Electric Vehicle Adoption: Progress, Setbacks, Regulations and the Fate of the V8

Analysis and opinion as of Friday, Oct 23, 2026 (ET). Throughout, “EVs” means battery-electric vehicles, “hybrids” means conventional and plug-in hybrids, and “gas-powered” or “internal-combustion” cars means vehicles with only a combustion engine and no hybrid system. Stock moves use closing prices through Thursday, Oct 22.

The short version

• The three groups are moving in different directions. In the US in Q3 2026, EVs were about 6.4% of new-vehicle sales, hybrids about 18.5% and pure gas vehicles roughly 75%. In the EU, EVs hold 22.7% of the market so far this year, hybrids 46.4% and petrol and diesel 28.2%. In China, EVs reached 47.3% of September retail sales and plug-in hybrids and range extenders 19.8%.
• The US EV boom ended with the tax credit. Q3 US EV sales of about 262,600 were the best in a year but still 39.5% below the record Q3 2025 rush before the $7,500 federal credit expired on Sept. 30, 2025. Tesla (TSLA) sold 54% of them.
• The rules have flipped. Washington has rescinded the greenhouse-gas “endangerment finding” and the vehicle CO2 standards, zeroed CAFE penalties, and finalized a fuel-economy reset that takes effect Nov. 30. Europe is softening its 2035 target, but the law hasn’t changed yet.
• The bill came due. Stellantis (STLA), Ford (F), Honda (HMC) and General Motors (GM) have booked roughly $62 billion of EV write-downs and charges between them.
• And the V8 is back in fashion. GM is spending heavily on a new small-block, Ram brought back the Hemi, and Mercedes-AMG has admitted it “underestimated” the V8 crowd.

Where each powertrain stands

EVs (battery-electric)

• US: about 262,600 EVs were sold in Q3, up 6.1% from Q2 but down 39.5% from a year earlier. EV share rose to 6.4% from 5.8% in Q2. Tesla sold about 144,100 of them (the Model Y alone was 99,000). Rivian (RIVN) was second at about 19,200, up 46%, helped by 8,469 delivery vans. Lucid (LCID) delivered 3,806 vehicles worldwide and built only 2,954 as it works down inventory after cutting a production shift in June.
• Global Tesla: 486,532 deliveries, ahead of the company-compiled consensus of 461,974. In Q3 results on Oct. 21, revenue was $28.05 billion and automotive gross margin excluding regulatory credits improved to 18.1% from 16.3% in Q2. GAAP net income still fell 43%, to $787 million.
• China: EV retail sales were 765,000 in September, down 8.5% from a year ago, as the country halved its EV purchase-tax break to a 5% tax for 2026. BYD (BYDDY) still sold a record 463,561 vehicles worldwide in September, but its domestic retail sales fell 28.9% and exports carried the growth. China’s EV and plug-in exports more than doubled to 558,000 in the month.
• EU: EV registrations rose 72.9% in September to 290,117, a 29.9% share. Germany hit 34.5%.

Hybrids (conventional and plug-in)

• US: nearly 25% of Q3 sales were electrified in some form, so hybrids and plug-ins made up roughly 18.5% after subtracting EVs. Toyota (TM) sold 363,367 electrified vehicles in the US in Q3, up 28.5% and 57.4% of its total. GM, by contrast, sells just one hybrid, the Corvette.
• EU: conventional hybrids are the single most popular powertrain at 36.3% of registrations year to date. Plug-in hybrids add 10.1%.
• China: plug-in hybrids fell 35.7% from a year earlier in September, while conventional hybrids rose 25%.

Gas-powered cars (internal combustion)

• US: still about three of every four new vehicles, in a market heading for 16.1 million sales this year. GM’s Q3 US sales fell 5.5% to 670,974, while full-size Silverado pickups rose 2.7%. The average new-vehicle transaction price was $50,562 in September, just $52 below the all-time high. Incentives averaged 6.6% of price, below 7.3% a year earlier.
• EU: petrol and diesel together fell to 28.2% of registrations year to date, from 36.9% a year earlier.
• China: conventional gasoline car sales fell 49% from a year earlier in September as high oil prices hit demand.

The ups and downs

• The boom: Q3 2025 was the best quarter ever for US EV sales, with share above 10% for the first time, as buyers rushed to beat the credit’s expiry.
• The bust: almost every legacy brand’s EV sales collapsed in Q3 2026. Ford was down 80%, Chevrolet 75% (the Equinox EV fell 92% to 1,905 units) and Honda 76%. Volkswagen, Audi and Jeep were each down 90% or more.
• The price war cooled: the average EV sold for $55,879 in September, about an 11% premium over a comparable gas vehicle, down from about 18% on average in 2025. EV incentives fell to 11% of price from 14.2% a year ago.
• The write-downs: Ford took $19.5 billion and cancelled the F-150 Lightning in its current form. GM took $1.6 billion plus $6 billion, and says total EV realignment cash charges come to $7.4 billion. Stellantis took €22.2 billion (about $26.5 billion), suspended its dividend, and its shares fell as much as 30% in a day. Honda booked more than $9 billion, posted its first annual loss as a listed company and scrapped its long-term EV sales target.
• The winners: companies with compelling new products. Toyota and Lexus EV sales rose roughly fivefold, and Rivian’s rose 46%.

Consumer acceptance

• Consideration: about a quarter of US new-vehicle shoppers say they are “very likely” to consider an EV. Among those who reject one, charging availability (46%), charging time (44%) and purchase price (42%) lead the list.
• Charging reliability is improving but still poor: 52.4% of drivers using non-Tesla networks reported finding broken chargers this year, down from 62% in 2025.
• Resale: used EV retail prices are up about 8% from a year ago, as cheaper used EVs have pulled in buyers who skipped new ones.
• Gas prices help: with pump prices above $4 a gallon, the running-cost case for EVs and hybrids is stronger than it has been in years. That’s a big reason hybrids are winning the middle of the market.

Changing regulations

• US tax credit: the up-to-$7,500 federal EV credit ended on Sept. 30, 2025.
• EPA: its rule rescinding the 2009 greenhouse-gas endangerment finding, along with federal GHG standards for new vehicles, took effect on April 20, 2026.
• CAFE: Congress set CAFE civil penalties to $0 in July 2025. NHTSA’s SAFE III rule, effective Nov. 30, 2026, resets the standards so the fleet average reaches about 34.9 mpg by model year 2031, versus about 49.3 mpg under the 2024 rules.
• California: on Sept. 2, a federal judge blocked EPA’s attempt to treat four California waivers as rules Congress could overturn, and ordered the status quo restored. The fight continues in court.
• EU 2035: the 100% CO2 cut for new cars from 2035 is still law. The Commission proposed 90%. Parliament committees backed 95%, with up to 7.5 points of credit for EU-made low-carbon steel (an effective 87.5%), and France and Germany back 90% without offsets. A plenary vote is expected in December, and final rules are not expected until 2027.
• Tariffs: the US keeps its 100% Section 301 tariff on Chinese EVs. With the 25% Section 232 vehicle tariff and the 2.5% base duty, the total can reach 127.5%. The EU’s countervailing duties on Chinese EVs range from 7.8% to 35.3%.
• China: besides halving the purchase-tax break, trade-in rebates moved to 12% of the vehicle price, capped at ¥20,000.

The demise, and comeback, of the V8

For 15 years, emissions and fuel-economy rules pushed automakers to downsize. Smaller turbocharged engines score better on the federal test cycles that set CAFE and CO2 compliance, and every big engine on the lot made the fleet math harder. That’s why Toyota dropped the V8 from the Tundra, Mercedes put a four-cylinder hybrid in the C63, and Ford leaned on EcoBoost V6s. With CAFE penalties at $0, the federal CO2 standards gone and a much looser CAFE curve arriving Nov. 30, the regulatory cost of displacement in the US has largely disappeared, and the product plans show it.

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• GM is investing $888 million at its Tonawanda, New York plant (its largest-ever engine-plant investment) and C$691 million at St. Catharines, Ontario, in sixth-generation small-block V8s. The new 5.7L and 6.6L engines (481 hp) arrive in the 2027 Silverado and Sierra 1500. The Tonawanda money replaced a previously announced $300 million EV drive-unit plan.
• Stellantis brought the 5.7L Hemi back to the 2026 Ram 1500 after the Hurricane twin-turbo inline-six was supposed to replace it, and the supercharged 777-hp TRX returns for 2027. The new Dodge Charger launched as a 536-hp EV and a twin-turbo “Sixpack” six. A V8 Hellcat Charger is reported for model year 2028 but isn’t confirmed.
• Ford keeps the 5.0L Coyote in the Mustang GT and Dark Horse and most F-150 trims, but dropped it from the King Ranch and Platinum for 2026.
• Mercedes-AMG says the four-cylinder C63 is being replaced by an inline-six C53, and there will be no V8 C63 this generation. A new flat-plane V8 is going into the S, GLE, GLS and CLE 63, and Mercedes plans to build V8s until at least 2035. Its CEO says the company “underestimated” how good “the good old V8 crowd” is.
• BMW M kept the twin-turbo V8 in the M5, now as a 717-hp plug-in hybrid. Toyota has stuck with its twin-turbo V6 and hybrid V6 in the Tundra.

Wick's take: displacement still matters

Wick will say what a lot of truck owners already know: for most heavy-duty, real-world use, turbos and batteries don’t fully replace displacement.

• Towing and sustained load: a big naturally aspirated engine makes its power without relying on boost. Under a long, hot, loaded climb, small turbo engines run near peak boost and heat for long stretches, which is where heat soak, high under-hood temperatures and long-term wear show up.
• Real-world fuel economy: in independent testing, small turbo engines have often missed their EPA ratings, because the test cycle rarely uses much boost and real driving does. In one well-known test, every one of 11 small-turbo models came in below its EPA estimate, for example 25 mpg against a 28 mpg rating. Newer turbos have narrowed that gap, but the gap is widest exactly when you’re working the engine.
• Longevity and complexity: turbos, intercoolers, direct injection and the extra plumbing add parts that can fail. A simple pushrod V8 is about as proven and cheap to fix as engines get.
• Feel: throttle response and sound are part of the product, and the market keeps proving it. Mercedes admitted it misread V8 buyers, and Ram brought the Hemi back.
• EVs under load: in testing with a roughly 10,000-lb trailer, an F-150 Lightning managed an estimated 91 miles and a Rivian R1T 85 miles, less than a third of their EPA ranges. A state transportation field test found 50–70% range loss while towing. In the cold, AAA found about a 41% loss at 20°F with the heater on, and federal testing found roughly 50% at 0°F.

To be fair: turbos genuinely win in some places. They hold power at altitude, where a naturally aspirated engine loses a meaningful share, and Ford’s 3.5L EcoBoost makes 500 lb-ft and is rated to tow 13,500 lbs, more than the 5.0L V8’s 12,800. Hybrids like the F-150 PowerBoost (570 lb-ft) and Tundra i-Force Max (583 lb-ft) beat the V8 on torque and city fuel economy. EVs deliver instant torque, quiet commuting and the lowest running costs for short daily trips. The right engine depends on the job. For towing and long hauls, displacement still earns its keep.

What it means for the stocks

• Demand for gas and hybrid cars is real, and inventory shows who is winning: Toyota had 35 days of supply in September and Honda 48, against 169 for Jeep, 152 for Ram, 149 for Dodge and 101 for Ford. The industry average was 82 days on 2.80 million units. The RAV4 had 24 days, the Ram 1500 142.
• HMC is up 17.3% this year despite its EV write-down. TM is down 7.4% year to date but up 8.3% since Sept. 30, with the leanest inventory in the industry.
• GM (down 5.1% YTD) fell 6.8% on its Oct. 20 report despite $50.0 billion of revenue and $4.1 billion of adjusted EBIT. It narrowed full-year adjusted EBIT guidance to $14.5–15.5 billion, and cost pressure and tariffs weighed on the shares. Its trucks and the new V8 are the profit engine.
• F is down 9.0% year to date and reports on Oct. 28. STLA is down 60.8% after its write-down, with Jeep and Ram still carrying the heaviest inventory in the industry.
• TSLA is down 16.7% year to date. It rose 3.4% into its Oct. 21 results and fell 3.1% the next day, though its US EV share keeps rising. RIVN (−38.8%) and LCID (−67.3%) show how unforgiving this market is for EV-only makers, and BYDDY is down 27.7% as China’s home market shrinks.
• Lithium: Albemarle (ALB) is down 34.6% this year, SQM (SQM) 18.1% and the Global X Lithium & Battery Tech ETF (LIT) 6.4%. All three fell 11–13% since Sept. 30, against a flat S&P 500.

Scenarios through 2027

Wick’s pickBase (50%), the hybrid decade: US EV share holds around 6–8% without the credit. Hybrids keep taking share from pure gas, gas cars stay around 70% or more of US sales, Europe’s EV share keeps climbing under softened CO2 rules, and China stays above 60% EVs and plug-ins. Hybrid-rich TM and HMC keep the edge, and GM and F lean on trucks and V8s.

Wick's take

Wick's pick is the Base case (50%). The EV isn’t dead: it’s 6.4% of the US, nearly a third of EU sales in September, and half of China’s. But in America, the winner of the last two years is the hybrid, and the internal-combustion car isn’t going anywhere. The regulatory push that was forcing EVs and downsized turbos on buyers is gone in the US. That leaves the market to sort powertrains by job: EVs for commuting, hybrids for the middle of the market, and displacement for towing, hauling and fun.

• Favored: makers whose lineups match that split (TM, HMC) and those cashing in on trucks (GM).
• Harder going: EV pure-plays and companies still burning cash to catch up (LCID, RIVN, STLA).

What would change the view: a sustained move in US EV share above 8% without new incentives would move Wick toward the rebound case. A collapse in hybrid supply growth would favor the gas-car renaissance.

What to watch

• Wed Oct 28: Stellantis Q3 2026 financial results..ics
• Wed Oct 28, 5:00 PM ET: Ford Q3 2026 earnings call (after the close)..ics
• Thu Oct 29, 5:00 PM ET: Rivian Q3 2026 earnings call (after the close)..ics
• Thu Nov 5: Toyota fiscal second-quarter (July–September) results..ics
• Mon Nov 9, 5:30 PM ET: Lucid Q3 2026 earnings call..ics
• Mon Nov 30: NHTSA’s SAFE III fuel-economy reset takes effect..ics

Analysis and opinion, not investment advice. Sales figures are industry estimates and may be revised. Stock moves use daily closing prices.

Add all 6 events to calendar (.ics) Times are ET. Each event has a 1-day reminder. Estimated dates are marked.