EV Write-Offs Rise, Yet One Auto Giant Is Doubling Down

A few years back, electric vehicles (EV) were one of the hottest themes in investing. Tesla’s success paved the way for many EV pure plays to go public, while legacy automakers committed billions of dollars to shift gears toward electric mobility. It was seen as the next big transformation in autos that would drive future revenue and earnings growth.

But the hype has faded. EVs have proved to be a costly transition, adoption has slowed, and things haven’t quite played out the way many had anticipated. In the United States, the EV market has struggled to hold momentum, partly due to weaker government support. The Trump administration rolled back incentives and regulations meant to boost EV sales. A key tax credit— worth up to $7,500 for qualifying EVs and plug-in hybrids— expired last September, removing an important demand driver. This has weakened the near-term case for EVs, even though they are still widely considered to be the future of transportation.

In response, many auto giants such as Ford F, General Motors GM and Stellantis STLA have reconsidered their EV strategies and taken write-off charges on related investments that no longer make business sense. The latest casualty is Honda HMC, which announced yesterday that it expects to take charges of up to $16 billion in the fiscal year ending March 31, 2026, as it pivots away from EVs.

Interestingly, Honda’s closest peer appears to have largely avoided this situation. That is the Japanese auto titan Toyota TM. The company did not go all in on EVs when the rest of the industry was aggressively investing in the technology, a decision that drew criticism at the time. But that cautious approach now seems to be paying off, as Toyota has not announced any EV write-downs so far.

Surprisingly though, the same automaker is now preparing to double down on EVs at a time when demand remains uncertain. Before discussing its strategy, let’s briefly look at how Ford, General Motors, Stellantis and Honda ended up taking write-offs on their EV bets.

$70B EV Reality Check for F, GM, STLA and HMC

Ford is moving away from its plans to manufacture large EVs. Instead of rolling out expensive, capital-heavy EVs into a reluctant market, Ford will now focus on profitable hybrids and internal combustion vehicles, while narrowing its EV efforts to smaller, lower-cost models. At the center of this shift is Ford’s new Universal EV Platform. Ford’s first vehicle built on the platform will be a midsize electric pickup. Notably, the company has even discontinued the fully electric version of its best-selling F-150 pickup. Ford announced $19.5 billion in EV-reset related charges.

General Motors also responded to slower-than-expected EV demand by selling its stake in the Ultium Cells Lansing plant and pivoting some assembly capacity from EVs back to internal combustion engine (ICE) vehicles. The company took $7.6 billion in charges in the second half of 2025 to reduce EV capacity.

Last month, Stellantis confirmed that it incurred around $25 billion in losses related to EV restructuring in the second half of 2025.Its RAM brand discontinued its planned all-electric pickup. The company is repositioning its North American strategy around conventional hybrids and extended-range electric vehicles (EREVs), which offer electric driving with longer range and reduce dependence on charging infrastructure.

Honda, as mentioned earlier, will be taking a massive hit of roughly $16 billion and is now projecting a full-year loss of 340-570 billion yen in fiscal 2026. It has canceled its highly anticipated 0 Series SUV and sedan just months before planned production, shifting its focus toward developing more competitive hybrid models while expanding its motorcycle business to strengthen profitability.

With that, the cumulative EV-restructuring losses for these four automakers come to roughly $70 billion.

Toyota Expands EV Push As Rivals Retreat

For years, Toyota prioritized hybrids over fully electric vehicles and was often viewed as one of the slowest legacy automakers to embrace BEV technology. Until the start of this year, the brand had only one EV offering in the U.S. market — the Toyota bZ.

That is now changing. Toyota is expanding its battery-electric lineup in the United States, with additions such as the Toyota Highlander EV, Toyota bZ Woodland and Toyota C???HR EV, per Autoblog. The new lineup spans multiple segments— from compact SUVs to more lifestyle-oriented crossovers— helping the company target a broader group of buyers.

Toyota views this expansion as a natural next step after the success of its hybrid strategy. Hybrid models have grown rapidly. That large base of hybrid customers could eventually become a pipeline of EV buyers.

The company is also trying to manage costs more efficiently. The company is also looking to control EV costs by leveraging its global operations and sourcing batteries from its new North Carolina plant. The Highlander EV will be Toyota’s first three-row electric SUV and also the first Toyota EV assembled in the United States.

At the same time, Toyota is rolling out updated EV models and offering pricing incentives to attract buyers now that the $7,500 federal EV tax credit is no longer available. With longer range, quicker charging and aggressive pricing, Toyota is betting its new EVs can appeal to mainstream buyers at a time when much of the industry is stepping back.

Last Word

In hindsight, Toyota’s reluctance to rush into EVs has saved it from the costly reset now facing several rivals. By holding back earlier, the company now appears to be in a better position to expand its EV push. Whether Toyota’s timing proves right remains to be seen, as EV demand is uneven and policy support uncertain. But if demand picks up again, that positioning could give Toyota an advantage as the next phase of the EV transition unfolds.

TM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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