EV Sector Woes Deepen as Uber Scraps Driver Incentives
The ride-hailing giant's decision to end its bonus program adds another headwind to an industry already grappling with slowing sales and rising inventory.
The electric vehicle market was dealt a fresh blow this week as Uber confirmed it is ending its monthly incentive program for drivers who use EVs, removing a key support for fleet sales. The move compounds existing fears of a significant slowdown in consumer demand, placing further pressure on automakers from industry leader Tesla (TSLA) to legacy giants like Ford (F) and General Motors (GM).
Uber's decision to halt the bonuses, which provided drivers with extra earnings for using battery-powered vehicles, signals a pullback from a program designed to accelerate EV adoption among its fleet. According to a report from Bloomberg, the end of these incentives could dampen a reliable source of demand that automakers had come to count on as they ramp up production.
The timing of the decision is particularly challenging for the EV sector, which is navigating a difficult transition from early adopters to mainstream buyers. Recent data paints a grim picture of cooling demand. Following the expiration of key federal tax credits, US battery-electric vehicle deliveries plummeted 43% year-over-year in November. This sharp downturn has led to a glut of unsold cars on dealership lots, with the supply of new EVs climbing to over 100 days earlier this year, significantly higher than their internal combustion engine counterparts.
Major automakers are already feeling the pinch. Ford's EV division, Model e, is on track to lose over $5 billion in 2025, with some dealerships reporting an "inventory nightmare" for models like the Mustang Mach-E. General Motors, despite a surge in sales before tax credits expired, has also warned of a weaker fourth quarter. Even market bellwether Tesla is not immune, facing what analysts project will be its second straight year of declining global sales growth in 2025 and resorting to aggressive discount campaigns to manage a growing inventory surplus.
The persistent headwinds of high interest rates, elevated vehicle prices, and consumer anxiety over charging infrastructure continue to weigh on the market. Shares of EV-native companies like Rivian (RIVN) have struggled, while traditional automakers are recalibrating their ambitious electric production targets.
While Uber's decision alone won't derail the long-term EV transition, it serves as a potent symbol of the market's current reality. For an industry already flashing warning signs, the loss of a prominent corporate catalyst adds another layer of uncertainty to an already challenging road ahead.