India, Europe cut a deal

Greetings from London!

Possibly the biggest surprise of the last week for the sector was that fully-electric cars outsold pure petrol engine cars in the European Union in December.

Yes, it's just one month and some factors may have skewed the data. Some gas cars may have been reclassed as mild hybrids and automakers were likely pushing hard to meet EU emission targets – which will change now that the bloc has abandoned a 2035 ban on combustion engine models.

But with a flood of new models coming this year from traditional automakers and new Chinese rivals, EVs are in Europe to stay.

Which brings us to today's Auto File…

India and the EU have concluded a long‑delayed trade deal to slash tariffs on most goods, including Indian car imports, to boost two‑way trade and reduce reliance on the United States.

On the face of it, the deal looks good for European automakers as it slashes tariffs on imports of EU-made cars to 10% from as high as 110%.

But as Reuters colleagues Christina Amann and Gilles Guillaume report, European manufacturers still face an uphill climb in a market dominated by homegrown firms and compact Japanese 'kei' cars. You can read all about it here.

European exports to India are dominated by premium cars, which sell in low volumes. The key to cracking India has been through selling large numbers of small, cheap cars.

Still, the market has plenty of potential, which is why Renault is making yet another run at building up its share of the Indian market with its Duster SUV.

The fact is that in a world with rising trade barriers, automakers need access to more markets. Which is especially true in Renault's case as it has no presence in China or the United States.  This makes India a must-have market for the smallest of the traditional western automakers.

The Invasion, um, Envision, is coming to the USA. Reuters/Rebecca Cook.

It was just a matter of time, but General Motors will move production of the Buick Envision SUV back to its Kansas City plant from China in 2028.

As Reuters colleagues Kalea Hall and David Shepardson report, GM began shipping the Envision to the U.S. in 2017 as its only Chinese import. GM has faced a 25% tariff on the vehicles since 2018 and failed to win a tariff exemption during the first Trump administration. You can read all about it here.

Making the SUV in China has no doubt helped GM in the last few years as its sales in China have fallen, by making sure its spare Chinese factory capacity gets used up.

But bringing it back to the United States will make the United Auto Workers union happy. Former UAW president Dennis Williams (before he went to prison) used to refer to the Chinese-made imported car as the "Buick Invasion."

Geely has big global plans - REUTERS/Go Nakamura. 

China's Geely aims to grow its global sales by about 63% to 6.5 million vehicles in 2030 from around 4 million in 2025.

That ambitious target would take the company, which ranked seventh globally last year, comfortably into the top five. At home in China, Geely has already knocked Volkswagen into third place and is now only second to BYD, which also has bold plans for global expansion.

If Geely is to succeed, that will come at the expense of other automakers, either traditional Western manufacturers or Chinese rivals also trying to expand outside China.

The global automotive map is being redrawn and we'll know within a few years who the winners and losers are.

Speaking of global shifts in the auto industry, China's Chery is buying Nissan's manufacturing plant in South Africa.

The deal showcases the trajectory of both automakers.

Chery's global sales rose nearly 8% in 2025 and the company had been openly pursuing manufacturing capacity in South Africa.

Nissan is undergoing a painful restructuring and year-to-date through November had seen its global sales fall 5% versus the same period in 2024.

Globally, there is plenty of spare car production capacity available for growing Chinese automakers. This deal is not the first and is unlikely to be the last.

General Motors raised its profit outlook for ‌2026 as it reported a higher fourth-quarter core profit lifted by robust sales of its large pickup trucks and SUVs, sending shares of the Detroit automaker up 4% in premarket trading.

Tesla has stopped including some driver-assistance features with new vehicles sold in the U.S. and Canada, requiring customers who want self-steering and similar technology to pay for a broader $99 monthly subscription.

VinFast has partnered with AI firm Autobrains to develop advanced autonomous driving technology, including a low-cost "Robo-car" system, potentially boosting the Vietnamese EV maker's self-driving tech push.

A federal judge has ruled the Trump administration unlawfully suspended funding to support EV charger infrastructure, in a victory for 20 Democratic-led states that sued over the action.

The U.S. National Transportation Safety Board is investigating self-driving car company Waymo after its robotaxis illegally passed school buses that had come to a stop in Austin, Texas, at least 19 times since the start of the school year.

Renault plans to shut down its EV and software unit Ampere Holding, reintegrating its activities into the group to simplify the organisation, reduce costs and speed up implementation of future projects.

CEO Elon Musk says Tesla is likely to win regulatory approval in Europe and China for its driver-supervised Full Self-Driving (FSD) system as early as next month, as the EV maker ‌looks to boost software revenue amid slowing vehicle sales.

Think your friend or colleague should know about us? Forward this newsletter to them. They can also subscribe here.