Why the world’s biggest carmakers are rethinking their ‘Electric’ dreams

The global electric vehicle (EV) boom is losing steam. After years of ambitious all-electric pledges, major carmakers are scaling back and embracing hybrids as policy shifts, costs, and consumer hesitation reshape the industry’s future.

According to BloombergNEF's annual Electric Vehicle Outlook report, EVs will make up one in four global car sales this year, yet growth will be uneven. China dominates, with over half of new cars sold being electric, while the U.S. and Europe face slowing demand and political uncertainty. Emerging markets like Vietnam and Thailand, meanwhile, are seeing record growth thanks to affordable EVs.

The shift from EV-only to ‘multi-energy’

Automakers that once promised fully electric lineups are rebalancing strategies to include hybrids and plug-in hybrids. Slower sales, high battery costs, and limited charging infrastructure are forcing a rethink.

Here are a few reasons why this change is arising globally:

1. Slower consumer adoption

While early adopters embraced EVs enthusiastically, mass-market buyers remain hesitant. Range anxiety, high upfront costs, and inconsistent charging infrastructure have curbed enthusiasm, especially in countries where charging networks are underdeveloped or electricity prices are rising.

2. High battery costs and material shortages

Lithium, nickel, and cobalt, the critical ingredients in EV batteries, have seen volatile prices. This volatility has squeezed profit margins and made EV production less financially attractive. Even with local battery plants coming up, costs remain high compared to internal combustion engine (ICE) and hybrid models.

3. Charging infrastructure gaps

Outside of China and parts of Europe, the charging network remains patchy. In the U.S. and India, limited fast-charging points and long charging times continue to discourage buyers. Automakers fear producing EVs faster than the infrastructure can support.

4. Policy uncertainty and weak incentives

Government incentives played a crucial role in EV growth, but many nations, including the USA, are cutting or revising subsidies. Inconsistent policies, changing emission standards, and trade tariffs on imported batteries or EV components are making long-term planning difficult.

5. Profitability challenges

Electric cars are expensive to design, manufacture, and sell profitably. Many automakers report that even with rising EV sales, profit margins lag behind hybrid or ICE models. Scaling production without consistent demand has become risky.

6. Consumer preference for flexibility

Buyers increasingly prefer hybrids or plug-in hybrids that eliminate range anxiety while offering better fuel efficiency. Automakers are responding to this “best of both worlds” demand instead of forcing a full shift to battery-only models.

7. Economic slowdowns and inflation

Global inflation and high interest rates have made car loans and EV ownership costlier. Consumers in both mature and emerging markets are delaying large purchases, impacting the pace of EV adoption.

8. Brand and market positioning

Luxury brands like Lamborghini and Porsche face unique challenges in convincing their traditional performance-focused customers to switch to EVs. Many now view hybrids as a more suitable bridge between legacy performance and future sustainability.

What comes next

EV adoption is not collapsing as global EV sales are still rising, with BNEF expecting ~16.7 million units this year. The longer-term projection remains that EVs will capture 30–39 per cent of global new-car sales by 2030 (including hybrids).

• But the pace of electrification will now be far less linear. Automakers are tacitly accepting that the revolution will be more evolutionary, powered by hybrids, incremental battery cost declines, and renewed regulatory support.