Picture this. Newly aware of the environmental risks of internal-combustion cars, regulators tighten emissions standards. American and other Western automakers revolt, arguing that it is simply impossible to make great cars with such onerous environmental standards. Across the world, in R&D studios in Asia, they are proven wrong by engineers working at smaller, hungrier companies that succeed in developing more efficient technologies.
Am I talking about 1975, or right now?
Both represent turning points, when America’s fuel-injected fervor gives way to a period of reorganization, learning and struggling. Experts have taken to calling the period from 1975 to the mid-1980s the Malaise Era. And with American car companies struggling to adapt to new regulations, facing increased fears of imports and struggling to satisfy consumers, I think a Second Malaise Era is just beginning.
Welcome to Power Moves, an InsideEVs column on the winners and losers of the EV race. Every other week, I explore how one of the world’s most vital industries is navigating its biggest shake-up ever.
American Malaise, Rebooted
If you’ve heard the term “enshittification,” you have a good understanding of how certain swaths of the auto industry have been going since the COVID-19 pandemic. The term refers to the way our online platforms trend toward useless drivel over time, but the effects can be seen in many other sectors. Every restaurant is more expensive with worse service. Air travel has never been more taxing. And yes, cars, too, are feeling the effects.
Photo by: Victoria Scott / Motor1
That’s no surprise: What’s really happening is that, after the pandemic, shortages drove up the price of raw goods and labor simultaneously. At the same time, automakers have been reckoning with emissions rules from both the Feds and California that—for a while, at least—got stricter every year.
They’re having to add turbochargers, 48-volt electric systems and electric motors to drive down emissions, all while facing higher input costs and customers who demand more technology—and invest heavily in battery technology and autonomous vehicles as well.
It is a hard, hard time to be an automaker.
That’s especially true in the U.S., where consumer preferences have been less aligned with forthcoming regulations. European buyers seem to be at least excited about the new generation of electric cars; meanwhile, many Americans fight full-throatedly against them. General Motors, Ford and Stellantis offer varying degrees of success at making and selling ground-up EVs, but they must also invest billions of dollars into future V8 engines.
Photo by: Ram
Ram delayed its two electric trucks while it got the V8 back on the menu—a true sign of the times.
But that whipsaw imposes a cost. Ram did remove the V8 for a year, but forcing buyers into the relatively unproven Hurricane inline-six didn’t seem to help sales. Chevy still makes V8s, but between cylinder deactivation niggles and an unbelievable number of engine failures, quality still seems to be heading in the wrong direction. Even Toyota can’t seem to build a modern truck without wide-scale quality issues.
It’s no better in the electric world, either. While the cars themselves are great, consumers still report far more issues than in internal-combustion cars. My 2024 Chevy Blazer EV has spent more days at the shop in the last year than my 231,000-mile Tahoe, and the damned thing still rattles. Stellantis’ three EV options are all underbaked in different ways. (Meanwhile, it’s not like the European automakers are inherently crushing this; see the reception to Mercedes’ jellybean EVs.)
Chevy Blazer EV Long term owner review
Photo by: Mack Hogan/InsideEVs
Even Tesla’s relatively mature products show the effects of stagnation and malaise. Today’s Model 3 is better in many ways than its forebear, but it’s fundamentally the same car: relatively stale and has taken the bare-bones interior approach too far. Any era where they take away our turn signals and gear selectors cannot be seen as a high-water mark. And in its rush to focus on autonomy, Tesla hasn’t given its fans that much to get excited about.
But let’s be real about what’s happening. At least some of this can be ascribed to the 180-degree reversal on EV policy by this current presidential administration. In seeking to undo EV tax credits, aggressive zero-emission mandates and industrial policy support for batteries, you get fewer EV sales, more pollution and more reasons for automakers to slow-walk a transformation they know they have to deal with someday.
In a way, it’s a twist on the original Malaise era: the Trump administration’s regulation-slashing may lead to less innovation over time, more stagnation. But the march of technology is going a certain way, and no carmaker wants to be left behind.
A Bright Future
None of this changes the truth: the American auto market is on the precipice of something great. The same could not be said for what lied ahead in, say, 1979.
Photo by: Ionna
Underbaked as some are, even the modern crop of EVs are quieter, smoother, cleaner and more refined than their internal-combustion counterparts. They’re also safer, with more advanced driver-assistance features.
The reality of emissions-free, hands-free commuting is right around the corner. For some people, it’s already here. Those with deep pockets can afford to buy incredibly well-built cars with cutting-edge technology. They may have some weird usability quirks and the tech suite may not be perfect, but the experience is mature.
It’s just not accessible. Not yet, anyway. The average new vehicle transaction price was $48,699 in April, per Kelley Blue Book. That’s more than the last reported Real Median Personal Income in the U.S., $42,220. No wonder today’s car buyers are old, wealthy people. The fresh-out-of-college car these days is a used Civic, not a new Camaro.
Photo by: Nissan
But cheaper, better cars are on the way. Some are right around the corner. The new Chevy Bolt, Nissan Leaf and Kia EV3 promise to offer modern EV tech at much more affordable prices. Tesla’s more affordable option is (perpetually) just around the corner. And incredible Chinese EVs like the BYD Seagull prove that charming, affordable transportation is still possible.
So too are amazing leaps forward in EV technology. We’ve already seen Megawatt charging and battery-swapping in other markets, but it’ll still be a few more years before the road-trip problem in the U.S. is definitively solved. EV chargers themselves are going through a Malaise Era, too, but with the industry settling on more reliable chargers and a unified charging standard, that problem is getting solved, too.
What It Means
American Malaise means the same thing now as it did in the ’70s. It is neither a solved problem nor the end of the world. As EV sales growth stutters, and we see companies repeating the same mistakes, it’s easy to feel like this trend is forever. It isn’t.
The history of cars, like the history of anything, has periods of growth, stagnation and decline. The post-recession era saw frenzied growth in car sales, reaching a new height. It also saw the onset of more tech-forward, complex cars, a trend which has brought great advancements along with its own share of headaches to the industry.
Photo by: Stellantis
Now, though, we’re in a period of stagnation as these companies navigate an uncertain future. Facing pressure from unpredictable consumer behavior, erratic tariff policies and a cloudy regulatory environment, most automakers are dialing back their ambitions and hunkering down for a rough couple of years.
They recognize that many of their current electric vehicles are flawed early efforts, and they know how to address those flaws. But that’s a process that requires years of factory construction, battery research, component design and testing. With tariffs squeezing the bottom line and forcing automakers to undertake costly reorganizations, there’s no bandwidth left to rush on EV redesigns.
But the cars of the future are electric. Automakers know this, and so while they can afford to let their efforts stagnate temporarily, they cannot let themselves fall behind. They know it now like they knew in the ’80s: You can’t hide from foreign competition forever. One day, you have to learn how to live in the new world. Those who understand this may just be around to see it.
