by Subaru reevaluates its electric vehicle strategy
Subaru, which has long lagged behind competitors in electric vehicle development, is now considering a slower rollout of its EV lineup. The company stated that it is reevaluating its strategy due to market instability and uncertain regulatory conditions.
Uncertainty over tariffs and incentives
In addition to the overall slowdown in demand for electric vehicles, Subaru, like other automakers, faces uncertainty regarding U.S. customs tariffs and tax incentives. It is currently unclear how conditions may change in six months or a year, complicating long-term planning.
Subaru estimates that Trump-era tariffs could cost it $2.5 billion this year.
Although the company has a plant in Indiana, it produces only half of the more than 700,000 vehicles Subaru sells annually in the U.S. The rest are imported, and even if production capacity can be increased, suppliers are not ready to scale up.
Changes in production plans
The new Trailseeker model will likely be manufactured outside the U.S., and the planned electric vehicle plant may now also produce traditional vehicles. These changes come against the backdrop of a 13% drop in Subaru’s operating profit to $2.7 billion and a 4.1% decline in global sales.
Despite the challenges, the company recorded a 5.4% increase in sales in the domestic Japanese market, which could become one of the key factors in further adapting its strategy. Subaru continues to seek a balance between electric vehicles and traditional technologies, considering both global trends and its own production capabilities.
