End of EV Euphoria Triggers $65bn Hit for Carmakers
The global automotive industry is facing a significant downturn, with a $65bn hit triggered by the end of EV euphoria. This decline is expected to have a modest direct impact on national GDPs, but secondary effects such as supply-chain disruptions, reduced tax receipts, and job losses could amplify the economic pain.
Key Statistics
- The $65bn loss could lead to a 0.3-0.8% decline in national GDP for countries heavily invested in EV manufacturing, including the United States, China, and Germany.
- The automotive sector employs approximately 3% of the global workforce, and a 1% contraction in sector output could translate into around 300,000 jobs lost worldwide.
- China’s dominance in battery cell production, with around 70% of global capacity in 2024, means a slowdown could reverberate through raw-material exporters and downstream manufacturers.
Country-Specific Impacts
- The United States could see a 0.3% impact on GDP, with Tesla’s US sales estimated to have dropped 17% in January 2026.
- China could experience a 0.5% impact on GDP, with the country representing around 60% of global EV sales in 2024.
- Germany and the EU could see a 0.8% impact on GDP, with the region being a core auto hub.
Conclusion
The end of EV euphoria has significant implications for the global automotive industry and economies heavily invested in EV manufacturing. While the direct impact on GDP may be modest, secondary effects could lead to amplified economic pain, highlighting the need for policymakers to carefully consider the potential consequences of their decisions.
Sources
- End of EV euphoria triggers $65bn hit for carmakers – Financial Times
- Tesla (TSLA) US sales estimated to have dropped 17% in January – Electrek (13 Feb 2026)
- Global EV Outlook 2025 – IEA, “Trends in electric car markets” (2025)
- What the Global Electric Vehicle Market Signals for US Automakers – Columbia Energy Policy (2026)
- National GDP & automotive-sector shares: Statista, World Bank, OECD (2024 data)