Government Subsidies Blamed for Decline of EV Industry

Auto industry experts warn that government intervention has stifled innovation and consumer demand for electric vehicles.

Published on Feb. 25, 2026

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A recent article in The Wall Street Journal reported that the pullback of major automakers from electric vehicle (EV) production has cost the industry $50 billion. The author, Stephen Moore, argues that excessive government subsidies and mandates for EVs have actually harmed the industry by distorting the market and alienating consumers.

Why it matters

The decline of the EV industry has broader implications for the transition to sustainable transportation and the ability of automakers to innovate. This story highlights the potential pitfalls of over-reliance on government intervention to drive technological change.

The details

Moore contends that subsidies and tax credits for EVs, as well as other special treatment like free charging stations, have caused automakers to focus on building cars for politicians rather than consumers. He argues this has backfired, with EVs becoming politically polarized and many consumers wary of the technology due to reliability issues. As a result, EV sales fell nearly 50% in 2025 after tax credits expired, leading to losses for major automakers.

  • In 2025, EV sales fell by nearly 50% after the federal tax credit expired.
  • Over the past six months, major automakers like Ford, GM, and Stellantis have lost money due to overinvestment in EVs.

The players

Stephen Moore

A co-founder of Unleash Prosperity and a former senior economic adviser to President Trump.

Elon Musk

The CEO of Tesla, who Moore believes may be right that electric cars will be the vehicles of the future as battery technology improves.

The Big Three

The major U.S. automakers - Ford, GM, and Stellantis (Chrysler) - that Moore says got "suckered" into building cars for politicians rather than consumers.

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What they’re saying

“If you want to kill an industry, then subsidize it.”

— Stephen Moore, Co-founder, Unleash Prosperity (The Washington Times)

“Elon Musk may well be right that electric cars will be the vehicles of choice in the future as battery technology continues to improve.”

— Stephen Moore, Co-founder, Unleash Prosperity (The Washington Times)

The takeaway

This story highlights the potential risks of over-reliance on government subsidies and mandates to drive technological change in the automotive industry. Experts warn that such interventions can distort the market, alienate consumers, and ultimately undermine innovation and progress.