DETROIT — The unraveling of the U.S. electric vehicle push is increasingly raising concerns of an existential crisis for the American auto industry, as Chinese carmakers surge ahead in the technologies that many still believe will define the next era of cars.

The latest warning sign came Friday, when Stellantis disclosed a $26 billion charge from a major business overhaul, including a pullback in EVs, triggering a more than 20% plunge in its stock. CEO Antonio Filosa blamed the hit on overestimating the pace of the energy transition.

It follows other automakers in the U.S. significantly pulling back from pure EVs in favor of large gas-guzzling trucks such as the Ford F-150 and SUVs like the Chevrolet Suburban. Chinese automakers are taking the opposite approach and are growing globally, led by EVs.

Legacy automakers General Motors and Ford Motor have lost billions of dollars on EVs and are pulling back partly because of the loss of a federal tax credit and lackluster consumer demand.

Even Tesla, which pioneered the EV industry, is facing pressure. It was surpassed by Chinese automaker BYD in EV sales as the Elon Musk-led brand lost its appeal and market share in Europe this year, while BYD ramped up exports there and around the world. Tesla also last week canceled its two oldest, lowest-selling electric vehicles to repurpose an American plant for humanoid robots.

After helming the electrification movement for years, Musk increasingly appears focused elsewhere, especially on robots, driverless taxis and his artificial intelligence company, which he combined with Space X in what was the biggest merger in history.

Meanwhile, global market share for Chinese brands has jumped nearly 70% in five years, and many experts see a threat to U.S. automakers, including the anticipated entrance of Chinese brands into America.

There’s fear among global automakers that Chinese rivals like BYD and Geely could flood global markets, undercutting domestic production and vehicle prices. The U.S. has taken a protectionist approach by implementing 100% tariffs on imported EVs from China, but Chinese automakers have made inroads across Europe, South America and elsewhere.

Companies in the U.S., where the automotive industry represents about 5% of the country’s gross domestic product, are worried about long-term implications.

“The Chinese auto industry presents an existential threat to the traditional [automakers],” said Terry Woychowski, a former GM executive who serves as president of automotive at engineering consulting firm Caresoft Global.

Several automotive experts used the word “existential” when discussing the growth of Chinese automakers.

“The existential risk to the U.S. auto industry isn’t Chinese EVs alone, it’s the combination of sustained government support, vertically integrated supply chains and speed,” said Elizabeth Krear, CEO of the Center for Automotive Research. “Those advantages lower costs and accelerate execution. Concurrently, saturation in China’s domestic market is driving automakers to expand aggressively into global markets.”

GlobalData forecasts Chinese EVs will continue to grow globally to roughly 6.5 million units by 2030, followed by nearly 8.5 million in 2035. That includes continued expansion in the U.S., where a few China-made vehicles such as the Buick Envision have been imported in recent years.

“Breaking into the U.S. market successfully and sustainably is not an easy accomplishment; it takes time, investment, patience and the willingness to make product mistakes but improve them until you get it right. It is expected that some Chinese automakers will have that blend and eventually look to participate in the U.S. market,” said Stephanie Brinley, a principal automotive analyst at S&P Global Mobility.

Brinley noted it took Japan’s Toyota Motor from 1957 to 2001 to reach a 10% market share, while South Korea’s Hyundai Motor reached 10% after 26 years in 2022.

“Because the U.S. is a mature market and sales are forecast to remain between 16 million and 16.5 million units through at least 2035, newcomers will take share from existing brands and automakers,” Brinley said. “How quickly they connect with consumers and which automakers lose volume or share to the new competitor remains to be seen.”

The Alliance for Automotive Innovation, a lobbying group representing nearly every automaker in the U.S., wants to prevent that from happening. It called on Congress and the Trump administration in December to prevent Chinese government-backed auto and advanced battery manufacturers from gaining entry to produce in the U.S.

“Automakers doing business inside the United States face geopolitical and market pressures from China that are a direct threat to America’s global competitiveness and national security,” John Bozzella, CEO of the alliance, said in a message to a U.S. House of Representatives select committee, citing unfair, anticompetitive trade practices and intellectual property theft.

Jeep maker Stellantis on Friday announced a 22 billion euro ($26 billion) hit from a business turnaround plan that includes pulling back on electrification and reintroducing V8 engines to U.S. models.

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.

GM CFO Paul Jacobson said Wednesday that the Detroit automaker, which has largely become a regional player in North America, isn’t abandoning EVs but is right-sizing to natural demand instead of attempting to appease regulators.

When asked about the expansion of Chinese automakers, Jacobson said GM “can hold our own” but that it needs to be on a level playing field — rehashing that he thinks U.S. tariffs should work to offset subsidies Chinese companies get from Beijing.

“You can see the type of intensity and competitiveness that those vehicles bring to the marketplace. And therefore, we’ve got to be ready,” he said during a Chicago Federal Reserve automotive conference in Detroit.

GM wasn’t ready for the rise of the domestic auto industry in China, which was the company’s top sales market from 2010 to 2023. The automaker’s earnings from China fell from around $2 billion annually in 2018 to a second consecutive year of losses in 2025 as China grew its own auto manufacturing.

GM’s crosstown rival Ford is taking a different approach. It has largely scrapped plans for large EVs in exchange for a next generation of smaller models that CEO Jim Farley believes will be the company’s saving grace against Chinese automakers.

Farley, who has been complimentary of Chinese automakers at times, said the new platform will be a simple, efficient, flexible ecosystem to deliver a family of affordable, electric, software-defined vehicles.

“This is a Model T moment for the company,” Farley said last year. “We really see, not the global [automakers] as a competitive set for our next generation of EVs, we see the Chinese. Companies like Geely and BYD … and that’s how we built our vehicle.”

Domestic EV startups such as Rivian Automotive and Saudi-backed Lucid Group — both exclusively producing vehicles in the U.S. — are facing profitability and sales challenges.

Amid the demand issues, the EV startups have tried to appeal to investors by touting themselves as technology plays rather than automakers, following in the footsteps of U.S. EV industry leader Tesla.

Tesla’s Musk has been warning about Chinese automakers for years, saying in 2023 after the rise of BYD that such companies will “demolish” global rivals without trade barriers.

Musk has historically positioned Tesla as a technology company that also sells cars despite that the vast majority of its revenue comes from car sales, leasing and repairs. He took it a step further on the company’s most recent quarterly earnings call, saying that Tesla is ending production of its Model S and X vehicles and will use the factory in Fremont, California, to instead build Optimus humanoid robots.

After the original Roadster, the two models are Tesla’s oldest vehicles. The EV maker started selling the Model S sedan in 2012, and the Model X SUV three years later. They only represented about 3% of Tesla’s sales in 2025, with the company continuing to offer the Model Y, Model 3 and Cybertruck.

In recent, years the company has slashed prices for those vehicles as global competition for electric vehicles has soared.

Musk believes China will once again be the company’s main competition in its newest humanoid robot venture.

“China will definitely be the tough competition as there’s no two ways about it,” Musk said on the company’s fourth-quarter earnings call. “So I always think people outside of China kind of underestimate China. China’s an ass-kicker, next level.”