Five more days. That’s how long the $7,500 federal EV tax credit has left before it’s gone—maybe forever. California thought it was going to be able to pick up the slack (it couldn’t), and automakers have officially started to scale back production to meet anticipated demand.
If you were planning on buying a new EV in the next few months but aren’t quite ready to pull the trigger, it definitely hurts to miss out on the $7,500 point-of-sale discount—but it might not have been for nothing. The push from the tax credit has had long-lasting effects, namely the cost of development and production of core EV components like batteries. And now, as we’re starting at the end of the line, we have a realization: Price parity between EVs and ICE-powered cars is basically within reach.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: China’s newly proposed rules on door handles actually make sense, and BMW says its sedans aren’t going anywhere. Let’s jump in.
30%: The Tax Credit Is Ending, But EVs Are Nearly At A Natural Price Parity With ICE
Photo by: Volvo
The U.S. EV tax credit (the federal program that feels like a $7,500 promo code at the dealership) officially dies this month. It’s sad to see, but it’s served its purpose: propping up EV sales so consumers gain interest in batteries, and automakers can drive down costs by scaling production. And now in 2025, we’re already hovering at the point where EVs can stand on their own four wheels.
Take, for example, Volvo’s upcoming EX60. Automotive News recently ran a story that quotes CEO Hakan Samuelsson calling the Swedish brand’s latest EV a “big step” towards price parity with its gasoline siblings. He’s not talking about using subsidies or gimmicks to reach that figure, either—with the EV tax credit gone, it’s about the actual bottom line.
Using the funds that Volvo generated from its outgoing generation of EVs, Volvo was able to build its brand-new SPA3 platform. It was designed to be electric from the ground up and modular enough to fit underneath all future electric Volvos. It uses in-house motors, higher-density batteries and even structural battery packs. Toss in megacasting and components shared across Volvo’s lineup and you can see where cost-cutting really comes into play here. In fact, Volvo says that it can claw back between 8% and 10% higher margin compared to its early EVs.
Volvo isn’t alone. Officially, Samuelsson says that the price parity will happen in the “next couple of years,” but industry analysts have been predicting that the magic date for price parity is somewhere between now and 2026—well, absent inflation and tariffs, that is. Here we are at the end of 2025; Volvo is cluing us in that it’s nearly there and the EX60 will be the model that gets the brand across the line—right as the EV tax credit rides off into the sunset.
We got a sneak peek of what price parity looks like over the summer, too. As automakers pushed out existing EV stock at fire sale prices ahead of the tax credit expiry, the average transaction price of BEVs in the U.S. actually crossed that of ICE vehicles for the first time. That’s not technically “true” price parity, but still—it’s proof that we’re close enough to taste it.
The battery side of the equation is moving even faster. CATL, the world’s biggest EV battery supplier, says that its sodium-ion packs are nearly ready for market at just $40 per kilowatt-hour. That’s 20% cheaper than its current LFP packs, and if those numbers hold, it could lower the price floor by dropping the most expensive part of an EV—the battery—even lower.
Of course, losing the tax credit hurts everyone in the short term. Buyers have an emptier wallet and automakers rake in less dough, too. Incentives made EVs feel like a deal, and without them, some buyers will walk. But Samuelsson makes a good point that shouldn’t be overlooked:
“It’s good to have goodies from the government short term, but that will never drive electrification,” the CEO said. “Electrification will be driven by better cars.”
60%: China’s New Door Handle Guidelines Are Actually Pretty Reasonable
Photo by: Scout Motors
Recently, safety advocates and regulators have been sounding the alarm about electronic and recessed door handles—namely around how difficult they can be to open should a car lose power. So when news broke that China was considering banning pop-out door handles, the world wasn’t exactly surprised.
China’s Ministry of Industry and Information Technology has released the draft rules that will potentially govern how automakers must design the door handles in new cars. The idea is to make sure that futuristic-looking handles don’t compromise on the less flashy (but most crucial) job of safety. And after reading through the report from CarNewsChina, I have to say, the rules seem to make a lot of sense.
Here’s what the requirements boil down to:
- All door handles, inside and out, require mechanical backup releases.
- External trunk releases are excluded from this
- External handles must have “adequate hand operation space” of at least 2.4″ x 0.8″ x 1″
- Internal mechanical door releases must be easily identifiable, clearly visible, positioned within one foot of the door edge, and be actuated without using tools
This is China doing something surprisingly rational in a space that’s usually full of safety fluff. Automakers, especially premium brands, have treated handles like some fashion gimmick—they disappear, can be difficult for new passengers to operate and have become so electronic that they’ve lost the plot of what a door handle is actually designed to do.
The results often mean worse usability, and occasionally at the cost of safety. That’s why regulators have needed to step in and intervene before things got even worse.
CarNewsChina digs into what went into the rule-making process:
In an interview with Chinese newspaper CNAutoNews, Rong Hui, Deputy Director of the China Automotive Standardisation Research Institute, explained that the standards were developed through extensive research involving over 20 companies and 63 vehicle models. The requirements address industry pain points while balancing technological advancement with safety concerns.
“With the development of automotive electrification, electric concealed door handles have been widely adopted, and the operation methods and structural types of door handle products on the market are increasingly diverse,” Rong stated. “These standards aim to respond to new technologies and safety requirements.”
The standards focus on three key areas: regulating door handle structural types, ensuring release methods maintain functionality during power loss, and standardising handle placement with clear safety markings.
The proposal is now open for public comment, and we’ll have to wait and see if they’re adopted. For automakers, that could mean extreme redesigns, with some already getting ahead of the problem.
It’s rare to see a car regulation that’s both practical and easy to cheer for, but this one certainly qualifies on nearly every level. Handles should be handles. China, of all places, is reminding the auto industry of that.
90%: BMW Says Sedans Are Here To Stay
Photo by: BMW
The automotive world has been quietly killing off sedans for the better part of a decade. Chevy bailed on the Malibu, Ford axed them completely, and Nissan just swore off a pair of electric sedans because it didn’t think anyone in the U.S. would buy them. Low-slung, four-door cars are an endangered breed—unless you’re BMW, that is.
While other automakers are cranking out crossovers aplenty, BMW’s design leadership has honed in on what’s core to the brand: sedans. It might seem crazy, but Oliver Heilmer, the senior designer behind the BMW Neue Klasse design language, pinky-swears that sedans aren’t going the way of the dodo.
Here’s what Heilmer told Go Auto during a recent interview:
Mr Heilmer particularly backed the role of the sedan for BMW, which the design chief sees as truly core to BMW’s DNA.
“A couple of years ago, you might have thought the sedan is something that might disappear,” he said.
“But it’s quite stable to be honest. Now it’s something where we are setting a statement. We have said BMW is standing for sedans. A small, sporty, elegant, midsized sedan is the core of the (BMW) brand.”
BMW’s next model to be revealed will be the i3 sedan. While it revives the dormant badge of an experimental hatchback, the new model is a 3 Series sedan with a BEV powertrain, featuring Neue Klasse design language and using [the Neue Klasse Platform].
In a weird way, it makes sense. BMW knows its buyers, and it knows its brand. Hell, the automaker’s entire reputation was built on four-doors that drove like sports cars (remember its slogan—”The Ultimate Driving Machine“?), so pivoting away sedans would be like Burger King deciding it was time to retire the Whopper. While other marques have been faced with a challenge of crossovers or sedans, BMW has instead embraced both, and in 2024, 35.4% of the company’s sales were from sedans.
Neue Klasse will naturally carry the sedan torch into the future, and it will do that using the classic three-box design, according to Heilmer. He even hinted that wagons are gaining more ground in the U.S., which could mean that America might see more Touring models to bridge that sedan-crossover gap in the future:
“[W]hat we have learned is that the station wagon is becoming more popular in the United States,” Heilmer told Go Auto. “And then we are reacting [to] it.”
Will it pay off? Maybe. Hopefully. The world’s insatiable hunger for SUVs and crossovers shows no signs of being satiated anytime soon, but that doesn’t mean BMW needs to feed the addiction.
And, sure, crossovers might be the financial backbone for many automakers—BMW included—but sedans still play a crucial part in appealing to certain consumers. By keeping sedans alive, BMW ensures that it stays true to its brand heritage and doesn’t just become another indistinguishable SUV maker with its roundel hood.
100%: Could Wagons Make A Comeback In A Crossover-Dominated World?
Photo by: Chris Perkins / Motor1
It’s kind of weird how anti-crossover but pro-wagon I am. Don’t get me wrong, a good car is a good car, but if I had the choice between an equivalently-specced Porsche Taycan Cross Turismo and Macan EV, you better believe I’m picking the Taycan all day.
Heilmer’s comment on more wagons potentially making an appearance in the U.S. has me a bit giddy. I mean, c’mon—wagons. But that doesn’t mean they’ll necessarily be popping up left and right.
Do you think that wagons have a market in a world where sedans barely sell and crossovers rule the world? Or are crossovers just too convenient that wagons don’t stand a chance? Or, could it be thanks to the paradox of choice that consumers will just default to something tried and true when presented with too many options?
Let me know your thoughts in the comments.
