EV slowdown drives hybrid shift as Stellantis, Ford, GM and Honda reset automotive logistics
Global EV demand slows, driving hybrid growth as Stellantis, Ford, GM and Honda reset strategies. Automotive logistics providers face greater complexity and volatility, needing flexible, multi-powertrain supply chains and selective battery investment to match uneven electrification.
The global shift to electric vehicles is entering a more complicated phase, with EV demand and production misaligning. EV adoption is progressing more slowly and unevenly than expected, prompting a renewed focus on hybrids and a more selective approach to battery investment. For automotive logistics, this means a rethinking of supply chains and markets, with a structural shift towards multi-powertrain supply chains, meaning more fragmented flows, less predictable volumes and increasing pressure on logistics providers to deliver flexible, regionally aligned operations.
Stellantis reset highlights cost of overestimating EV transition
In the case of Stellantis, the OEM acknowledged it overestimated the pace of EV adoption, particularly in the US. In its recently released second half results for 2025, the carmaker said it was resetting its EV strategy to continue at a pace “governed by demand rather than command”.
“The charges largely reflect the cost of overestimating the pace of the energy transition that distances us from many car buyers’ real-world needs, means and desires.”
Stellantis suffered charges of approximately €22.2 billion ($25.5 bn), primarily due to overestimating EV uptake. The charges include write-offs related to cancelled products of €2.9bn and impairment of platforms of €6bn, mostly due to significantly reduced volume and profitability expectations, as well as €2.1bn related to the resizing of the EV supply chain, with €0.7bn of that in cash payments over the next four years related to steps of rationalising battery manufacturing capacity.
Its CEO Antonio Filosa said: “The charges largely reflect the cost of overestimating the pace of the energy transition that distances us from many car buyers’ real-world needs, means and desires. They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team.”
Reflecting the uneven nature of EV demand across regions, price point and infrastructure, the OEM said it has made decisive organisational changes including the “re-empowerment of regional teams”, so that they can make decisions based on the direct knowledge of the preferences of the customers they serve.
The OEM’s reset in light of the uneven demand includes reduced expectations for BEV volumes, a reconsideration or exit from some battery investments and joint ventures, and a focus on cost-effective battery chemistries such as LFP and flexible sourcing. Batteries remain critical, but investment is becoming more selective and ROI-driven, with localisation and partnerships becoming increasingly important.
North American OEMs pivot to hybrids amid policy and demand shifts
Stellantis is not the only carmaker to consider an EV reset. In fact, the other two OEMs making up the ‘Big Three’ have made similar strategic moves. Ford has pivoted away from aggressive EV expansion, redirecting investment into hybrids and lower-cost EV platforms. The OEM scrapped its best-selling electric pickup trucks, the F-150 Lightning, saying the business case “eroded” as a result of lower-than-expected demand, high costs and regulatory changes.
Meanwhile, GM has reduced EV production capacity and reallocated resources back to ICE vehicles after taking a $6bn earnings hit, due in part to the “termination of certain consumer tax incentives and the reduction in the stringency of emissions regulations”, which it said caused slower industry-wide consumer demand for EVs in North America.
The termination of consumer incentives came at the beginning of 2025, in the first week of US president Donald Trump’s return to the Oval Office. The Trump administration revoked the Biden administration’s 2030 EV sales target and paused funding from the Inflation Reduction Act (IRA), which was introduced in 2022 to boost incentives for EV adoption. Then in September 2025, the US Senate passed the ‘Big Beautiful Bill’, which saw the end of consumer EV tax credits.
Japanese carmakers double down on hybrids as EV plans stall
Beyond the US, Japanese OEMs have also signalled a strong shift towards hybrids. Honda announced last week that it has cancelled the development of three EV models that had been planned for production in North America, a decision it made “as part of the reassessment of the company’s automobile electrification strategy due to various factors including recent changes in the business environment”.
“Honda automobile business has fallen into an extremely challenging earnings situation due to [... ] its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs.”
As a result, Honda said it expects to record losses for the fiscal year ending March 2026, including operational expenses of 820 billion yen to 1.12 trillion yen ($5.2bn to $7.5bn) and special losses of 340bn to 570bn yen. In an announcement, Honda set it had previously undertaken a major strategic shift towards EVs “based on the belief that EVs will be the optimal solution to realise carbon neutrality”, but said the profitability of the company is declining “due primarily to the unfavourable impact of changes in US tariff policies on the gasoline and hybrid vehicle business and a decline in the competitiveness of Honda products in Asia due to the impact of the allocation of more resources to EV development”.
Honda added that in China, customer demand leans more towards software-based features that will continually advance, rather than hardware features such as fuel efficiency.
The statement added: “Honda automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs.”
Toyota has also cut planned EV production volumes and delayed battery factory investment, continuing its long-standing multi-pathway strategy of hybrid first.
Similarly, Subaru has delayed EV programmes and is prioritising hybrids amid slow demand, reinforcing the regional trend.
Europe recalibrates EV timelines rather than reversing course
In Europe, carmakers are adjusting their electrification timelines, rather than completely abandoning electrification.
Volvo Cars has paused certain EV plans, including ending the US sale of its EX30 after 2026, due to cost and demand pressures, but it is still targeting high electrification in the long term, aiming to have 90-100% of its global sales coming from EVs and hybrids by 2030.
VW Group is also reassessing its EV strategy driven by market demand and cost pressures, but is still seeing value in electric models. The carmaker recently delivered its first vehicle off the production line through its partnership with Chinese EV maker XPeng as part of its “In China, for China” strategy, and in a financial statement earlier this month, VW Group reaffirmed its plans to launch affordable electric mobility with premium technology in 2026.
Multi-powertrain supply chains increase logistics complexity
The recalibration underway across global OEMs signals a structural shift in EV logistics. For automotive logistics providers, the move towards multi-powertrain portfolios will increase network complexity, fragment volumes and challenge traditional planning models built around scale and predictability.
Battery flows will become more regionalised and selective, while finished vehicle logistics will need to accommodate more volatile demand signals across markets with diverging regulatory and consumer dynamics.
At the same time, the renewed emphasis on hybrids extends the lifecycle of existing supply chains, delaying full electrification but increasing operational overlap.
In this environment, competitive advantage will hinge on flexibility, the ability to dynamically rebalance capacity, integrate new sourcing patterns and respond to shorter planning horizons. The EV slowdown may have tempered timelines, but it has accelerated the need for more agile, data-driven and regionally responsive automotive logistics networks.
