DETROIT – The U.S. automotive industry has entered a new phase for all-electric vehicles: realism.

The industry was euphoric about the EV segment in the early 2020s, but consumer demand never took off as much as expected and, as it fizzled, automakers monitored and planned how to react. Now, they’re pivoting, as companies have wasted billions of dollars in capital, Detroit automakers are refocusing on large gas-guzzling trucks and SUVs, and many have admitted that policies, not consumers, were driving the charge for EVs.

“We have to make the investments to get to … the regulatory environment they set. We’ve seen a complete change in that. One way, 180 degrees. One way, 180 degrees back. That’s the world CEOs of automakers are living in,” GM CEO and Chair Mary Barra said earlier this month during The New York Times’ DealBook conference.

How automakers like GM that invested heavily in EVs will respond over the next year will be telling for the future of the vehicles in the U.S., according to industry insiders and experts.

Barra said “it’s too early to tell” what true demand for EVs is following the end of up to $7,500 in federal incentives in September to purchase an electric vehicle. She said the industry will likely find its natural demand over the next six months.

In the meantime, GM continues to reassess its EV plans after disclosing a $1.6 billion impact from its pullback in those investments, with more write-downs expected in the future. Ford Motor last week said it expects to record about $19.5 billion in special items related to a restructuring of its business priorities and a pullback in its all-electric vehicle investments.

“We evaluated the market, and we made the call. We’re following customers to where the market is, not where people thought it was going to be,” Ford CEO Jim Farley told CNBC last week.

U.S. EV sales peaked in September, ahead of the federal incentives ending, at 10.3% of the new vehicle market, according to Cox Automotive. That demand plummeted to preliminary estimates of 5.2% during the fourth quarter.

“The long-term direction toward electrification remains clear: The future is electric. However, the timeline is being recalibrated,” said Stephanie Valdez Streaty, Cox director of industry insights. “In the near term, automakers will continue to adjust their strategies and significantly expand hybrid offerings to meet consumers where they are today.”

Most industry experts, including those at consulting firm PwC, don’t believe it’s the end days for EVs, but rather that expectations are more realistic now. PwC expects the EV industry to pick up toward the end of this decade, with EVs forecast to make up 19% of the U.S. industry by 2030.

“As several of the U.S. [automakers] have announced, there’s some level of charges, and we got out in front of the customer demand and likely the infrastructure that’s otherwise available here in the U.S.,” C.J. Finn, U.S. automotive industry leader for PwC, told CNBC.

GM, which was by far leading in such investments in the U.S., will continue to offer its current models but has little to no plans of expanding in the future, according to Barra. Instead, it will use some of its planned capacity for increased production of large trucks and SUVs. The automaker also has said it plans to offer plug-in hybrid vehicles in the years ahead, but it hasn’t disclosed many other details.

Ford has said it will refocus investments on hybrid vehicles, including plug-in models rather than pure EVs; cancel a next generation of large all-electric trucks in exchange for smaller, more affordable EVs; and rebalance its investments in core products such as trucks and SUVs.

And Stellantis is deprioritizing EVs, including for its coveted Jeep brand, as it attempts to revive its U.S. sales.

“All of us are waiting to see what the demand is, how it’s going to continue to shake out,” Jeep CEO Bob Broderdorf told CNBC. “The [EV] industry will slide. It’s going to slow down. And then what is the normal state of EVs?”

Hyundai, which also invested billions in EVs, is taking a mixed approach compared with its peers. Like GM, it plans to continue offering its current models but it is also expected to have new models coming. On the other hand, like Ford, it’s decided to more heavily emphasize hybrids and allocated production at a new $7.6 billion plant for Hyundai and Kia vehicles in Georgia.

Others such as Honda, Nissan, Porsche, Volvo and Jaguar that announced ambitious plans for EVs have canceled or significantly scaled back those goals. GM also has backtracked on its pledge to exclusively offer EVs by 2035, including several of its brands before that time frame.

The bullishness around EVs began with the rise of Tesla. The company, which remains the U.S. leader in EV sales by a wide margin, was able to significantly boost sales and its market valuation from Wall Street analysts at the beginning of this decade.

That led other automakers to take notice and, as the industry does, attempt to replicate Tesla’s success, according to officials. But what executives didn’t realize was consumers were buying Teslas — not just any EV.

“Tesla wasn’t creating a battery-electric vehicle market. They created a market for the Tesla brand.” said Stephanie Brinley, associate director in AutoIntelligence at S&P Global Mobility.

Tesla vehicles were, and continue to be, a “tech-buy” of software-first products that just happened to be EVs, Brinley said. The company also set up its own charging network and created a tech-savvy customer base of loyalists who looked past many quality and growing pain issues.

That success led Wall Street to seek out the “next Tesla,” ushering in an unsustainable amount of new companies. From 2019 to 2022, nearly a dozen EV carmakers went public as well as a litany of related ones. Most of those have gone bankrupt amid federal investigations, scandals and executive upheaval.

“The attention that Tesla got woke everyone else up. But now there’s competition, and there’s competition from trusted, known and respected brands,” Brinley said.

The euphoria surrounding EVs started waning as companies kept spending with little to no success and “legacy” automakers entered the market, investing big sums to bring unprofitable vehicles to market.

Hopes for profitable EVs further eroded with the second inauguration of President Donald Trump this year. Trump has killed or rolled back many of the Biden administration’s support and funding for the sale and production of EVs.

The biggest blow was in September with the end of up to $7,500 federal incentives for the purchase of an EV.

“The end of federal incentives came to an abrupt stop at the end of Q3, driving a lot of demand and sales for the new and used market,” Jeremy Robb, Cox interim chief economist, said last week. “Since then, we’ve seen the slowdown in both the pace of sales as well as the growth of new vehicle production. Next year will be pivotal for EVs.”

ServiceNow will acquire cybersecurity startup Armis in a cash deal valued at $7.75 billion, the company said Tuesday.

The enterprise software company said the deal will bolster its cybersecurity capabilities in the age of artificial intelligence and more than triple its market opportunity for security and risk solutions.

“This is about making a strategic move to accelerate growth, and we see the opportunity for our customers,” CEO Bill McDermott told CNBC’s “Squawk on the Street” on Tuesday. “In this AI world, especially with the agents, you’re going to need to protect these enterprises [because] every intrusion is a multi-million dollar problem.”

ServiceNow said the deal is expected to close in the second half of next year, financed by a combination of cash and debt.

The company has been on an acquisition spree in 2025 as it sought to accelerate growth, McDermott said.

ServiceNow announced a deal for AI agent platform Moveworks for $2.85 billion in March, and at the beginning of December, said it would acquire identity security platform Veza.

“ServiceNow will have the only AI control tower that drives workflow, action and business outcomes across all of these environments,” McDermott added.

Bloomberg first reported earlier this month that Armis was exploring a possible $7 billion deal with ServiceNow.

In November, the California-based company, which helps businesses protect internet-connected devices from cyber risks, said it had raised $435 million at a $6.1 billion valuation.

At the time, co-founder Yevgeny Dibrov told CNBC that Armis was looking to go public in 2026 or 2027, but his main objective was to surpass $1 billion in annual recurring revenues.

“The need for what Armis is doing and what we are building, in this cyber exposure management and security platform, is just increasing,” he said, adding that there’s “very unique and huge” demand for its tools.

Many companies have opted to stay private for longer or get acquired as a turbulent initial public offering market has begun to rebound. Large companies such as Stripe and Databricks have found an influx of capital in private markets.

In the age of AI, companies are spending more on cybersecurity to protect against increasingly sophisticated threats.

This year has also been significant for major cybersecurity deals as companies look to enhance their threat protection capabilities. That includes Google’s $32 billion acquisition of cloud security startup Wiz and Palo Alto Networks’ $25 billion deal for CyberArk.

ServiceNow said Armis has topped $340 million in annual recurring revenue with 50% year-over-year growth, up from $300 million disclosed in August.

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Here are five key things investors need to know to start the trading day:

Regulators approved the first-ever GLP-1 pill — yes, a pill — for treating obesity yesterday. It’s viewed as a landmark decision that can lead to expanded access for patients.

Here’s what to know:

• Novo Nordisk, the company behind blockbuster shot Wegovy, said the new weight-loss pill will launch early next year after receiving clearance from the Food and Drug Administration.
• The starting dose of 1.5 milligrams will be available at pharmacies and through select telehealth providers for $149 per month, with savings offers.
• Shares of Novo Nordisk surged 7% in overnight trading. Competitor Eli Lilly, which has been trying to launch its own obesity pill, slid more than 1%.
• Elsewhere, we’re keeping an eye on Dominion Energy, whose shares fell more than 3% yesterday after the White House halted the wind project it was developing.
• Follow live markets updates here.

Paramount Skydance is putting some billionaire weight behind its embattled bid for Warner Bros. Discovery. Yesterday, Paramount guaranteed the backing of Larry Ellison, the father of CEO David Ellison, in an amended offer for the media company.

The elder Ellison’s support is viewed as a response to questions from Warner Bros. Discovery’s board of directors about Paramount’s ability to finance its offer. WBD Chairman Samuel Di Piazza told CNBC last week that the board wanted more involvement from Larry, who is known for co-founding Oracle.

WBD investors have a decision to make: Go along with the recommended sale to Netflix or tender their shares to Paramount. CNBC’s Alex Sherman walks through why shareholders may go with or against Paramount.

Alphabet said it would acquire data center company Intersect for $4.75 billion in cash while assuming its debt. The Google parent said the deal would help bring additional data center and generation capacity online more quickly.

Meanwhile, CNBC reported Monday that Trian Fund Management and General Catalyst would acquire asset manager Janus Henderson in a deal that’s expected to close mid next year. The duo will pay $49 per share in cash, which values Janus at around $7.4 billion. Janus shares jumped more than 3% in yesterday’s session.

The euphoria around electric vehicles is largely gone. Now, as CNBC’s Michael Wayland reports, it’s the era of EV realism.

Despite billions of dollars spent and grand ambition, demand never met expectations. Now, legacy car companies are admitting that federal tax credits and other incentives mainly generated interest in the vehicles, not genuine consumer preference.

As a result, Detroit automakers are deprioritizing the EVs that were once heralded as the future of the business. Instead, they’re focusing on more-traditional trucks and SUVs.

Instacart said Monday it was ending its controversial artificial intelligence-driven pricing tests. Retailers will no longer be able to use the delivery platform’s technology to experiment with what consumers pay.

As CNBC’s Annie Palmer notes, this technology was thrust into the spotlight after a study by Consumer Reports and other organizations found that the pricing tool led shoppers to pay different prices for identical items from the same store. Instacart said that its testing left “some people questioning the prices they see,” which the company said was “not okay.”

Holiday road-trippers will get a gift of sorts at the pump: The average price of unleaded gasoline in the U.S. has hit four-year lows.

— CNBC’s Annika Kim Constantino, Tasmin Lockwood, Spencer Kimball, Pia Singh, Sara Salinas, Lillian Rizzo, Alex Sherman, Ashley Capoot, Fred Imbert, Michael Wayland and Annie Palmer contributed to this report. Terri Cullen edited this edition.