The retreat of many automakers from a purely electric vehicle strategy is gaining momentum worldwide. More than a dozen manufacturers are scaling back their electric vehicle targets, postponing model launches, or extending the use of plug-in hybrids and combustion engines. Besides Honda, Mercedes-Benz, Ford, Stellantis, and Volvo Cars, several luxury brands such as Rolls-Royce, Bentley, Lotus, Audi, Porsche, Lamborghini, and Ferrari are also affected. The triggers are continued demand for gasoline engines, changed political frameworks in the US and Europe, and high costs from already launched electric vehicle programs. Particularly in the luxury segment, the lack of engine sound is considered a crucial risk factor, while the consequences are already visible: halted projects, delayed schedules, and billions in losses. (ft: 25.03.26)
The retreat from electric cars is particularly pronounced in the luxury segment
Manufacturers, especially in the upper price segment, are deviating from their earlier goals for electric vehicles. Rolls-Royce announced that it will continue to offer gasoline-powered vehicles even after 2030, despite having introduced one of the first all-electric luxury cars, the Spectre, back in 2023. At the same time, CEO Chris Brownridge emphasized that Rolls-Royce intends to continue producing electric models, but that classic V12 technology will remain in its lineup. Bentley has also reversed course and now plans to continue selling plug-in hybrids beyond 2035, while the brand’s first all-electric model will arrive two years later.
Lamborghini, Audi, Porsche, and Lotus have also noticeably scaled back their plans. Lamborghini abandoned its plan to launch the Lanzador as a purely electric car by 2030. Instead, the model will now be released as a plug-in hybrid. CEO Stephan Winkelmann explained the move by citing increasing resistance to fully electric vehicles, stating, “The rejection rate for fully electric cars is rising.” He also mentioned vibration, steering feel, braking performance, and the lack of engine sound as key reasons for many customers’ skepticism.
More than twelve manufacturers worldwide are changing course
However, this strategic shift extends far beyond niche manufacturers. Honda abandoned its plan to phase out internal combustion engines by 2040 and expects to incur costs of around $16 billion over the next two years due to the restructuring of its electric vehicle strategy. Mercedes-Benz, Ford, Stellantis, and Volvo Cars have also reduced or postponed their all-electric targets. This shift is solidifying into a broad industry trend that now affects several market segments simultaneously.
While Ferrari isn’t completely abandoning electric cars, it is adjusting its expectations. Last year, the manufacturer halved its EV production target for 2030, yet it remains committed to its first electric model. At the same time, CEO Benedetto Vigna has repeatedly stated that Ferrari will not force its customers to forgo the familiar sound of gasoline engines. Therefore, an electric Ferrari is intended to deliver the same driving pleasure as a model with a gasoline or hybrid powertrain. This clearly demonstrates that the retreat in the luxury segment is not solely about technology, but also about brand identity and customer expectations.
Politics and Billions in Costs Drive the Shift
The shift also has political and financial reasons. Since Donald Trump took office, the US has eliminated tax incentives for electric vehicle buyers, cut spending on charging infrastructure, and relaxed emissions targets. Regulations have also been weakened in Europe, prompting many manufacturers to readjust their plans. While demand for conventional engines remains stronger than expected, the transition to all-electric fleets is therefore proceeding much more slowly.
Added to this are the high costs of canceled or postponed projects. According to calculations by the Financial Times, changes to EV strategies cost the global automotive industry at least $75 billion last year alone. This includes canceled model launches, reduced investment plans, and new expenditures on hybrid technology. The retreat from a hardline electric vehicle strategy is therefore not just a technical adjustment, but also an expensive restructuring of the entire model policy of many manufacturers.