A shift in electric vehicle (EV) policy in the US is driving a surge in momentum for hybrid vehicles and a slowdown in momentum for full battery electric vehicles, according to Elizabeth Krear, president and chief executive officer of the Center for Automotive Research
By Robert England
21 May 2026
Fastmarkets Metals and Mining
Changes in EV policy represent “a near complete reversal in direction,” Krear said in a keynote speech at the Great Designs in Steel Symposium held on Wednesday May 20 in Novi, Michigan.
“Hybrids now represent 14.5% of US market share while full battery electric vehicles have declined to 5.1% after peaking at 7.8% in 2024,” Krear said.
“Today electrified vehicles in the US account for 20% market share — and by electrified I mean hybrid, plug-in hybrid and full battery electric vehicles,” the keynote speaker said. Internal combustion engine (ICE) vehicles hold “the remaining 80% of the market share,” she added.
It is unclear how the shift away from full battery electric vehicles will affect overall demand for automotive steel, which surged in the second and third quarters last year as buyers rushed to purchase new cars before tariffs were reflected in prices. That activity drove total US 2025 sales volume to about 16 million light vehicles, Krear said.
Various forecasts for 2026 “are converging” on total sales of around 15.7 million vehicles, or 300,000 fewer than in 2025, she noted.
Steel industry observers at the conference told Fastmarkets on May 20 that ongoing sales of hybrid and full battery EV vehicles rely in part on new, lower-priced models, where automakers are more likely to substitute steel for aluminium.
Gains in hybrid sales could ultimately boost total demand for 2026 and result in demand for steel that is level or close to level with 2025, rather than lower, a steel mill source at the symposium told Fastmarkets.
“Vehicles priced below $60,000 are more likely to substitute steel for aluminium for fenders and hoods, due in part to advances in high-strength steels,” the mill source said.
The 24th annual gathering in Michigan, organized by the American Iron and Steel Institute’s Automotive Program, was sponsored by ArcelorMittal and Cleveland-Cliffs.
Krear identified key US policy changes that are driving the American EV pivot.
“Policy changes have ranged from prioritizing expanded American energy production to halting portions of EV infrastructure funding and eliminating EV tax incentives, to challenges to state zero-emission mandates, reducing penalties associated with failing to meet [corporate average fuel economy] requirements and also reconsidering the Environmental Protection Agency endangerment finding framework,” the keynote speaker said.
“Policy shifts of this magnitude create greater flexibility for original equipment manufacturers to re-evaluate their product portfolios and better align future investments with actual consumer demand,” the CEO said.
“What’s interesting is that the only propulsion that has gained sales momentum is the hybrid. All other propulsion types are down in sales compared to last year,” Krear said.
“Consumers are looking for better fuel economy without having to commit to [electric vehicle] charging,” she said.
Hybrid vehicles have taken nearly 27 years since the Toyota Prius was introduced in 1999 to reach a 14.5% market share, the keynote speaker said.
“Year over year, industry experts are continuing to lower [full battery] EV adoption forecasts and frankly I believe even the current projection of 16% market share by 2030 may still be overstated,” Krear said.
Based on automotive investment announcements by the Ann Arbor, Michigan-based Center for Automotive Research, the future belongs to light trucks, which have gained an 83% market share compared with only 17% for passenger cars. The future model lineup will include a robust selection of ICE vehicles, Krear said.
Further, Krear said capital investment has shifted toward the US southern states and toward ICE technologies.
“Since 2020, over $234 billion of investments have been announced by automakers [in North America] — 77% in the United States, 13% in Canada and only 9% in Mexico,” the keynote speaker said.
Within total US investment announcements of more than $181 billion, Georgia has now overtaken Michigan to take the largest share, Krear said.
“Overall, we continue to see strong concentration of investment along the southern manufacturing corridor, driven by lower costs and expanding supplier ecosystems tied to electrification, battery production and localization.”
“This geographic shift highlights how the industry’s manufacturing footprint continues to evolve with technological changes,” Krear said.
Looking at all investments for 2025 and thus far in 2026, “we [also] see the impact of regulation on the shift back toward ICE,” Krear said.
