Fwd: 'EV winter' is coming

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Loretta Lohman

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Jan 6, 2026, 9:49:02 AM (13 days ago) Jan 6
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Why sales growth is set to slow in 2026 |
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Automakers sold a record number of electric vehicles globally in 2025. While sales are likely to once again increase in 2026, the jump will be smaller.

Today’s newsletter explains why the market is cooling. Plus, what to expect if you’re a homeowner looking to install rooftop solar in the US this year.

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The big chill

By Kyle Stock and Lili Pike

Growth in global sales of electric vehicles is expected to slow this year as China winds down some subsidies, Europe wavers on its phase-out of combustion engines, and US producers and policymakers make a U-turn from the segment.

BloombergNEF expects drivers to buy 24.3 million passenger EVs this year, an increase of only 12% on 2025 and weaker than the 23% growth in sales last year.

In the US in particular, electric vehicle makers are facing an “EV winter,” and will need to navigate bumpy months ahead before a likely revival in sales in 2027 and 2028, said Nathan Niese, Boston Consulting Group’s global lead for EVs and energy storage. Though the long-term trajectory for battery-powered vehicles remains positive, there isn’t “a 2026 story buried in there that says there’s lots to be optimistic about,” he said.

A mound of snow near the Tesla Inc. factory in Gruenheide, Germany. Photographer: Krisztian Bocsi/Bloomberg

Ford Motor Co.’s decision in December to take $19.5 billion in charges related to a sweeping overhaul of its EV business — including the move to convert its flagship electric F-150 Lightning truck to an extended-range hybrid vehicle — highlighted the fragility of the sector’s short-term prospects, and capped a series of strategy rollbacks from major producers outside China. 

The Trump administration’s withdrawal of up to $7,500 consumer tax credits in the US after September and hollowing out of fuel-economy standards has sent the nation’s EV market tumbling. US sales in December plunged 41% from a year earlier, BNEF said in a recent note.

Even in China, the world’s top EV market, analysts are anticipating a slight slowdown in sales growth, due in part to narrowing government support for the industry. Beijing has cut the EV tax break in half for 2026, while a cash-for-clunkers program will include new restrictions limiting eligibility. Authorities have criticized “rat-race competition” in the nation’s crowded auto sector, and are cracking down on discounts offered to counteract waning demand. 

“The Chinese government is definitely trying to cool the price war,” said Michael Dunne, CEO of Dunne Insights, a California-based auto industry consulting firm. 

Fierce competition saw BYD Co., China’s EV champion, post its weakest annual sales growth since 2020 last year, as rivals including Geely Automobile Holdings Ltd. and technology giant Xiaomi Corp. begin to gain ground. The nation’s auto firms are also seeing growth slow as they try to expand in tougher markets, such as smaller cities and rural areas. 

China’s passenger EV sales, including plug-in hybrids and extended-range hybrids, are expected to have reached 15.6 million in 2025, a 27% increase on the previous year, according to a Bloomberg Intelligence forecast. Sales for 2026 are projected to rise just 13%.

While EV policy is deteriorating, the sector’s economics are improving. Affordability has been among the largest barriers to EV adoption in the US, and battery prices — the most expensive part of any electric car or truck — fell another 8% in 2025, according to BNEF estimates. 

“Carmakers that can cut costs and offer affordable models in the most desirable vehicle segments are likely to see sustained sales growth,” BNEF analyst Huiling Zhou said in a recent report.

Read the full story, including what’s ahead for China’s EV exports. You can subscribe to the Hyperdrive newsletter for weekly insights into the auto industry’s future. 

Charges everywhere

$1.6 billion
The amount of charges tied to paring EV production capacity for GM. The automaker flagged more such moves may be in the offing.

A used buyers' market

"The depreciation on the EVs appeared to be considerably more than a gas engine."
Jeff Craig
Craig is among a growing number of people finding deals on used EVs in the US, which are closing in on price parity with used gas-powered cars and trucks despite the higher new price tags. 

Going electric in 2026

By Todd Woody

The elimination of US tax credits for residential heat pumps, solar panels and batteries will make electrifying your home more expensive in 2026, and tariffs and made-in-America mandates could add additional costs.

Just how pricey remains to be seen. New financing models could help keep some solar and battery costs in check, according to Emily Walker, director of insights at online solar marketplace EnergySage.

Here’s some of what you need to know.

A worker installs solar panels on a rooftop. Photographer: Mario Tama/Getty Images

The impact of the tax credit repeals

The expiration of the 30% federal tax credit for solar and battery installations at the end of 2025 doesn’t necessarily make the equipment more costly to buy but for homeowners with a tax liability, it does end the ability to reduce or erase their tax bill. A typical solar and battery system generated tax credits worth about $10,000.

You can still save by leasing

Tax credits remain for leased solar systems through the end of 2027, though the installer receives the incentive and passes on the savings to homeowners through lower monthly payments or other cost reductions.

Tariffs and new rules raise costs

To receive the tax credit, leased systems must comply with new domestic manufacturing requirements that took effect Jan. 1, 2026. The federal government, though, has yet to issue final guidance on what percentage of components from China and other countries are prohibited under the Trump tax bill enacted in July.

Read the full story to find out more about the new model of solar financing.

This week’s Zero

Kim Stanley Robinson’s life project has been imagining utopias. He’s a science-fiction writer best known in climate circles for writing Ministry For The Future, which depicts a future in which the world grapples with climate change following an extreme heat event that kills millions. Robinson joins Akshat Rathi this week on Zero to discuss how to create better futures and whether it’s right to pursue abundance.

Listen now, and subscribe on AppleSpotify or YouTube to get new episodes of Zero every Thursday.

More from Green

The US is awarding $900 million each to Centrus Energy Corp. and two other nuclear fuel makers as part of an effort to restart domestic production and wean the US off of enriched Russian uranium.

Centrus’ Ohio facility, which can house thousands of centrifuges to enrich uranium. Photographer: Jed Rosenberg/Bloomberg

The funding for Maryland-based Centrus will go toward the development of next-generation reactor fuel, according to the Energy Department, which is announcing the awards later Monday. Funding will also go to Peter Thiel-backed advanced nuclear fuel enrichment startup General Matter and to a subsidiary of Orano SA, which is planning an enrichment facility in Tennessee.

The announcement comes as President Donald Trump’s administration throws its weight behind expanding the US nuclear industry. But the funding, which was awarded by Congress in 2024, was part of a plan by former President Joe Biden’s administration to wean the US off of cheap enriched Russian uranium and help restart a long-dormant domestic industry for enrichment and other specialized services needed to manufacture nuclear fuel.

Read the full story.

Millions of Australians face an increasing risk of urban wildfires similar to the deadly blazes in Los Angeles last year. Suburbs on the fringes of centers, including Sydney, Melbourne and Perth, house at least 6.9 million inhabitants and, like regions impacted in LA, adjoin highly flammable grasslands, according to a new report.

European power prices went negative a record number of times in 2025. Germany logged 573 hours of negative prices in 2025, a 25% increase from the previous year. And Spain, which experienced negative prices for the first time in 2024, has since seen them double year-on-year.

Top soy traders exited a landmark deal created in Brazil to protect the Amazon against deforestation. Industry group Abiove, which has among its associates Archer-Daniels-Midland Co., Bunge Global SA and Cargill Inc., said it is withdrawing from the Soy Moratorium. The move is a major setback to the 19-year-old initiative.

More from Bloomberg

  • Business of Food for a weekly look at how the world feeds itself in a changing economy and climate, from farming to supply chains to consumer trends
  • Hyperdrive for expert insight into the future of cars
  • Energy Daily for a daily guide to the energy and commodities markets that power the global economy
  • CityLab Daily for top stories, ideas and solutions, from cities around the world
  • Tech In Depth for analysis and scoops about the business of technology

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