U.S. Electric Vehicle Industry Faces Existential Crisis
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17h ago
0mins
Source: CNBC
- Market Share Decline: The global market share of U.S. legacy automakers has dropped from 21.4% in 2019 to an estimated 15.7% in 2025, indicating a severe challenge posed by the robust growth of Chinese EV manufacturers.
- Massive Loss Warning: Stellantis disclosed a $26 billion charge due to a business overhaul, resulting in a more than 20% plunge in its stock, reflecting overestimated expectations regarding the pace of the energy transition and weak market demand.
- Rise of Chinese Brands: Chinese EV sales skyrocketed from approximately 572,300 units in 2020 to 4.95 million in 2025, with a nearly 70% increase in global market share over five years, showcasing the strong expansion capabilities of Chinese brands in the global market.
- Impact of U.S. Policies: U.S. automakers have invested over $27 billion in EV development, but due to policy shifts and declining market demand, many companies are scaling back their EV plans, potentially leading to a long-term decline in competitiveness.
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About TM
Toyota Motor Corp is a Japan-based company mainly engaged in the automotive business, as well as financial services and other businesses. It operates through three business segments. The Automotive segment designs, manufactures, and sells automobiles, including sedans, minivans, compact cars, sport utility vehicles (SUVs), and trucks, as well as related parts and accessories. The Financial Services segment provides financing and vehicle leasing services to complement the sales of automobiles and other products manufactured by itself and its affiliates. The Other segment engages in information and communications services. It also oversees manufacturing and sales companies, conducts public relations and research activities, oversees financial companies, and develops various mobility products, primarily software.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Share Decline: The global market share of U.S. legacy automakers has dropped from 21.4% in 2019 to an estimated 15.7% in 2025, indicating a severe challenge posed by the robust growth of Chinese EV manufacturers.
- Massive Loss Warning: Stellantis disclosed a $26 billion charge due to a business overhaul, resulting in a more than 20% plunge in its stock, reflecting overestimated expectations regarding the pace of the energy transition and weak market demand.
- Rise of Chinese Brands: Chinese EV sales skyrocketed from approximately 572,300 units in 2020 to 4.95 million in 2025, with a nearly 70% increase in global market share over five years, showcasing the strong expansion capabilities of Chinese brands in the global market.
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See More
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- Stock Performance: The stock price of Toyota has risen nearly 10% recently, reflecting market confidence in its growth potential, particularly as the global automotive market recovers, which could further drive its stock upward.
- Industry Outlook: With Japan's industrial push, Toyota could emerge as a long-term beneficiary, especially due to its ongoing investments in electric and hybrid vehicles, which are expected to enhance its market competitiveness and brand image.
- Recall Issue: Toyota is recalling over 160,000 vehicles in the U.S. due to a camera display issue; while this may impact sales in the short term, it demonstrates the company's commitment to product quality and consumer safety, potentially strengthening consumer trust.
See More
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- Star Athlete Participation: Featuring NFL wide receiver Puka Nacua, Paralympian Oksana Masters, and NASCAR driver Bubba Wallace, the ads showcase their interactions with their younger selves, conveying the dreams and efforts behind every champion, further enhancing the brand's image.
- Emotional Storytelling: “Superhero Belt” narrates the emotional bond between a grandfather and grandson, using memories of a 1997 Toyota RAV4 to illustrate love and legacy across generations, strengthening consumer emotional identification with the brand.
- Integrated Marketing Activities: As the official automotive partner of the NFL, Toyota conducted various activities during Super Bowl week, including the NFL Honors and a black-light flag football game, showcasing its support for community and sports, further solidifying its position in consumers' minds.
See More
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- EV Sales Projections: The International Energy Agency projects that by 2025, EV sales will make up 60% of all vehicle sales in China, but with government subsidies being cut, a decline in sales is expected in 2026, putting pressure on BYD.
- Rising Raw Material Costs: The price of lithium and other critical minerals for battery production has more than doubled in the past year, from $11 per kilogram to $23, impacting BYD's profitability, as evidenced by a 3.05% drop in revenue in Q3 compared to the previous year.
- Sustained Profitability: Despite these challenges, BYD's operating revenue increased by 12.75% year-over-year in the first nine months of 2025, and it remains profitable with a gross margin of 19.9%, demonstrating resilience in adversity.
See More
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- Brand Reinforcement: Toyota is returning to Super Bowl LX with two impactful 30-second ads that emphasize the brand's belief that while destinations may change, the people beside us are what truly matter, which helps strengthen emotional connections with consumers.
- Advertising Strategy: By advertising during the world's most-watched sporting event, Toyota not only boosts brand visibility but also showcases its all-new 2026 RAV4, further solidifying its position in the highly competitive automotive market.
- Market Impact: This advertising campaign is expected to attract significant viewer attention, particularly among younger consumers, potentially driving sales growth and increasing market share, especially in the SUV segment.
- Interactive Experience: Toyota also offers an interactive multichannel news release, enhancing consumer engagement and brand experience, indicating the company's innovation and investment in digital marketing.
See More
U.S. Electric Vehicle Industry Faces Existential Crisis
- Market Share Decline: The global market share of U.S. legacy automakers has dropped from 21.4% in 2019 to an estimated 15.7% in 2025, indicating a severe challenge posed by the robust growth of Chinese EV manufacturers.
- Massive Loss Warning: Stellantis disclosed a $26 billion charge due to a business overhaul, resulting in a more than 20% plunge in its stock, reflecting overestimated expectations regarding the pace of the energy transition and weak market demand.
- Rise of Chinese Brands: Chinese EV sales skyrocketed from approximately 572,300 units in 2020 to 4.95 million in 2025, with a nearly 70% increase in global market share over five years, showcasing the strong expansion capabilities of Chinese brands in the global market.
- Impact of U.S. Policies: U.S. automakers have invested over $27 billion in EV development, but due to policy shifts and declining market demand, many companies are scaling back their EV plans, potentially leading to a long-term decline in competitiveness.
See More
Chinese Automotive Industry Surges Ahead Globally
- Market Share Shift: Since 2023, the Chinese automotive industry has become the largest vehicle exporter globally, with electric vehicle sales projected to reach 4.95 million by 2025, indicating strong growth that poses significant pressure on traditional U.S. automakers.
- Crisis in U.S. Auto Industry: U.S. manufacturers like Stellantis announced a $26 billion restructuring charge due to missteps in the EV transition, leading to a 20% stock plunge, reflecting a decline in competitiveness in the EV market that could impact long-term profitability.
- EV Sales Comparison: Tesla has been surpassed by Chinese brand BYD in European sales, indicating a waning appeal for Tesla in the global EV market, while Chinese brands have increased their market share by nearly 70% over the past five years, posing a threat to U.S. markets.
- Future Outlook: Chinese EV sales are expected to reach 6.5 million units by 2030, and as Chinese brands expand globally, U.S. automakers will face intensified competition, particularly in mature markets.
See More
