The auto industry slowdown continues.
Honda (HMC) on Tuesday scaled back its electric vehicle targets, citing diminishing U.S. demand. The Japanese automaker had initially planned to invest $69 billion in an electrification strategy by the end of 2031 but has reduced the figure to $48 billion.
“The environment surrounding the automobile industry is changing day by day. Uncertainty in the business environment is increasing, due particularly to the slowdown in the expansion of the EV market due to several factors, including changes in environmental regulations,” Honda said in a statement.
The decision is “a switch in the planned course,” said Honda Motor Co. Chief Executive Toshihiro Mibe. Although the company remains committed to its long-term electrification, the roadmap faces delays, he added.
And General Motors (GM) on Monday halted exports of Chevrolet Tahoe sport utility vehicles to China, and announced it will forgo plans to export other high-end models there. G.M. began shipping the America-made Tahoes to China last year, a spokesman said, under a scheme called the Durant Guild, named after G.M founder, Billy Durant.
“Due to significant changes to economic conditions, we have decided to restructure the Durant Guild and correspondingly optimize G.M. China’s operations,” the automaker said in a statement. Yet, it’s worth noting, Durant exports account for less than 0.1 percent of the 443,000 vehicles that G.M. manufactures and sells in China.
There are several obstacles weighing on the domestic auto industry.
Trump introduced a 25% tariff on cars and parts imported into the U.S. in March. Shortly after, the S&P Global (SPGI) downgraded its 2025 forecast for U.S. vehicle sales by 700,000. This is on top tit-for-tax tariffs: a 30% levy remains on Chinese goods, and U.S. imports into China face a 10% tax.
The GOP also has launched an assault on EVs. House Republicans have proposed ending Inflation Reduction Act tax credits for buyers, and the Trump administration is rolling back auto emissions standards.
New data suggests that EV demand could be slowing as a result. Installation of high-speed chargers fell by more than 21% in the first quarter compared to the year-earlier period, according to a Bloomberg analysis of Energy Department data. BloombergNEF has reduced its cumulative estimate for U.S. charging installations by 20% this year, down to 285,000. BloombergNEF analyst Ash Wang foresees annual U.S. charger installations by 2030 even dropping by 30% or more, “if [we] continue in this direction,” she told Bloomberg.
Souring consumer sentiment toward Tesla (TSLA) CEO Elon Musk may also be hampering sales. An Axios Harris Poll 100 on Tuesday revealed a 30% drop in Tesla’s reputation over the last decade, plummeting from “Excellent” to “Poor.”
Shares in Tesla fell by more than 50% between December and April, although they have rebounded in recent weeks as Musk reassured investors he would be taking a step back from overseeing the Department of Government Efficiency, or DOGE.
Signs of a strained U.S. auto market come as CATL, the world’s biggest EV maker, made its market debut on Tuesday, launching its initial public offering in Hong Kong— the world’s largest this year. Despite U.S. investors being locked out from the listing, shares in CATL surged 16% on the first day of trading.