Automotive Industry

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German family receiving retroactive electric car subsidy check from Environment Minister beside new EV, symbolizing government boost for green automotive industry.
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New electric car premium applies retroactively from year start

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The German government is introducing a new purchase premium for electric cars, retroactive for vehicles newly registered since the start of the year. Subsidies ranging from 1,500 to 6,000 euros will be available based on income and family status. Environment Minister Carsten Schneider views it as a boost for the domestic automotive industry.

The EU Commission has partially rolled back the planned 2035 combustion engine ban, which a study by the think tank Transport & Environment says could lead to higher CO₂ emissions and declining EV sales. The original 100 percent CO₂ reduction was softened to 90 percent, reducing the share of pure electric vehicles to 85 percent. Experts fear job losses in the German automotive industry.

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In July 2026, Mexico, the United States, and Canada will begin the review of the United States-Mexico-Canada Agreement (USMCA), a pivotal process that could extend the deal for another 16 years or lead to prolonged negotiations. This evaluation occurs amid political tensions, with voices from Washington suggesting the U.S. could thrive without the treaty, and aligns with challenges in Mexico's automotive industry, which is seeing export declines and the influx of Chinese vehicles. Business leaders and experts stress the need for regional integration to sustain competitiveness.

Electric vehicle sales in the US fell dramatically in October following the abrupt end of federal tax credits. Dealers reported a 20 percent decline in used EVs and a 50 percent drop in new ones compared to September. Analysts predict a slowdown but expect continued growth in adoption.

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Prime Minister Sanae Takaichi's administration advocates responsible and proactive public finances, focusing on tax system revisions to boost economic growth. Discussions for the fiscal 2026 revision highlight automobile-related taxes, with challenges in offsetting revenue losses. Local government opposition and alignment with decarbonization efforts must also be addressed.

Leading battery-electric pickup trucks from Tesla, Ford, and Rivian faced significant sales declines and production pauses in 2025, despite a rush of EV deliveries before federal tax subsidies ended. The Tesla Cybertruck, Ford F-150 Lightning, and Rivian R1T accounted for much of the segment's challenges, with low volumes raising questions about their viability heading into 2026. While Tesla's Model Y set sales records, the pickup models highlighted broader market hurdles for electric trucks.

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Electric vehicle maker Rivian has agreed to a $250 million settlement with investors who accused it of misleading statements about vehicle pricing during its 2021 initial public offering. The company denies any wrongdoing but says the deal will allow it to concentrate on launching its mass-market R2 vehicle in 2026. The lawsuit stemmed from post-IPO price increases that erased a significant portion of Rivian's value.

 

 

 

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