European and US automotive companies have had to write off almost €60 billion in investments in electric vehicle (EV) projects in 2025, according to a new study by consultancy EY.
Mainly as a consequence of these write-offs, the 19 leading carmakers saw their profits dwindle by 59 per cent, from €143 billion down to €59 billion.
EY manager Constantin Gall said the automotive industry was in a deep crisis, which for some companies could threaten their survival.
A major reason for that are the failed bets on electric cars as the future of mobility: “Many companies had focused their investments on growing markets and a rapid ramp-up of electric mobility. In reality, however, demand for electric cars is proving significantly weaker than forecast, particularly in the US and Europe,” Gall said.
“Now comes the strategic shift: Write-offs running into the billions on battery joint ventures, shelved or postponed factory projects and discontinued models, with new investments instead being channelled into combustion engines. The result is an unprecedented slump in profits.”
The biggest losers of the failed EV breakout were Stellantis – which includes brands such as Peugeot, Citroen, Fiat, Alfa Romeo, Opel and Jeep – which wrote off €22 billion and US carmaker Ford, which wrote off €18 billion.
Significant losses were also incurred by Honda (€14 billion), General Motors (€7 billion) and German carmaker Porsche (€3 billion) – which recently announced heavy layoffs after its EV strategy failed.
The turnaround measures, though, do not signify a total goodbye to electromobility, according to EY.
“The charges are an expression of a realistic rebalancing of speed and scope of the electrification plans – not a total exit,” said Gall.
The EV write-offs are not the only factor weighing on carmakers’ profits. The newly introduced US tolls also reduced their margins, in addition to geopolitical uncertainties.
EY expects that the Iran war and the subsequent oil crisis will also keep down demand for new cars, irrespective of how they are powered: “The unstable global political situation, rising energy prices and higher inflation are a poison for the car industry,” Gill said.
“One or two car buyers may now opt for an electric car after all – but there won’t be a real boom. Rather, in view of lower disposable incomes and gloomy economic prospects, many people will postpone buying a car and keep driving their old model for longer.”
