Around the Industry Archives - Greater Cincinnati Automobile Dealers Association

Automotive suppliers facing mounting headwinds

Automotive suppliers are under increasing pressure as they continue to face challenging market conditions. According to a recently study conducted by Roland Berger and Lazard, stagnant production volumes, geopolitical uncertainty, increasing competition and rising cost pressures have driven average profitability down to just 4.7 percent.

Weak demand and challenging price negotiations with OEMs are placing additional strain on suppliers. While OEM profitability is still higher, it has also declined. That is predicted to put sustained pressure on supplier margins in the coming years.

“What we are currently observing in the European and North American automotive supplier industry can best be described as a phase of ‘stagformation,’” says Felix Mogge, a partner at Roland Berger. “On the one hand, suppliers are facing stagnant volume growth, while on the other, they are undergoing a fundamental transformation that requires them to urgently reshape their business models.

“While suppliers have slowly regained revenue growth since the Covid-19 pandemic, their profitability has structurally declined,” explains Mogge. “A significant portion of revenue growth has been driven by inflation, which has also increased costs.

“Overcapacity is putting pressure on the market, especially in Europe,” warns Mogge. “In contrast, China and South Asia are the primary drivers of modest global automotive growth. Slower-than-expected transition to EV adoption in Europe and North America is lagging behind expectations, preventing the realization of anticipated economies of scale. The EV market is attracting new players, increasing competitive pressure and cost challenges for suppliers.”

“The era of steady market growth is over and a more volatile environment will continue to put pressure on earnings and profits,” adds Florian Daniel, a partner at Roland Berger who worked on the Global Automotive Supplier Study. “However, suppliers can still succeed by implementing consistent efficiency improvement programs, forming partnerships to optimize and scale their portfolios, streamlining their product offering and focusing on strategic technologies.”

Another study conducted by Plante Moran claims that General Motors, Honda and Toyota have the best business relationships with suppliers in North America. Specifically, cost management, strategic alignment and stronger communication are seen as important factors in helping suppliers manage risk and uncertainty.

“Suppliers want balanced financial risk, and they want to know where they fit in OEMs’ future market strategies so they can align accordingly,” says Angela Johnson, Ph.D., principal in Plante Moran’s management consulting supplier relations analytics. “They perceive OEM behaviors—fairness, equity, accountability and then trust—through the impact of OEM decisions to their bottom line.

“What separates the top three from the bottom three OEMs is their ability to help suppliers reduce their costs to serve the OEM and manage uncertainty,” claims Johnson.

The top-three automakers in the study scored better in the basics: communication, responsiveness, accessibility, engagement and buyer knowledge. “These skills help suppliers operate more efficiently and, in turn, create strong relationships,” explains Johnson. “Stronger relationships enable OEMs and suppliers to work together and better navigate industry uncertainty with more equitable risk and cost sharing.”

“It’s all about balancing and aligning the various functional demands of the OEM—purchasing, manufacturing, engineering, design and finance—so there are fewer conflicting demands on the supplier and the OEMs’ team members,” adds Dave Andrea, principal in Plante Moran’s strategy and automotive and mobility consulting practice.

“Overall, OEMs that effectively address consistency, predictability and alignment of strategic goals are generally stronger, more profitable and become customers of choice for suppliers,” says Andrea. “And, because of their mutual dependency, these attributes are good for the suppliers, too.”

From factories to dealerships, thieves are targeting auto industry cargo

A few days before Thanksgiving in 2022, a unit within the Louisiana State Police got some troubling news.

Thirty-two new vehicles had disappeared over the course of a single week from a rail yard in New Orleans that served as “a crucial off-loading and storage facility for newly manufactured vehicles destined for dealerships in the Gulf South region,” according to a police press release.

The unit learned of more theft from the rail yard in March 2023. By May 2023, the police said 79 vehicles worth $4 million were stolen.

Last August, the Louisiana State Police announced that they had recovered 72 of the vehicles and arrested more than a dozen people — but other auto businesses go without such happy endings.

This type of crime, called cargo theft, has become more common and more expensive in the auto industry.

The FBI defines cargo theft as theft of goods or money that are part of a “commercial freight shipment moving in commerce.”

Automotive News analyzed FBI data for vehicles and parts theft throughout the supply chain in the U.S. The agency collects the information from law enforcement agencies across the country. They reported more than 1,360 cargo thefts involving parts and vehicles in 2023, the most recent data available from the FBI. The goods stolen were valued at more than $35 million that year.

Police recovered more than $16 million worth of automotive cargo in 2023.

Still, agencies have seen a significant increase from the at least 96 cases in which about $700,000 worth of vehicles and parts cargo were stolen in 2013.

At least 495 cargo thefts from 2012 through 2023 — the years for which data is available — involving vehicles and parts occurred at dealerships, and at least 162 were at industrial sites, including factories and other facilities “specifically designed for the manufacturing of goods.” Others occurred at garages, on highways, at service or gas stations and at construction sites, the data shows. The data includes trucks, buses and related components.

Analysts and companies say that cargo theft in the auto industry and others ballooned during the pandemic, when e-commerce became a necessity.

Stolen components are attractive loot, as buyers often ask few questions when purchasing parts on the Internet. Parts become enticing to thieves in desperate times, when scarcity can boost the value of a pilfered product. If manufacturers scale back production because of tariff costs or China’s export controls on rare earth metals, price hikes could incentivize bad actors.

“One thing that we’re tracking moving forward is potentially an increased theft risk, even looking ahead to this year, amid tariffs on automobiles and automotive products,” said Stephanie Phillips, a business intelligence analyst at BSI focusing on supply chain security.

Theft adds another cost for companies contending with tariffs, a sluggish electric vehicle transition, large R&D expenditures and pricey new tech.

“It’s not unique to any one region or any one automaker,” said Dan Hearsch, Americas leader of the automotive and industrial practice at AlixPartners. “It’s something that is pretty damaging, not just from a dollar standpoint.”

Cargo theft can threaten parts and vehicles

Police in Summit, N.J., announced last month that they had arrested a former employee of Smythe Volvo Cars accused of stealing three vehicles from the dealership.

In March, police recovered eight stolen Chevrolet Corvettes valued at $1.2 million from General Motors’ plant in Bowling Green, Ky. GM declined to comment for this report.

In April, police alleged that two former workers at Kia India stole 1,008 engines worth $2.3 million from a factory over three years. James Bell, a Kia Americas spokesperson, directed Automotive News to a previous statement by Kia India in which the company said it was strengthening internal processes and monitoring.

In May, police arrested four men in conjunction with a yearslong theft ring at Ford Motor Co. plants in Dearborn, Flat Rock and Wayne, all in Michigan, for parts worth millions. Ford declined to comment for this report.

While it’s not clear whether law enforcement agencies classified those instances as cargo theft and reported them as such to the FBI, the data shows an upward trend with some fluctuations.

Automotive News filtered the FBI’s data for cargo thefts involving vehicles and parts, including commercial vehicles such as trucks and buses, and removed instances in which law enforcement agencies determined that the victim was classified as an individual, rather than a business, public agency, financial institution or other category.

The results, which likely undercount the crimes, show that thieves are getting bolder, stealing more automotive cargo worth more money.

Cargo theft’s costs go beyond lost goods

Automotive facilities have strict security, said AlixPartner’s Hearsch. Plants are replete with guards, turnstiles, bag inspections, cameras and other measures. But theft still happens at factories and beyond.

“You can’t watch everything,” he said.

Hearsch said he was skeptical that vehicle parts have “gotten suddenly more valuable in excess of other goods” and raised doubts about the tariffs’ potential impact given the fact that facilities even in other countries struggle with cargo theft. Theft has been happening for decades, he said, and selling vehicle components on the secondary market is still harder than selling something such as a fancy watch.

Still, other analysts said there is a thriving secondary market for automotive parts. Individual components in boxes or trucks are rarely tracked and can fetch a significant sum.

Trucks are particularly vulnerable parts of the supply chain. Locks can be inadequate, and soft-sided trailers can be cut through.

“Thieves will pull up a truck right alongside the trailer [and] unload things,” said Anna Lee Robbins, a lead business intelligence analyst at BSI. “Sometimes the truck driver won’t even know it’s happening, and then you can drive away.”

Of course, recouping lost goods costs money. But time spent discovering the theft and waiting on replacement parts can be a significant drag on productivity.

When something like engines are stolen, vehicle assembly plants are “choking because they don’t have the engines that they need to keep up with production,” said Sandy Munro, CEO of Munro & Associates, a product development and consulting firm. “Theft is a real big deal when you’re looking at components.”

Learn from the Charapp & Weiss 2025 dealership compliance quiz

Many of our newsletters have covered various compliance topics. How well do you understand compliance at your stores?

This quiz tests your knowledge on the status of some critical compliance issues for your dealership. 

Sales Practices

1. True or False? Arbitration agreements are regularly challenged by plaintiffs’ attorneys. But there are substantial benefits to arbitration— reduced time to a decision, removal of the possibility of a runaway jury, and limited discovery, to name a few. We can still use arbitration agreements for transactions with customers and for employees.

Answer: True. Judicial decisions have strengthened the ability of businesses to use arbitration provisions and reap the benefits. Several Supreme Court decisions have supported predispute arbitration.
Unfortunately, limiting or ending predispute arbitration is at the top of the agenda for every
consumer and employee advocacy group. A consumer or an employee voluntarily enters an
arbitration agreement. Whether an arbitration will survive a challenge depends upon its terms and how
it is implemented. The agreement must be fair and balanced. It must be supported by consideration.
When these requirements are observed, an arbitration agreement is likely to survive a challenge.
Predispute arbitration agreements have not yet been outlawed by federal action. A dealer in a state that
allows predispute arbitration who wishes to enjoy the protections of predispute arbitration in consumer
matters and employment matters is still free to do so.There is one caveat to this answer and it has to do
with sexual harassment cases brought by employees. Congress passed the Ending Forced Arbitration of
Sexual Assault and Sexual Harassment Act of 2021, which President Biden signed into law on March 3,
2022. The Act amends the Federal Arbitrations Act so that “at the election of the person alleging conduct
constituting a sexual harassment dispute or sexual assault dispute, or the named representation of a
class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute
joint-action waver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal
or State law and relates to the sexual assault dispute or the sexual harassment dispute.” Thus, should
any sexual harassment or sexual assault claims be brought against your dealership by an employee,
your employment arbitration agreements no longer govern those actions, and the employee has the right
to bring a lawsuit, or even a class action, against the dealership in federal or state court.

2. True or False? We stopped using the NADA Fair Lending program when the Trump administration entered office in January 2025. We still train our sales and F&I employees that finance rates should be provided to customers on a non-discriminatory basis. Our fair lending training should protect us from lawsuits.

Answer: False. Despite the move from the Biden Administration to the Trump Administration, private
litigants, state attorneys general, the U.S. Department of Justice, and the Federal Trade Commission can all
enforce equal credit laws. And it is not only finance reserve that will be at issue. Practices in selling
voluntary protection products are also potential subjects of legal action by these enforcers. If your dealership is not using a fair lending program and a program for sale of voluntary protection
products that requires offering finance rates and VPPs at uniform pricing levels, with deviations for
nondiscriminatory reasons, and with results you can review and for which you can take corrective
action for non-compliance, you are not adequately protecting your dealership. The Fair Lending
Program and the Program for Sale of Voluntary Protection Products published by the National
Automobile Dealers’ Association are comprehensive programs your dealership should implement and
follow.

3. True or False? We spot-delivered a vehicle to a difficult customer for whom we cannot find a finance source to approve assignment of the RISC. The customer is finally agreeing to return the vehicle. Because of the extra work we had to do, we wish to keep the down payment. We may do so if we can justify our expenses.

Answer: False. Carefully observe customer rights in spot deliveries. If you must take back the vehicle you
delivered, you are rescinding the contract. In other words, you are returning the dealership and the
buyer to the beginning as if the transaction had not even occurred, to the extent possible. That means
that not only must the customer give back the car you delivered, you must give back the trade and any
down payment. If you do not do that, or you cannot do that, then you cannot “rescind” the transaction. 

4. True or False? We spot-delivered a car, and we cannot find a finance source to accept the RISC. We also cannot find the customer or the car to repossess it despite diligent efforts to locate them. We can report the vehicle as stolen.

Answer: False. First, dealers must know if they have a statecompliant spot-delivery form or language if their state mandates such, like Virginia and Maryland. Having decided that you can rescind, the recovery
service could not locate the vehicle. Now what do you do? Often, the decision is made out of frustration.
The customer was not candid when he bought the car, or he has not been cooperative in working with
the dealership, or he appears to be hiding the vehicle. The first reaction is likely to be, “Let’s show him! Let’s report the car as stolen.” That is the wrong reaction. The car was not stolen. You gave the customer
possession of the vehicle under the transaction documents. Even a misdemeanor charge of wrongful
use may lead to a malicious prosecution lawsuit since the customer is operating on legally issued documentation, even if overdue. Even if you win the suit, the publicity about the events will likely damage
the dealership. The answer is a civil suit to recover the vehicle. The dealership then can quickly obtain a judgment it can use as the basis for discovery from the customer to find the vehicle and to potentially recover damages if the car can never be found or to recover the dealership’s losses for the period the vehicle was withheld.

Advertising

5. True or False? When we advertise an attractive APR, we must disclose any qualifiers such as the limit on the duration of the financing, and we must disclose the amount or percentage of the down payment and the terms of repayment.

Answer: True. Advertising enforcement will continue to be a cornerstone of actions against car dealers by
the FTC, even under the Trump Administration. Compliance with the Truth in Lending Act and the
Consumer Leasing Act are critical because both laws are clear. If an APR is only available for loans of limited duration, that must be disclosed to meet the general requirements of the FTC Act that terms
and conditions of offers must be fully disclosed. If the limitation is a trigger term (for example, “up to
36 months”), the duration disclosure then requires the follow-on disclosures.

In advertising credit in connection with a motor vehicle, any of the following is a trigger term:

  • The amount of the down payment (expressed as either a percentage or dollar amount);
  • The amount of any payment (expressed as either a percentage or dollar amount);
  • The number of payments or the period of repayment; or
  • The amount of any finance charge.

If you use a trigger term, you then must disclose:

  • The amount or percentage of the down payment;
  • The terms of repayment; and
  • The “annual percentage rate,” using that term or the abbreviation “APR.” If the annual percentage rate may be increased after consummation of the credit transaction, that fact also must be stated.

6. True or False? Under the Truth in Lending Act, if we advertise a low APR, we must also disclose the
amount or percentage of the down payment, and the terms of repayment.

Answer: False. Under the Truth in Lending Act, the annual percentage rate is not a trigger term. You must
make further disclosures under TILA only if an advertisement employs a trigger term.

7. True or False? We have some especially low lease rates. Even though those are like the annual percentage rate, we cannot advertise those as low APR leases.

Answer: True. Often dealers seek to equate lease rates to APR and advertise low rates in connection with leases and nothing more. The Consumer Leasing Act prohibits that. In advertising a lease rate, you may not use the term “Annual Percentage Rate,” “Annual Lease Rate,” or other equivalent term. In addition, if you do advertise a lease rate, the following statement must appear near the rate with no intervening language or symbols: “This percentage may not measure the
overall cost of financing the lease.”

Employment Practices

8. True or False? An employee handbook is dangerous because it lets employees know what their rights are and is viewed as an employment agreement.

Answer: False. An employee handbook is critical to let employees know what is expected of them and to
convey information required by law. A properly designed handbook benefits a dealership and is not
an employment agreement. Your handbook should be reviewed and updated from time to time to remain
current with laws as they change. 

9. True or False? We want to run credit bureau reports on employment candidates to make sure they don’t have credit problems. Our employment application contains an authorization to run a credit report on an employment applicant, but we cannot do so based simply on the signature on an employment application.

Answer: True. Don’t assume that policies for running credit reports on customers apply to employment
situations. The rules are different. A dealership can only run a credit bureau on an applicant for
employment if the authorization is based on a signed document that authorizes a consumer report and
an investigative background report and nothing else. That is why if you are using an employment
application that contains an authorization to run a credit bureau report, the application is hopelessly out
of date. Use an updated employment application and a separate form to authorize a credit report. Credit
reports contain critical personal data, and personal data protection will be an even higher priority under
the Trump administration.

10. Choose the Correct Answer. What should be covered in a salesperson’s pay plan?
A. The length of the salesperson’s employment
B. The specific definition of vehicle cost
C. All pay calculations are final
D. None of the above
E. All of the above

Answer: D. It is more critical than at any other time to use pay plans that protect the dealership. The pay plan simply describes the method for calculating pay due a salesperson. No length of time should be specified, or the plan could be construed as an agreement for employment for a specified time. There should not be a specific definition of vehicle cost. In any pay plan in which calculation of commissions is based upon sale price over cost, the cost should be determined in the sole discretion of
the dealership, and the plan should specifically state that. A pay plan should never indicate that pay
calculations are final. They should always be subject to revision. We provide a pay plan checklist in this
newsletter. 

11. True or False? An employee filed a claim of harassment. We didn’t violate federal law by
harassing the employee in the first place, so we can’t be found liable for taking action against the
employee for filing a complaint. 

Answer: False. Retaliation can be a separate violation of the law even if there is no underlying offense.
Managers and employees must be well trained in the company’s policy and process against discrimination and harassment. Every complaint must be taken seriously. When investigating, always warn those with whom you discuss the circumstances leading to the complaint that retaliation is against company policy and can lead to discipline, including termination. Retaliation is the most prevalent
category of complaints to the EEOC, according to the agency. Protect the dealership against retaliation
claims. 

12.  True or False? Salespeople are paid on commission. They don’t have to punch the time clock. 

Answer: False. Salespeople still need to earn at least minimum wage for hours worked. Timecards have always been the best method to know hours worked by employees. For those exempt from premium
overtime, like new car dealer salespeople, this will give your office the ability to track earnings to ensure
those personnel are paid minimum wage for hours worked. For non-exempt personnel, this will give
your office the opportunity to calculate premium overtime properly.

General Compliance

13. True or False? Our dealership is located in Virginia and has Maryland customers. One of our salespeople called a Maryland customer to discuss a vehicle they purchased. We don’t use the “quality assurance” recording on outbound calls and our employee did not tell the customer that the call was being recorded. We have now been sued by that customer and want to use the voice recording from that call as part of our defense in the lawsuit. There is no issue using that call because our employee knew the phone call was being recorded and gave consent. 

Answer: False. Virginia is a one-party consent state, but Maryland is not—meaning that only the employee at the dealership needs to know that the call is recorded in Virginia to be compliant, but in Maryland, this is a privacy violation because the law requires that both the employee and customer give consent to the call being recorded. While federal law requires only that one party give consent, the following states require the consent of all parties involved in a particular conversation: California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania, and Washington. Most dealerships’ phone service vendors have a
“whisper” or recording for inbound calls that states, “This call may be recorded for quality assurance or
training purposes.” Thereby, if the person stays on the call, it would be viewed as valid consent from
both parties (so long as your employee knows that you are recording them). For outbound calls, it’s
not always cut and dry whether the “whisper” or recording is present. For dealerships that do business
with customers in those two-party consent states, you need to either have a recording for outbound calls
that states that the call is being recorded or cease recording those calls. Dealers should put their employees on notice that their telephone calls are being recorded. 

14. True or False? We are compliant with the FTC Privacy Rule so we are compliant with the FTC Safeguards Rule.

Answer: False. The Privacy Rule and the Safeguards Rule are two different rules that cover different things
and have different requirements. The Privacy Rule governs consumer and customer information
collection and sharing practices. The Safeguards Rule governs how you protect the customer
information you collect and maintain. Meeting the compliance for one does equate to compliance for
the other. The Privacy Rule requires that you provide a notification, to those consumers whom you may or
have arranged leasing and financing through the dealership, of how you will use the information and
certain limitations on disclosure of that information. Personal information collected from cash customers
is not subject to the Privacy Rule. The FTC updated the Safeguards Rule in 2021, which went into effect in 2023. The Rule change requires numerous elements as stated below and should be in effect at your dealership now.

  • A Written Information Security Program Including Specific Requirements.
  • Designate a qualified individual responsible for overseeing and implementing the
    information security program.

  • Perform a written risk assessment with specific evaluation and assessment criteria
    that identifies reasonably foreseeable internal and external risks.

  • Periodically perform additional risk assessments that reexamine the reasonably
    foreseeable internal and external risks.

  • Design and implement safeguards to control the risks identified in the risk assessment,
    including limiting access to data only to those with a need-to-know, encryption, multi-factor
    authentication, a log for users, and a 2-year maintenance requirement with safe disposal
    of customer data unless an exception applies.
  • Testing. Regularly test or otherwise monitor the effectiveness of the critical controls, systems, and
    procedures.
  • Continuous Monitoring. For information systems, monitoring and testing shall include
    continuous monitoring or periodic penetration testing and vulnerability assessments.
  • Awareness and Training. Implement policies and procedures to ensure that personnel can
    properly use the information security program.
  • Regular Updates. Continually evaluate and adjust the security program to address changes.
  • Service Providers. Oversee service providers to ensure their compliance with Safeguards
    requirements.
  • Regular Reports. Require the Qualified Individual to report in writing, regularly and
    at least annually, to the board of directors or equivalent governing body.

Last week, the FTC posted updated FAQs for dealers on the Privacy and Safeguards Rules. The FAQs are very informative to dealers and should be reviewed. The link to that post is: https://www.ftc.gov/businessguidance/resources/automobile-dealers-ftcssafeguards-rule-frequently-asked-questions

Gone are the days that dealers could implement all compliance requirements on their own. For best
practices, dealers should be using an outside vendor to assist with compliance needs.

Hybrid cars, once derided and dismissed, have become popular

Automakers and car buyers are taking a second, harder look at hybrids after leaving them behind for electric vehicles.

There are a lot of things Sarah Martens likes about the 2025 Toyota Highlander hybrid she bought a few months ago. Its pearlescent white paint shimmers in the sunlight. It has lots of safety features. And for a large sport utility vehicle, it sips gasoline, getting nearly 30 miles per gallon at times.

But the thing she likes most: It doesn’t feel like a hybrid.

“It’s so smooth,” said Ms. Martens, a Pilates instructor in Ann Arbor, Mich. “When it starts off from a stoplight or switches from electric to gas, I can’t tell I’m driving a hybrid. It just seems like I’m driving a normal car.”

Not so long ago, it seemed that the heyday of hybrids had come and gone. As Tesla and the potential of electric vehicles grabbed the imaginations of drivers and automakers, hybrids appeared destined to be remembered as an interim step on the way toward a fully electric, emissions-free future.

Just four years ago, for example, General Motors set a goal of ending production of all internal combustion models by 2035, and all but eliminated hybrids from its future product plans. Other manufacturers also bet heavily on electric vehicles and scaled their hybrid plans.

But then a funny thing happened. Car shoppers balked at the high prices of fully electric models and the challenges of charging them. In the last few years, sales of electric vehicles have grown at a much slower rate than automakers once expected. And hybrids have stepped in to fill the gap, accounting for a large and growing share of new car sales.

“People like the attributes that hybrids bring to the table,” said Jessica Caldwell, executive director of insights at Edmunds, a market researcher. “They offer better mileage than pure gasoline models, and the prices are pretty close to pure gas vehicles, so they’re much more affordable than E.V.s.”

In the first three months of this year, hybrids — including cars that can and cannot be plugged in — made up about 14 percent of all light vehicles sold in the United States, according to the Department of Energy. That was around twice the market share of fully electric vehicles in that period.

Republican legislation working its way through Congress could further lift sales of hybrids. In May, the House passed a policy bill backed by President Trump that would eliminate a $7,500 tax credit available to people who bought or leased electric vehicles. That legislation would also impose an annual tax of $250 on electric cars and $100 on hybrids to finance road projects. The Senate version of the bill introduced this week would do away with the tax credit, too, but does not include the annual tax.

A few large automakers dominate the sale of hybrids.

Nearly half the cars and trucks that Toyota and its luxury brand, Lexus, sold in the first five months of the year were hybrids — and sales of those vehicles were up about 40 percent from a year earlier. Ford Motor’s hybrid sales rose 31 percent in the same period. Honda is on track this year for its highest hybrid sales ever, and the hybrid versions of its Accord sedan and CR-V sport utility vehicle now outsell the gasoline-only models.

Hybrids are typically powered by a small gasoline engine that is paired with an electric motor driven by a battery that is much smaller and, thus, less expensive than the batteries in fully electric vehicles. These batteries are charged primarily by regenerative brakes and gasoline engines.

Plug-in hybrids, which account for a small share of hybrids, have bigger batteries than regular hybrids and can also be charged from power outlets at home or at charging stations. Some plug-ins can go around 50 miles on battery power alone before the gas engine kicks in.

Hybrid technology burst onto the automotive scene more than two decades ago when Toyota introduced the Prius, which was able to go more than 45 more miles on a gallon of gas — a remarkable feat at the time.

Early hybrids, including the Prius, sometimes felt a little clunky as they switched from gas engine to electric motor and back, and many were small vehicles that lacked the power and room some drivers were accustomed to. Some auto engineers at rival car companies brushed the Prius off as a toy, and objected to the idea of a car’s having two propulsion systems under the hood because they found it too complicated or unconventional.

But when gasoline prices rose in the early 2000s, the Prius drew raves from environmentally minded consumers and cost-conscious drivers. As Prius sales took off, other automakers hopped on the hybrid bandwagon.

Hybrids gained proponents especially in periods when gas prices spiked. But once Tesla’s sales took off in the middle of the last decade, the industry’s focus shifted to electric vehicles.

Consumers are now gravitating toward hybrids because the technology has improved significantly. Batteries are smaller in size but hold more power. The switching between the gas engine and the electric motor — as Ms. Martens has noticed — is now pretty seamless.

“When the Prius came out in 1997, it was mostly tuned to be fuel-efficient,” said David Christ, group vice president and general manager for the Toyota brand in North America. “But we’ve had 25 years to refine the technology in a way that makes our hybrids not only fuel-efficient but also fun to drive.”

The hybrid version of Toyota’s RAV4, Mr. Christ noted, now has more power and torque than the pure gasoline version.

At the same time, automakers have created hybrid versions of all types of vehicles, and have found ways of using the hybrid’s battery to offer consumers additional features. Ford offers a hybrid version of its F-150 pickup truck that can run power tools and lighting on job sites. The truck can also provide electricity during power outages.

“I think a lot of consumers are seeing that it’s a better propulsion system,” said Jim Baumbick, Ford’s vice president of advanced product development, cycle planning and programs. “You get better fuel economy, and it unlocks a lot of new capabilities that they never had before.”

And in some cases, automakers have decided hybrid technology is the only way to go. Several mainstream Toyota models, including the Sienna, Camry, Crown and RAV4, are or will soon be available only as hybrids.

Several automakers are slowing the introduction of new electric vehicles, and have accelerated development of new hybrids. Hyundai plans to double its hybrid offerings to 14 models. Ford plans to make hybrid variants across its model line by the end of the decade. Stellantis, which already makes plug-in versions of its Pacifica minivan and certain Jeeps, plans to add a hybrid option for its Jeep Cherokee and Ram pickup.

“There are still people who don’t like hybrids and don’t want hybrids. They still want a V8 or just that raw power,” Ms. Caldwell said. “But it’s a shrinking number. There’s definitely a lot less resistance to hybrids now.”

Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal.

High costs have ended America’s love affair with cars

You love them, you want them, you can’t live without them…and they’re costing you a fortune in repairs, insurance and shockingly expensive replacement parts. Dan Neil on why our national obsession with the automobile has turned dangerously codependent.

By Dan Neil

I think of myself not so much as a car reviewer as an intimacy coordinator. Four out of five American households depend on an automobile to get to work, to get the kids to school, to go wherever. The typical driver spends about an hour a day in the car, says the AAA—more face time than many of us spend with our families. A good relationship starts with a good match. 

Lately, though, Americans have been losing that car-loving feeling. Actually, they’re at the dish-throwing stage. Light-vehicle sales have fallen by about 1.7 million a year since 2016, reflecting the number of younger consumers declining the pleasures of ownership. Millions more remained trapped in toxic relationships with abusive elders. The average age of passenger cars on the road is currently 14.5 years, according to S&P Global’s data.

Most of the yelling is about money. According to U.S. Bureau of Labor Statistics, the total cost to own and operate an automobile averaged a frightening $12,296 in 2024, roughly 30 percent higher than a decade ago. Driving the numbers are new-vehicle prices, now averaging $48,883, according to Cox Automotive’s latest data. With middle-income buyers priced out of new cars, demand for used cars has strengthened, now averaging around $25,500. 

Go ahead, throw a dish. It’ll make you feel better.

Among the major stressors: car insurance. Lexis-Nexis Risk Solutions’ annual report found average insurance costs rose 10 percent in 2024, after soaring 15 percent in 2023. Full-coverage policies now average $2,680 annually, up 12 percent from June 2024, says Bankrate. 

And whatever you do, don’t mention depreciation. In 2024, the AAA calculated the average new vehicle loses an eye-watering $4,680 in value every year, over the first five years. Edmunds reported that in the last quarter 2024, one in four consumers were underwater on a car loan—meaning that they owed more than the vehicle’s market value.

The spike in personal transportation is a budget buster. Many thousands of families face being forced out of their cars and into what is effectively a second-class citizenship. What are we supposed to tell a generational workforce that is going broke just getting to work? Take one of America’s fine new trains?

It’s not just about money, honey. It’s about trust. Doubts start with the mounting complexity of new cars: turbocharged hybrid and plug-in hybrid powertrains; screen-based displays and controls; and advanced safety systems. Anyone who has ever owned a laptop has reason to question the shelf-life of the technology.

“How long will manufacturers offer replacement modules and software for older cars?” wonders Tom Wilkinson, a former GM employee living in Michigan. In the future, cars might come with a fixed lifespan, perhaps “10 years or 150,000 miles,” Wilkinson said. “After that, the [automaker] would brick them, if for no other reason than to avoid the decades-long liability….”

The acres of plastic under the hoods of new cars isn’t very reassuring. In the early 2000s, automakers stepped up the use of injection molded thermoplastic components, which have the advantage of being lighter, more recyclable and cheaper than metal.

In the past two decades automakers have filled their engine bays with plasticized water pumps, oil filter housings, radiators and hoses. Between 2012 to 2021, the average amount of plastic in automobiles increased by 16 percent, to 411 pounds, according to the American Chemistry Council.

Unfortunately, even the strongest plastics degrade in the daily extremes of heat cycling under the hood. It is only a matter of who pays. In 2021 BMW settled a class-action suit over engine failures related to so-called plastic embrittlement of timing chain components. In 2022 Volkswagen Group settled a similar suit involving the use of plastic water pumps.

Among the more widely loathed current practices is the use of wet timing belts. These toothed, reinforced-rubber belts synchronize an engine’s cam timing with the crankshaft. Commonly, the belt winds around the crank sprocket, partially submerged in hot engine oil.

A wet belt’s typical lifespan is roughly equivalent to a chain belt’s, but before wet belts break, they erode, spreading a rubbery contamination into the oiling system. If this gunk blocks the oil pickup, it can kill an engine.

Making matters worse—as in more expensive—is the practice of burying such term-limited components deep in the machinery, which often add hours of labor to the bill. In the terse wisdom of the garage: Engineers hate mechanics.

The “gizmo that failed in my Ford Escape that pivots to direct either hot or cold air in the HVAC is plastic,” said David Francis Kiley, a producer and publisher in Michigan. “The cost to replace it was over 2,000 bucks because the geniuses at Ford buried it with no access unless the whole dash was pulled out.”

Delivering value to customers, said Ford spokesperson Mike Levine, “requires a balance in engineering and manufacturing processes. We optimize between efficient assembly—which directly influences the customer’s initial purchase price—and repairability, to minimize a customer’s total cost of ownership over time.”

With garage repair costs up over 43 percent in six years, according to the U.S. Bureau of Labor Statistics, the not-worth-fixing threshold is shockingly easy to reach. The average single repair across all types of vehicles was $838 in 2024, according to Cox Automotive.

“Cars have become disposable because automakers want them to be,” said Eric Evarts, a high-school English teacher from Danbury, Conn. Evarts noted automakers’ ongoing fight against right-to-repair legislation. Among other things, right-to-repair would oblige automakers to make the necessary tools, codes and parts available to owners and independent garages.

It’s surprising how many of the current discontents are the consequences of good intentions. Take, for example, collision repair.

The cost of fixing damaged cars has skyrocketed 28 percent since 2021, according to data from the U.S. Bureau of Labor Statistics. The collision-repair industry blames the rising cost of replacement parts; a shortage of trained technicians; and the increasing complexity of new cars, with special scorn directed at Advanced Driver-Assist Systems, or ADAS.

Designed to reduce accidents and improve safety, ADAS technology—including functions such as automatic lane-keeping, dynamic cruise control and emergency braking—relies on cameras, sensors and transceivers integrated into the bumper trim, grille or windshield. Ultrasonic parking sensors are especially vulnerable.

In the era of ADAS, there is no such thing as a minor fender bender.

“My 2013 BMW X5 rear ended a small car and the damage to my car looked minor,” said Tom Walken, a psychologist in Raleigh, N.C. “But the electronics in the front bumper area pushed the repair cost to more than 75 percent of the car’s value so North Carolina law required that it be totaled.” (When contacted, BMW had no comment).

Millions of mindful consumers paid premium prices to drive electric cars. And they are still paying. Insurance companies are wary of covering collision repairs that involve battery packs or related systems. The diecast aluminum structural elements that undergird Teslas—“gigacastings”—are lightweight, compact and robust. But when damaged they often can’t be repaired, only replaced, and with great difficulty.

Last year Edmunds had a spot of trouble with the Tesla Cybertruck in its one-year test fleet. While parked on a street in West Hollywood, the huge, steel-paneled  truck was struck in the left rear by a small sedan. The Tesla was totaled. The estimate for repairs— including $4,280 for a new rear casting and $16,584 for labor—came to $57,879.89. Edmunds sold its Cybertruck to a salvage company for $8,000. (When contacted, Tesla did not reply.)

The cost of making modern cars whole again, combined with steep depreciation, sends thousands of lightly damaged, otherwise functional cars and trucks to salvage yards every month. In 2018, adjusters totaled 19 percent of all vehicles they inspected, one of every five claims (LexisNexis Risk Solutions). By 2023, the ratio had jumped to one of four claims (27 percent).

No wonder people are having abandonment issues.

My take: If automobility is to remain a defining feature in American society, something has to give. And that’s gasoline. The mounting costs of the automobile enumerated are all associated with a greater disruption: vehicle electrification.

Despite Tesla’s best efforts, EV sales rose globally again in 2024. The global industry has reached the place where it is now nominally cheaper to build an EV than an equivalent ICE vehicle. As the cost of energy storage (batteries) continues to fall, EV’s advantages will accelerate. There is no rollback of rule or regulation that will allow ICE vehicles to again be cost-competitive.

EV technology is not perfect, not yet. But ICE technology is as good as it’s ever going to get.

So I say lean in and move on, America. Let go of the past. You have nothing to lose but your timing chains.

They travel the world—and cheat death—for license plates

Collectors trek to all corners of the globe for rare finds, from diplomatic tags to the devilish 666; the Vatican City holy grail

Some people dream of scaling a peak or writing a novel. Ethan Craft wants to collect at least one license plate from 500 global jurisdictions.

The quest has taken the 27-year-old across the world in search of junkyards, antique stores and other collectors willing to trade plates.

It also nearly killed him.

The Phoenix native and freelance journalist was recently driving through South Africa’s rural Eastern Cape in a rickety Renault Kwid hatchback when he swerved to avoid debris, slammed into a rock wall and flipped over. Craft avoided major injury. As important, he was able to recover the dozens of plates that spilled onto the road—along with the tag on his rental car.

“I’m going to save that one for my will,” said Craft.

Stamp collectors are called philatelists. People who save coins are numismatists. License plate collecting is so arcane that there isn’t a word for it. But there are thousands of people who so covet tags that they are willing to travel to remote corners of the globe—sometimes at great expense and personal risk—to score a rare find. 

Some collectors focus on geographic regions. Others target tags based on design or color. Numbers are big draws, too, namely low ones, birth dates, the devilish 666 and the code for marijuana, 420. Some seek out diplomatic tags or presidential inaugural ones. Others pursue early porcelain plates or those from countries at war. 

Tags from Vatican City are a holy grail for plate collectors. For enthusiasts of early American plates, it doesn’t get much better than a 1921 Alaska tag, one of which is rumored to have changed hands for $60,000. 

There is a market for humorous plates that call to mind the “Assman” tag meant for a proctologist that instead went to Kramer in an episode of “Seinfeld.” In Maine, where vulgar plates were outlawed in 2021, bidding wars erupt when a good one comes up for sale.

The Super Bowl of plate collecting takes place in July at the annual convention of the 3,000-member Automobile License Plate Collectors Association. This year’s event, in Tulsa, Okla., marks the gathering’s 70th anniversary.  

Craft’s obsession began at age four on road trips with his dad, peering out the back seat window to see how many different state tags he could identify. He later used a disposable camera to shoot out-of-state plates at the airport and malls, collecting them in a scrap book. Craft’s parents took note. “One year, the tooth fairy left me a license plate instead of a couple of bucks,” he said.

Craft memorialized his South Africa mishap on his TikTok account, where he treats his 526,000 followers to lessons on why European plates have no mounting holes, the historical differences between tags from Zimbabwe and Zambia and what features reveal a Sri Lankan plate’s age. 

Craft has traveled to about 70 countries, collecting plates from 181 of the 193 U.N. member nations and about 400 global jurisdictions. He has about 2,000 plates in his core collection and another few thousand for trading.

He isn’t the only extreme plate collector.

During his four-decade collecting career, Dave Stratton has gone to extraordinary lengths to acquire rare tags.

Stratton, 74, a retired international flight crew scheduler at FedEx who lives in Mississippi, at one time was enthralled by plates from tiny, hard-to-reach islands in the Bahamas. A pilot friend with a homemade single-engine aircraft made him an offer.

“He said, ‘I’ve got this plane,’” Stratton said. “If you buy the gas, I’ll fly it. I thought he was joking at first but over the course of two years planning it got more serious.”

The duo eventually flew 1,300 miles in a Bushby Mustang II two-seater aircraft from Olive Branch, Miss., to Mayaguana, Bahamas, population 208. They braved thunderstorms, narrow dirt runways and rocky Caribbean bureaucracy over the four-day journey there and back. “Thank goodness for fax machines,” Stratton blogged after the 2001 trip.

Larry Luxner, a Florida-born freelance journalist based in Israel, has been acquiring plates since the age of 5. In 1994, he was driving in Nicaragua on a highway between Managua and Matagalpa when he came upon the aftermath of a head-on collision. The car’s front was totaled, but the back was preserved.

“So I asked the policeman there if I could take the plate because I’m a collector,” Luxner said. “He produced a screwdriver and handed it to me.”

Luxner still esteems the plate in his nearly 700-piece collection—“Nicaragua Libre MV 1899.”

Bernt Larsson, an 89-year-old Swedish economist who lives in Barcelona, said his 1,000-plate collection began in 1952 with a letter to the AAA from Stockholm.

“I received a very kind letter from the secretary with a license plate from D.C. with a very low number, 1087,” said Larsson, who was first inspired to collect by his father, a member of the Royal Automobile Club of Sweden. “I thought, ‘how nice.’”

Larsson followed that up with letters to other countries. He got a surprising response from police authorities in Asunción, Paraguay, in 1960 when the country was under a military dictatorship.

“They sent me 10 or 12 plates from cars, trucks, from a bus, and then sent me a telegram telling me they had mailed the plates. I was so happy,” said Larsson.

Craft is trying to persuade two friends to travel with him to locations with rare plates such as Nunavut in Canada’s northern Arctic region. His pitch: They can sell tags they acquire to fund the trip’s cost.

“They said, ‘How about we go to Miami? Or England?’ I said, ‘How about Nunavut? Or Turks & Caicos? Or Anguilla?’” he said. “We’re in that stage now of making the math work.”

Write to Robert P. Walzer at robert.walzer@wsj.com

Automakers Race to Find Workaround to China’s Stranglehold on Rare-Earth Magnets

Major manufacturers, fearful they will have to shut down assembly lines, consider moving some parts production to China

Four major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks.

Several traditional and electric-vehicle makers—and their suppliers—are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said.

Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work because the restrictions only cover magnets, not finished parts, the people said.

If automakers end up shifting some production to China, it would amount to a remarkable outcome from a trade war initiated by President Trump with the intention of bringing manufacturing back to the U.S. 

“If you want to export a magnet [from China] they won’t let you do that. If you can demonstrate that the magnet is in a motor in China, you can do that,” said a supply-chain manager at one of the carmakers.

China in April began requiring companies to apply for permission to export magnets made with rare-earth metals, including dysprosium and terbium. The country controls roughly 90 percent of the world’s supply of these elements, which help magnets to operate at high temperatures. Much of the world’s modern technology, from smartphones to F-35 jet fighters, rely on these magnets.

In the auto industry, rare-earths are what allow electric-vehicle motors to function at high speed. They are also used in less exotic, though no less critical, functions performed by such parts as windshield wipers and headlights.

China was supposed to have eased export controls on rare-earth magnets as part of a 90-day tariff truce agreement with the White House, but the country has slow walked license approvals for magnets. Trump accused China of violating its deal with the U.S. China has pushed back at the notion that it was to blame, alleging “discriminatory and restrictive measures” by Washington, including restricting exports of AI chips and revoking visas for Chinese students.

As exports of rare-earth magnets have virtually ground to a halt, carmakers face hard decisions about whether they can continue to keep some plants operating, according to people familiar with the planning. The European Association of Automotive Suppliers said Wednesday that several production lines and plants across Europe have already closed, with more impacts expected in the coming weeks as inventories deplete.

In May, industry groups representing most major automakers and parts suppliers told the Trump administration that vehicle production could be reduced or shut down imminently without more rare-earth components from China.

“While efforts are under way to bolster supply chains and suppliers of these elements outside of China, this will take additional time and will not alleviate the immediate shortage of elements vital for automotive components used to produce vehicles here at home,” said the letter, which was signed by the heads of the Alliance for Automotive Innovation and MEMA, the Vehicle Suppliers Association.

Shipping an unfinished part halfway across the world to have a chiclet-sized magnet installed adds to the cost and time it takes to manufacture, but the companies see it as perhaps the only alternative to shutting down some production lines altogether. The move could expose carmakers to additional tariffs, but auto executives believe the alternative would be even worse.

Car companies are also looking at alternative sources for magnets in Europe and Asia, instead of purchasing them directly from Chinese factories as they do currently. None of these sources would provide enough magnets to support the demand from the automotive industry, said one company official.

The people familiar with the planning say many ideas are under consideration that might not come to pass.

The elaborate workarounds being considered underline how reliant the U.S. has become on China for these magnets. The country controls almost all of the refining capability that transforms raw minerals into usable forms. Analysts say China has superior technical know-how for separating rare earth from surrounding rocks. 

American carmakers aren’t the only ones struggling to source magnets from China. 

Car companies in Japan and India have also warned of looming manufacturing disruptions. In Europe, automakers say that the pace of export license approvals hasn’t kept up with their demand.

“Although some licenses have now been granted, this is currently not enough to ensure smooth production,” said Hildegard Müller, president of the German auto industry’s lobbying group. “If the situation does not change quickly, production delays and even production stoppages can no longer be ruled out.”

In the U.S., Ford Motor shut down production of the Ford Explorer at its Chicago plant for a week in May because of a rare-earth shortage, a spokesman said.

The lack of magnets hits EVs and hybrid vehicles harder than conventional cars and trucks. A typical EV contains far more rare-earths than a gasoline-powered model, but rare-earth magnets are found throughout any modern vehicle.

Producing more gas-powered cars instead of EVs isn’t a solution, because companies would risk falling short of federal fuel-economy standards, which could result in fines. Regulatory credits that automakers can purchase from EV-makers, such as Tesla and Rivian, to offset their emissions are sold out through the year 2027.

Another option to conserve dwindling magnet supplies is reverting to older electric-motor technology that doesn’t make use of rare-earth magnets. Carmakers stopped using those motors because the current versions are cheaper and more efficient.

Carmakers are also considering stripping out some premium features, such as adjustable seats, that make use of several tiny electric motors. High-end speaker systems that use rare-earth magnets could also be replaced with downgraded versions.

Write to Sean McLain at sean.mclain@wsj.com and Ryan Felton at ryan.felton@wsj.com

LIberation Day for gas-powered vehicles

Editorial Board

The Senate voted 51-44 on Thursday to free Americans from California’s onerous electric-vehicle mandate. This is a real Liberation Day, and the voters who re-elected President Trump won’t fail to notice when he signs the resolution. Feel free to rev your engines in approval. If Gov. Gavin Newsom hears it loud enough, maybe he won’t sue.

The Senate’s move follows similar action in the House, which this month voted 246-164 for a resolution to rescind a federal waiver that gave a green light to California’s EV mandate. The 1996 Congressional Review Act (CRA) lets lawmakers overturn recent regulations. The President also must sign off, so it typically happens only after a change in power.

Under California’s EV regime, 35 percent of auto maker sales next year are required to be “zero-emission vehicles,” rising to 68% in 2030 and 100 percent by 2035. The Clean Air Act lets California set its own vehicle emissions standards, which was meant to address its historically smoggier air. CO2 emissions from gas cars don’t contribute to pollution, but the Environmental Protection Agency under President Biden granted a waiver to bless the policy.

A dozen or so other states have also adopted California’s rules. But auto makers aren’t anywhere close to meeting the quotas. In 2023 EVs made up a mere 13 percent of sales for traditional car makers in California, 8% in Massachusetts and 6 percent in New York.

Auto makers warn the quotas would force them to produce fewer gas cars. Prices would almost certainly rise to offset their EV losses. The mandate would harm workers, too. Auto makers have shed jobs as they ratchet up EV production. Michigan has lost 11,600 motor vehicle and parts jobs in the past two years.

This explains why Michigan’s Democratic Sen. Elissa Slotkin joined Republicans in killing the California quotas. “I have a special responsibility to stand up for the more than one million Michiganders whose livelihoods depend on the U.S. auto industry,” she said. Credit to the Senator for keeping her pledge from last year’s campaign to oppose EV mandates.

Mr. Newsom plans to go to court to defend California’s power to dictate what kinds of cars people can buy. He’s unlikely to prevail, since the CRA prohibits judicial review of any “determination, finding, action, or omission under” the law. Yet the California Governor has recently gone in reverse on some of his politically unpopular positions. If Mr. Newsom wants to run for President in 2028, and doesn’t want to crash and burn in Michigan, here’s another place he might consider a U-turn.

Electric vehicles died a century ago. Could that happen again?

More than a century before Tesla rolled out its first cars, the Baker Electric Coupe and the Riker Electric Roadster rumbled down American streets. Battery-powered cars were so popular that, for a time, about a third of New York’s taxis were electric.

But those early electric vehicles began to lose ground to a new class of cars, like the Ford Model T, that were cheaper and could more easily be refueled by new oil-based fuels that were becoming available around the country. Bolstered by federal tax incentives in the 1920s, the oil industry boomed — and so did gasoline-powered cars.

That history has largely been forgotten, and almost all of the early electric cars have disappeared so completely that most people alive today have never seen one — and many have no idea that they even existed. A few specimens are in museums and private collections, including a fully restored Baker Electric that Jay Leno keeps in his sprawling California garage.

Mr. Leno’s ancient electric car has a wooden frame and 36-inch rubber wheels. It looks like a stagecoach, but it is propelled by electric motors and batteries just like a current-day Tesla Model Y or Cadillac Lyriq. It elicited smiles and amazement from people on the streets of Burbank, Calif., when Mr. Leno drove it around town recently.

The car may be a novelty, but it is newly relevant because the United States may be poised to repeat history.

The Trump administration and Republicans in Congress are working to undercut the growth of electric vehicles, impose a new tax on them and swing federal policy sharply in favor of oil and gasoline.

Scholars who have studied the earlier age of electric vehicles see parallels in their demise in the early decades of the 1900s and the attacks they are facing now. In both eras, electric cars struggled to gain acceptance in the marketplace and were undermined by politics. A big knock against them was they had to be charged and ultimately were considered less convenient than vehicles with internal combustion engines.

“Electric cars are good if you have a towing company,” President Trump said at a campaign rally in Iowa in October 2023. At another appearance the next month, he said, “You can’t get out of New Hampshire in an electric car.”

Charging and access to fuel were also concerns a century earlier.

Americans in the 1920s wanted to explore the country. But many rural and suburban areas didn’t have electricity. President Franklin D. Roosevelt made a big push to electrify the entire country in 1936 — the last farms were connected to the grid in the early 1970s. That made it difficult to use electric cars in many places.

Republican leaders say that electric vehicles do not deserve subsidies in the tax code and that their tax bill levels the playing field that Democrats had tilted in favor of one technology.

A hundred years ago, lawmakers also put their thumbs on the scale — and came down on the side of oil.

The oil industry has enjoyed numerous tax breaks. One was enacted in 1926 when Congress allowed oil companies to deduct their taxable income by 27.5 percent of their sales. The sponsor of the legislation later admitted that the incentive was excessive.

“We grabbed 27.5 percent because we were not only hogs but the odd figure made it appear as though it was scientifically arrived at,” Senator Tom Connally, the Texas Democrat who sponsored the break, was quoted as saying in a biography of Lyndon B. Johnson, “Sam Johnson’s Boy: A Close-Up of the President From Texas.”

That tax break lasted for decades. It was eliminated for large oil producers and reduced for smaller companies in 1975.

Perhaps unsurprisingly, crude oil became dominant. The Energy Department noted on a timeline on its website that electric cars “all but disappeared by 1935.”

The triumph of internal combustion made long-distance travel accessible to the masses and helped power the U.S. economy. It also led to deadly urban air pollution and has been a major cause of climate change.

Now, the decades-long tug of war between combustion engine and electric cars is intensifying again, and electric cars may be in trouble, at least in the United States.

Sales of electric cars are growing quickly in most of the rest of world, increasing 35 percent in China in the first four months of the year and 25 percent in Europe, according to Rho Motion, a research firm. But in the United States, sales were up a more modest 11 percent in the first three months of 2025, according to Kelley Blue Book.

Republican leaders are pushing legislation that would eliminate many Biden administration programs intended to promote electric vehicle sales, including a $7,500 federal tax credit. They also want to impose a new annual $250 fee on electric vehicle owners to finance highway construction and maintenance.

While the Republican changes probably wouldn’t kill electric vehicles, they could set the industry back years. “E.V. momentum in the U.S. has slowed, with policy uncertainty mounting,” analysts at Bernstein said in a note this month.

But electric cars have not just been hampered by politics. They also had to overcome gender stereotypes. Their benefits like quiet, smooth operation were considered by some men to be too feminine, and, in the late 1800s and early 1900s, many models like the Baker Electric were explicitly marketed only to women.

Advertisements for the early electrics hang on the walls of Mr. Leno’s Burbank garage. “Make This the Happiest Christmas — Give Your Wife an Electric,” proclaims one. On another, a young woman pleads, “Daddy Get Me a Baker.”

Men, by contrast, have long been pitched on the masculine virtues of gasoline vehicles that roar and thunder.

In the fall of 2022, Representative Marjorie Taylor Greene, a Republican from Georgia who is closely allied with Mr. Trump, pushed the notion that gasoline cars are more macho at a rally. “There’s nothing more American than the roar of a V-8 engine under the hood of a Ford Mustang or Chevy Camaro, an incredible feel of all that horsepower.” But Democrats, she said, “want to emasculate the way we drive.”

Elon Musk, Tesla’s chief executive who has been working with the Trump administration, has tried to broaden the appeal of electric vehicles. His company’s newest model is the Cybertruck, a massive pickup truck with lots of sharp angles.

“Musk has done everything he could to try to make a Tesla a manly vehicle,” said Virginia Scharff, an emeritus distinguished professor of history at the University of New Mexico and author of numerous books, including “Taking the Wheel: Women and the Coming of the Motor Age.”

But, Ms. Scharff added, Mr. Musk may have gone too far. His alignment with Mr. Trump’s conservative politics has alienated some of the most reliable buyers of electric cars — liberals and environmentalists who hope to move the world away from fossil fuels.

“Here’s like the gender flip: Tesla is so associated with a kind of toxic masculinity now as opposed to the electric car being associated with femininity in the early part of the 20th century,” Ms. Scharff said.

Mr. Leno, the former “Tonight Show” host, who now has an online show focused on cars, “Jay Leno’s Garage,” has a restored 1909 Baker Electric in his collection. It has a top speed of 25 miles per hour and can travel 80 miles on a full charge.

With a high-top cab decorated in Victorian flair, it has two fabric-cushioned bench seats facing each other and roller shades on the windows. The car was meant to accommodate fanciful women’s hats, which at the turn of the century were often big and bold. As an added touch, the car’s designers mounted a makeup case inside the car.

“What do men like?” Mr. Leno said. “Something that rolls, explodes and makes noise. That’s why men like the gasoline car, because it frightened children, you know, that type of thing.”

Mr. Leno said he loves the Baker, which he drives around Burbank at least once a year, to see holiday lights and decorations with his wife.

He said such vehicles had many merits, convenience among them. They are low maintenance, they’re fast and you can fuel them at home, particularly at night when electricity is generally much more affordable than during the day.

The concept of home charging isn’t new. Home car chargers also made their debut a century ago, only bulkier and a bit more frightful.

“It looked like a machine out of Dr. Frankenstein’s laboratory,” said Leslie Kendall, chief historian at the Petersen Automotive Museum in Los Angeles.

Mr. Kendall said electric cars could have stuck around and even done well. But they were hampered by the lack of electricity in many communities, long charging times and their higher costs relative to gasoline vehicles — a Model T in 1908 cost about $650 compared with $1,750 for an electric roadster.

“You could carry extra gas with you,” he said. “You couldn’t carry extra electricity.”

Richard Riker, a grandson of an electric car pioneer, Andrew L. Riker, said his grandfather had identified one of the biggest stumbling blocks to the cars he designed and sold — one that lingers to this day.

“They didn’t have charging stations out on the street corners like my grandfather said they need to,” Mr. Riker said.

During the Biden administration, Congress sought to address that shortcoming by allocating $7.5 billion for the construction of public chargers. Mr. Trump has halted that program.

One of Andrew Riker’s cars from the mid-1890s, a topless, two-seater cab that still sputters along at about 15 m.p.h, is on display at the Petersen museum along with other electric vehicles, both from history and those under development.

Despite policy and other challenges, Mr. Riker said he was still optimistic about electric vehicles. He expects that in the coming decades, technical advances will give such vehicles a big edge over gasoline vehicles.

“If you can charge a car in five minutes and go 500 miles,” he said, “the gasoline engine is history.”

Ivan Penn is a reporter based in Los Angeles and covers the energy industry. His work has included reporting on clean energy, failures in the electric grid and the economics of utility services. Jack Ewing contributed reporting from New York. Susan C. Beachy contributed research.

WSJ Opinion: The politics of EVs have changed

The Wall Street Journal Editorial Board

The times they are a changin’, especially on progressive climate dogma. On Thursday the House voted in strong bipartisan fashion to overturn the EV mandate the Biden Administration let California impose on the rest of America.

The vote was 246-164 for a Congressional Review Act (CRA) resolution to repeal the waiver that the Environmental Protection Agency granted California for its EV mandate. The waiver provision was written to let California address smog. But Sacramento Democrats lobbied the Biden EPA to let it apply to carbon emissions.

The mandate is ludicrously impossible to meet. It says zero-emissions vehicles would have to account for 43 percent of an auto maker’s sales by 2027 in California and the dozen other states that have signed up for its rules. It rises to 68 percent by 2030.

Major car makers other than Tesla are nowhere near those sales targets. It also amounts to another case of California’s regulatory imperialism on the rest of the U.S. since car makers would have to adjust their assembly lines to meet the Golden State’s standards.

The House vote is especially striking because of the 35 Democratic ayes. That included three of six Democrats from Michigan, three of five from Ohio, four of 12 from Texas, and even two from the High Climate Church of California (Luis Correa and George Whitesides). Let’s hope they’re not excommunicated by Pope Gavin (Newsom) I.

The vote underscores that one salutary effect of the 2024 election is the introduction of at least some economic realism into the climate policy debate. Pressed by big environmental donors, Democrats have been willing to genuflect at whatever demands the climate lobby makes—never mind if they will have no effect on global temperatures. President Trump’s willingness to challenge this orthodoxy has shown Democrats that the political risks aren’t all on one side.

Next up is what we hope will be a Senate vote to repeal the waiver. The CRA says the resolution needs only a simple majority to pass, and Republicans who are skittish can take comfort in the bipartisan House majority. The Democratic roll call will be instructive—especially those are up for re-election in 2026 such as Georgia’s Jon Ossoff and Virginia’s Mark Warner.

The New York Times tried to spin the Senate vote over the weekend by calling the CRA an “obscure law” that threatens the filibuster. Yet Bill Clinton signed the CRA knowing about its provision requiring only 51 Senate votes. It’s especially amusing to see the Times, which claims Mr. Trump is a dictator, criticizing an attempt by Congress to rein in the executive. Reporter Maya Miller never mentions the 35 Democratic votes to repeal the California waiver.

If the resolution passes the Senate, Mr. Trump is expected to sign it after he campaigned explicitly against such mandates last year, notably in car-making states like Michigan. Repealing the waiver would be a good deed for the car companies, auto workers, car buyers and the U.S. economy.