Acura ZDX, and are being replaced by 2nd or 3rd generation EVs that are probably better for more people.
Stellantis Will Probably Stick Together
I should probably start using a different photo of Stellantis CEO Antonio Filosa, mostly because MSN always flags it as being “violent.” It amuses me, so I won’t replace it until I find a new one.
Filosa has a tough job, and one of the challenges is that Stellantis has so many brands. All the brands. Should Stellantis kill some brands? It’s a discussion we’ve had, but it sounds like Filosa isn’t there yet, at least according to this interview in Bloomberg from the Detroit Auto Show, which may or may not have happened yesterday.
“We want to stay together,” he said Wednesday. “It’s a good combination.”
The comments are the latest indication that Stellantis’ leaders plan to largely continue the company’s current construction, formed through the 2021 merger of Fiat Chrysler and France’s PSA Group that created a portfolio of 14 brands.
Stellantis Chairman John Elkann similarly downplayed a potential breakup last February, saying the carmaker’s global reach and sale in major markets is a “big strength.”
Filosa is focused on turning sales around in the United States and fixing the mess the last guy made, so perhaps chucking out brands isn’t the best first step. Viva Lancia!
Honda Will Have A Sporty Version Of Most Of Its Cars
The Tokyo Auto Salon last week, and Honda announced that it was introducing a “SportLine” trim and “TrailLine” trim for basically everything. To clarify, “Sport Line” for the cars and “Trail Line” for the crossovers, although it would be great if Honda swapped those (Trail Line Accord?). This is the middle option in terms of performance, seemingly similar to Audi’s S-Line.
Based on Honda Sports DNA, Honda will expand its lineup of more exciting sport-type models, for both on-road and off-road driving. In addition, as the key pillar of its initiative to further enhance its sport-type model lineup, Honda will introduce HRC-spec models for a wider range of production models by leveraging technologies HRC has amassed through racing activities and feedback from its race drivers.
Honda has always been a company that loves motorsports, which is endearing. What’s more interesting to me is the HRC versions, as mentioned in this Automotive News article:
Honda’s upcoming TrailSport HRC offerings are expected to be priced higher than their standard-trim counterparts, spokesman Yuzo Mori said.
The HRC trim builds upon the TrailSport grades already offered in the U.S. on such nameplates as the Passport and CR-V crossovers, as well as the Ridgeline pickup.
TrailSport HRC offerings will incorporate sporty design cues and technologies amassed through Honda’s racing activities to differentiate them from existing TrailSport trims, Honda said.
What would a TrailSport HRC HR-V even do?
I don’t know, but I’m curious.
Mary Barra Doesn’t Think People Plug In Plug-Ins
I feel like David and I are always getting into arguments with our peers over the concept of vehicles with a gas engine and battery pack. Basically, one side thinks that no one plugs them in, and the other side thinks they do, but a lack of data means none of us know for sure.
The reality is probably somewhere in between and is likely highly dependent on the vehicle. Do I think Wrangler 4Xe owners are plugging in regularly? I doubt it. Are people who buy a Mercedes or BMW plug-in charging at home? Probably, yes.
There is some portion of the pro-EV crowd that’s still angry that their rosy projections for EV adoption turned out to be wrong, and this makes them lash out at hybrids, EREVs, and PHEVs. In fairness to them, the data on PHEV usage is hard to come by, and the fact that automakers are not anxious to share isn’t a good sign.
As reported by InsideEVs, GM CEO Mary Barra isn’t that keen on them either:
“What we also know today with plug-in hybrids is that most people don’t plug them in,” she said. “So that’s why we’re trying to be very thoughtful about what we do from a hybrid and a plug-in hybrid perspective.”
That’s kind of a bummer because vehicles like the Equinox Plus that GM sells in China are interesting. [Ed Note: I wouldn’t be surprised if people didn’t plug in their PHEVs, as America’s PHEVs aren’t good enough. -DT].
What I’m Listening To While Writing TMD
If you are not a younger Millennial or a GenZer or whatever, you may have missed all of the Geese discourse. What you need to know is that it’s a rock band fronted by a guy named Cameron Winter, who is both handsome and talented, which means the Internet loves him. He’s got a sort of Rufus Wainwright thing to him as well that sounds a little different than what’s out there now. “Au Pays du Cocaine” is a good entry into the world of Geese.
The Big Question
Will people plug-in EREVs, which offer much more electric range than current PHEVs? [Ed Note: And to add to that question: If they don’t like plugging in their EREVs for whatever reason, would these customers have been happy with a BEV that has to be plugged in? -DT]
Top photo: BMW, Rivian, GM, depositphotos.com
