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## Introduction:

In a rapidly changing global automotive landscape, the sector is facing significant shifts on multiple fronts. On one hand, there are rising costs, changing consumer preferences, and a lack of government incentives. On the other hand, major automakers are adapting their strategies and launching new models and plans to remain competitive. This report will focus specifically on the US market, also addressing developments at major companies, as well as the challenges facing suppliers and the supply chain.

## First: US Market Trends and News:

### End of the Federal Electric Vehicle Tax Credit

A key event of this period was the expiration of the US federal tax credit for purchasing or leasing electric vehicles (up to $7,500) on approximately September 30, 2025. ([Reuters][1]) This credit was a major incentive that boosted electric vehicle sales, but with its expiration, it became clear that demand was beginning to decline. For example, light vehicle sales in the United States fell by 6.5% in October, including electric vehicle sales, which dropped from 98,289 units in September to 74,897 units in October. ([Reuters][2])

On the other hand, analysis from J.D. Power shows that the number of people who said they would "consider buying an electric vehicle" reached its highest level since January, despite the expiration of the tax incentive. ([InsideEVs][3]) This suggests that interest hasn't waned, but the market has entered a "reset" phase after being swayed by the stimulus. ([Edmunds][4])

### Potential New Tax:

Media reports indicate that the U.S. government is considering imposing an additional tax on electric vehicles to offset some of the revenue lost due to the incentives, as well as to fund the necessary infrastructure (charging and networks) and road maintenance. ([Reuters][5])

This creates further pressure on the electric vehicle sector, especially for potential buyers who are hesitant due to the high total cost of ownership.

## Layoffs and Declining Production:

Many major industrial companies have begun reacting to the new reality. For example, General Motors decided to lay off more than 3,400 workers at its electric vehicle and battery plants in the United States, including Factory Zero in Detroit and two other plants in Ohio and Tennessee. (wardsauto.com][6]) The company stated that these reductions were due to "lower near-term demand for electric vehicles" as a result of the changing regulatory and economic environment. (wardsauto.com][6])

These developments indicate that companies are no longer as optimistic as they were in recent years that incentives cover everything, and that they now need to achieve a better balance between costs and returns.

### Rising Insurance Costs:

Another important aspect: Car insurance has become more expensive. With the rising prices of new cars, especially electric ones, and the increasing risks faced by buyers (limited infrastructure, a shortage of charging stations, and declining incentives), insurance premiums are seeing a significant increase. Market observers are taking this into account. ([Reuters][2])

Here, the customer must consider that the cost of purchasing an electric vehicle includes not only the initial price but also the long-term cost of ownership (maintenance, insurance, energy, etc.).

## Second: Technology, Specific Models, and Company Responses:

### Tesla:

Incentives. For example, the company recently canceled its planned production of a low-cost electric car and shifted its focus more toward self-driving taxis and future projects. ([Yahoo Finance][7])

This shift suggests that the company’s rapid growth may be entering a correction phase.

Audi:

Audi recently unveiled a major project: a concept car called the R26 Concept, a precursor to its entry into Formula 1 in the 2026 season. ([Motorsport][8]) This move highlights that Audi is not only showcasing cars now but also marketing a strong technological and sporting image, which is reflected in its reputation and the components of its future vehicles.

On the other hand, Audi is part of the Volkswagen Group and operates under a “in China, for China” strategy, which necessitates its response to the changing global electric vehicle market and the need for innovation.

Volkswagen:

The German powerhouse has already embarked on profound strategic changes, particularly in the Chinese market:

* Electric vehicle sales in China fell by 34% in the first six months of 2025 compared to 2024. ([InsideEVs][9])

* It announced it will launch around 20 electric or hybrid models in China by 2027, as part of its "In China, For China" strategy. ([Volkswagen Group][10])

* It also announced that, through a partnership with a Chinese company like Horizon Robotics via the CARIZON project, it will develop its first proprietary electronic chip in China to support intelligent driving. ([Reuters][11])

All these moves demonstrate that Volkswagen is restructuring, not only in terms of products, but also in terms of driving technology, intelligent vehicles, and open platforms.

While some companies rely on government incentives, Volkswagen is working to make technology an integral part of the vehicle's added value.

### Other Developments:

* Regarding luxury cars, Rolls-Royce is facing a lawsuit over a custom-built vehicle with a 27-liter engine. Details are currently unclear, but it reflects the competition in the luxury car market and the battle for technology and patents. (Source: CarBuzz)

* Hoever, fast-charging technology, alternative energy grids, and high-voltage batteries (e.g., 800 volts) are emerging and gradually becoming part of the equation, especially for companies targeting advanced and premium markets.

## Third:

Global News and Supply Chain

### The Electric Vehicle Market in China:

While China remains the world’s largest and most important market, Volkswagen’s latest figures indicate fierce competition. Its electric vehicle sales have declined significantly, forcing the company to reconsider its strategy. ([InsideEVs][9])

In China, some domestically competing Chinese companies have the advantage of lower costs, wider charging networks, and faster adaptation to market preferences, forcing foreign companies to quickly intervene and change their strategies.

### Chip Shortages and Supply Risks:

Suppliers in Germany and some other European countries have begun expressing concern about a shortage of electronic chips (silicon and semiconductors) due to trade disputes between China and the Netherlands, the suspension of permits, and supply chain delays. ([Edmonds][4]) This challenge affects not only electric vehicles but also conventional cars, but electric vehicles are more affected because they rely more heavily on electronics and software.

### Battery Production in Europe:

Meanwhile, the European Union is investing in building battery factories and in research and development to reduce its reliance on suppliers outside the continent. This reflects an industry shift towards redistributing production globally, not just towards America or China. (BBC News)

The aim is to strengthen the domestic supply chain and reduce the risk of disruption.

## IV. Summary and Outlook:

* The expiration of the federal tax credit for electric vehicles in America has sent shockwaves through the market; demand has been impacted, electric vehicle sales have declined, and some factories have reduced production and workforce.

* Despite this, interest in electric vehicles remains strong, and their owner base is loyal, meaning the electric transition is still underway. However, policies, subsidies, and costs remain critical factors.

* Major companies are reassessing their strategies: they are no longer focusing solely on quantity but also on product quality, related technology and services, and geographic reach.

* Suppliers and supply chains are facing pressures—chip shortages, rising costs, and a shift in the production landscape—which are hindering industry stability.

* * In the Chinese market, it is clear that foreign companies cannot easily gain a competitive advantage and need stronger local penetration, partnerships, and rapid technological advancements.

In the short term (12-18 months), we expect the electric vehicle market to enter a "stabilization" phase, with sales falling below their peak during the stimulus period. However, in the medium and long term (2026 onwards), a recovery could begin if support is provided, costs are reduced, and infrastructure is expanded.

* For investors and observers: Now is the time to reassess whether electric vehicles are economically viable in the current market and what the new operating or marketing model should be.

- A detailed digital analysis of recent electric vehicle sales figures in the US, comparing companies (Tesla, Ford, General Motors, Volkswagen), and future projections for the global market up to 2030.

* [Reuters](https://www.reuters.com/sustainability/us-electric-vehicle-tax-breaks-will-expire-sept-30-2025-07-03/?utm_source=chatgpt.com)

* [apnews.com](https://apnews.com/article/30792ad41c5148fb5528a2d0bcc0b59b?utm_source=chatgpt.com)

* [businessinsider.com](https://www.businessinsider.com/general-motors-gm-layoffs-slower-ev-demand-regulatory-environment-2025-10?utm_source=chatgpt.com)

[1]: [1] https://www.reuters.com/sustainability/us-electric-vehicle-tax-breaks-will-expire-sept-30-2025-07-03/?utm_source=chatgpt.com "US electric vehicle tax breaks will expire on September 30"

[2]: https://www.reuters.com/business/autos-transportation/us-motor-vehicle-sales-drop-october-ev-subsidies-expire-2025-11-04/?utm_source=chatgpt.com "US electric vehicle sales have declined United States in October as support for electric vehicles declines..."

[3]: https://insideevs.com/news/778668/more-americans-want-evs-no-tax-credit/?utm_source=chatgpt.com "More Americans want electric vehicles, despite the tax expiration..."

[4]: https://www.edmunds.com/car-news/ev-market-faces-reset-after-record-september-2025-edmunds-insights.html?utm_source=chatgpt.com "Electric vehicle market enters 'reset phase' in October as federal tax credits expire and prices rise"

[5]: https://www.reuters.com/business/autos-transportation/senate-republican-bill-would-end-7500-ev-tax-credit-180-days-after-approval-2025-06-16/?utm_source=chatgpt.com "Senate Republicans seek to repeal the $7,500 electric vehicle tax credit."

[5]: https://www.reuters.com/business/autos-transportation/senate-republican-bill-would-end-7500-ev-tax-credit-180-days-after-approval-2025-06-16/?utm_source=chatgpt.com "Senate Republicans seek to repeal the $7,500 electric vehicle tax credit." [6]: https://www.wardsauto.com/news/gm-layoffs-ultium-cells-factory-zero/804171/?utm_source=chatgpt.com "General Motors cuts thousands of jobs at its electric vehicle and battery plants..."

[7]: https://finance.yahoo.com/news/companies-hit-brakes-evs-laying-213812069.html?utm_source=chatgpt.com "Companies halt production of electric vehicles, laying off thousands of..."

[8]: https://www.motorsport.com/f1/news/audi-targets-2030-f1-title-bid-as-it-unveils-r26-concept-car-for-2026/10776252/?utm_source=chatgpt.com "Audi aims to win the Formula 1 title 2030, with the unveiling of the R26 concept car..." [9]: https://insideevs.com/news/778571/vw-china-problem-partners-fix/?utm_source=chatgpt.com "Volkswagen has a problem with China, and it can't solve it alone."

[10]: https://www.volkswagen-group.com/en/press-releases/volkswagen-group-launches-a-major-product-offensive-at-auto-shanghai-2025-offering-intelligent-fully-connected-vehicles-

"Volkswagen Group launches major product promotion campaign in..."

[11]: https://www.reuters.com/business/retail-consumer/volkswagen-develop-chip-china-smart-cars-with-horizon-robotics-2025-11-05/?utm_source=chatgpt.com "Volkswagen to develop smart car chip in China in collaboration with Horizon Robotics"

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