THE GREAT RESET

The global auto industry is at a turning point—new tech, new rules and buyers who want something different

- BY EILEEN FALKENBERG-HULL

IT'S NOW A YEAR OF RECKONING FOR THE AUTO INDUSTRY. Automakers and their suppliers are navigating the tricky business of tariffs, changing regulatory policies, the impact of war and the high cost of research and development, for starters.

CEOs are increasingly answerable to governing bodies, importers, dealers and shareholders, as much as to their direct consumers. And they're struggling to find the right balance.

"The auto market has always been a difficult, capital-intensive space where decisions are made on products years in advance and manufacturing commitments are meant to be consistent for decades, with whole communities of jobs on the line," Stephanie Brinley, associate director at S&P Global Mobility, told Newsweek.

And not only is CEO performance being judged by boards of directors and investors, they're the subject of ridicule and praise from the car-buying public based on what is on dealer lots.

Welcome Back, Hybrids

AS FEDERAL INCENTIVES HAVE WANED FOR BATTERY-ELECTRIC vehicle, or BEV, purchase in tandem with the rollback of U.S. Corporate Average Fuel Economy standards—or federally set miles-per-gallon targets—automakers have pushed forward with plans to introduce more hybrid vehicles.

"The market looks much more ready for hybrids than it does for an all-in EV push. Hybrids ask far less of the customer, which is exactly why they are working right now. They improve fuel economy without forcing major behavior changes," Paul Waatti, director of industry analysis at AutoPacific, told Newsweek.

Charging infrastructure continues to be a major concern for potential BEV buyers. With no need to plug in, hybrids are a reasonable alternative.

"Americans still want BEVs, but they are being much more selective about them. The novelty phase is over. Buyers want EVs that are easy to live with, realistically priced and built for everyday life," Waatti explained.