The world's biggest automotive markets are in fight-or-flight mode right now. While China is pushing forward with EVs, the U.S. has all but pulled federal support for them.
And then there's Europe, which is caught in the center of a global tug-of-war between outright banning gas cars and admitting defeat to the Chinese EV market and silently letting it take hold. It's all coming to a head—very soon.
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Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: EVs are already selling more slowly since the tax credit disappeared, and Uber's EV incentives for drivers are being clawed back. Let's jump in.
25%: Diluting Europe's EV Mandate 'Only Widens The Gap With China'
Europe is in the middle of a fight over the future of the internal combustion engine. On one side, automakers and suppliers are preparing for the possibility that their lobbyists can keep Europe's impending 2035 gas car ban from going into effect. On the other side, you have some politicians and large EV players who warn that blinking means admitting defeat to China.
Some of Europe's largest automakers are quietly nudging suppliers to keep their supply chains ready and able to serve up parts for new combustion-equipped vehicles well past the next decade. Their bet is that the European Commission, the European Union's main executive body, will get cold feet and won't uphold its planned scrappage of new gas and diesel cars.
Automotive News explains what's at stake:
Several European automakers and their suppliers are preparing to give cars with a combustion engine a new lease on life, based on expectations that the European Union will walk back its planned ban of the technology, according to people familiar with the matter.
Parts makers are hearing from automakers that they should be ready to move forward with non-EV models for Europe beyond the EU’s 2035 deadline, the people said, declining to be named because the talks aren’t public.
BMW, Mercedes-Benz and Stellantis are reportedly some of the brands that are putting their money on the table as a bet that combustion cars will continue to be sold at dealerships long past the 2035 deadline. That might be in the form of full-on powertrains, or hybrids of some form (including Extended Range EVs).
As Benjamin Krieger, secretary general of the European Association of Automotive Suppliers, puts it thusly: “People aren’t ready yet to buy only battery electric vehicles in 2035.”
He must not mean people in China, because they sure as heck are in 2025. And the automakers who served them have ambitious plans for the rest of the world. That's the EV industry warns that backing off means handing over the future of automotive manufacturing directly to China. From Reuters:
In an open letter to Commission President Ursula von der Leyen, campaign group E-Mobility Europe and ChargeUp Europe, backed by nearly 200 signatories such as Swedish automakers Polestar and Volvo Cars, called for the targets to be kept.
"We are deeply concerned about recent efforts to dilute your objectives," the letter said, referring to intense lobbying efforts by the wider auto industry.
The groups added that reopening the door to transitional technologies such as plug-in hybrids and CO2-neutral fuels would create uncertainty and slow the shift to electric vehicles, even as Chinese electric automakers streak ahead and cut costs.
"Every delay in Europe only widens the gap with China," it added.
The EU will reveal the results of its review and potentially updated guidance for its local EV industry next week.
50%: Tax Credit Blues? EVs Are Selling 18% Slower
Here's a shocker: when you take away the $7,500 incentive to buy an EV, the cars take longer to sell.
According to new inventory data, EVs in the U.S. sold 18% slower in November compared to last year. The data, published by Lotlinx and reported by Automotive News, revealed that EV supply has ballooned to a massive 126-day supply, which is double that of hybrids and nearly 40% longer than combustion cars.
Perhaps more damning would be looking at sales data from September (just before the EV tax credit was pulled away). Cox Automotive reported that the market had just 47 days of supply ahead of the credit discontinuance.
Meanwhile, cheap cars are selling like lightning. Lotlinx's data suggests that sub-$25,000 cars are virtually vaporizing from dealer lots with an average time-to-turn of just 1.5 days.
There's a lot going on that could be influencing these numbers. Obviously, the repeal of the EV tax credit and the pushed-up demand likely shrunk EV sales (as expected). But an uncertain economic outlook, plunging interest rates and manufacturers re-focusing manufacturing efforts to better suit demand could all play a part.
As we've said before, this comes down to affordability. And that's true of new gas cars too.
75%: Uber Discontinues EV Incentives For Drivers
For years, whether it be for PR or because it was mandated to do so by state law, Uber and other ride-hailing providers became extremely environmentally conscious. With incentives aplenty, it loudly showed the world that with a little bit of help, driving can be green (and so can its business model).
However, that's all coming to an end. Companies like Uber have officially begun to end the incentive programs that pushed their drivers to purchase or drive an EV while using their service. The result is drivers who question whether or not they'll continue to drive on the platforms—and questions about whether or not Uber will hit its stated green-driving goals.
Uber now offers a $4,000 bonus for gas drivers who switch to EVs. But that offer is limited to just 2,500 drivers and complete 100 rides by the end of April 2026.
Bloomberg shares the details:
Uber needs all the clean miles it can get to reach its green goals and various local regulations. With 38 million daily trips globally, the company’s emissions have nearly doubled in the past three years, and its climate footprint now surpasses the entire country of Denmark. Yet despite the rise in emissions and soaring profits, Uber is scaling back some of its key climate efforts.
The company had pledged to reach 100% EVs in London by this year, and 100% in North America and Europe by 2030, but it’s far short of those goals. The San Francisco-based firm reported earlier this year that about 40% of its miles in London are in EVs, while Europe and North America are about 15% and 9%, respectively.Instead of enticing drivers into EVs with cash, Uber is ratcheting back extra payments and backpedaling in other ways.
The backpedaling that Bloomberg speaks of is multifaceted. First was the direct $1-per-ride stipends for drivers who operate EVs—that reward was canned last year in favor of an award ranging from $100 to $250 if they hit 200 rides. Now, the monthly rewards are completely gone.
Bloomberg points out that Uber originally pledged $800 million to its drivers by the end of 2025 to help electrify its fleet. It hit $539 million as of 2024 and is expected to miss that $800 million mark. One investor told Uber CEO Dara Khosrowshahi that the company had "become a money-printing machine" after the company pledged to spend $20 billion on stock buybacks.
100%: What Happens If Europe Doesn't Uphold Its Gas Car Ban?
We know that most Western automakers have struggled with modern EVs (and even more so with software-driven vehicles, but that's another story.) But a much more impressive, and cheaper, crop of electric options is coming in 2026 and beyond. And yet those EVs are the fruits of years of investments driven by the belief that gas cars would one day be mandated out of existence.
So what happens if Europe follows America's example and backs off? Does the market retreat to gas, or do the BYDs of the world turn everybody else's lights out? Let us know your theory in the comments.
