[Gangnam Perspective] The Long Road to the End of Internal Combustion Cars

When the global financial crisis erupted in 2008, two of the Big Three U.S. automakers, General Motors (GM) and Chrysler, survived the turmoil thanks to $85 billion in bailout funds from the U.S. government. In return for the rescue, they were required to close plants, cut jobs, and accept government intervention. The heads of the car companies were harshly criticized by lawmakers when they appeared before hearings in the United States Congress.
They were asked whether they were going to repeat the same 'foolish' corporate decisions and were rebuked for flying to Washington, D.C. on private jets at a time when they were supposed to be cutting costs.
When they appeared at the hearings again, perhaps more self-conscious, they arrived in hybrid vehicles. At the time, U.S. broadcasters used GM as an example and extensively reported that automakers were turning to Electric Vehicle (EV) development as a way out of the crisis.
Seventeen years on, EV sales are now going through their weakest period since the onset of the COVID-19 pandemic in 2020.
The year 2025 has been recorded as the point when a tectonic shift occurred in the EV sector.
The Big Three U.S. automakers began to retreat from EVs, and the Donald Trump administration eased fuel economy standards, scaling back a plan that would have required vehicles to travel 81 kilometers per gallon (3.3 liters) by 2031 to 55.5 kilometers.
Chief executive officers of U.S. carmakers welcomed the decision and signaled new investments in more cost-effective vehicles.
GM backed away from its original plan to electrify all of its lineups by 2035. GM CEO Mary Barra made it clear that while the company will continue to offer EVs, it has no plans to launch new electric models and will instead ramp up production of large internal combustion engine trucks and sport utility vehicles (SUVs).
Ford Motor Company has shifted its focus back to launching hybrids, including plug-in models, instead of purely electric vehicles. In the EV segment, it decided to discontinue its next-generation electric pickup truck and unveiled a more balanced investment plan that includes cost-effective smaller models.
Jim Farley, CEO of Ford Motor Company, said it is a reality that the use of internal combustion engine vehicles will be prolonged, adding that he would not be surprised if EVs' market share in the United States fell to 5%.
Responding to demands from the governments of Italy and Germany—both heavily reliant on the auto industry—as well as from European carmakers, the European Union (EU) has also relaxed its policy of ending sales of internal combustion engine vehicles by 2035, giving European manufacturers a sense of relief. Germany’s Bayerische Motoren Werke (BMW) has admitted it was a mistake to ignore demand for internal combustion engine cars.
Other European and Japanese automakers have also scaled back or scrapped their EV production plans.
Automakers rushed to emulate the success of Tesla, Inc., but failed to recognize that consumers were buying the Tesla, Inc. brand itself rather than EVs as a generic product.
Just as affluent consumers with money to spare often find Swiss luxury wristwatches more appealing than smartwatches, buyers of high-end cars are showing a preference for internal combustion engine vehicles over EVs—a reality that Europe’s auto industry has been slow to grasp.
Recent foreign media reports on EV sales conclude that demand has fallen short of expectations and that automakers have squandered tens of billions of dollars in investments over the past five years.
The gist is that it was not consumer preference but government policy in each country that drove the EV market, and that, in reality, automakers now have to focus on fuel-inefficient pickup trucks and SUVs.
Environmental groups are protesting the increased production of internal combustion engine vehicles, while industry insiders worry that European carmakers, which need to catch up with EV manufacturers in China, may end up diverting more investment into other areas.
For the time being, global automakers are expected to sharply increase production of hybrid vehicles that run on both gasoline and electricity to meet consumer demand.
Attention is now on whether the prediction by the head of an automotive consulting firm—that 'in our lifetime, internal combustion engine vehicles will not disappear'—will indeed come true.
jjyoon@fnnews.com Reporter