Having followed the travelling annual financial results circus over the past weeks, as well as darting to Düsseldorf to take in VW's new 2027, €20,000 Portuguese and Rivian software equipped ID.1, featuring an "increase in Chinese components" and LFP batteries to narrow dilutive margins, followed by a shimmy over to Brussels – courtesy of a Polestar 3 (full report in the next edition) – to hear about Toyota's European BEV product strategy, all powerpoints, discussions and sideline chats couldn't hide one underlying trend: the relief at the kick-back to EU CO2 targets. Avoiding a hard 2025 implementation – an average 15% fall in CO2 fleet emission targets over 2021-2024 levels, or more for weighty premium manufacturers – following the conclusion of the Strategic Dialogue between policymakers and stakeholders, a switch to a 93.6g/km target "over three- years" was agreed. However, with BEV investment and cadence cycles in full swing, baked into the original regulatory-aligned product timetable, a large proportion of those models already planned three years ago will still hit the market in 2025. OEMs will be given only the briefest opportunity to pop Champagne corks before the stoppers are reapplied.
Auto CEOs are likely to use this opportunity of the rebranded Green Deal Industrial Plan to call for more stabilisers to get additional electric models onto European roads.
The desire is for help to push BEVs on a European level in order to meet the three- year average target.
European taxpayer money is being asked to fund a faster infrastructure rollout – although AFIR (Alternative Fuels Infrastructure Regulation) is already in place – as well as lower the price of vehicles, but significantly, not with the traditional broad-brush purchase subsidies approach.
BMW Group's Zipse dislikes subsides, saying it is next to impossible to discontinue these programmes once they are implemented.
Meanwhile, Volkswagen Group's CEO, Blume, said he would like to see a French-style social-leasing scheme applied on a European basis, although he wasn't clear how this should be funded, perhaps still tipsy on the prospect of a new debt-fiananced German economy announcement following a steadfast debt break firmly applied under the outgoing government.
Social-leasing schemes are designed to get motorists least likely to transition to BEVs first – due to the price premium of a BEV putting them out of reach to many – lower income households, which see a lease deposit for a BEV covered by the state, leaving monthly costs in the same boundary as a phone contract.
Conveniently for Mr Blume, Volkswagen are busy putting the "Volks" back into Volkswagen with the lower-income aimed ID.1/ID.2.
However, at the same time, Blume, who also heads Porsche, appears to be planning previously unplanned ICE investments with a new ICE Porsche model, set to reincarnate the Macan ICE across the region under a different name.
The Macan in ICE guise was shelved in 2024 prior to a type approval change last summer, although it is still manufactured in Leipzig for non-European markets.
However, it wasn't all cheering from the rooftops. Manufacturers that had fully prepared for the CO2 fleet cut, such as Volvo Cars, Tesla and Polestar, and had hoped to monetise their low CO2 fleet positions by offering regulatory pools, are set to see those windfalls evaporate again as soon as they appeared.
Polestar had previously planned a low three-digit million Euro positive impact from regulatory credits during 2025.
A high-ranking Toyota Motor Europe executive told this report on the fringes of the Brussels event that despite the change, they would have to nonetheless remain in the Tesla pool during 2025, but not in 2026 or 2027 as it was a one year deal.
The world's largest car company will bring two new BEVs to Europe in 2025. The Indian-made Suzuki-based Urban Cruiser and the Turkish-made Toyota CHR+ based on Toyota's e-TNGA platform on which the current Japanese-made BZ4X is based.
Three more BEVs arrive in 2026.
Meanwhile the European Commission's President, Ursula von der Leyen, possibly appeared like the Easter Bunny a few weeks early to many auto executives during March, delivering those CO2 fleet emission delay treats.
However the most significant egg in the regulatory basket was, the intention to bring the mid-term review, looking at the progress to 2030 and 2035 targets, back on to the table during 2025, rather than 2026, and possibly reopen the long- term targets once again.
The review will now be based on 2024 and first half 2025 baseline data, which certain OEMs could presumably manipulate, slowing the BEV pace and using that small opportunity in the 2025 - 2027 phase-in framework to push from 2026 onwards once the review has finished.
VW Group said just two weeks ago, however, that 18% of their current European order book is represented by BEVs accompanied by a high order intake for its PHEVs, while CFO Antlitz underlined the fact that the ID.7 order intake remains at parity with the Passat although highlighting the costs associated with pushing those margin dilutive models.
Volkswagen Group certainly didn't hold back in January though, claiming all top-three most registered BEV models across the region. It helped the collective stable of brands, which offers BEVs across five brands, achieve a convincing 27.7% share of the region's new BEV car market or every fifth West European Group model this year.
VW Group currently offers 16 BEV passenger car models, of which 97% of January's deliveries were based on either the MEB or PPE BEV-dedicated platforms offering scaling advantages. That number will surpass 20 during 2026, with four Spanish-made €25,000 small-sector compact models entering the region across three Volkswagen Core-brands.
All feature LFP batteries for the first time in Europe, which helps reduce costs and contributes to the 50% reduction in battery prices, which they have forecast for 2027, over a 2023 benchmark.
However, another major OEM, has told us those price battery forecasts are overly optimistic. Cupra's Raval will be the first of those core-models to enter the region later this year. Meanwhile, we learned that Audi and Porsche models (including all BEVs) made in Southern Germany and Slovakia (Cayenne BEV model from 2026) heading Eastwards to Asia will, in the future, be exported from Northern Italy, with Volkswagen acquiring a port there.
A presentation at the recent Automotive Logistics conference in Bonn highlighted this.
The strategy is to avoid congestion at North European ports and reduce shipment times and costs to China; it will also open more capacity for importing models such as the ID.1 and ID.2 to Northern Germany from the Iberian peninsula and the Golf from Mexico.
While we've had bunnies in this editorial, perhaps it's time to mention the elephants.
While one manufacturer has been gaining market share, another has inevitably been losing... Tesla.
The US company has seen a 2.8 percentage point loss in BEV market share in the 12-month trailing period up to and including January 2025 (15.4%) from a recent high of 18.2% towards the end of 2023.
The current trajectory puts it in a corridor to deliver just half as many BEVs as VW Group across the region this year.
While this downward trajectory began during 2024 with the US company being hit by key high-volume markets such as Germany withdrawing purchase subsides entirely, the most recent negative hit, alongside a likely consumer delay waiting for the Model Y facelift, has likely been the political positioning of its CEO Elon Musk.
Most recent 3-month trailing data shows Tesla's BEV market share across W-Europe fell even faster to just 14.4%.
Meanwhile, the latest German KBA data could indicate things are potentially even worse with a high number of Tesla models, of up to 30%, potentially being registered into Tesla's own fleet across Germany into their utility-business fleet. 29.4% of all German Tesla models registered in January fell into the classification of "other commercial holders" which includes "interest groups as well as church and other religious associations, political parties, repair of IT equipment and consumer goods as well as the provision of other predominantly personal services".
With more competitor models from "legacy" companies about to enter the market, thanks to the regulatory roadmap, offering more Alternatives for Teslas (AfT), the hard rain could easily turn to a pour.
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*Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK
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