Business
EV realism is here. How automakers react in 2026 will be telling
Frederic J. Brown | Afp | Getty Images
DETROIT – The U.S. automotive industry has entered a new phase for all-electric vehicles: realism.
The industry was euphoric about the EV segment in the early 2020s, but consumer demand never took off as much as expected and, as it fizzled, automakers monitored and planned how to react. Now, they’re pivoting, as companies have wasted billions of dollars in capital, Detroit automakers are refocusing on large gas-guzzling trucks and SUVs, and many have admitted that policies, not consumers, were driving the charge for EVs.
“We have to make the investments to get to … the regulatory environment they set. We’ve seen a complete change in that. One way, 180 degrees. One way, 180 degrees back. That’s the world CEOs of automakers are living in,” GM CEO and Chair Mary Barra said earlier this month during The New York Times’ DealBook conference.
How automakers like GM that invested heavily in EVs will respond over the next year will be telling for the future of the vehicles in the U.S., according to industry insiders and experts.
Barra said “it’s too early to tell” what true demand for EVs is following the end of up to $7,500 in federal incentives in September to purchase an electric vehicle. She said the industry will likely find its natural demand over the next six months.
In the meantime, GM continues to reassess its EV plans after disclosing a $1.6 billion impact from its pullback in those investments, with more write-downs expected in the future. Ford Motor last week said it expects to record about $19.5 billion in special items related to a restructuring of its business priorities and a pullback in its all-electric vehicle investments.
“We evaluated the market, and we made the call. We’re following customers to where the market is, not where people thought it was going to be,” Ford CEO Jim Farley told CNBC last week.
U.S. EV sales peaked in September, ahead of the federal incentives ending, at 10.3% of the new vehicle market, according to Cox Automotive. That demand plummeted to preliminary estimates of 5.2% during the fourth quarter.
“The long-term direction toward electrification remains clear: The future is electric. However, the timeline is being recalibrated,” said Stephanie Valdez Streaty, Cox director of industry insights. “In the near term, automakers will continue to adjust their strategies and significantly expand hybrid offerings to meet consumers where they are today.”
Most industry experts, including those at consulting firm PwC, don’t believe it’s the end days for EVs, but rather that expectations are more realistic now. PwC expects the EV industry to pick up toward the end of this decade, with EVs forecast to make up 19% of the U.S. industry by 2030.
“As several of the U.S. [automakers] have announced, there’s some level of charges, and we got out in front of the customer demand and likely the infrastructure that’s otherwise available here in the U.S.,” C.J. Finn, U.S. automotive industry leader for PwC, told CNBC.
‘What is the normal state of EVs?’
That projected EV market share doesn’t justify the billions of dollars companies have spent on the research, development and production of the vehicles, so automakers are significantly altering their plans to allow customers more choice of all-electric vehicles, hybrids and traditional internal combustion engines.
“If you think back a few years ago, it was like, ‘If you’re not all-in on EV, you’re going to eventually go out of business. Your terminal value is zero,'” KPMG partner and U.S. automotive leader Lenny LaRocca told CNBC. “Now I think that multi-propulsion technology approach is what’s panning out to work out well. We used to call it the ‘mosaic of powertrains.'”
A NYC charging station seen in the Yorkville neighborhood of New York City.
Adam Jeffery | CNBC
The changes have taken different forms for companies that have already heavily invested in EVs.
GM, which was by far leading in such investments in the U.S., will continue to offer its current models but has little to no plans of expanding in the future, according to Barra. Instead, it will use some of its planned capacity for increased production of large trucks and SUVs. The automaker also has said it plans to offer plug-in hybrid vehicles in the years ahead, but it hasn’t disclosed many other details.
Ford has said it will refocus investments on hybrid vehicles, including plug-in models rather than pure EVs; cancel a next generation of large all-electric trucks in exchange for smaller, more affordable EVs; and rebalance its investments in core products such as trucks and SUVs.
And Stellantis is deprioritizing EVs, including for its coveted Jeep brand, as it attempts to revive its U.S. sales.
“All of us are waiting to see what the demand is, how it’s going to continue to shake out,” Jeep CEO Bob Broderdorf told CNBC. “The [EV] industry will slide. It’s going to slow down. And then what is the normal state of EVs?”
Hyundai, which also invested billions in EVs, is taking a mixed approach compared with its peers. Like GM, it plans to continue offering its current models but it is also expected to have new models coming. On the other hand, like Ford, it’s decided to more heavily emphasize hybrids and allocated production at a new $7.6 billion plant for Hyundai and Kia vehicles in Georgia.
Others such as Honda, Nissan, Porsche, Volvo and Jaguar that announced ambitious plans for EVs have canceled or significantly scaled back those goals. GM also has backtracked on its pledge to exclusively offer EVs by 2035, including several of its brands before that time frame.
The Tesla effect
A litany of factors played into the current EV marketplace, including industry dynamics and external factors such as pressure from Wall Street and political whiplash from the Trump and Biden administrations.
“No doubt the policy had a big impact on customer demand. The net-net is the market’s changed,” Farley told CNBC last Monday.
The bullishness around EVs began with the rise of Tesla. The company, which remains the U.S. leader in EV sales by a wide margin, was able to significantly boost sales and its market valuation from Wall Street analysts at the beginning of this decade.
That led other automakers to take notice and, as the industry does, attempt to replicate Tesla’s success, according to officials. But what executives didn’t realize was consumers were buying Teslas — not just any EV.
“Tesla wasn’t creating a battery-electric vehicle market. They created a market for the Tesla brand.” said Stephanie Brinley, associate director in AutoIntelligence at S&P Global Mobility.
Tesla vehicles were, and continue to be, a “tech-buy” of software-first products that just happened to be EVs, Brinley said. The company also set up its own charging network and created a tech-savvy customer base of loyalists who looked past many quality and growing pain issues.
A Tesla Cybertruck near General Motors’ Renaissance Center world headquarters in Detroit.
Michael Wayland / CNBC
That success led Wall Street to seek out the “next Tesla,” ushering in an unsustainable amount of new companies. From 2019 to 2022, nearly a dozen EV carmakers went public as well as a litany of related ones. Most of those have gone bankrupt amid federal investigations, scandals and executive upheaval.
“The attention that Tesla got woke everyone else up. But now there’s competition, and there’s competition from trusted, known and respected brands,” Brinley said.
The euphoria surrounding EVs started waning as companies kept spending with little to no success and “legacy” automakers entered the market, investing big sums to bring unprofitable vehicles to market.
Hopes for profitable EVs further eroded with the second inauguration of President Donald Trump this year. Trump has killed or rolled back many of the Biden administration’s support and funding for the sale and production of EVs.
The biggest blow was in September with the end of up to $7,500 federal incentives for the purchase of an EV.
“The end of federal incentives came to an abrupt stop at the end of Q3, driving a lot of demand and sales for the new and used market,” Jeremy Robb, Cox interim chief economist, said last week. “Since then, we’ve seen the slowdown in both the pace of sales as well as the growth of new vehicle production. Next year will be pivotal for EVs.”
Business
New Income Tax rules from 1 April 2026: 50% HRA exemption for Salaried employees in THESE cities may soon be a reality
New Delhi: Good news for salaried employees who are likely to benefit from a higher income tax exemption as the draft Income Tax Rules 2026 propose a major change in House Rent Allowance (HRA) deductions. If approved by Parliament, these changes may apply from April 1, 2026.
According to the draft Income-tax Rules, 2026, the government is proposing to expand the scope of higher HRA tax exemption under the old income-tax regime by extending it to more cities. The proposal aims to align tax relief with increased rental prices in rapidly expanding cities and evolving job trends.
New Income Tax: What is the proposed change?
Currently, salaried employees in Mumbai, Delhi, Kolkata and Chennai can claim an HRA tax exemption of up to 50 percent of their salary while those living in other cities can only claim an exemption of 40 percent. Under the draft rules, cities of Bengaluru, Hyderabad, Pune and Ahmedabad are proposed to be added to the 50 percent category.
New Income Tax: How will the exemption be determined?
According to the proposal, the method for computing HRA relief will remain the same. The exemption will be determined as the lowest of three figures which is the actual allowance received, the excess of rent paid over 10 percent of pay or a prescribed portion of salary linked to the employee’s city of residence.
New Income Tax: Why HRA matters?
HRA is a portion of an employee’s salary that an employer contributes to help cover house rent. Under the old tax regime, some part of HRA is not taxed which enables employees to save tax. HRA tax benefit is available only in the old tax regime and not in the new one. Even though the newer framework offers lower slab rates, only those employees who opt for the old system are eligible for the HRA exemption.
New Income Tax: What has govt proposed the changes?
The government has proposed the changes to update HRA norms in response to India’s changing economic landscape. In recent times, cities including Bengaluru, Hyderabad and Pune have drawn in a sizeable salaried population. The proposal also aims to align tax relief with higher rental prices in these rapidly expanding cities.
The final regulations will be forwarded to Parliament following assessment. If approved, these changes will apply from April 1, 2026.
Pakistan is preparing to repay about $1.3 billion in principal and interest on a maturing Eurobond in April 2026, as negotiations with the International Monetary Fund (IMF) approach under the country’s $7 billion reform programme.
As the IMF review mission prepares to arrive in Pakistan later this month, officials said the delegation will stay in Karachi for a couple of days before moving to Islamabad around March 2, 2026, for key discussions under the $7 billion Extended Fund Facility (EFF).
These talks are expected to focus on fiscal reforms, external financing and progress on structural benchmarks agreed under the program.
Officials indicated that the Ministry of Finance plans to launch Panda bonds shortly after the end of holidays in China in an effort to raise the first tranche of $250 million.
According to sources, there are indications of strong investor interest, with expectations of oversubscription for the bond issuance.
The government, officials said, repaid a $700 million Chinese commercial loan ahead of schedule to demonstrate its repayment capacity, while Chinese banks have reportedly assured refinancing within the ongoing fiscal year.
Pakistan is also engaged in negotiations with international commercial banks to secure an additional $500 million in fresh financing during the current fiscal cycle.
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Yotta Data Services to spend $2 billion to deploy Nvidia’s latest Blackwell chips in India, building one of Asia’s largest AI superclusters
Yotta Infrastructure’s Greater Noida data centre park (Photo Credit: Yotta’s website)
India’s data centre sector is entering a new era of scale. Yotta Data Services said Wednesday, February 18, that it will deploy Nvidia’s most-advanced artificial intelligence chips in a $2-billion project that will establish one of the largest AI computing hubs in Asia, positioning the country as a serious contender in the global race for AI infrastructure.
The investment centres on the first-ever deployment of Nvidia’s Blackwell B300 graphics processing units in India, to be housed at Yotta’s hyperscale campus in Noida, just outside New Delhi. The supercluster is expected to go live by August.
Anchoring the project is a four-year agreement with Nvidia valued at roughly $1 billion, under which the chipmaker will establish one of Asia-Pacific’s largest DGX Cloud clusters within Yotta’s infrastructure. Sunil Gupta, managing director and chief executive of Yotta, told The Economic Times that Nvidia will deploy approximately 10,300 GPUs through the arrangement to serve its global Asia-Pacific customers and run its own models and services. “Nvidia is creating one of Asia’s largest DGX Cloud clusters on our supercluster,” Gupta said.
The deal underscores a broader shift in how hyperscalers and chipmakers are approaching India. Global cloud providers, including Microsoft and Amazon, have been expanding AI data centre capacity in the country, drawn by surging demand for generative AI services and government pressure to localise advanced computing infrastructure, according to Reuters. Nvidia’s direct commitment within Yotta’s facility goes a step further, signalling confidence in India as a viable hub for serving enterprise AI workloads across the region.
A significant share of remaining capacity will be dedicated to India’s national AI Mission, which has received more than 500 applications from start-ups seeking affordable compute access. Gupta told The Economic Times that the expansion will increase the country’s compute capacity “by almost five to six times”, addressing what he described as enormous pressure on existing resources. The infrastructure will support state-backed Indian language model initiatives, including Bhashini, Sarvam, BharatGen and Soket, all aimed at building foundational AI models trained on Indian-language datasets.
Yotta currently holds around 10,000 advanced Nvidia GPUs, accounting for nearly 75% of India’s GPU compute capacity. With the new deployment, its total GPU count will rise from roughly 40,000 to more than 75,000 over the next two years.
The capital push is being funded through a combination of debt and equity. Speaking to CNBC-TV18, Gupta said the company is targeting a fundraise of close to $1 billion to support its current phase of GPU deployment. Yotta has already invested over $1.5 billion in infrastructure and expects to commit an additional $2 billion toward advanced chips. A pre-IPO equity round is underway, with the company aiming to enter public markets within the current financial year.
Yotta is part of Indian billionaire Niranjan Hiranandani’s real estate conglomerate and operates data centre campuses in Mumbai, Gujarat and near New Delhi. Additional capacity from its Mumbai facility will supplement the Noida supercluster.
The timing of the investment is notable. US export controls have reshaped global supply chains for advanced AI semiconductors, pushing technology firms to deepen partnerships in markets that remain accessible. India, which has cultivated strong ties with Washington and positioned itself as a neutral beneficiary of great-power competition in technology, has emerged as one of the cleaner plays for companies looking to expand AI compute outside China.
Speaking to CNBC-TV18, Gupta said that India’s AI ambitions are grounded in practical outcomes, with the goal of delivering impact across agriculture, healthcare, education and climate. He drew a comparison to the Unified Payments Interface, suggesting AI-led transformation could similarly reshape how services are delivered at scale across the country.
For Nvidia, the DGX Cloud anchor at Yotta is the latest in a string of sovereign and commercial AI infrastructure deals across Asia, as the company works to deepen its footprint ahead of any potential tightening of chip export restrictions.
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February 18, 2026, 11:30 IST
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