With falling sales figures, weak demand for electric vehicles, and slumps in important markets such as China, many car manufacturers are under pressure.

One automotive company is now taking countermeasures—kicking off a major savings and investment program, while implementing a remarkable change in strategy. Instead of focusing on a purely electric future, it is looking to produce more combustion and hybrid models again.

Customers in both the US and Europe have been slower to switch to electric cars than many manufacturers had hoped, due to problems with the charging infrastructure and high purchase prices. In China, buyers are increasingly opting for domestic e-car brands, which is an additional problem. Demand for luxury goods is also falling. In Germany, the federal electric subsidy was discontinued overnight. Together, these factors are squeezing profit margins and increasing costs of automotive manufacturers.

Politicians have also been vocal about the advantages of the traditional combustion engine.

Several manufacturers have now softened their electric targets or are no longer giving a fixed date for phasing out the combustion engine. They are now increasingly focusing on hybrids to be able to react flexibly to demand. Plug-in hybrids remain an important bridging technology for meeting CO₂ reduction targets without losing customers. The renewed switchover will result in higher costs and therefore a lower profit margin in the current year.

This does not signal the end of electric vehicles; rather, sales of vehicles with combustion engines will serve to finance the electric transition. However, the rapid transition to 100% electric seems to be slowing down—at least for the next few years, or, as one corporate executive put it: ‘as long as there is a market for combustion engines.’