EVs stumbled into 2026. Now automakers are betting on cheaper cars.

• Tesla sales declined in 2025 and several legacy automakers are pulling back their EV commitments.
• Car companies are struggling to contain prices, and consumers are signing on to riskier loans.
• Analysts say there is a potential solution: cheaper EVs. We're about to see a bunch in 2026.

On the surface, the electric-vehicle industry looks like it's heading into 2026 with a flat tire.

Federal subsidies are gone, and EV sales have cooled since September. Even Tesla, America's dominant EV maker, is experiencing a sales slowdown.

Now, carmakers are scrapping once-ambitious EV plans.

In December, Ford discontinued production of the all-electric F-150 and announced a $19.4 billion write-down tied to its battery investments. A week later, Volkswagen halted production of the electric ID. Buzz minivan for 2026, with plans to potentially revive it in 2027.

That trend snowballed on Thursday. General Motors said it expects to lose $6 billion as it retools its EV strategy. On the same day, Stellantis went even further, discontinuing every plug-in hybrid in its lineup — including the once-bestselling Jeep Wrangler 4xe.

But beneath the headline-grabbing cancellations, there's a quieter shift underway that could end up reviving the ailing EV market. It has everything to do with the auto industry's biggest problem: price.

"Electric vehicles are becoming more affordable as more mainstream options enter the market," Erin Keating, an executive analyst at Cox Automotive, told Business Insider. "We're finally seeing automakers deliver EVs at price points beyond the luxury segment."

This year, legacy automakers — including several that recently pulled back EV projects — are preparing their factory floors to churn out lower-cost electric cars. Startups are jumping into the fray, too.

Nissan's Leaf just rebooted as a $29,000 Tesla Model Y look-alike. Subaru and Toyota are launching the Uncharted and C-HR — nearly identical crossover SUVs with $35,000 starting prices. Kia will have a $35,000 competitor with the EV3. Rivian is about to release its $45,000 R2 onto American roads. The Jeff Bezos-backed Slate anticipates its mid-$20,000 pickup will launch in the fall. Chevy's Bolt is returning with $29,000 on the sticker.

The push toward cheaper EVs is expected to roll into 2027, too, with Ford launching its $30,000 electric pickup.

It all comes as Americans struggle to keep up with every-expanding vehicle debt.

The average price of a new vehicle sold in the US hit $50,077 this week, Automotive News reported, citing Cloud Theory's average marketed price metric. That sticker shock has pushed the median buyer to put $6,579 down and take on monthly payments of $748 stretched across nearly six years, NerdWallet data shows.

Meanwhile, Americans carried a record $1.66 trillion in auto loan debt in 2024, the most recent data from the Federal Reserve Bank of New York. That's more than credit cards and federal student loans, and second only to mortgages. Delinquencies also crept higher that year, a sign that many consumers ran out of room to absorb ever-larger car payments.

"The reality was that new vehicle sales were being driven by well-heeled consumers," Keating said — a dynamic that was especially pronounced in the EV market.

Since 2020, when legacy automakers started launching their first EVs to compete with Tesla, they focused heavily on top-end cars with luxury prices.

The Ford F-150 Lightning, for example, started around $50,000. Higher-end trims climbed into the high-$90,000 range. Rivian's R1S SUV started at $77,000. Lucid's Air sedan cost between $70,000 and $250,000.

In September, the federal $7,500 tax credit that helped modestly bring down those high prices largely expired.

Now, as those same carmakers roll out lower-priced models, the industry appears to be course correcting, Keating said. Much of the early EV premium reflected the cost of building an entirely new ecosystem, she added.

Early buyers weren't just paying for a car. They were helping automakers finance new battery plants, retool factories, retrain workers, and pour billions into supply chains that didn't yet exist.

Six years later, much of that infrastructure is already in place. As a result, new EV consumers are beginning to see those sunk costs roll off the sticker price.

Now, automakers are going to see how much consumers actually want competitive EV products.

"We're entering a period where we'll see what organic demand for EVs actually looks like, without the policy thumb on the scale," Keating said. "They're not going to abandon EV platforms. They've already made the investments."