The EV Retreat: Honda and Others Pull Back from U.S. Market
AI-generated image · Bay Street Wire
A combination of expired tax credits, tariffs, and shifting consumer tastes is driving a wave of electric vehicle cancellations.
The U.S. electric vehicle market is facing a significant contraction, highlighted by Honda's decision to discontinue the Prologue. According to TechCrunch, the move removes the last all-electric vehicle from the automaker's U.S. portfolio.
Honda's retreat includes more than just the Prologue. In March 2026, the company canceled three planned EVs: the Honda O sedan, the Honda O SUV, and the Acura RDX. Honda attributed these cancellations to Chinese competition and U.S. tariffs. Additionally, a joint venture between Honda and Sony abandoned two Afeela-branded EVs in March 2026, despite previous marketing efforts.
Other manufacturers are similarly scaling back. Nissan opted not to produce a 2026 model of the Ariya SUV for the U.S. market. Hyundai announced in March that it would stop selling the Ioniq 6 in the U.S., a decision linked to tariffs and changing economics, though it will keep the higher-priced N-model. Meanwhile, Polestar has been effectively banned from the U.S. due to restrictions on Chinese-connected vehicle technology; the company is selling remaining stock of the Polestar 3 and Polestar 4 but lacks the Department of Commerce authorization granted to its sibling company, Volvo Cars.
Market data from Cox Automotive and Kelley Blue Book indicates that 247,226 EVs were sold in the second quarter of 2026, equal to about 5.8% of the overall vehicle market. While sales grew between Q1 and Q2 of 2026, they remain lower than the previous year. TechCrunch reports that the end of the $7,500 federal tax credit in fall 2025 had a significant impact on sales, specifically noting that the Prologue—which sold 39,000 units in 2025—saw sales enter a "free fall" after the credit expired.