Detroit’s ICE Revival: Gas-Powered SUVs Return as EVs Take Backseat

Major automakers such as Ford, GM, and Stellantis are refocusing on SUVs and pickup trucks following deregulation, raising questions about climate commitments VS profit.

The regulatory rollbacks enacted by the current federal government administration might set climate commitments made by automakers back more than ten years. Changes made could push EVs further away and make room for giant gas-guzzling SUVs and trucks to continue to dominate the roadways. This change in policy means Detroit automakers are ready to move forward with large, and highly profitable pickups and SUVs.

The war on EVs

Electric vehicles were a huge part of the previous administration’s push for climate responsible vehicles on the roadways, but the new administration has changed nearly everything. Although automakers are still free to build and sell EVs, the tax breaks offered and support for charging infrastructure are all but cancelled and won’t likely return until 2029. This could push back the growth and development that has happened in the EV market thus far, but that won’t be a problem for most legacy automakers. It will be a huge issue for EV brands like Tesla, Rivian, and Lucid, but the Detroit Big Three will continue to thrive off ICE vehicles.

CAFÉ standards overlooked

Automakers are expected to pay massive fines for not meeting CAFÉ standards. These are the fuel efficiency standards set across an automaker’s entire lineup, and some brands have had to pay massive fines in recent years. The executive brand of the federal government has rolled these standards back to 2022 levels and cancelled all fines that automakers would have to pay for missing these standards for the past few years. This means automakers can focus on building large trucks and SUVs instead of worrying about meeting stricter fuel economy requirements.

EVs were already facing troubles

Electric vehicles don’t make a large percentage of all vehicles sold, but that figure was expected to increase through the end of the decade to be close to 50% of all vehicle sales. Now that EVs aren’t the focus, nor in high demand, many US automakers are tearing up the playbooks regarding these vehicles. This is a huge opportunity for automakers to relax their EV focus and build large SUVs and trucks, which is what they have done for decades.

“This is a multibillion-dollar opportunity over the next couple of years.”

• Ford CEO, Jim Farley

Ford is already changing its lineup and scaling back EV plans to focus on larger vehicles.

Eliminating state regulations

The EV boom has certainly fizzled out, and that has caused the current administration to focus on stripping states of their regulations designed to mandate battery-powered vehicles. This will impact California the most. It has led the way in the push for electric vehicles and has set its own emissions standards for many years, which many other states have followed in the past. With these changes, California will no longer have the ability to set mandates for emissions standards and fuel efficiency. California was set to reach zero ICE vehicles sold in the state within the next decade.

What does this mean for automakers?

• The Detroit Big Three can relax and feel relieved. In recent years, many vehicles powered by large V8 engines were being redesigned to use turbocharged and hybrid-assisted V6 engines, but now, that doesn’t have to happen. Ford, GM, and Stellantis can continue to produce vehicles using large V8 engines, if they choose to. Some automakers, such as Toyota, had already shuttered all V8 engines from its lineup, and the Dodge brand ended production of the Hellcat-powered vehicles due to increased fuel efficiency challenges.

Because regulations have been lifted and fines cancelled, these automakers can focus on building vehicles with large engines and avoid the challenge of meeting stricter efficiency regulations. Since 2022, Ford, GM, and Stellantis have spent nearly $10 billion on regulatory credits due to the CAFÉ regulations. This money

can be reinvested into ICE vehicles, allowing these automakers to focus on what they do best.

Will EVs die?

It will probably take more than one administration to kill EVs, but don’t expect EV sales to grow over the next few years. Without the Federal EV Tax Credit, and new fast-charging stations, electric vehicles might not have as much of a future as they would have if the current administration built on the previous one. Still, it’s possible that CAFÉ standard were getting too strict and consumers should have choices without federal credits being part of the buying decision.

Electric vehicles will likely return or grow again in the future, but for now, US automakers can focus on building the large trucks and SUVs that have been a staple of the automotive industry for decades. Instead of worrying about meeting fuel efficiency regulations, automakers can build vehicles with the latest tech and features to be some of the most interesting vehicles ever created. Of course, with the life cycle of most vehicles, this change requires immediate pivoting of the market. Most automakers need three to five years to develop new models. Thankfully, the Detroit Big Three already have full lineups of trucks and SUVs to keep the focus where these automakers work best.