While the loss of the tax credit will hurt sales short-term, it also removes the "government mandate" attack line used by politicians. This forces EVs to be judged as just another car, allowing them to compete on their own merits like lower operating costs and better performance.

With a key government subsidy gone, Tesla is using a rental model as a 'try-before-you-buy' tactic. This shift indicates EV companies must now rely on creative sales funnels and direct product experience, rather than financial incentives, to convert hesitant customers.

Ford's CEO states the company's EV investment strategy is designed to be sustainable without consumer tax credits. The new universal platform's primary goal is to make an affordable EV that is profitable for Ford on its own merits, a crucial step for long-term market viability.

China's economic structure, which funnels state-backed capital into sectors like EVs, inherently creates overinvestment and excess capacity. This distorted cost of capital leads to hyper-competitive industries, making it difficult for even successful companies to generate predictable, growing returns for shareholders.

Despite devising a clever, IRS-approved leasing scheme to extend EV credits, both companies immediately abandoned the plan after a few senators threatened an investigation. This rapid reversal highlights the auto industry's extreme sensitivity to political pressure, even when legally in the clear.

While maintaining EVs as its long-term 'North Star,' GM is pragmatically adjusting to slowing EV adoption and regulatory shifts. CEO Mary Barra acknowledges the need to 'meet the customer where they are,' indicating that the profitable internal combustion engine (ICE) business is crucial for funding the transition and maintaining stability through market volatility.

The belief that consumers needed electric versions of familiar gas-guzzling trucks and SUVs led to EVs that were too big, heavy, and expensive. The market is now forcing a pullback from this strategy towards smaller, more efficient, and profitable designs.

Ford celebrated attracting buyers new to trucks and their brand. In hindsight, this data was a "canary in the coal mine," signaling that their core, loyal truck customers—the largest market—were rejecting the electric vehicle. This misinterpretation led to a flawed growth narrative.

Ford's decision to end its flagship F-150 Lightning EV program and pivot toward a 50% hybrid fleet by 2030 is a major signal that the mainstream US auto market is not ready for a full EV transition. It shows that the most viable near-term strategy for legacy automakers is the 'Goldilocks' hybrid option.