Automation Equipment Manufacturers rethink electrification strategy: Worthington Steel
Manufacturers of original automotive equipment (OEMs) are moving from battery-powered electric vehicles (BEVs) to hybrid vehicles, top executives at Worthington Steel said during the company's third-quarter earnings report on Thursday, March 26.
The reversal is driven by a variety of factors, Jeffrey Gilmore, chief executive officer, president and managing director, said Thursday, citing the removal of the fuel economy requirement and the $7,500 federal tax credit.
In December 2025, President Donald Trump's administration proposed repealing the Biden-era corporate Average Fuel Economy (CAFE) standards, which could potentially reduce pressure on automakers to increase miles per gallon across their entire fleet, and could reduce incentives to use fuel-saving technologies or electrification to meet federal goals.
A few months earlier, the Trump administration had reduced government support for electric vehicle purchases by signing the One Big, Beautiful Bill Act on July 4, 2025, which, starting September 30, 2025, cancels the right to tax breaks of up to $7,500.
"It is obvious that the market is shifting from government regulation of the production of hybrid cars to consumer demand for hybrids. The data is quite clear," Gilmore said, highlighting the increased consumer interest in hybrid and all-wheel drive electric vehicles due to rising oil prices and geopolitical tensions.
According to the U.
S. Energy Information Administration, by March 23, regular gasoline prices in the United States rose to $3.96 per gallon, an increase of $0.46 per gallon, or 13.14%, from $3.50 per gallon on March 9.
Worthington Steel's forecast for the automotive market for 2026, according to the CEO, was "cautiously optimistic."
"It looks like the market situation will improve at the end of the year. This view is supported by the growing confidence that a[US — Mexico — Canada Agreement]will be completed in 2026, eliminating significant market uncertainty," Gilmore said.
Negotiations on the revision of the USMCA between the United States and its two trading partners began in March.
Expansion of electrical steel production in Canada and Mexico
Worthington Steel reported on the company's progress in implementing projects for the production of electrical steel in Mexico and Canada.
"We are pleased with the growth in hybrid production, as we have the opportunity to produce sheets of electrical steel for the hybrid traction motor, as well as special cold-rolled steel used in the powertrain for the hybrid internal combustion engine