Why Legacy Automakers Have Written Off $55 Billion in EV Investments: A Reality Check | Taha Abbasi

$55 Billion in EV Writedowns — What Went Wrong?

Taha Abbasi has been studying the automotive industry’s electric transition for years, and the numbers are staggering: legacy automakers have collectively written off approximately $55 billion in EV investments. From GM’s Ultium struggles to Ford’s EV division losses to Stellantis’s strategy pivots, the traditional auto industry’s electric ambitions are colliding with brutal economic reality.

But as Taha Abbasi argues, the story isn’t that EVs failed — it’s that legacy automakers’ approach to EVs failed. The distinction matters enormously for understanding where the industry goes from here.

The Root Causes

1. Software incompetence: Legacy automakers tried to build software organizations inside hardware companies. The cultural mismatch was catastrophic. Tesla, by contrast, was software-first from day one. Taha Abbasi, with his background as a CTO who has built software organizations from scratch, recognizes this as the fundamental failure mode.

2. Platform compromise: Many legacy EVs were built on modified ICE platforms rather than purpose-built EV architectures. This led to suboptimal packaging, weight distribution, and efficiency. GM’s Ultium platform was supposed to fix this but has been plagued by production and quality issues.

3. Dealer resistance: Traditional dealer networks actively resisted EV sales because EVs require less maintenance (lower service revenue) and dealers often lacked charging knowledge. Tesla’s direct sales model completely sidesteps this friction.

4. Half-hearted commitment: Many legacy programs were announced with fanfare but funded with caution. When early EV sales didn’t immediately reach ICE volumes, executives used the “demand isn’t there” narrative to justify pullbacks — even though their products often weren’t competitive enough to generate demand.

The Political Cover Story

As Taha Abbasi notes, the current US political environment has given legacy automakers convenient cover to retreat from EV commitments. Rolling back EPA emissions standards, questioning EV mandates, and signaling support for ICE vehicles lets automakers frame their EV pullbacks as “responding to policy uncertainty” rather than admitting product and execution failures.

But this narrative doesn’t hold up under scrutiny. Ford’s pivot to hybrids and GM’s delayed EV launches were driven by internal failures, not external policy changes. The companies losing money on EVs are the ones who built bad EVs — not the ones affected by policy headwinds.

Who’s Getting It Right

While Detroit stumbles, several companies demonstrate that profitable EVs are possible:

• Tesla: Consistently profitable with industry-leading margins
• BYD: Profitable and scaling globally at remarkable speed
• Hyundai/Kia: Strong EV lineup with improving economics
• Rivian: Not yet profitable but showing clear progress toward profitability

The Real Lesson

Taha Abbasi draws a clear lesson from the $55 billion in writedowns: the EV transition rewards companies that commit fully and build from first principles. Half-measures — modified ICE platforms, reluctant dealers, divided R&D budgets — result in products that can’t compete with purpose-built EVs. The writedowns aren’t a failure of electric technology; they’re a failure of organizational transformation.

What Comes Next

The $55 billion question is whether legacy automakers will learn from these expensive lessons or continue retreating into the false comfort of ICE and hybrid vehicles. Taha Abbasi’s view: the companies that recommit now — with better technology, dedicated platforms, and reformed organizations — still have a chance. Those that retreat will find themselves stranded when the market inevitably shifts.

---

About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com