AD #4240 – BMW Abandons L3 Autonomy for More Affordable L2; EU Dealers Demand Help to Fight Chinese Invasion; Hyundai Warns of Escalating Tariff Threat

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

EUROPEAN NEW CAR SALES PLUMMET AS DIESEL COLLAPSES
The European auto industry got off to a rocky start this year as new car sales fell more than 3% in January. All the major automakers, except Stellantis, saw a drop in sales and some of them, like Renault, Toyota and the Hyundai Group, saw double digit drops. But there are a couple of bright spots for automakers who are selling PHEVs and BEVs. Sales of PHEVs hit nearly 100,000 units for the month, up a whopping 32%. While pure battery electrics were up 14% with 189,000 units sold. In fact, BEV market share hit 19.6%, up three full percentage points compared to a year ago. One reason why BEVs and PHEVs are gaining share, is that gas and diesel cars are in a steep decline. Petrol, or gasoline powered cars, were down almost 26%, while diesels fell 22%. In fact, only 68,000 diesel cars were sold last month, which is astonishing considering that only a decade ago diesels accounted for nearly 50% of all new cars sold in Europe.

EU DEALERS DEMAND EMERGENCY HELP TO FIGHT CHINESE EV INVASION
And with the European car market so weak, new car dealers are practically begging the EU for help. They want it to immediately back off emissions standards for commercial vans, they want more emission credits for small, low-emission cars, not just electric ones. They want a cash-for-clunkers program to encourage consumers to buy new cars. And they want at least 70% local content for EVs to slow down the Chinese. We say the EU better move fast. Last month BYD’s sales in Europe were up 175%. And SAICs sales were down a fraction, but it ended up gaining market share because the rest of the market was down more than 3%.

  

HYUNDAI WARNS OF ESCALATING TARIFF THREAT AMID U.S. TRADE TENSIONS
Hyundai is warning that U.S. tariffs could escalate despite the Supreme Court striking down the Trump Administration’s universal tariffs. The automaker’s President is urging South Korea to approve a trade deal the U.S. and Korea reached last year, which would lower tariffs from 25% to 15%. President Trump has even threatened to raise import fees on South Korea if the agreement isn’t approved soon. Hyundai says if the tariffs do go up, it will be less competitive. Last year, the new U.S. tariffs cost Hyundai and Kia a combined $5 billion.

      

MERCEDES SCALES BACK ELECTRIC G-WAGON PLANS FOR HYBRID PLATFORM
It seems like every day we’re reporting on automakers scaling back EV plans and today’s no different. Mercedes is dropping plans to launch a smaller version of its G-Class that was supposed to be electric only and will now also offer it with a combustion engine. The baby G-Wagen EV was set to come out in 2027 and be based on the same platform as the electric GLC. While the model is still expected to launch next year, it will now be built on a modified version of the platform that the new CLA and GLB use. And both of those models come with hybrid and fully electric powertrains.

BMW ABANDONS LEVEL 3 AUTONOMY FOR AFFORDABLE LEVEL 2 TECH
BMW is dropping Level 3 automated driving in the 7 Series and will replace it with a newly developed Level 2 system. It’s not too surprising of a decision. The technology was only available in Germany, it only operated in certain conditions and it was expensive, about $7,000. By comparison, the new L2 system costs $1,700. That new system will also be offered in the iX3 and then roll out to other models as well. Similar tech will be offered in the U.S. and a version developed with Momenta will be available in China. Besides BMW, Stellantis and Mercedes have also reversed course on L3 systems because of high costs and technical challenges.

MCKINSEY: ROBOTAXI COSTS TO PLUMMET AS AI REVOLUTIONIZES AVs
McKinsey says that autonomous vehicles are at a turning point, not just because the technology is getting better, but because the business case is starting to look really attractive. The cost per mile for a robotaxi today is $8, but McKinsey says it’s headed to $1 to $1.50 a mile. And while teleoperators today can monitor 5 to 10 cars at a time, with AI that’s going to jump to 100 at a time. Even more, AI is writing code for autonomous vehicles which is slashing the cost of AV development. McKinsey says AVs are not just about convenience. It points out that 95% of all traffic accidents are caused by human error, and even with today’s level of autonomous technology we could see a 60-80% reduction in traffic fatalities and injuries.

TOYOTA PARTNERS WITH TREEHOUSE TO SLASH EV HOME CHARGER INSTALL TIMES
Yesterday we covered a survey from Escalent that showed a large portion of EV owners still charge at home. That’s likely part of the motivation for Toyota and Lexus wanting to make EV home charger installation easier for its BEV and PHEV customers. They’ve partnered with a company, called Treehouse that says it can cut weeks from the process. Instead of an in-home visit, a customer uploads a picture of their electrical panel and a video of where they want the charger to go, then Treehouse says it will follow up with a quote for the entire installation in 48-hours or less. After that it connects them with a local electrician that has experience with EV chargers and who also handles all the permits and inspections. Treehouse says a typical installation costs between $1,500 and $2,750, but that includes the charger and Toyota and Lexus offer a dual voltage home charger for free with all 2026 and new BEV and PHEV models. Or customers can upgrade to a more power hardwired Level 2 charger from ChargePoint as well.

CHERY LAUNCHES RELY BRAND TO CHALLENGE GLOBAL MID-SIZE PICKUP MARKET
We’ve got more details on Chinese automaker Chery’s push into the mid-size pickup market. It launched a new brand, called Rely that is supposed to come out with a whole lineup of trucks. It recently kicked off sales of its first model in China, an all-electric mid-size pickup, called the R08, but we also know it wants to launch EVs and hybrids in Europe and diesels for Australia, New Zealand, South America and Africa. And at least some of those diesels will be paired with electric technology. CarNewChina reports a Chery-branded version of the Rely P3X truck will be sold in Australia at the end of this year with a diesel plug-in hybrid powertrain. The model is slightly bigger than the R08, about the size of a Jeep Gladiator or Rivian R1T, and while they’re aren’t any details about the EV part of the system, the diesel is a 2.5L engine. Mid-size pickups are a very profitable segment globally for automakers like Toyota, Ford, Isuzu, Nissan and Volkswagen. So, it’s no surprise why Chery is trying to fight its way in.

But that’s a wrap for today’s show. Thanks for making Autoline a part of your day.