Electric cars are not Beanie Babies or Labubus or whatever, although the hype cycle around them has felt as extreme at times. It turns out that EVs are a great solution for a lot of people, but without incentives, the market looks very different.
The topline number is that, based on the first half of the month, it looks like October EV sales are going to plummet by 43% to make up way less than 10% of the total market. That’s bad for EVs. That’s real bad. And now one analyst who will be familiar to Morning Dump readers says the quiet part out loud: At that market share, why even build them?
The most obvious answer is to be Tesla, which still makes a (much smaller) profit off of electric cars. It helps that its buyers are less price sensitive. Is the company about to lose its CEO?
Could this have been avoided if the market here had more affordable cars? Possibly; that seems to be happening in Europe. China has the cheapest EVs, although perhaps they have too many.
EV Sales Likely To Drop By More Than 40% In October
Somewhat predictably, with the loss of federal incentives, EV sales in the United States were destined to fall. It won’t be until later in November that we’ll have full registration data, but preliminary numbers from J.D. Power reportedly show a year-over-year drop of 43% is possible. More dramatically, EV share of the market is expected to plummet from nearly 13% of all new cars sold in September to maybe 5% this month.
With incentives for building battery factories, selling EVs, and even building chargers going away, there’s already less support for electrification. At the same time, the White House successfully rolled back CAFE regulation penalties and fought to remove the California waiver [Ed Note: The CARB thing is still in limbo. I’d be amazed if somehow what California says no longer matters. And more importantly, it’s hard to make decisions as an automaker with things like this teetering. -DT], meaning there’s not much of a reason to move in that direction from a regulatory standpoint.
At least, I think that’s what Karl Brauer is saying in this Automotive News article:
“It’s tough to know what the long-term market share of new EVs will be after only a few weeks without the incentive,” said Karl Brauer, executive analyst at iSeeCars.
The loss of the tax credit, along with relaxed federal emissions rules, has pushed automakers to focus on selling profitable gasoline and hybrid models and away from money-losing EVs, Brauer said.
“The stable percentage of new EV sales after everything settles down is no higher than 6 percent and likely 4 to 5 percent,” Brauer said. “Automakers aren’t going to have any incentive to build them, so they’ll only make them if they can earn at least a little profit.”
While Tesla’s share is declining, it still has a large chunk of that small piece of the total pie. When it comes to the next generation of EVs there’s only a couple of ways I think this can go, and it doesn’t involve every company producing a lot of $40-50k EVs.
- Someone will sell cheaper cars, though the volumes are maybe not there (Chevy Bolt, Tesla Model 3, Nissan Leaf, Whatever Ford Is Doing). This lack of volume will make cheap, new EVs harder to come by.
- Expensive luxury EVs for people who want them will continue to be the norm.
This is likely to squeeze out a lot of the market, which is kind of a bummer. Tesla’s high loyalty rate is a sign that once people drive EVs they tend to like them. Adoption is predicted to fall for a while, making that curve a lot slower.
In this new environment, Tesla seems poised to continue to do alright, and maybe GM will. Of course, Tesla has other issues.
Is Musk Going To Lose His $1 Trillion Pay Package?
Source: Tesla
Obviously, Tesla CEO Elon Musk would like for the passage of his $1 trillion pay package to go forward, if only so he can be in control of the robots.
Voting to approve the package is open and will continue for another week. Historically, Musk wins these votes easily, but there’s been some opposition to this current package from various sources, as CNBC reports:
Several groups have publicly opposed the pay package in recent days, with Institutional Shareholder Services, the biggest proxy advisory firm in the world, recommending against its “astronomical” value.
Last week, a group of unions and corporate watchdogs launched the Take Back Tesla website to oppose the pay package, noting Musk’s embracing of right-wing political movements and amplifying of conspiracy theories that have damaged the brand.
Musk lashed out at top proxy advisors ISS and Glass Lewis, calling them “corporate terrorists” on an earnings call with analysts last week.
I don’t know what will happen, I just know it’s interesting to see how hard Tesla is trying to whip votes in its favor. Does the company sense weakness?
Europe’s Car Sales Boosted By EVs, Hybrids
Overall, car registrations were up 0.9% year-over-year in September. This was led by a big jump in EV sales, with pure BEVs representing a full 16.1% of the market.
As Europe’s car industry association notes, though, hybrids are the even bigger winner:
Up until September 2025, battery-electric cars accounted for 16.1% of the EU market share, an increase from the low baseline of 13.1% in September 2024 YTD. Hybrid-electric car registrations continue to surge, capturing 34.7% of the market, remaining the preferred choice among EU consumers. Meanwhile, the combined market share of petrol and diesel cars fell to 37%, down from 46.8% over the same period in 2024.
The difference between our market and Europe’s market is that Europe has a lot more small, relatively lower price models. If only…
China Removes Electric Cars From Five-Year Plan
Electric cars have been a big part of previous “five-year plans” from China’s government, which has allowed billions of dollars in subsidies at all levels to flow to EV automakers.
No more, says Reuters:
China has omitted electric vehicles from its list of strategic industries in its five-year development plan for 2026-2030, marking their first exclusion in more than a decade, as the sector grapples with oversupply challenges.
That makes sense. While EVs are still extremely popular in China, the massive oversupply of vehicles has resulted in sales trickery and fraud, meaning that the industry doesn’t really need the support.
What I’m Listening To While Writing TMD
Anyone else stay up to watch the game last night? I went to bed at like 3 am, so it’s a late Morning Dump today. In honor of Freeman’s shot, here’s “Centerfield” by John Fogerty.
The Big Question
Which European or Chinese EV would you like to see for sale here (geopolitics aside)?
Top Photo: Ford
Not only is “the CARB thing still in limbo” …… if CARB’s Advanced Clean Cars II waiver is struck down we revert back to Advanced Clean Cars I – which requires 22% of vehicles sold in CARB states (40% of US sales) to be ZEVs from 2026 on.
Then there is the fact that CAFE is still a thing. Companies still have to submit data and calculate their requirements and keep track of credits and debits. TODAY there is no penalty for going negative on that credit balance but switch can be flipped back on just as easily as it was turned off.
The only real reason EVs are more expensive than ICE cars is batteries. Almost all the manufacturing efficiencies for gas cars have already been squeezed. Since batteries keep both getting cheaper and more efficient at some point EVs will become cheaper than gas cars.
If the US automakers don’t prepare for that day a lot of other automakers will, it won’t be pretty when that happens.
You are correct, however we’re still in the EVs need to be weird and different because ‘new technology’ stage. All the weird and different for the sake of weird and different costs a lot of money. Giant screens, massive wheel/tire diameters, and electronic everything (motor controlled air vents, electronic glovebox latches, motorized charging doors for examples) adds up. It’s faux luxury in place of simplicity.
On batteries specifically, the cost is due to the energy density per pound, which drives cost not just for the batteries themselves, but also for the extra structural metal needed to support that mass.
As energy density per pound drops to approaching gasoline, weight will massively decrease. I don’t expect us to get there in the next 5 years, but probably in 10.
“Electric cars are not Beanie Babies or Labubus or whatever“
True. But US marketing and consumer habits can never get out of this gear. Maybe it’s because hustle culture is at a desperate high or we buy stuff as a massive form of distraction.
Automakers want, even need, EVs to be like Labubus.
You can’t determine anything about the “natural” demand for EVs based on this month’s sales. Probably not November or December’s sales either. The expiration of the tax credit pulled forward a lot of EV sales to meet the deadline. A large percent of the people interested in buying an EV in the near future and had the means to do it pulled the trigger by the deadline, so there will be an EV sales hangover for a few months as a result. Q1 of 2026 should start to show what the natural market share will look like.
I want the Chinese market Nissan Frontier with it’s EREV platform
I don’t see the EV market decreasing globally. Maybe it’ll increase more slowly outside of the US, but a decrease just doesn’t make sense. There are a lot of countries where fuel costs are very high and EVs become a very attractive option, especially considering the rest of the world isn’t so infatuated with gigantic SUVs and trucks. I just got back from South America, and was shocked to see how popular EVs were… but the economics made sense. A small EV from BYD is economical when your fuel cost is super high and electricity is based largely on renewables. That’s not even considering the margin and complexity advantage of EVs. Existing automakers will want to get there…they just need the other economics to work out.
With cost of about everything about to go up more in Canada, I could see us returning to our long standing preference for small cars. If Carney opens the market for Chinese automakers to bring EVs over, I think they’ll do really well here. I saw a bunch of the BYD Dolphins on the road in Uruguay, and they look great! I’d get one.
It’ll collapse in the US, but that’s to be expected now. It’ll be the other 81% of the car market globally that pushes EV demand.
Please just let me buy a Renault 5.
Me too. or Moi aussi
“Which European or Chinese EV would you like to see for sale here (geopolitics aside)?
”
Any that their maker would like to support over here and thinks they can make a business case for. The problem over here is there is not enough choice, either in format, price, or capability. Let the people of the “free” (/s) market decide how much they want to spend for whatever is available. Some surpises may well be seen.
Price will determine EV future here. And small, simple, attractive designs like the Green Renault above or the new Prius. But 25k will have to be the base level price (to match similar sized base ICE vehicles. And the manufacturers must actually manufacture the EV’s and Hybrid versions in quantities that will meet demand to prevent dealer gouging and mark ups. Ford Maverick and the new Toyota Prius come to mind. And not just the loaded upper trim levels either, plenty of base ones please.
I always thought the radar would be a good fit for the us market obviously other thought so too since they are working on making similar things. Still wouldn’t be bad to have as an option. Xiaomi line would be a big hit. I love going in their stores would be nice to have them in the us just in general. Something like the Mona M03 would be nice to have around and something like the geely panda or something small panda car for urban transport.
““The stable percentage of new EV sales after everything settles down is no higher than 6 percent and likely 4 to 5 percent,” Brauer said”
I predict that Brauer will be proven wrong in the long run. I predict the percentage of EV sales will be much higher in the long run as the tech continues to get better and cheaper.
“Is Musk Going To Lose His $1 Trillion Pay Package?”
If he doesn’t, he should. His actions over the past year or so is the single biggest reason Tesla stopped being a growth story.
Musk has gone from being Tesla’s biggest asset to Tesla’s biggest liability.
“Which European or Chinese EV would you like to see for sale here (geopolitics aside)?”
I’d like the see BYD cars being sold in Canada.
The emissions regulations going away is a major disappointment to me. Having spent some time in a developing nation, the American EPA was never something I thought about, let alone was thankful for. That was before going without it. Having your entire apartment filled with uncontrolled diesel-exhaust fumes every time a bus or truck drives by (every 10–15 mins, 24 hours/day), quickly made me thankful for how clean the air is here in the US. The fact that NYC, LA, and Chicago aren’t covered in smog anymore is a modern marvel; and the fact that a large segment of the population wants to return to that is ignorant at best, and is more likely intentionally malicious.
My only hope is that most automakers realize that the rollback of environmental regulations is only temporary and that the regs are very likely to be reinstated in 3 or 7 years.
Big Question: I like the look of the Renault 5 and the Honda e.
I think part of the reason for the rollback of pollution standards is similar to the increase support of anti-vax positions. A large portion of the population has grown up without experiencing the horrible air pollution of the past, and don’t appreciate how much regulation had to go into getting the relatively clean air we have now. Same with vaccines, 100 years ago, every single parent knew someone who lost one or more children to childhood diseases, and so were very eager to get their kids vaccinated to protect them. Now we have generations who have grown up with the protection of vaccinations, completely oblivious to how deadly and contagious childhood diseases are.
I was thinking something similar, but it just seems like it was too recent for people to forget. It wasn’t in my lifetime we were dealing with smog, but it was within my parents’ lifetime, and it absolutely was around during the lifetime of every dinosaur in political power. I suppose you’re right, though.
We still deal with smog today. I can see the air above my city far to many days per year.
However, that smog is also mostly concentrated in urban areas while the Republican base is rural.
Salt Lake City?
Yes, Salt Lake City has horrible air quality. (My wife turned down a job after visiting).
It is also an urban area and Salt Lake County voted for Harris by a 10% margin in the 2024 election.
Same kind of mentality as that Ocean Gate submarine CEO: “why do we have all these regulations, there hasn’t been a submarine accident in years!”
Car makers will definitely have incentive to continue to make EVs because EVs are incredibly simple vehicles.
An electric motor is far easier and cheaper to manufacture than an ICE motor. And while batteries are still expensive, as the chemistries improve and processes develop, an EV will take a fraction of the man power to build versus an ICE vehicle.
Plus there is a lot of freedom in terms of packaging and design. And on top of all that, EVs are nearing parity to ICE in terms of costs because battery prices are still dropping – it is only bound to improve from there.
I would agree with you that yes they are cheaper but there is something to be said about less electrical. I don’t trust car manufacturers to make proper software for an ice car let alone electric. Not yet at least.
But that has little to do with incentive for carmakers to build EVs.
The article was claiming there is little incentive for them to continue EV development, but I totally disagree with that.
Also, let’s be clear here – when you peel back all the Unreal Engine and Android Automotive hoopla, the underlying electronics are (mostly) fine. We’ve had industrial automation and commercial-grade electric motors for literally decades. Its all a well understood technology. The problems that usually come up are on the glitzy UI and fancy features.
My problem is from a control perspective. I don’t like how they have full control over everything. I work in IT and the idea of a car being a computer is scary to me. Mechanicals are easier to diagnose than software bugs where you have zero access. All I see is this leading to worse bullshit.
I have mixed feelings about this. As an engineer, I know I need data. More sensors the better – better combustion, better fuel economy, better at extreme conditions, more repeatable. But more sensors means more wiring, more sensors that can go bad, etc.
Usually these things run in cycles – in the 80s is when cars started getting sensors. At first they would glitch-out, they were expensive, they were hard to work with. Then as the industry learned how to work with them, it actually make troubleshooting stuff easier, as long as you had a laptop and OBD scanner. Then OBD2 came out in the mid-90s and a bunch of more sensors were stuck into cars. Same thing happened with them being a pain in the butt to deal with at first, and then things smoothed out. Since the 2020s carmakers are adding a whole ton of even more sensors to cars, so the cycle is repeating. LOTS of glitches in cars these days, but I assume things will smooth out eventually.
See I work in software development and I have seen nothing but software getting worse and more buggy in the modern times. Companies are far far more concerned with being first and making short term money than they are with having bug free/secure software. I have zero desire to own a car with that because I do not trust software. It seems like releasing a bad product doesn’t hurt companies like it used to due to rampant consumerism. You are more optimistic than I am about it.
Answer to the big question is, of course, that we need a network of Changli dealers. I’ve been looking for an excuse to add a battery powered chainsaw to the tool collection.
Elon’s insistence that he needs “control” to produce an army of robots is scary.
For the benefit of mankind, with that ‘control’ he’ll get them to respond to any command by shouting out “Pedo” whilst saluting.
What’s scary is Tesla shareholders throwing obscene amounts of money at him because they just LOVE that idea.
I’m just assuming that people have far too much of their wealth tied up in Tesla stock, and are terrified that the value will crater if Elon doesn’t stay in control. It’s the only remotely logical reason to continue to support him.
Yes either it’s his usual bluster that results in disappointment, or he succeeds. Either outcome is bad.
Chevy Equinox PHEV that is available for China, it should be sold here to compete with the Rav4 Prime. If they are going to bring battery packs from China for the first couple of years for the Bolt EUV, whats limiting to do the same for the Equinox? Bring the packs, produce locally the rest of the vehicle.
Oh this was one I forgot about since the original reporting a while back. Yeah the “Equinox Plus”. It’d be great for the US
$1 Trillion could fund a thousand Toecutters $1 Billion Each to produce affordable, reliable, repairable, non- spying, driver-centric, fun EV cars that would move the market away from dystopia.
So, start with a clean Slate?
Kinda, sorta. I like small trucks, though when I needed a truck, I ended up buying(used) full size for the same price point and much more capability. Mine weren’t sporty, they were work trucks. That Slate, idk, strikes me as if Yugo made a Ranger.
I don’t think the Slate will cause Ford to lose any F-150 sales. Maverick sales, maybe.
Perhaps a topical gentleman to speak of, on the topic of environment:
Ronald Reagan was a key person to pursue environmental studies leading to improvements combating acid rain, and signed bilateral agreements with Canadian prime minister Brian Mulroney to commit to restore and protect the waters of the great lakes (GLWQA) amongst other environmental legislations.
Acid rain was an, in a word, unpleasant condition in North America during the 70s/80s/90s until things started to improve. And there remain, still, dead lakes in North America.
Careful praising Reagan, buddy. You’ll get your trade talks cancelled.
Perhaps it’ll upset you further to hear of the timeline of those days:
The next person to tighten up emissions, and worked closely their with nearest trade allies to drop tariffs, was Republican George HW Bush. The same man who signed the North American Free Trade Agreement with Canadian Prime Minister Brian Mulroney & Mexican President Carlos Salinas de Gortari, and signed off on substantial Clean Air Act amendments to address a lot of the findings from the Reagan-era studies.
Conservation used to be a thing with Conservatives before the paranoia about former Soviets changing the game with “Environmentalism.”
As near as I can tell from what research I’ve done, there was a lot of overlap but it’s more due to the fact that the Soviet Union put a lot of effort into research on environmental impacts. It is valid that they favored an agrarian society and did a lot to crush capitalism, fueling the paranoia even more.
I often wonder if we had focused efforts on finding compromise between conservative conservationists and environmentalists if we wouldn’t be so much better off today but instead both sides decided that they couldn’t give way to the other and here we are.
Yeah the whole red scare bullshit really came back to haunt us with modern republicans.
Reagan did do good but I think his trickle down economics pretty much erase all good will over how damaging and awful they have been to the country. The only thing I can think of that has been worse getting us where we are today was corporate personhood for political donations. That one change in 2010 fucked us as a country.
I remember, particularly in elementary school and middle school, learning a lot about acid rain and the hole in the ozone layer. By the time I graduated high school in 2011 I hardly heard anything about either issue. Because the country and world actually managed to work together for the good of the planet we all live on. I still think one of the greatest achievements of the 21st century is the world coming together to fix (for lack of a better word) the ozone layer. I can’t see something like that happening again any time soon.
I grew up in the 80s and they made it sound like acid rain was going to be the death of us all.
I still remember the screaming raindrop commercial on MTV.
I think that is more of an achievement for the 20th Century. The international treaty that was signed and the banning of CFCs happened in the 1980s.
I was debating whether to write 20th or 21st century there, 20th century it is!
Affordable and fun EVs are still hard to find brand new but there are some amazing deals on the used ones coming off-lease right now.
Mark your Calendar! I suspect the used EV market will drop quite a bit starting in January 26. That’s 3 years after leases were able to access the $7500 tax credit
At this rate there will be no desire for American cars outside of the American market within the next 3-5 years…but hey, Orange Man says pollute away and we can make LINE GO UP RIGHT NOW, so hurray!!!!
Anyway please don’t bail these idiots out again….
To be fair, GM and Ford have very different portfolios for markets outside of the US. Just because our market goes one direction, it doesn’t mean they have to follow that lead for other markets. Also, even if the EU goes to 25% EV market share, that still means ICE has a 75% share. I refuse to buy into the “sky is falling because of the president”, regardless of which side of the aisle is in the office at the moment. Four years ago, the right-wing echo chambers were screaming the same thing about the Biden administration.
Is it dumb that CAFE went to a $0 penalty, yes. Will that stop dissuade companies, probably. However, not as likely as the actual market contraction now that EV production and sales are no longer artificially inflated. Most regular consumers here don’t want EVs, and that’s ok. Let the consumer dictate the market direction
As for Stellantis? They’re a lost cause outside of Jeep and Ram IMO.
Because everyone splitting their R&D is working so well for companies like Stellantis.
I don’t think that splitting your r and d works out well in the long run. Having a single base technology package for multiple portfolios is the recipe to success. We will see how it goes in the long run but I expect issues eventually.
But, most importantly, “that thing got a HEMI?”
That orange idiot will also turn around and threaten the rest of the world with tariffs for not buying our cars.
What’s with the Hyundai Ioniq 6 picture? That taillight bar is definitely edited.
I’ll be in the market for a new EV or hybrid next year, so I’m hoping sub-$60k EVs aren’t hit too hard by production cuts.
TAD – The Afternoon Dump
EV I’d like to see here from Europe or China?
Well, if EREVs count there are some compelling powertrain designs in China for sure. Wouldn’t buy from a Chinese OEM though. Really I just like the idea of those cars more than the cars themselves. They’re (rightly) styled for mainland Chinese tastes, which, well, aren’t my tastes.
As for Europe, I did a quick search for models they have that we don’t and didn’t see anything I found compelling. May have missed one though. I don’t find the hair-shirt city cars very interesting and we have some of the same crossovers here.
R.E. sales figures in the US for EVs, it’s going to look worse than it is for a few months because everyone who was even considering an EV rushed to get one. So it’ll be a while before new people are in the market. I suspect it’ll come up a bit early next year. You won’t see out the door prices change much, carmakers and dealers will just be making less money.
Its 9AM somewhere…
To put it another way, I have been getting ads on various platforms telling me to vote in favor of Elon’s pay package “to incentivize him to focus on Tesla.” People are spending money to try to give the worlds richest man more money than anyone in history BECAUSE HE ISN’T CURRENTLY DOING HIS JOB.
Tesla stock is a complete and utter joke. While my instinct is to say that anyone who holds it has it coming to them when it inevitably craters, but Tesla being a Mag 7 stock means the average retirement (401k/Roth, etc) held by an American has a shockingly large amount of money in Tesla via ETFs, Index, and Mutual funds that retirement accounts default allocations tend to invest in, meaning when Tesla falls, a lot of people who don’t actively pump Tesla are going to get hit financially.
It’s insane. I’m in corporate legal, and having the CEO of a major public company calling the proxy advisors terrorists on an earnings call is just insane. I cannot express how far outside the norms (and laws) this man’s actions are. But hey, let’s give him a trillion bucks to try to persuade him to do his job.
As with almost everything these days, those with the most money and power are literally buying their way out of every single problem they cause, while every normal person would be reprimanded, fined, fired or imprisoned for doing far lesser actions, or in some cases nothing at all. I’m honestly just sad and tired with the state of things.
And don’t forget the job he wants to do doesn’t involve cars. He wants to move to robots.
I’m tempted to say what needs to happen here is Elon needs to get out of the way of the car manufacturing adults in the room (Exhibit A: Cybertruck) and let them be a proper car manufacturer. He can (and should) go off and play with robots as a completely separate company.
The problem with this (from Wall Street’s perspective) is everybody thinks Elon is the company. If he goes, the stock will tank (because it’s a meme stock and not actually valued on fundamentals), and the fund managers certainly don’t want that to happen.
I keep waiting for one big player or another to start pulling out of TSLA enough to start the domino effect. Pretty sure it’s just that most of them are afraid they’ll lose too much if they start the stampede out the door.
I could be very wrong, because I am no expert on stock trading, but that feels like the way it all comes crashing down. Unless Musk throws a fit and sells a ton of his stock to punish everyone else, which seems like it would have the same cascading effect.
Lousy baseball, messing with my cars.
The Renault 5 and 4