They’re talking about what’s happening to car sales right now—who’s winning, who’s struggling, and why it feels brutal for car companies. It’s basically the overall “health” of the market for brand-new cars.
Concept
car company CEO these days
They’re saying running a car company right now feels like a no-win situation. When the market is tough, even good companies can get squeezed by costs and weaker demand.
They’re asking whether some car companies might get taken over by other companies. When the market gets really bad, consolidation can happen to keep the business alive.
Sometimes car brands get bought by bigger companies. When that happens, the new owner may steer the brand in a different direction, which can make the cars feel less like what longtime fans expect.
Some luxury car brands sell fewer cars and spend more per car to keep quality high. The hosts are saying that even though there are easier ways to make money, these companies choose the harder path of making cars.
Aston Martin is a luxury car brand from the UK. The hosts mention it because it’s a smaller, premium sports-car company that’s hard to run profitably compared with other luxury businesses.
McLaren is a high-end sports-car brand from the UK. The hosts bring it up as an example of a premium car company that’s not chasing easy money, but trying to build a brand people truly love.
In 2008, the economy basically took a big hit. When people feel unsure about money, they buy fewer cars, and it becomes harder for dealerships to get customers approved for loans.
Tariffs are taxes imposed on imported goods, and in the auto world they can raise the cost of parts and vehicles crossing borders. That can squeeze margins and force companies to renegotiate sourcing or pricing.
This is the big shift away from burning fossil fuels toward cleaner energy like wind and solar. That pressure influences what car companies build, especially more electric vehicles.
Volkswagen Group is a huge car company with lots of brands under one umbrella. The point here is that smaller or less-backed automakers have a harder time surviving tough times because they don’t have that same financial cushion.
“EV market” just means the business of electric cars—who’s building them, how many people are buying them, and whether the companies think it’s making money. The discussion here is about EV plans getting scaled back because sales aren’t meeting expectations.
Rolling back EV commitments means car companies are backing off from big promises they made about going fully electric. If sales are slower or costs are higher than expected, they may delay or cancel parts of their EV plans.
Ford is one of the big automakers mentioned as cutting back on electric-car plans. The point is that they’re canceling some EV models because they don’t think those investments will pay off right now.
A write-down is basically a financial “we were wrong” adjustment—companies admit some investment isn’t worth as much as they thought. Here, it’s tied to EV plans that didn’t work out.
“Battery powered vehicles” means cars that run on electricity stored in a battery. The hosts are saying some companies are stepping back from building more of these cars.
General Motors is also mentioned as taking a big financial hit tied to EV plans. The takeaway is that EV strategies are being adjusted because the numbers aren’t working out the way companies expected.
Cadillac is GM’s luxury brand. If Cadillac isn’t going fully electric by 2030, it usually means they think EV sales or costs aren’t lining up with earlier plans.
Stellantis is a big car company that owns several brands. A “write-off” like this usually means they spent money expecting one outcome, and the results were worse than planned.
Volvo is a car brand that has been pushing EVs. If it’s backing off an all-electric-by-2030 plan, it suggests EV demand or economics aren’t moving as fast as expected.
This is the work of improving gas engines—making them cleaner and more efficient. The point here is that companies are changing their plans and continuing engine work longer than they previously said.
Porsche is a German sports-car brand, and its EV rollout decisions are closely watched because it’s known for performance and engineering. The transcript says Porsche dialed back EV plans due to weaker demand, China pressure, and higher US tariffs—showing how global trade and regional sales can reshape product strategy.
The Porsche Panamera is Porsche’s four-door sports sedan. Keeping it in production with gas or hybrid power means Porsche isn’t betting everything on EVs right away.
Lotus makes performance cars. If Lotus is changing from “full EV” to a plug-in hybrid setup, it means they’re adapting their electrification plan based on what buyers and the market will support.
Mercedes-Benz is a major luxury car brand. The transcript says they first committed strongly to EVs, then later changed course—showing how plans can flip when the market doesn’t cooperate.
This means building a car’s design specifically for electric power, not just converting a gas-car design. If a company changes this plan, it usually means the EV rollout is harder or slower than expected.
Electrified vehicles are cars that use electricity to help power the drivetrain. Hybrids use both gas and an electric motor, while full EVs use electricity only.
An EV sales forecast is a prediction of how many of a company’s cars will be electric by a certain year. If the forecast drops, it usually means they think fewer customers will buy EVs than they expected.
Bentley’s “Beyond 100” was a big plan to move toward electric cars. The key point here is that Bentley kept changing the timeline and ultimately gave up on the original “fully electric by 2030” goal.
The Aston Martin DB2 is an older sports car model from Aston Martin. It’s mentioned because it’s part of the brand’s history and the “DB” name is important to Aston Martin. The podcast brings it up while talking about a newer Aston Martin event.
The EV transition is the shift from gas cars to electric cars. The point being made is that automakers, customers, and the market aren’t moving together as smoothly as expected.
Here, “infrastructure” refers to the charging network and related support systems that make EV ownership practical. If charging access improves, EVs become easier to live with—so the market can shift from “theoretically good” to “actually usable.”
Concept
demand vs supply mismatch
Car companies have to plan and build cars well ahead of time. If they don’t build enough EVs when people start wanting them, buyers can’t find the cars they want.
Concept
EVs costing less than 20,000 pounds
They’re talking about EVs that cost under £20,000. That price matters because it’s the point where more normal buyers can consider an EV instead of it being a luxury purchase.
The Renault Twingo is a small car made for city driving. It’s meant to be easy to maneuver and park. The podcast is bringing it up because the host is planning to drive it and wants to see how it feels.
A solid-state battery is a newer type of EV battery that uses solid materials instead of the usual liquid inside the battery. People expect it could make EVs safer and possibly give more range, but it’s still not everywhere yet.
Concept
EVs are almost indistinguishable from each other mechanically
They’re saying a lot of EVs use very similar basic technology underneath. If the hardware is close, companies often try to stand out with gadgets, software, and features instead of big mechanical differences.
Concept
EVs properly
The host means EVs are being designed better now, not just converted from gas-car designs. That usually helps the car use energy more efficiently and feel more practical.
“Range” means how many miles you can drive before the battery runs out. EVs are getting better at this, but real-world driving can be different from marketing claims.
The Mercedes CLA is a small Mercedes model. The host is saying that even with a smaller battery, newer EVs can still drive around 400 miles on a charge.
Concept
industrial strategy
An industrial strategy is basically a long-term plan by governments (and sometimes industries) to guide how a whole sector grows. The point here is that car makers can’t wait for perfect timing—they have to commit early.
An EV is an electric car that runs on a battery instead of gasoline. The big practical question is whether it’s easy enough to charge it where you live and drive.
Car companies are trying to move away from burning fuel to making cars that produce no tailpipe pollution. That usually points to electric cars, and sometimes hydrogen cars, but the switch depends a lot on charging or fueling infrastructure.
The “struggle” is basically the hard part of switching car companies from making gas cars to making electric or hydrogen cars. It’s not just the cars themselves—factories, suppliers, and customer demand all have to change too.
Hydrogen cars make electricity using hydrogen, so they don’t burn gasoline. The catch is that hydrogen has to be made and delivered to fueling stations, which is why it’s not as widespread as charging.
A hydrogen fuel cell is a way to make electricity inside the car using hydrogen gas. The car still drives like an electric car, but it “refuels” with hydrogen instead of charging batteries. The challenge is that there aren’t many hydrogen stations yet, so the system needs a lot of infrastructure to work well.
A “bridging technology” is a stopgap solution that helps us get from today’s cars to whatever comes next. The speaker is saying EVs might play that role the way hybrids do now. The open question is whether EVs will be the final destination or just an in-between step.
Government mandates are rules that require car companies to sell a certain number of zero-emission cars. The speaker’s point is that these targets may be set faster than people are ready to buy them. That mismatch can make the market feel chaotic for both buyers and manufacturers.
Some governments set rules for how many electric cars a company must sell. If a company falls short, it can face big penalties and has to adjust its strategy.
Some governments require car companies to sell a certain percentage of electric cars. If they don’t, they can sometimes buy “points” from other companies that did better, instead of selling enough EVs themselves.
Concept
discounting EVs to push units
Discounting means lowering the price or offering incentives so more people buy the cars. Here, the hosts are saying companies do it to sell enough EVs to meet government requirements.
Residual value is what a car is expected to be worth later, like at the end of a lease. If a company discounts cars a lot today, buyers may expect lower resale prices later too.
Tesla is being used as an example of a company that may be doing well enough on EV sales that other automakers would need to “pay” for credits to catch up.
Some governments set rules that say new cars sold after a certain year must produce no exhaust pollution. That pushes car companies to make more electric cars instead of gas cars.
Instead of requiring every new car to be zero-emission, the rule is loosened so some share can still be non-electric for longer. That gives automakers more time to transition.
Combustion cars are regular gas or diesel cars that burn fuel and produce exhaust. The point here is that policy changes can let these cars stick around longer.
Road pricing is a system where you pay for driving, usually based on where or when you drive. The idea is to charge drivers differently depending on the type of vehicle.
They mean cars made in China that are showing up more in other countries. The conversation is about why they’re becoming common—often because they’re priced aggressively.
Some Chinese car companies may get financial help from the government. That can make it easier for them to sell cars cheaper than other brands, because their costs are effectively lower.
Incentives are the reasons companies make certain choices, like how much they can afford to discount cars or how they decide what to build. If those reasons are different for different companies, the market can get more competitive fast.
“On-limit” means pushing the car really hard, close to the point where it starts to lose grip. The hosts are saying some buyers might not care as much about how the car behaves when you’re driving it at that extreme level.
They’re describing competition that ends up hurting the old guard, even if it wasn’t planned as a direct attack. The idea is that this pressure can force other brands to make better cars.
They’re pointing to a past period when Japanese car companies started competing strongly in the U.S. The point is that this kind of competition can eventually make everyone’s cars better.
They’re saying Korean car brands went through a similar “new competitor” phase earlier on. The takeaway is that once these brands gain ground, other companies often improve their cars too.
BYD is a well-known Chinese car company. The hosts are suggesting that Chinese brands like BYD may have advantages that help them sell aggressively, possibly due to government support.
Geely is a Chinese car brand. The hosts are talking about whether government support helps brands like Geely compete more aggressively.
Brand
cherries
“Cherries” sounds like it’s meant to be a Chinese car brand name. They’re grouping it with other Chinese automakers to discuss whether government support helps them sell more easily.
When you look at the top-selling car for a single month, it can be affected by things that don’t last—like a new release or limited stock. So the monthly winner might not tell the whole story about what people will keep buying.
The podcast is talking about a car model called “JQ7” that was the best-selling car in the UK for March. That means more people bought it than other cars that month. It’s mentioned because it shows what buyers are choosing.
When life gets more expensive, people have less money to spend on big purchases. That can make cheaper cars more appealing, even if they’re from brands you don’t know as well yet.
“Car of the year” is an award where judges test and compare new cars. The host is saying that Chinese cars weren’t even making the final group for many years, and none had won.
“Good enough” is a market strategy where a manufacturer focuses on meeting the minimum expectations that most buyers care about—like reliability, features, and value—rather than trying to be best-in-class in every category. The host argues Chinese brands have learned that they can win market share without needing to “excel” in traditional judging criteria.
Instead of trying to build the “best” car in the world, some brands try to build the “best deal.” They focus on giving you a lot of car for the money—so it feels worth buying even if it’s not the most advanced on paper.
They’re talking about a special subscriber-only show they run called “Ask the Intercooler.” It’s mainly a reminder about where to find more episodes, not a car topic.
Supernatural Car Care is a company that sells car cleaning products. The hosts mention they work with the podcast and offer subscribers a chance to win products and get a discount.
The Renault 5 E-Tech Electric is a Renault 5 that runs on electricity. It’s designed to keep the idea of the original car while using an EV powertrain. The podcast mentions it because they’re talking about new electric versions of the Renault 5.
They’re saying BMW is planning an electric M3. Since the M3 is known for being a sporty, driver-focused car, it’s a big deal to see how BMW will translate that to an EV.
A “straight six” is an engine with six cylinders in a single line. People often like them because they can sound smooth and feel balanced, and the hosts are saying that’s part of what makes certain performance cars special.
A V8 is a powerful engine type with eight cylinders arranged in a V shape. The hosts are bringing it up because many fans connect the “feel” and sound of V8s with performance cars like the M3.
EVs often weigh more because of the battery. That extra weight can change how the car handles and feels, so the hosts are saying it might not be as exciting as the lighter, traditional performance versions people love.
Term
Brazilian horsepower
They’re joking about horsepower numbers—basically saying the EV might still be rated as powerful. But the point is that power on paper doesn’t automatically mean the car will feel as exciting to drive.
If a company makes a big change and customers don’t like it, the brand can lose trust and excitement. The hosts are saying BMW could hurt its image if electrifying the “M” formula doesn’t work.
The Porsche Taycan is Porsche’s all-electric performance sedan. The hosts mention it as an example of a top-tier EV that still doesn’t feel “thrilling” in the same way as traditional performance cars, highlighting how instant torque and refinement don’t automatically equal the same driving excitement.
The “C63” is a Mercedes-AMG performance version of the C-Class. People often buy it specifically for the V8 sound and feel, so when Mercedes changes the engine layout, some buyers feel like the car lost part of its identity.
A hybrid component is the electric part of a hybrid car—usually a motor and battery—that helps the engine. The hosts are saying some buyers worry about how reliable and expensive that electric system might be over many years.
The Ferrari F8 Tributo is an older Ferrari supercar that uses a V8 engine (not a hybrid). The hosts bring it up because it’s the “previous generation” style of Ferrari before the newer hybrid approach.
Twin turbo means the engine has two turbochargers that help it make more power. More air gets pushed into the engine, so it can feel stronger without needing a bigger engine.
The Ferrari 296 GTB is a high-end Ferrari supercar that uses a V6 plus an electric/hybrid system. It’s the kind of car where the “newer but cheaper” vs “older but more expensive” comparison can tell you a lot about how buyers value modern Ferraris.
The Land Rover Defender Octa is a high-performance, top-spec version of the Defender. The point here is that people are still excited to buy new, powerful versions of big SUVs.
They’re talking about whether the hybrid parts will be reliable and affordable to fix years from now. Even if the car is great today, buyers may hesitate if they think the hybrid system could become costly later.
A straight four is an engine with four cylinders in a single line. Here it’s mentioned because changing from a V8 to a smaller four-cylinder can make some fans feel the car isn’t what they expect from Ferrari.
LIVE
Welcome back to the In School of Podcast, everybody, the podcast powered by car finance
specialist JBR Capital.
This is episode 311 with Dan Proser and Andrew Frankel.
We're talking about the new car market in this episode and a couple of other topics
a bit later on, but the new car market is just a total bloodbath at the moment, Andrew.
And the sort of inspiration for this episode, I realized how many times over the last couple
of years we had uttered this expression, offhand, just sort of throwaway line, I'm glad I'm
not a car company CEO these days, because they seem to be on a hiding to nothing and
they have been for a long, long time.
So I thought we should just take a moment to have a proper, thorough, rigorous look at
what's going on in the market and try and work out what the repercussions might be.
And I just wonder, do we need to seriously consider that one of the big established car
makers might not exist a few years from now or might have to be absorbed by another?
Do you think that's a real possibility?
Yeah, absolutely.
You know, it's happened in the past, hasn't it?
I mean, how many?
You know, when I came into this business in 1988, the idea that Rover wouldn't exist,
the idea that Saab wouldn't exist.
I mean, absolutely unimaginable.
It'd be like saying, I don't know, BMW or Land Rover wouldn't exist.
I mean, those were, you know, they were in Rover was always in the top three best selling
cars in the UK at the time.
And they've been going a long time now.
So I think that nobody is ever guaranteed ongoing existence in this business.
And I can certainly see brands being absorbed into other companies and quite
possibly putting out product, which are not necessarily true to the historic values of
that brand.
And yeah, I'm absolutely, I can see others go to the wall.
I don't think I want to name any because I think that would be
indelicate and not constructive.
But there are clearly car companies that are struggling.
I mean, a couple of things.
I think the first thing that I admire so much about the car industry, particularly
people who head up, you know, small, really high quality luxury car
manufacturers, I'm thinking of sort of, you know, the Aston Martin's and the
McLaren's of this world.
And I think of those people and I think you have chosen quite knowingly, quite
wittingly, such a difficult path because you could go into some other area of
luxury, like, I don't know, fashion or luxury goods or whatever, where margins
are not single digit percents, but hundreds and hundreds of percentage
points and make yourself so much money and have so much easier in life.
But you didn't because ultimately what lies behind these decisions is not just
cold commerce.
In fact, I think a lot of them fly in the face of cold commerce because I think
an awful lot of objective observers would look at some of the decisions that
have been made and go, you must be mad.
But of course, what they don't appreciate is the passion, is the love
and the desire to make these wonderful brands work.
And I just think that is, I think I just think that is admirable.
And I think the people who do it should be admired to their boots for having
the guts to do it and having the passion.
And sometimes it works out and sometimes it doesn't.
But thank goodness that they do because without them, maybe these companies
wouldn't exist.
Yeah.
Well, let's just apply a bit of context here.
So the last couple of decades on and off have been extremely tough for
car makers.
They've faced constant headwinds for years.
So we'll go back to the 2008 financial crash, a disaster for a lot of them.
Brexit, so in Europe and particularly in the UK, massive headache for a
lot of them, COVID, the semiconductor crisis, the war in Ukraine, Trump
tariffs, the war in Iran now, all of these things, one after another,
bang, bang, bang, bang, all while managing a once-in-a-generation
fundamental energy transition from fossil to renewables.
I mean, it's amazing you knew the left at all after that loss.
I mean, so that was the other point I was going to make is that if you could
just go, oh, well, your cars are a bit crap or they're costing you far too
much money to make or your quality's not right, things that the manufacturers
themselves are doing wrong, which therefore can be put right.
That's one thing.
But all the things that you read out just now, which are all the things which
are creating the problems, particularly for those companies which don't have a
Volkswagen group behind them, they'll all completely be on their control.
So I've, we need to obviously, we need to talk a bit about EVs and what's
going on in the EV market.
Now, however you feel about EVs, that's beside the point because all of the
discussion we're about to have now is factual.
It's based on data and statements from the car makers themselves.
Um, and so broad brush, I saw that global car makers have written off $65
billion due to canceled EV projects or losses around the EVs.
I actually think it's probably more than that.
Um, and let me just, and that, and also that is so far so far so far.
I think it's more.
Okay.
So manufacturers are rolling back EV commitments.
You remember five, 10 years ago, they were tripping over one another to, um,
announce that they would be fully electric, 100% electric by 2030 or 2035.
They all made these bold statements, right?
They've rolled back on them.
And I'm going to list a bunch of them here.
You're going to have to bear with me because it's worth going through them.
Okay.
Ford announced it would take a $19.5 billion right down and cancel several
electric vehicle models, signaling a major retreat from battery powered vehicles
amid weakening demand.
CEO Jim Farley stated, we can't allocate money for things that will not make money.
Okay.
General Motors announced a $6 billion right down in January this year as
part of a total $7.6 billion hit to its EV business.
Cadillac will no longer be going fully electric by 2030.
It goes on.
Stellantis wrote off $26.5 billion during the second half of 2025.
The CEO attributed the right down to overestimating the pace of the energy
transition Volvo dropped its plans to go all electric by 2030.
In June 24, the Volkswagen Group said it would pour $65 billion into internal
combustion engine development.
Having said that, they were going to stop all internal combustion engine
development by some time that's already in the past.
It's just extraordinary.
Porsche dialed back plans for its electric vehicle rollout due to weaker
demand, pressure in China and higher US tariffs.
Porsche confirmed that Panamera and KN will continue to be sold with
internal combustion and hybrid powertrains well into the next decade,
causing a $6 billion hit to profits.
Lotus was going to be full EV by 2028.
It's just put a plug-in hybrid electric powertrain into its
electric SUV.
A couple more.
In 2022, Mercedes-Benz CEO Ola Kalenya said, we have made a clear and
definitive decision that we are going all in on electric.
As of 2025, all new vehicle architectures for Mercedes will be electric only.
By 2024, two years later, that had changed entirely.
Mercedes-Benz backtracked on its EV commitment and it's now expecting
electrified vehicles, including hybrids, to represent only half of
total sales by 2030.
Ferrari committed to be keeping combustion engines alive and cut its
2030 EV sales forecast from 40 to 20 percent.
Last one, in 2022, Bentley laid out a $3.4 billion investment as part of
its Beyond 100 strategy to become fully electric by 2030.
That was rolled back in 2020, in 2020, sorry, I'll do that again.
That was rolled back to 2033, then back to 2035, then abandoned.
CEO Frank Stephan Valles has said, there is a dip in demand for luxury
electric vehicles and consumer demand is not yet strong enough to
support an all-electric strategy.
The luxury market is a lot different today than when we announced Beyond 100.
Goodness.
What's going on?
I was also talking to, I was on the Aston Martin DB12S launch about a
fortnight ago and I was talking to them about EVs and they said,
we'll start making EVs when our customers start telling us that's what
they want us to make.
They're not saying that at the moment.
What is going on?
I mean,
what I find so interesting about this and I guess so concerning is
that the EV transition and the companies that are responsible for
delivering it seem strangely out of sync.
It's like sort of walking down a narrow corridor and someone's coming
towards you and you suddenly go left to get out their way.
At the same time, they go right.
So you're still on the same side and then they go right and you go left.
And you kind of have this sort and you end up walking into each other.
And what I see from the EVs that are coming now and from the pace of
change to EVs that are coming now and even the way the infrastructure
does seem finally to be less rubbish than it was.
Although goodness me, with a huge amount of distance still to go.
Is I can see a situation in three or four or five years time when
actually for an awful lot of people, maybe not people who are, you know,
traditional TI subscribers, but for an awful lot of people who
require their cars, there's nothing more than a means of getting
from one place to another comfortably and reliably.
EVs might suddenly make a great deal of sense.
Yeah.
And yet all those EVs which could then have been sold to those people.
The decisions to build those cars would need to have been made around about now.
And they've been abandoned.
So the cars aren't there to satisfy that demand.
And they just seem so out of sync with each other.
And so my real concern is kind of like the opposite one.
Back then, you know, a few years ago, it was they're making all these EVs
and nobody wants them.
In a few years time, it could be there are all these people who want to EVs,
but there aren't any EVs for them to buy.
And I think that is a real possibility.
I genuinely do.
And I think essentially what is happening is you're getting a knee jerk
reaction completely understandable to the absolute catastrophe that has
befallen, you know, so many of these car manufacturers.
And so, you know, they've given the pendulum a massive big bung and it's
gone far too far in the other direction.
That's my, actually, it's not just my concern.
I think that's my reading of the situation.
Because if you look at the EVs, particularly the affordable EVs that
you and I have driven, you know, we talk about things like the Fiat Grande
Panda and the Renault five, and you look at the ones coming along.
You know, we always used to say, didn't we?
That, you know, one of the problems with EVs is that nobody could afford them.
But now there are some really affordable EVs coming along.
You know, EVs costing less than 20,000 pounds.
I'm going to drive a Renault Twingo quite soon and really interested in that.
And these will still be quite niche products because they won't have much
range, but I think Toyota are going to put a solid state battery on sale quite
soon. And I think there are all these developments and the pace, because I
think what's happened is when manufacturers suddenly went, oh, shit,
we need an EV.
And actually, because EVs are almost indistinguishable from each other
mechanically, any old tap will do and we'll just fill it up with gadgets
and gizmos and hope nobody notices.
I think they've realized the folly of that approach and they're now actually
doing EVs properly.
You know, EVs like the sort that we've that we've talked about.
You've also got things like the BMW iX3, which has, you know, a potential
500 mile range, I mean, you'll never get it.
But, you know, things like range are being absolutely transformed.
The new Mercedes CLA, which isn't massively heavy, doesn't have a massive
battery, but will still do 400 and something miles on a charge.
Those are the sorts of cars that we are getting to now.
Those are the sorts of cars that were designed when people realized that
something thought, oh, shit, we can't just, you know, pedal tat.
And that acceleration and ability is only going to increase.
Um, EVs are going to go on getting better.
Our concerns about them are going to continue to diminish.
The only thing that's going to change is there won't be any people to buy
because all the manufacturers would have just run away from them.
Blimey.
So imagine trying to come up with an industrial strategy and I would be
if I was a car manufacturer, I probably wouldn't be saying anything about it.
But I'd be so counterintuitive, isn't it?
Given how terrible the market is now.
But you have to remember, you have to make these decisions years out and in a
market that is in flux, so that is in transition when, you know, it's the
greatest change to car production that there has ever been since the invention
of the car and clearly they're going to be fluctuations along the way.
But actually, if I was a car manufacturer now, I'd be saying, I think
we need to be designing some EVs.
Well, that's it.
Okay.
It's a transition.
We've said that.
It is a transition from combustion to zero emissions, probably EV.
And it's, it was always going to be a massive, massive struggle for
lots of car makers, wasn't it?
It was always going to be.
So are we just observing that?
Is that just happening around us and actually give it a few more years
and the transition will be complete?
I think the challenge, yes, I think that's exactly what is happening.
It depends on what view you take.
In the short term, we know it's, it's chaos.
It's an absolute, as you said, it's a bloodbath out there at the moment.
In the medium term, the transition will take place and we will come to look back
at it and think, well, that was all a bit sticky, but we made it in the end.
And isn't it worth it?
Because, you know, you can just go and fill your EV now as easily as you
could your petrol car back then.
I think in the long term, and I've said this a few times on the podcast, I
don't think the, I don't think EVs are the answer.
I think in the long term, hydrogen is the answer.
I think it has to be because of all the problems that we know are inherent
within EV design.
And I think that ultimately, and I may or may not be around to see it, but I
think that ultimately most cars on the road will be powered by hydrogen fuel cells.
I think that's where we're going.
I think EV will be regarded in the same way as hybrids are regarded today as
what they describe as a bridging technology between the old world and the new.
I think the EVs are another bridging technology.
But of course, as with hybrids then with EVs now, the one question
nobody answers, how long is the bridge?
Yeah, you make a good case for the EVs being a bridge.
I don't think I can see hydrogen because the complexities in it and building
out an entirely new infrastructure.
And I think if the EV infrastructure and technology improves, then that
becomes a sufficient solution to the problem for most people.
But it becomes a question of time frames, doesn't it?
Maybe in decades to come, there's something else again.
Maybe that is hydrogen.
I don't know.
But everything right now is complicated in the UK and in Europe by these
government mandates that determine what proportion of a car maker's sales
must be zero emissions.
And it's way out of step with demand.
Massively.
That's the problem.
Government out of step with demand and not listening to the industry.
Wow.
Or buyers.
Who knew?
So the government is saying, I can't remember exactly what the percentages
are, but it's, was it 25, 28 percent, something like that?
I can't remember what it is for this year.
Yeah.
But it changes.
It gets more and more.
Yeah.
It's been passing, yeah.
And so most car makers are not meeting this.
And I think the average discount on an EV last year was 11,000 pounds.
Just to try and push some units, get some cars out the door to try and
meet those mandates because there are huge fines that must be paid.
Yeah.
Look at it from the car manufacturer's point of view.
You either have to discount the EVs and torpedo your residuals, or you have to
buy EV credits from your rivals.
That's good fun, isn't it?
You know, giving Tesla money or the other way to make sure that 28 percent
or whatever it is of your sales, our EVs is to reduce sales of your non EVs.
So you just sell for your petrol powered cars.
I mean, talk about a bunch of choices, none of which you'd like to make.
So in the EU, there was a similar mandate.
And I think it declared that 100 percent of new cars sold with some
exceptions for very low volume cars had to be zero emissions by 2035.
That's been watered down, I think to 90 percent.
So it leaves the door open for combustion cars for a while.
And presumably the UK mandate is going to have to be adjusted some way.
It will.
Or at least the ramp up has to be made more flexible.
Yeah, well, we're at 2030 at the moment, aren't we?
Yeah.
Yeah.
I mean, it's not.
We're in our three and a half years.
It's not going to happen.
No.
It simply isn't going to happen.
And don't forget that we're having this conversation long before.
You know, the Chancellor brings in her road pricing scheme to tax the whatever
out of people who use EVs or indeed hybrids.
Because I mean, to an extent, she has to do it because of the loss of
revenue from from petrol.
But we all know how expensive electricity is on the motorway at the moment.
We all know what EVs residuals are like.
We all know that EVs aren't particularly fun things to be in and around.
I mean, how many more reasons do people need to not buy an EV?
I know, I know, it's extraordinary.
Should we talk a little bit about the threat from the East?
I think at some point, maybe we need to do an entire episode.
We do.
And we talked about this before.
And actually, no, if anybody doesn't know what I'm talking about,
it was actually the answer to ask the intercooler podcast, which is our
subscriber only podcast.
If you don't subscribe to the intercooler and you would like to ask us questions,
then do subscribe to the intercooler website and app and you'll be able to.
Yeah.
But somebody on that podcast said, you know, what is the threat from the East?
And you and I both took an enormous deep breath and said, we need to
do an entire podcast on that.
And this isn't that podcast.
It's not, but we need to mention it briefly, don't we?
So you'll all be aware of this.
You see them on the roads, cars that you just don't recognize with badges
that you just don't recognize.
And these are Chinese cars, credible cars, attractive in a kind of bland and
generic way, a lot of them, and they are cheap, relatively speaking.
You've driven many more than I have, Andrew, but I think one of the key things
is that these cars are often subsidized by the Chinese state.
And these manufacturers' incentives are very different to established European
carmaker incentives.
They just want to expand.
They just want to get more and more cars out there.
They are not trying to build profitable businesses yet.
I don't think.
Yes.
To an extent, I have a small problem, even with couching the issue as a threat,
because that just sounds quite sort of competent.
I mean, the bottom line is the Chinese are creating cars that appeal to consumers
in this country.
Now, they may not appeal because of their on-limit handling characteristics.
They may appeal because they are affordable, well-equipped, quite uncomfortable.
And maybe that's all a car needs to do these days to sell.
In many ways, I think that, and we've seen this so many times before, we saw it
with the Japanese in the 70s and the 80s, and then we saw it with the Koreans.
These inadvertent commerce threats turn up, and all the legacy brands
throw out their hands in horror and say, it's terrible.
But actually, what history tells us is that time and again, what happens is
those brands, those traditional brands, step up.
And the arrival of this, again, inadvertent commerce threat, what that
actually does is improve the quality of what everybody else is doing.
Now, I'm not saying it is fair.
I don't want to get into the politics of it because, A, I don't want to get
into the politics of it and, B, I don't know enough about just how subsidized
the big Chinese car max, the cherries and the BYDs and the geelys of this
world are subsidized by the Chinese government and whether it is as simple
as they're able to do that, because I suspect it's not as simple as that.
I suspect that one of the reasons they're able to do it is they're just done a
better job, and they have, and maybe it is, maybe you can, if you're the
Chinese government, so frankly, because you're not a democracy, you know,
you're not going to get replaced and no one's going to change your rules.
You're one of the, I hate to use the word, speak sort of favorably about
about a dictatorship, but one of the things you undoubtedly can do is plan
for the future in a way you cannot if you've got to have a general election
five years time and what the Chinese government might well be thinking to
itself is, well, okay, you know, our aim is to have, you know, to be the
overwhelmingly dominant force in this market in 20 years time.
And that's going to require us to do this now and to get into every corner
of every car market right around the world with products which aren't just
cheap but are good enough to really compete.
And they are able to do that.
And, you know, those who are, who have traditionally occupied that pace can
either, as I say, throw out their hands in horror, or they can get busy
making their cars better.
There's so much more nuance and texture to this discussion about Chinese
cars arriving in vast numbers.
This isn't the episode to do that, but I will just say this, that in March
this year, the JQ7 was the UK's best-selling car.
Yeah, as a brand didn't exist before the beginning of last year in this country.
That's just amazing.
So, I mean, often those sort of monthly figures can be skewed by the number
of registrations of a particular model in that country.
But the direction of travel is clear.
You can see it.
And actually, what I find most extraordinary is, it's the pace at
which UK car buyers have accepted Chinese cars.
It hasn't taken a couple of decades.
These cars have become available.
They are comparatively affordable.
They're perfectly competent, as far as we know.
And UK buyers have just said, OK, that's great for me.
And perhaps the timing actually is right for these Chinese makers because
we are living in a cost of living crisis.
People are trying to reduce their costs.
And perhaps the time is just right for them.
And one of the things I said in my answer to when this question was asked
on the intercooler podcast, and if you subscribe to us and you heard
that apologies for me repeating myself, is that I said another thing
called the car of the year jury have done for at least 15 years,
where we have to test every new car that goes on sale.
And from that drop a short list of seven cars, which we want to put forward
to win the ultimate car of the year award, in all those time, all that time,
there's never been a Chinese car on the short list, let alone win it.
And what does that say?
It says that the Chinese car manufacturers understand that there is such a thing
as good enough, they don't have to excel.
And it's more important to them to be good enough,
but affordable at the same time, then to really push the boat out
and come up with cars with very sophisticated mechanical engineering,
which are maybe like 5% better here, there and everywhere than anything else.
That's not where they are.
They want to establish a presence.
They want to get their names established.
And they can't do it by being better than everybody else.
So they're doing it by being better value than everybody else.
And we know the approach work because it worked for the Japanese
and worked for the Koreans and it's now working for the Chinese.
So Andrew's mentioned that extra podcast that we do ask the intercooler,
which is the subscriber only show that goes out on a Thursday.
We've done a year's worth of those now.
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So let's have a little think about the enthusiast rather than the mass market.
So staying on EVs, I mean, we know the demand for sporting enthusiast EVs.
Right now is basically zero.
It's very, very little, isn't there?
I don't know how many MG sidebusters have been sold.
People don't want them.
What I will say is that there are some interesting sporting EVs coming to market soon.
Longbow we've spoken about before, the Nutty Renault 5 Turbo 3E.
There's going to be an electric version of the BMW M3 for the first time.
Will they sell, will demand emerge for those?
It's hard to see at the moment, isn't it?
It really is hard to see at the moment.
Yeah, people who love those great straight six and before that V8 engines, you know,
that have been in those M3s for so long, are they really going to be happy with?
I mean, I'm sure it'll have a Brazilian horsepower, but with, you know, with a car,
with an electric motor that's going to be so much heavier.
For that, I'm not saying that I struggled to see why anybody buys an EV clearly,
but if I was BMW, I'd be thinking long and hard about that.
Because every time they do something like that, if it doesn't work, it's not just
you've lost the sales, there's a certain reputational damage as well,
that BMW has abandoned, you know, a very substantial kernel of its identity.
You know, M cars are thrilling to drive.
I haven't driven an electric car that's thrilling to drive yet, even the very
best of the Porsche Taycan's as well.
They're very impressive and I like them.
And, you know, I enjoy driving, but they're not thrilling.
There's something else, isn't it?
An M3 has to be thrilling.
Yeah, it is something different.
It's not just EVs, the latest performance cars.
Anecdotally, we're hearing that people aren't really turned on by them the way
that they are slightly older cars.
But also there's hybrid stuff that just isn't in demand in the market.
You know, the four cylinder Mercedes AMG C63.
It's really, really quick, but it's lacking something.
We've driven it.
Well, I can tell you it was lacking.
Yeah.
A V8 engine.
It is.
And the trouble is the previous, every previous C63 had the V8 and it's such a
hard sell to take it away.
Yeah.
Even if you give more power, it's such a hard sell to take away.
Doesn't matter.
You know, four liter V8, which sounds, you know, the sound of which you'd be happy
to have played as your coffin goes down the aisle at your funeral or a two liter
four.
Yeah, it's no comparison.
It's not difficult to understand why people have been turned off.
As we understand it, the four cylinder C63 is going to be dropped soon and
replaced probably by a six cylinder car.
Not a V8 at that point.
Not a V8, which is a shame.
Yeah.
Maybe it just wasn't possible.
I don't know.
But you also see it in residuals of certain Ferraris.
So the 296 GTB, which is a fine car.
One of the finest Ferraris.
One of my favorite Ferraris.
There you go.
But it's a V6, most of its predecessors were V8 and it's got a big hybrid component.
And actually you, so it's immediate predecessor was the F8 Tributo, V8 car, twin
turbo, and I looked at the cheapest examples of each in the classifiers that I
could find.
The cheapest F8, a 2020 car with 13,000 miles was 220,000 pounds, 220, right?
The cheapest 296 GTB, a 2023 car with just two and a half thousand miles is up
for 186,000 pounds.
Goodness me.
Huge difference for a newer car with far fewer miles.
It's amazing.
And actually anecdotally, we are seeing and hearing that demand for what new cars
there are with big high capacity multi-cylinder engines is strong.
You know, the Land Rover Defender Octa, the most powerful version of the
Defender, the most expensive version, people want it.
Yeah, I mean, I think I think they were having to put on more stuff and more
shifts just to just to make enough of the thing.
What is your view about?
Because I mean, we think that there are two reasons why cars like the 296 GTB are
not selling and their residuals are poor.
How much do you really think it is the fact that it has two fewer cylinders?
And how much do you think it is nerves about maintenance of the hybrid over time?
Oh, I don't know.
Good question.
Because I think if Ferrari did a Mercedes and went from a V8 to a straight
four, that I can understand people just going, well, forget it.
That's not a Ferrari.
But Ferrari have done V6s before in the Dinos.
Also, that V6, to me, sounds better than the V8.
It's a great, it's a great sounding engine.
It is to me a far better car than an F8.
And I like F8s and I love 488s and I love 458s.
I mean, that entire series of cars, I think, are terrific.
And I just wonder whether they think, well, here is a Ferrari, a boutique
manufacturer anymore when they make a five figure number of cars per year.
But it's still by, you know, by Volkswagen standards, it's still a very
small company making electronically very complex cars, which are clearly
going to be quite expensive to service and possibly very expensive to repair.
If this very complex electronic engineering starts to play up.
I wonder if people are just thinking, actually, I just, I'm just a bit scared
of taking that on.
That is a good point.
And I have heard tales, very secondhand tales of LaFerrari owners, for instance,
facing enormous bills to get the battery replaced in their car.
Yeah, I mean, OK, I know somebody who owns a LaFerrari and he is somebody
who can afford to own cars like that to put it mildly.
And he still buys the extended warranty because it's not obviously
because he can't afford to do it, but he just doesn't.
He, you know, he thinks it's value because he's sufficiently worried to
to think, well, actually, the sensible thing to do now is just to cover
that cover off that possibility.
So something may well be happening in the 296 space.
Another issue with modern cars that is putting people off, ADAS, advanced
drive systems. We hear so much, we hear so much of that.
So much of people just saying they are so bored of their cars,
hectoring them, scolding them, pointing out every time they transgress
what the car thinks they should be doing.
And of course, you can turn it off and you and I spend most of our lives
turning off ADAS system in cars because it's something that you have to do
the moment and we get into lots and lots of different cars.
And clearly some stay off and some have to default to on by law.
But it is a massive turn off.
I think even for people who are not sort of died in the wool car nuts,
like you and me, I just don't think people like being their cars,
telling them how to drive and try and also the sense of that sort of loss
of control. It happens and you must have done this.
You must have been driving a car down a road and there's a parked car
in front of you and you can see very clearly that all you're going to
do is nothing coming in the way and so you're just going to drive around it.
But the car doesn't think the car thinks you're about to go
smashing into the and it performs some ridiculous emergency stop
and starts flashing lights at you and tightening your seat belt.
It's alarming. It's unpleasant. It's unnecessary.
And clearly there will be occasions when these systems do save people from themselves.
But to an extent that doesn't matter so much in the in the in the buyer's eye,
because all the biases is a car which is interfering unnecessarily,
compromising their peace, their quiet, their enjoyment.
And I don't think, generally speaking, people like being told what to do.
People like to think that they're grown ups and that they don't need to be told,
least of all by, you know, some electronic box buried deep in their car,
which thinks that they're using a bit too much of the road that they should,
all that they may be two miles an hour over the speed limit.
Yeah. Yeah. Oh, my God.
So all of this means that
in the enthusiast space, in particular, demand for the latest cars
doesn't seem to be very strong.
Or there is a ground swell of appetite and interest in slightly older cars.
We see it all the time, stuff from the 90s through to the 2010s.
Though the best of those cars are really, really in demand these days.
But I mean, the whole thing
does seem like a bloodbath at the moment, as you said.
And just to look back to what we're saying right at the start,
it would be naive just to assume that all the car makers that we're familiar with today
will exist in the same form in 10 years.
It's a very, very difficult time for them.
Yeah. Yeah. And I hope it changes, but I can't really see.
I mean, it's possible the world will sort itself out.
Yeah. Ukraine will sort itself out, that Iran will sort itself out.
The Trump will have to repeal the tariffs.
I mean, clearly there are the midterms coming up in November
and all the signs are at the moment that he's no longer going to have his,
excuse me, strangle hold over, over Congress.
We wait to see what happens there.
All sorts of things can happen.
But in the meantime, I mean, who knows what can happen?
You know, China might be sitting there and looking at
you know, Russia invading Ukraine and Trump attacking Iran and thinking,
well, if they can do it, I mean, maybe we'll have a crack at Taiwan.
Yeah. Who knows? Who knows?
I mean, they could say, well, everybody else is up to it. Yeah.
So I think we live in difficult times.
And I think as a car manufacturer, all you can
try to do yourself is to ensure that whatever troubles you do have,
as few of them as humanly possible are internal.
Yeah.
And there's nothing else you can do and try to make the right calls
and try to get ahead of where the market is now.
Because for people who are designing cars in a period of such intense change,
the one thing you can guarantee now, you can guarantee now
is that wherever the market is now, it ain't going to be there by the time
your cars come out.
So final thought on this and what car makers can do, look at BMW.
It's taken a very, very clever approach to this period of transition.
It's production lines and its models are almost powertrain agnostic
so they can put petrol engines, hybrid powertrains or EV powertrains.
And diesels. And diesels.
The fire series you can buy with a diesel, a petrol, a plug-in or an electric.
Yeah. Yeah.
And that protects BMW from these these changing winds.
And it also it also means the M fires by two and a half times.
It does mean that. It does mean that.
But BMW made a 10 billion euro profit in 2025.
Yeah. And they've just come out with the IX3, which is hands down
the best EV on sale.
Wow. Well done BMW. Huge credit into that.
Well done BMW. I mean, absolute props to them.
They've just knocked it out the park.
Yeah, it's fantastic.
OK, did you want to discuss anything else this week?
What else is on your radar?
Very briefly, I want to talk about the Volvo ES 90, which is an EV.
It's a, well, it's actually a hatchback, but it looks quite like a saloon.
I've always had a bit of a thing about volvos only because I didn't grow up
with volvos, but all my mates did.
And so every time I was sort of taken out by a school, because I was educated
in one country, my parents lived on another, there were a lot of people
always sort of like weekends where I'd be, you know, I'd be kind of like
left alone unless some friend you would take pity on me and paint back to their
place. And their parents always turned up in volvos or beaten up old volvos.
So I spent a lot of time when I was young and I was always quite curious about them.
And I developed a little bit of an affection for them,
which because I love the fact that they're kind of, you know, they are very
individual, slightly iconoclastic cars.
And I like them about them.
And I also like the fact that they simply didn't care about style or fashion.
They were absolutely, they knew what, and I've said this on the podcast so
many times, I love cars, which know that what they are for.
And if you go and look at a 1970s Volvo 244 DL, you might laugh at it,
but goodness me, it knows what it's for.
And so I got a long, total long to drive this ES90, which is kind of like the
the successor to those cars.
And in many ways, it is quite good.
It's quite good looking.
The interior is quite clean.
It's certainly very quiet.
It's certainly comfortable.
It's not that expensive for what it is.
But there are just some bizarre things about it, which I just find strange.
You can't see at the back.
We had to stop and put down the center headrest in the rear seat so
that we could get proper view out the back.
So I say we I was sharing with the editor of Auto Express.
And even then, the view out the back wasn't great.
Things like if you want to adjust the steering wheel, you've got to go into a menu.
Oh, my God.
I mean, more concerning than that, if you want to put on your fog lights,
I think it's like five different stages, five different things you've got to do.
So you drive into a wall of fog on the M1 and you're desperately trying not to
pile into the car in front, even more desperate that the car behind doesn't
come piling into you.
What you want is a big red button with a fog light switch on it, which you can
just hit and put it so you can be seen.
And I just find it staggering that a company as safety focused as Volvo,
which is so clear about its mission to create a collision free future.
Now, they may well get to a point where Volvos don't crash into anything else,
but they're not going to stop people crashing into Volvos.
And people can't see their fog lights, but people are still desperately
trying to work out how to turn the bloody things on.
And it was it was.
I mean, it's not a bad car at all.
I think I gave it one if you read the review I've written about it on the
website map, I think I gave it seven out of 10.
But it could have been it could have easily been an eight.
But for a few of these, you know, rather self-inflicted injuries,
it's also you can tell it's based on an SUV platform.
It's the SPA to which have been a pretty late and trouble platform.
And the ex 90, the SUV, which I reviewed, I think when I drove it in the states
last year, and I quite liked because the fact that it was quite heavy,
didn't really trouble me in an SUV format.
And the fact that he's got a very high driving position didn't trouble me
because it's an SUV.
Well, in the in the ES 90, you've still got the very high floor because you've
got all those batteries underneath it.
But your feet just don't sit where you expect them to because you're just
sitting, everything is just higher up than you expect.
I mean, it's a small point, but it's just, I don't know.
I think I concluded my story.
I need to go back and read it is that when I left, I left thinking
not so much about how good the car is and the car is in many ways is quite good.
But how much better it both could and should have been.
Yeah, but for some unforced errors, but for some unforced errors.
And in this world, goodness me, you know, as we've been talking about all
podcast, you know, if Trump decides to attack Iran or put massive tariffs up
or whatever, OK, fine, but there's nothing you can do about that.
But you could make sure people can see out the back of your cars when you're
a Volvo and when you're a Volvo, you could make you might think actually
it might be quite a good idea if people could see very easily and very
quickly how to turn your fog lights on.
Yeah. It's bizarre.
I think there'll be a a reversion to physical controls for for critical things.
People just prefer having a little row of buttons somewhere or a rotary dial thing.
It's just so much better.
Yeah. And whoever's driving this within car makers, they need to give it up.
Please, please. It's not better.
It's not progress.
It might be cheaper for you car manufacturers, but ultimately, if you
sell less cars as as a result, fewer cars as a result, it ain't working for you.
Yeah. Blimey. OK.
Well, I think next week, we need to talk about something a bit jollier.
Oh, how about amazing road trips?
OK, let's do amazing road trips, something fun.
Let's celebrate the car and our enthusiasm for them.
It's a date. But it is.
I think it is important to really acknowledge what's going on in the
marketplace these days, because it's so we will be back next week
with an altogether less depressing podcast.
Yeah, we will. We will.
And so everyone who's watching, everyone who's listening,
thank you ever so much for doing so.
Please just remember to follow the show or subscribe to our YouTube channel.
If that's how you're watching any return will be back with something much more fun next week.
I'll see you then.
About this episode
Dan Proser and Andrew Frankel dig into why the new car market feels like a “bloodbath,” arguing that automakers face relentless macro shocks while the EV transition is happening out of sync with real demand. They cite massive EV write-downs and widespread rollbacks of “all-electric” timelines across major brands, then debate what happens if buyers want EVs but the cars aren’t there. Government mandates, discounts, and residual fears add pressure. They also discuss Chinese brands’ rapid UK uptake and why enthusiast demand for new tech is weak, with ADAS and hybrid complexity turning people off.
The new car market is a total bloodbath #episode 311
Dan Prosser and Andrew Frankel discuss the state of the new car market, as brands write off billions of dollars in EV development programs. How are the Chinese brands managing to be so competitive, and what room is there left for enthusiast vehicles?
Use coupon code pod20 at checkout to get 20% off an annual subscription to The Intercooler's online car magazine for the first year! Listen to this podcast ad-free, and enjoy a subscriber-only midweek podcast too. With a 30-day free trial, you can try it risk-free – https://www.the-intercooler.com/subscribe/
