NEW YORK—The electric vehicle revolution, once a runaway narrative in the automotive industry, is now encountering a patch of rough road. General Motors’ quiet retreat from its bold 2035 all-EV pledge—announced this month alongside a $4-billion investment largely focused on gas-powered vehicles—has reignited questions about the future of EVs and what a recalibration could mean for resale values and lenders’ portfolios.
While GM insists it hasn’t abandoned electric vehicles, industry analysts interpret the shift as a major course correction.
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“They’re essentially giving up any hope of achieving that [2035] goal,” said Sam Abuelsamid, an auto analyst with Detroit-based Telemetry, in comments to Politico.
Kevin Tynan
GM isn’t alone. A growing number of automakers are slowing EV production, citing stalled consumer demand, high costs, and ongoing infrastructure challenges. The pullback underscores a broader reality: The transition to an all-electric future may not unfold on the aggressive timeline many once envisioned.
For Lenders, A New Layer Of Risk
The implications for lenders are significant. As automakers throttle back EV output, questions are being raised around the long-term value retention of electric vehicles already in circulation.
“Certainly in jeopardy,” said Kevin Tynan, director of research at The Presidio Group, when asked whether EV values could face further declines. “But thinking about supply and demand balance, production cuts could keep values from completely falling off the cliff.”
Still, in cases where inventory outpaces demand, the burden of risk shifts—from automakers to lenders.
“It’s a moving target—or more like a falling knife,” Tynan added.
Tynan also pointed to broader issues that cloud EV residual values, such as insurance and repair costs.
“Going all-electric isn’t the same thing as just downsizing engines for fuel economy gains. These are fundamentally different technologies,” he said. “And with legacy automakers trying to pivot, it’s like learning to fly by practicing how to jump high.”
Differentiating Risk and Reward
Scot Hall, a veteran in the vehicle remarketing space, isn’t sounding the alarm just yet.
Scot Hall
“GM is by no means the first manufacturer to pull back on their EV sales mix claims,” said the Swapalease.com EVP. “I still believe EVs will eventually dominate the U.S. market as technology improves and consumers better understand the benefits.”
Hall also noted the influence of international trends.
“China’s auto market is roughly the size of the U.S., and they’re already at over 50% EV registration penetration in 2024. Automakers may scale EV development for global markets even if U.S. demand lags,” he said.
For lenders, Hall advised watching loan-to-value ratios closely.
“Some may already have different requirements for EVs, and I wouldn’t be surprised if we see more of that. But among prime and near-prime borrowers, it’s probably not a major concern,” he said.
Hall added that strong battery warranties help offset risk, and that increased sales volume over time could help stabilize resale values.
What Lenders Should Monitor Now
As automakers rethink their EV strategies, lenders will need to be more proactive. Experts recommend the following steps:
- Closely track LTV ratios for electric vehicles, especially for non-prime borrowers
- Factor battery warranties and serviceability into valuation risk models
- Watch market inventory levels, as oversupply in a soft demand environment could accelerate value depreciation
- Adjust risk tolerance for EVs depending on regional infrastructure and adoption trends
For now, the future of EVs in the U.S. remains in flux—still heading down the road, but no longer at full throttle.