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 (though I’m not convinced they don’t), 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
We have two PHEV’s, 2018 Chrysler Pacifica and a 2026 Mercedes GLC 350e. Both get plugged in regularly. The Pacifica daily and the Benz every other day or so since the electric range is 60 miles or so.
Bonus on our van, the warranty for the battery and the transmission have both been extended to unlimited years and unlimited miles! Zero reason for us to get rid of it anytime soon!
I think we could get a lot of people to plug in PHEV if we just added a small display showing something like $/mile based on fuel/electric cost and the vehicles gas/electric mode ratio.
I wonder what percentage of PHEV’s are rental Pacificas that have never, ever, ever been plugged in.
Or 4xe where they’re afraid of it bursting into flames.
I’m currently not interested in changing vehicles, but if I were, a used PHEV is something I’d definitely consider. Full EV doesn’t have a good enough ROI for my driving habits to justify the purchase, and I’m too practical to let the other factors sway me.
A PHEV Prius is roughly $5,000 more than a regular Prius. If I am going to shell out thousands more, I am very well going to plug it in. Otherwise, what’s the point? If the Prius was only available as a PHEV, I could see it.
The EREV is harder to answer. Someone may want a new Scout and be perfectly fine just running on dino juice. Since it will only be available as a BEV or EREV, they may buy it with no intention of charging it with liberal electrons.
I think Barra might be guessing on bad info. Knowing a PIH costs more, most folks without a good plug-in situation aren’t going to spend extra for a car that, while a hybrid, isn’t as good at hybriding as straight hybrids are.
I don’t know anyone with a PIH that isn’t plugging it in on the regular. Granted I don’t know many people and even fewer of them have PIHs but those of us that do, do.
What is the point in plugging in something that doesn’t get meaningful electric range?
All you end up doing is short-cycling the gas engine most of the way to work.
Now get me a real honest 100-150km of plug-in range? Add in V2H and I’ll have that thing glued to my charger when I’m home.
My uncle Bought a PHEV Mercedes SUV (the 450e, I think), and he loves it. In the first two months of ownership, he hasn’t even put a tank of fuel through it, because it’s range covers his commute.
It seems like the first half of your statement is arguing with the second half.
The average US commute is shorter than the average PHEV electric range.
*under ideal conditions.
Add in any kind of weather, or errands after work and you’re boned. The 4xe won’t even make it round trip to my work and back, and it’s only a 15 minute drive.
Ideal or typical? How many days a week are you running errands? If you’re in a cold climate, the system definitely takes an efficiency hit, but that’s less than half the time (unless your in Alaska I guess).
I can imagine a 4XE is a less than ideal application of the system, being that w/o the hybrid it’s a 15mpg car. But it’s not really a solution for everyone. I think putting it on a truck is mostly a waste of effort.
-I live in Canada, so we’re dealing with near or below freezing temps half the year.
-I also need to defrost the windows and warm myself.
-I also take an efficiency hit from deep snow winter tires (which I need, we’re actively receiving over a foot of snow as I type this).
-I also take an efficiency hit from, you know, the resistance of driving through snow.
-I also take an efficiency hit since half my commute is on a highway
Add it all up, and what the hell was the point of plugging in?
Now, if I had 100km of range in ideal conditions, my commute is about 40km round trip. I should be fine in all conditions.
I also argue that trucks are THE best use of EREV tech. Specifically because their efficiency makes large packs impractical.
You also take en efficiency hit from all of your factors in relation to the gasoline you use otherwise. Is it really that hard to plug something in?
You are in Canada, Canadians are constantly going on about their cheap, clean, hydro electricity while also complaining about their gas prices. Why wouldn’t you want to use more cheap electrical power and less expensive gasoline?
Actually, never mind, that was all sort of rhetorical. Just keep on truckin’, I guess…
To quote myself:
Which causes lower fuel economy while using gas, hurts engine longevity, and kills emissions equipment while also putting our higher emissions.
So yeah, put some real, usable daily range in it and people will plug it in.
How are you boned? You’re in a PHEV, if you run out of electric range you just run on gas for the few miles you still need to go. That’s literally the point of a PHEV – you don’t get stranded because there’s always a gas station nearby if you need it.
Yeah, and the engine doesn’t get up to temp and just short cycles. Which was my original point. I’m glad you finally made it back to where we started.
Condescension is a bad look on you.
Arguing in bad faith doesn’t look any better on you.
All you end up doing is short-cycling the gas engine most of the way to work.
Bingo, our Pacifica PHEV has in theory the right amount of range to drive to work (28 miles to work, 35 miles of range in theory) but depending of weather and speed, sometimes the engine will start the last portion of the trip. The engine doesnt even gets warm up properly.
I dont drive it to work because of this, I use it local short errands or road trips.
People will absolutely learn to plug their vehicles in if electricity is the main motivation. Just like with smartphones. Some will forget once in a while. But unlike a phone, needing the car to get places in our zero public transportation country is going to teach people quickly.
Color me intrigued on the R2. One sure would look good in the garage next to our Tesla.
SportLine seems a little redundant for Honda when they already have Sport trims but the others make sense given the market. I’m a little surprised the HR-V hasn’t already added a TrailSport trim to try and line up even more against the Crosstrek but TrailLine makes a bit more sense and that seems to be more what the CR-V TrailSport actually is. Seems like they see what Kia has with the X-Pro/Line setup and want to mimic it. This will also make sense for the Passport which only has the one non-TS trim but will probably benefit even more with another higher trim that keeps the look without as much off the off road hardware.
Yeah. For the civic, there is only a $4000 delta between LX and Sport- is that really enough space for another model? Maybe it is.
There used to be something called an EX, which was basically a base model LX with alloy wheels and air conditioning. My parents had one. Basically an appearance package with a few key features.
Maybe that’s the play here- Some modest silver alloys, and whatever the current ‘gotta have it’ feature you would otherwise find on the Sport. (Bigger infotainment screen?)
I’ve been saying this for a while but the frothing at the mouth anti-EV crowd hasn’t wanted to hear it. The second generation EVs that are debuting this year (or frankly last year as well) are going to be really intriguing because there isn’t really a price delta between them and their ICE counterparts anymore…not to mention range anxiety won’t really be a thing.
The Rivian R2 is supposedly going to cost about the same as a Passport, 4Runner, Bronco, etc. and about the same as a highly spec’d CRV, RAV, and other midsized transport bubbles. It has an NACS port and 300 miles of range as well. I don’t think it’ll just be people that want EVs who are going to give it a try. I do think there will be some customers that were looking at gas powered competitors and wound up with the R2 instead.
Same goes for the iX3. The initial reviews of that car are absolutely glowing and it’s apparently going to range from the high 40s to low 60s depending on spec. It can offer up to 400 miles of range and like the R2 it’ll have an NACS port. That’s the same price as (insert mid sized luxury crossover here) and there are 0 hybrids in that class other than Lexus and the Volvo PHEVs.
Again, I don’t think it’ll only be EV diehards looking at them, especially with how bad and hideous the current X3 is. Say what you will about the iX3 (I love it, don’t @ me) but at least it’s interesting and unique. You could remove the kidney grilles and badge from an X3, tell me it’s a commodity brand, and I’d believe you. Same goes for the Q5, GL whatever, the list is long.
We’re now getting BEVs that are good enough to compete on their own merit, and I think plenty of folks will enticed by that. Or maybe they won’t and EVs have become such a hideous culture war monstrosity that the US is well and truly hopeless on that front. Color me optimistic for once.
I think the limiter to some of these from outselling their ICE counterparts is the lack of infrastructure. How many city/suburban folks in apartments with no charger would love one, but have no where to charge it?
–I am talking about big apartment complexes with hundreds of families and not enough spots for everyone who lives there. Or big ones in a city downtown somewhere where its street park only.
As an electric car owner, I think Matt’s take on electric sales in 2026 will prove optimistic. The main barrier to entry remains ability to charge at home as it is difficult for them to make sense to anyone who can’t. Do I think there is some large pool of people that live in single family homes and will be enticed by a slightly cheaper car? No I do not, particularly when the used market will be awash in even cheaper used EVs.
NACS ports are starting to become standard kit, and with access to Tesla’s supercharging network I don’t think the “but I could never possibly charge at home!” crowd is going to be as averse to them since the superchargers are almost as common as gas stations in most urban and suburban areas.
I agree with the first half of your comment. I think that the second one makes sense, but misses a segment of buyer. I personally view a used EV like a used computer. I would never buy a used computer.
I would buy a cheap computer tho to just surf the web, like I would buy a cheap new EV to cruise to the grocery.
Everyone that i know that bought a plug in hybrid, plugs it in. That’s why they bought it.
I suspect more people will plug in EREVs than PHEVs, and I suspect the PHEV number is already skewed by the Jeep offerings being on massive discounts for so long. The people I know with PHEVs (and I am on my second), mostly bought them to commute on electric or at least get some of the commute on electric. Once the battery-gas ratio is higher, it will feel like it saves people more time and money. Especially if they can’t get a full commute on electric with a PHEV, but can on EREV.
I do think it is also location-dependent. I live in an area with super cheap hydro power. Of course people plug in most of the time here; it saves a fair amount of money. If gas is cheap enough and electric expensive enough, it might even be cheaper to run a PHEV as a hybrid, and maybe not inconvenient for folks. EREVs would make it slightly less convenient, but cheaper is going to win for most folks.
As to David’s question, I think that a person who uses an EREV as a gasser just doesn’t want an EV at all (and is probably someone who doesn’t want a hybrid, either). That said, if they had to have an EV for some reason, they’d learn to plug in. It’s not an onerous task. They might not like it (especially if they drive enough daily to need L2 charging at home and don’t have a garage), but they’d manage it, just like people learning when to gas up (I don’t understand people who have to learn it the hard way, but it happens–my mom was telling me about how she learned not to run to empty because she used to drive for a long time after the needle hit bottom…until it actually went dry once).
Would they be happy to move to an EV? No, at least not until they feel like they’d save enough money and/or have enough range (or whatever else they feel is lacking in EVs). Or once they don’t feel like it’s “political.”
There is a very interesting “drive mode” in our Pacifica PHEV that I feel should be adopted more for other vehicles that have both gas + battery propulsions. For some reason if the car is fully charged and you are driving on the highway above 80 mph (I should be able to turn this “mode” on my own but anyway), the engine kicks on and both battery and engine work together to move the vehicle. This way the battery decrease very slow and the instant MPG shows around 36-38mpg.
With a bigger battery like an EREV and this driving mode, I should be able to cover long distances getting very good MPG. The Volt I snatched back allows me to put it on hold or not, and when the battery is depleted and you push the engine, the MPG is not as good for the size of the vehicle.
“MSN always flags it as being “violent.”
Ha! It does kind of look like he’s getting ready to throw fists.
I think it’s his Jeep “ballistic vest” cosplay.
Oh, that’s a good call. I think you’re right.
I’m more optimistic trump will finally be removed from office, this time with threatening to take over land from an ally, and going to war over it.
The spineless sacks of brown nosing butt kissing sycophants in Congress will continue to let him do whatever he wants for fear of being primaried. The only way Trump is leaving office is death (natural causes/age related) or end of term.
I like your optimism that he would actually leave at the end of his term.
People will plug in EREVs because the engine is conceptually ~the backup~, and they will be sold as such. People understand what a backup generator is
Yeah. I can see why non-technical people would think their PHEV is simply a ‘better hybrid’ with plug-in charging seen as ‘nice option’. And they would be technically correct.
EREVs are an entirely different animal. They’re going to be expensive vehicles for their class- You won’t accidentally buy one over an ICE without the intent to maximize the technology.
I just assumed I missed it because I’m not Canadian.
You should try being Canadian. It’s pretty great.
“What would a TrailSport HRC HR-V even do?”
Extract more money from customers without much effort.