An ICE vehicle ban means that cars with gasoline or diesel engines are not allowed to be sold. The goal is to encourage people to buy electric cars instead, which don’t produce exhaust emissions.
Emissions targets are limits that governments set on how much pollution cars can produce. They help decide what kinds of cars will be allowed in the future.
A zero emissions requirement at the tailpipe means cars must not release any bad gases from their exhaust. This pushes manufacturers to make cleaner engines or electric motors.
Some electric cars have a little gasoline engine that turns on only when the battery is low. It charges the battery so you can keep driving instead of stopping to plug in.
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The EU reverses course on its ice band, splitting the auto industry. The state of California could suspend Tesla sales, and Scout Motors wins a license to sell directly to consumers.
Plus, we'll get more details on the EU's emissions reversal from automotive news Europe's Peter Siegel, including winners and losers inside and outside the auto industry.
That actually means that 25% of cars sold after 2035 could have some form of a combustion engine in Europe, which is huge.
Let's run through all the news you need to know to keep up in the auto industry.
The European Union is reversing course on its planned band of combustion engines. The EU's new auto package would allow some ice vehicles to be sold after 2035, shifting from a 100% emissions reduction to 90%.
That means up to a quarter of new cars could still have combustion engines if emissions are offset with EU-made green steel or sustainable fuels.
The package also includes incentives for small, affordable EVs built in Europe, and Titan's rules for corporate fleets.
Reaction is split, BMW and Volkswagen welcome the flexibility. Stellantis says it fails to provide a viable trajectory for the light commercial vehicle segment, while Volvo warns it undermines Europe's competitiveness.
The plan now faces months of negotiations before final approval. In a minute, we'll hear from automotive news Europe's Peter Siegel, who breaks down what this major policy shift means for the industry.
California is moving to suspend Tesla's sales license for 30 days over misleading marketing of its auto pilot and full self-driving features.
The California DMV says Tesla exaggerated its driver assistance capabilities. Advertising vehicles can make trips quote, with no action required in the driver's seat.
The suspension won't take effect for 90 days, giving Tesla time to appeal or rebrand its systems.
This matters because California is the nation's largest car market and top EV state.
Tesla registered over 135,000 vehicles there through September representing 11% of its global deliveries.
And Scout Motors has scored a major win in its battle for direct sales. Colorado's Motor Vehicle Dealer Board approved a dealer license in a 6-to-2 vote.
The Volkswagen-backed brand can now sell its upcoming traveler SUV and Terra pickup directly to consumers in the state.
Here to talk more about this story is Jack Wallsworth, who covers Scout and Volkswagen Group for us at Automotive News.
Jack, welcome back to Daily Drive.
Hi, Carl, thanks for having me.
So, Jack, Scout appears to have utilized a loophole that EV brands like Tesla, Rivian, and Lucid have used to sell in Colorado.
But there's some controversy over their powertrain strategy. What's going on there?
Sure. So, I think the issue that dealers in Colorado are kind of raising right now is that they don't necessarily see Scout as a full EV brand.
So, to be sure, Scout is going to launch with electric vehicle, but they're also launching with an extended range EV or an ERA, which does utilize a gas engine, but it's worth noting that only X as a generator, it's not really powering the vehicle.
You know, dealers see that as just like a hybrid, basically, and not a true EV.
But one of the dealers I've talked with for the story mentioned that under called out a law, an ERA basically is an EV or a qualify doesn't EV.
So, it kind of seems like Scout is sheltered from that.
You know, Scout back in the day when they first envisioned it was going to be EV only, of course, that changed last year when they revealed their prototypes for the first time.
So, remotely here from Scout, most of the reservations for their vehicles are for the ERA or what they call the harvester powertrain.
So, it seems like once Scouts come to market, most of them will be the ERA version.
What are dealers saying about this and is there anything they can do to try to stop it?
So, I would definitely say they're disappointed.
You know, I talked with Matthew Groves yesterday, not long after the vote, and he is the CEO of the Colorado Auto Dealers Association.
You know, he expressed disappointment. I think he or he said they kind of anticipated this was a possible outcome.
I talked with Fred Emmick. He's a prominent Volkswagen dealer. He's got two Volkswagen stores in one in Denver, one in Boulder.
He's also chairman of the dealer council, and he is disappointment as well.
In terms of next steps, you know, Matthew Groves mentioned it's pretty fresh. The voting just happened, but you know, one outlet or one option is potential litigation.
You know, the dealer's association could appeal the vote, or he said, you know, they could just let Scouts see how Scouts does.
You know, he used it if they can swim or not, basically.
So, you know, it kind of seems like a couple different options, but I wouldn't be surprised if it's a litigation route.
You know, there's still a little bit of time between now and when Scouts is going to be in production in late 2027.
So, there definitely something to keep eyes on, and I'm sure it will be a big story here as we head into the new year.
Interesting stuff. Jack Wallsworth, thank you so much for joining me.
Thank you.
Thanks, Scott.
And those are today's headlines. You can find more details on all those stories at auto news.com coming up.
Automotive news, Europe's Peter Siegel joins to show to give us the details of the EU's newly missions plan.
That's next on Daily Drive.
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Welcome back to Daily Drive. I'm Kellyn Walker.
As we mentioned at the top of the show, the European Union is making a major reversal on its emissions policy.
Here to break down what changed, why it matters, and what it means for automakers on both sides of the Atlantic is Peter Siegel, editor of our sibling publication Automotive News Europe.
Our own Jake Nier reached him at an event near Amsterdam.
Peter Siegel, thank you so much for joining us all the way across the Atlantic, really appreciate it.
Thank you. Great to be here, Jake.
Alright, so give us the biggest changes here.
We've been talking for quite a while about the idea of the EU changing its emissions targets and this essentially a de facto ice vehicle ban.
What are the major points of what it's changing here?
Sure, so the headline is that they backed away from the zero emissions requirement at the tailpipe, and that's very important because they were going to go from 100% reduction starting at the 2021 baseline.
Instead, they went to 90%, which you might think, okay, it's 10% EVs, but actually with the way emissions are calculated and the requirement that emissions be offset with green steel and sustainable fuels,
that actually means that 25% of cars sold after 2035 could have some form of a combustion engine in Europe, which is huge.
That recalibrates automotive companies' investment plans to your one suppliers that had struggled to adapt to electrification.
They can now breathe a little easier because they can continue to make ball bearings, crank shafts, lifters, pistons, all the things that we all thought were going to be consigned to the scrap heap of history.
At least in Europe, they have a second life.
What is the reason for this? I mean, this is a major backtrack. We have obviously seen over here in the US, the market really soften for EVs, especially under the Trump administration, but what's going on in Europe that has...
What kind of pressure were they under to do this?
Well, automakers put a lot of pressure on the EV because the EV penetration had not reached the level required to make the emissions targets,
and missing those emission targets would have cost billions, for example, for a company like Volkswagen that sells millions of cars a year in Europe.
For every gram over the target, it's 95 euros per car, so extrapolate that out, and you can see what the issue is.
So, the EV adoption rates slowed in Europe for a couple of reasons.
National incentives were up and down. France, at one point, was offering a total of 8 or 10,000 euros.
It's traded at an old car and buy an EV. While at the same time, Germany pulled its EV incentives.
So, pulling those EV incentives alone in Germany had a huge effect on the market, so no one really knows what the natural demand for EVs are, whether it's the US or Europe.
It's unknown. And consumers were confused. They were like, well, why should I... maybe I'll wait. Why would I buy an EV now?
And then, of course, you have range anxiety, a lack of charging infrastructure, and the end EVs at this point are also more expensive, you know, in an apples-to-apples sense.
So, all those had combined to make the EV adoption rate below what was needed, and significantly below.
And so, automakers were saying, look, we're going to face billions of fines.
And on top of that, if this EV transition goes on as you are requiring us to do, we're going to have to close combustion engine factories, hundreds of thousands of job losses, all the things you don't want to hear.
So, there was a lot of pressure on the EO and the active.
So, you mentioned EV subsidies. Now, under this plan, and we should note that the plan's not final, we'll talk a little bit more about what comes next after this.
But, if this plan were to be finalized, would there be any EU-wide direct subsidies toward EVs?
So, there are no direct subsidies. What's really important is what's called the supercredit for automakers who sell small EVs. That's 4.2 meters or less.
So, about 13.5 feet, they're made in Europe.
So, they will get a credit of 1.3 vehicles for every small EV they sell, which counts against or for their cafe fleet average.
So, the more small EVs made in Europe, you sell, the better. And the EU has really pledged to push this through.
They really want to create a separate category for small EVs that would be inexpensive.
So, their target is 15,000 to 20,000 euros, so 18,000 to 23,000 dollars.
And there aren't a couple of them in Europe now, but they really want to address consumers' concerns about affordability.
It's the same as in the US. Europe's car sales are way down since the pandemic. And the main reason is affordability, which the automakers say is electrification and new regulations red tape.
We've heard that before, but they're not wrong. So, that's a big thing. They can send it to bump up EV penetration.
Have you heard anything from analysts at this point about, obviously, you know, this is huge for European automakers and others that play big in that market, but what this might mean for Detroit automakers or US automakers as they try to adjust their strategies in Europe going forward?
Yes, well, I mean, the main ones are obviously still answers and Ford since GM doesn't have a European presence anymore.
But Ford has already teamed up with Renault. We just heard an announcement about a week and a half ago that Renault is going to build and help develop EVs for Ford.
Ford's largely backed away from the European passenger car market in part because of uncertainties around EVs.
We also know what they just did in the US recently where they rolled back the Lightning program.
Ford is saying, we're not going to take a chance. We're not going to invest our billions in EVs for now and that includes Europe.
Columbus is obviously highly dependent on the European market and they will have to think about where they're going to direct some of their investments because one thing that scientists does not have in Europe is full hybrid.
The way Toyota is big on hybrid scientists does not have that. They will have to decide do we want to develop a full hybrid system.
They said they would but that was just before Antonio Filosa took over. So it's hard to say where they're going to go with that.
They could also expand range extender technology. They have dipped into it a little bit in the US with one of the ramp pickups and their Chinese brand leap motor has a range extender.
The EU is apparently going to look favorably upon range extenders because most of the time you are running in full EV mode.
It's only using the engine as a generator. So for slats us it's okay. We have this pot of investment.
We're also on the comeback trail. Where do we direct it? So that it does scramble the calculus for a lot of companies.
That's really interesting. We've talked about the winners quite a bit here. I feel like, but are there losers from this plan if it's finalized?
Yes, there are some losers. The losers are at this point a lot of the Chinese companies who don't build in Europe because they're not going to be eligible for some of these incentives.
Stellantis is also a bit of a loser because they wanted a bigger break on commercial vans which is another subject but commercial vans were not really changed and that hurts Stellantis though the commercial van leader.
Tesla is also a bit of a loser because they don't build small cars in Europe. But Tesla is also sort of an outlier in the EV market for a lot of reasons.
So there are some losers but mostly winners honestly at this point from the perspective of the auto industry. The green lobby and safety consumer organizations would say that consumers are the losers because every dollar you spend or every year you spend on a hybrid is a year you could have been spending to develop EV.
But from the auto makers perspective this is a big plus.
Yeah, and sort of mirroring what's happening here in the United States. We just had a piece from our own Molly Boygon talking about when you relax emissions standards obviously that also increases fuel costs for consumers over the long run which in the case here on this side of the the ocean.
It could actually outweigh the savings that they get on their MSRP so it'll be interesting to see how that plays out in the EU as well. Finally here you know as I alluded to earlier this isn't finalized yet what's what's the process look like from here what comes next.
So it's sort of the standard European process now goes to the European Parliament which is the main delivered of body they will hash out what they want to send to the Council of Europe which is basically the heads of each country's delegation is generally the head of state of each country.
I think the outlines of this program are likely to stay in place mainly the 90% versus 100% emissions reduction the small car rules rules on bands cutting red tape those are going to take a while and I think we haven't heard the end of this high suspect will be reporting on this for the next several years honestly.
Sure, absolutely. All right, well Peter Siegel is with our sibling publication automotive news Europe Peter, thank you so much for taking the time really appreciate your reporting on this.
That's daily drive for today. I'm Kellen Walker thanks to automotive news reporter Jack Wallsworth for his reporting for today's podcast.
You can get the latest news on emissions regulations retail sales and everything happening in the auto industry at auto news dot com.
We'd love to hear from you let us know what you think of the show when the topics we covered today send us an email at daily drive at auto news dot com or leave us a voicemail at 313 or 444 2774.
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About this episode
The EU's recent reversal on its ICE ban has sparked significant debate within the auto industry, allowing up to 25% of new cars sold after 2035 to feature combustion engines if emissions are offset. This shift is seen as a relief for manufacturers like BMW and Volkswagen, while others like Stellantis express concerns over its impact on commercial vehicles. Meanwhile, California is considering a 30-day suspension of Tesla's sales license due to misleading marketing claims about its autopilot features. Scout Motors also celebrates a victory in direct sales licensing, although its hybrid strategy raises eyebrows among dealers.
The EU’s reversal on its combustion engine ban will reshape where automakers invest billions and which vehicles they prioritize globally. Automotive News Europe’s Peter Sigal details how this policy shift creates winners and losers for companies operating in both Europe and the U.S. Plus, California could suspend Tesla sales, and Scout Motors wins direct-sales rights in Colorado.
