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Good morning! It’s Friday, December 12, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.
In this morning’s edition, The European Commission throws in the towel on its planned 2035 combustion engine ban, global EV sales see their slowest growth since February of 2024, Mexico is about to impose its own sky-high tariffs on Chinese vehicles and Volkswagen may bring EVs with range-extending gas motors to the U.S.
1st Gear: EU Commission drops 2035 ICE vehicle ban
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The European Commission is giving up on its 2035 combustion engine ban for new cars in the 27-nation bloc. Given the state of the world right now, I’m sure this isn’t too much of a shock to you. Basically, what happened is that Germany got cold feet because of growing competition and trade issues, so it backed out of the whole deal. Since Germany is by far and away the biggest economic power on the continent, what it says goes. An official announcement is expected in the early half of next week once it is confirmed in Brussels.
While this does seem to be a massive blow to green initiatives, German Chancellor Friedrich Merz admitted that electric mobility remained the path forward. However, he said there would be other technologies running alongside it — like synthetic fuels — that would help achieve carbon neutrality. From Reuters:
“Next Tuesday, the European Commission will be putting forward a clear proposal to abolish the ban on combustion engines,” Manfred Weber, president of the largest party in the European Parliament, EPP, said at a press conference in Heidelberg, Germany.
He added it should be left to markets and consumers how climate targets are achieved.
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“And that is precisely what we mean by technological openness. This now gives the industry real planning security,” Merz said.
Right now, there’s no word on whether other goals — like automakers hitting a 55% reduction in emissions by 2030 — are still in place. I suppose time will tell.
This is a rather stuffing reversal and an incredibly quick turnaround. I mean, the EU only agreed to ban the sale of new internal-combustion-powered cars in February of 2023. It’s amazing how quickly the world can change, but I suppose that gives some solace that it can always change back.
2nd Gear: Global EV growth hits a massive snag
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There’s trouble afoot in electric vehicle sales land. In November, global EV sales saw their slowest growth rate since February of 2024, thanks mostly to China’s plateau and the end of the $7,500 federal EV tax credit in the U.S. Now, North America is on track for its first year of EV decline since 2019. This really isn’t good for anybody.
Things are a slightly different story in Europe, where registrations of EVs and PHEVs maintained strong growth thanks to national incentive programs. They’re actually up by a third so far this year, compared with the same time last year, according to consultancy firm Benchmark Mineral Intelligence. Of course, that’s not enough to change the mind of Germany, which just killed the 2035 gas car ban. It’s also not enough to make up for shortballs in the U.S. and China. From Reuters:
Global EV registrations, a proxy for sales, rose by 6% to just under 2 million units in November, the data showed.
They were up by 3% in China to more than 1.3 million, the lowest year-on-year increase since February 2024.
North American registrations fell by 42% to just over 100,000 cars sold, following a similar drop in October at the end of U.S. tax credits, and are down 1% so far this year.
Europe and the rest of the world were up respectively by 36% and 35% to more than 400,000 and almost 160,000 registrations.
I don’t think things are going to get better for this industry anytime soon, either. Last week, President Trump proposed the idea of rolling back the fuel economy standards that were put in place by the Biden Administration, and China is reducing subsidies for electric vehicles. Both of these things will surely hurt demand.
3rd Gear: Mexico doesn’t want Chinese cars, either
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Lawmakers in Mexico just approved a bill that will impose 50% tariffs on Chinese-made vehicles in an effort to broadly align with U.S. efforts to constrain trade with the Asian country. Over 1,400 other products will also face tariffs between 5% and 50%, and the bill passed with 76 votes in favor, five against and 35 absences. These new tariffs are slated to take effect next year.
Technically, the measure doesn’t specifically target China, but it will impact countries with which Mexico doesn’t have a free trade agreement, like South Korea. It’s meant to increase local production and protect industries within the country, such as automotive and textiles. Of course, China will be the most heavily impacted country. From Bloomberg:
According to the tariff legislation, Chinese cars will face among the steepest tariffs, at 50%. China’s auto sector currently holds 20% of the Mexican market, up dramatically from minimal vehicle imports just six years ago.
Mexican officials and local auto associations backed the import levies in a bid to protect national vehicle production.
Along with the new tariffs, lawmakers approved a measure that will empower Mexico’s Economy Ministry, responsible for trade policy, to adjust the import levies as it sees fit.
Mexico’s finance ministry estimates that the new tariffs will end up raising newly $2.8 billion in extra revenue in 2026 alone. Obviously, these sorts of calculations rely on the idea that these companies will just eat the extra costs, rather than pass them along to the consumer. As we’re already seeing with our own increased car costs, that’s not really the case.
4th Gear: VW could bring EREVs stateside
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Volkswagen is apparently working on a plan to bring electric vehicles with range-extending gas motors to the U.S. and Europe. It represents a strategic shift for the German automaker as it looks for what to invest in in the future. While I’m more of a pure EV guy, I do certainly see the benefit of an EREV for silly people who have range anxiety. From Bloomberg:
The German manufacturer is studying adding range-extending engines to its high-selling sport utility vehicles and sedans, the people said, declining to be named discussing internal matters. Popular in China, the technology is not yet widely available in Western markets. That may change as governments roll back EV support and consumers continue to worry about patchy charging networks.
Volkswagen said it’s monitoring market developments and has reserved the range extender concept for its future EV platform. “If and when this technology will be available in Europe and the US depends on customer demand,” it added.
The carmaker is currently preparing its next five-year investment plan, with the topic expected to be discussed during a supervisory board meeting later Thursday. Volkswagen annually decides on how to divide up spending between factories, vehicle models and new technologies such as batteries, software and EVs. The company plans to unveil details of its future investments in March, a supervisory board spokesman said Thursday.
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VW’s final investment decisions partially depend on the outcome of the EU’s review and on a range of other factors not fully under its control. The group is also considering producing Audis in the US to counter President Donald Trump’s import tariffs.
Volkswagen has already been playing with this technology. It announced it was going to make range extender models with its Scout brand in the U.S., but it has yet to say if its other brands, like Audi and VW, would bring the same sort of technology to market. It also said it plans to offer range extender models in China in 2026.
Reverse: Good for Kenya
History.com
If you’re ever looking for something that has been an unequivocal good for the world, look no further than the dismantling of the British Empire. To learn more about Kenya’s fight for independence against its British oppressors, head over to History.com.
On the radio: Bing Crosby – White Christmas
To me, Bing Crosby’s “White Christmas” is the warmest Christmas song there is. Whenever I hear it, it feels like I just had a big mug of piping hot cocoa. On a different note, I cannot speak for why the “official” music video for this song is so strange. It’s safe to assume Bing had nothing to do with it.
