In a year filled with tough news for the electric car race in America, the death of the Ford F-150 Lightning was a little different.
This was not the case Acura ZX or Volkswagen ID.7After all, it was one of the most groundbreaking products to ever come out of the American auto industry, and arguably the product that made the biggest argument in favor of Power the vehicle to load and off.
But between new tariffs, slowing electric vehicle sales, the lack of more tax breaks for electric vehicles, regulatory changes and other challenges, The math simply didn’t work for Ford anymore. Now, its focus is on hybrids and gas engines over the next few years, since they are no longer under the metaphorical threat of reaching mostly zero emissions by the 2030s. Similar moves are happening at General Motors and Stellantis. However, something has to give, as all of these car companies face an intensifying EV race elsewhere in the world.
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Welcome back to Critical materialsour morning report on industry and technology news. Also on deck today: Tesla’s Robotaxi program in California is growing at a dizzying pace, and some electric vehicle industry trends we’re watching for 2026. Let’s dive in.
25%: Explaining the gas problem in Detroit
2022 Ford F Series Super Duty
Meanwhile, a return to gas and hybrid power suits all of these companies. They derive most of their profits from large gas-powered trucks and SUVs. This is good news for their bottom line at the moment (although certainly not good news for the climate). But in the wake of Lightning’s death, Wall Street Journal He asks: How long can they keep this up?
General Motors, Ford and Stellantis have all said they will shift their sales mix to more gasoline-powered car models, generating higher profits. They laid off thousands of workers at electric car factories, some of which were idle. Ultimately, matching production with demand is crucial for a sector that manufactures just in time. Tom Narayan, equity analyst at RBC Capital Markets, points out that a quarter of mismatched production could lead to billions of dollars in losses.
Switching back to selling more gasoline cars could be very profitable for the Detroit 3. On the company’s second-quarter earnings call, Ford CEO Jim Farley said easing emissions regulations could be a “billion-dollar opportunity over the next two years.”
(…) But even as these automakers focus on gas guzzlers, they insist they will not exit the global electric car race. GM CEO Mary Barra said on the company’s second-quarter earnings call that “profitable electric vehicle production” remains the company’s north star. Ford Farley said this year that the company sees Chinese electric vehicle companies such as BYD and Geely as competitors.
(…) The danger is that they move too slowly in electric vehicles to catch up.
It’s a problem that in 2026 will move from theoretical to very real: How can these automakers continue with electric vehicle investments if the ones they’ve made so far are unprofitable? And if they don’t maintain their investments in electric vehicles, how will they compete with China — globally and perhaps here in the United States one day?
I would argue that this is, unfortunately, a more uniquely American problem than the auto industry likes to admit. European automobile manufacturers It appears to be discovering ways to compete with new Chinese entrants in small and mid-sized electric vehicles. But American automakers have largely become big truck companies, and electric vehicles with large batteries have proven expensive and often inadequate for the towing and hauling those owners expect.
But I would also add that some of the Big 3 (Big 2.5? Unclear these days) are doing better than others. GM says it is Approaching profitability With its electric cars, unlike Ford and Stellantis, it has a wide range of offers in this area. It also has a more aggressive battery strategy.
However, this remains a dilemma that Americans will have to solve at some point. the Wall Street Journal He likens them to major American oil companies: they have done well, financially, by not focusing on sustainable and renewable energy as much as their European counterparts. However, sticking with gas trucks forever is not an option for automakers: “But the difference with Big Oil is that the rest of the world could shift to mostly electric vehicles faster than an overall shift away from oil and gas, which will still be necessary for things like aviation, electricity generation, marine shipping and plastics manufacturing.”
50%: Tesla registers more than 1,000 robotaxis for its California fleet
Tesla Robotaxi Service in San Francisco
Photo by: InsideEVs
I’m currently back in Austin to visit my family for the holidays, and Waymo’s acquisition here is roughly on par with what I just saw in San Francisco. But a Tesla Robotaxi ride or two is definitely on my agenda while I’m in town. Many people in California will soon experience it, according to Business insider:
Tesla has been expanding its “Robotaxi” program in California at a very rapid pace. So far, the automaker has registered 1,655 vehicles for passenger service in the state, a California Public Utilities Commission spokesperson told Business Insider. The spokesman said that the company registered 798 drivers.
That’s up from 28 cars and 128 drivers in August, when the service launched, according to the CPUC.
The vehicle number reflects the vehicles that have been approved for use, not the actual operational fleet number.
Numbers-wise, that puts it within Waymo’s shooting range in the Golden State. Many Tesla supporters believe this is one of the company’s biggest advantages in the autonomy race: It doesn’t need to build or buy specialized cars from a third-party partner like Waymo or Zoox, but it can deploy the same old fleet of cars with a version of Full Self-Driving (FSD) software all on its own. We’ll see next year if Tesla can really achieve that scale, and get revenue from it.
75%: The affordability challenge is a trend to watch in 2026
Photography: Patrick George
We’ll have more on that as well, however Cox Automotive It really identifies some industry trends to watch in the coming year. The first is the potential decline not only in electric vehicle sales, but also in sales of all new car models, as buyers press affordability.
The research firm expects sales to decline by 2.4% in 2026. Here’s one such trend that stood out to me, and it’s also somewhat related to the first item above:
The divided consumer: The gap between high-income and low-income families is widening. Wealthier consumers will benefit from wealth effects, lower taxes, and interest rate cuts, while lower-income households will continue to feel pressures from years of inflation, but will also see higher tax refunds. This divergence accelerates trading behavior, making value perception critical throughout the market. Cox Automotive expects an increase in demand for more affordable vehicles, lower monthly payments, and used vehicle options that provide solutions for consumers seeking to stretch their budgets.
Can car companies move fast enough to meet customers looking for value and low prices? High-cost, high-margin vehicles may not be able to survive in this industry for much longer.
100%: Can American automakers find a future beyond gasoline?
Again, a lot of this is because Detroit relies on big trucks for profit. But right now, there’s also an appetite for smaller, more affordable vehicles. Is this the way out of this dilemma? Or should they all just rely on the return of pro-EV policies at some point? Share your thoughts in the comments.
Contact the author: patrick.george@insideevs.com
