Global ICE Vehicles Stage a Partial Comeback: Automakers Reinvest in Combustion Tech as Policies and Markets Shift

Recently, Stellantis, Ford, and General Motors have collectively recorded over $55 billion in asset impairments due to the overly rapid pace of their electrification transitions, prompting the industry to reassess its electric vehicle (EV) strategies. Meanwhile, slowing EV demand in the U.S., phasing-out of subsidies in Europe, and intensifying price wars in China have led to converging policy approaches between China and Europe—China’s eight ministries explicitly called for “stabilizing internal combustion engine (ICE) vehicle consumption,” while the EU has adjusted its 2035 ban timeline on new ICE vehicles. Automakers are now reviving investments in ICE technologies: Mercedes-Benz has delayed its EV targets, Volkswagen is upgrading its ICE platforms, and Ford is extending the lifecycle of its ICE SUVs. At the same time, a trend toward “equal intelligence for ICE and EVs” is emerging, with ICE models like the Audi Q5L and Geely’s Xing series already featuring advanced intelligent driving capabilities. Bosch forecasts that China’s passenger vehicle market will stabilize into a 4:4:2 split among battery-electric vehicles, hybrids, and ICE vehicles, with ICE cars experiencing a partial resurgence thanks to intelligent upgrades and their strong cash-flow advantages.