I hate those narratives that if you don't jump on EVs, your future is doomed.

The last 5 years just don't show it. The EV market is still small and infrastructure missing in most of the world.

Toyota played it safe and made bank when everybody was saying they were doomed.

German automakers went hard on EVs. VW group sold 1 million fully electric vehicles in 2025, they will probably overtake Tesla in a couple of years for the biggest non-Chinese EV automaker by sales, but is it paying off financially?

At the same time german premium brands have a very hard time differentiating when Chinese cars offer similar quality at half the price even after tariffs.

German automakers are suffering because their sales in the Chinese market has tanked. Not going hard on EVs would have left them in an even worse situation.

Take VW: in 2020 they were by far the biggest automaker in China with ~16% market share. In 2023 they had fallen to number two at ~10% behind BYD. But now that they are starting to have competetive BEVs in their lineup they are tied for first place in the market at ~13% market share.

If you look here in Germany at the car companies, they are suffering quite a bit. Most of that has to do with EVs eating the market share of their legacy car business. VW, Mercedes, and BMW each make pretty decent EVs at this point of course. And there are a lot of even better ones coming to market soon from them. And they sell pretty well even. But because their legacy business is imploding, profits are down by very large double digit percentages. Despite this, the Germans are adjusting well. VW seems to be having some success in the Chinese market now (lots of China specific VW models coming out there). And BMW is gearing up to what looks like a massive range luxury EV (500 miles) that should be doing well.

EV sales keep on growing world wide by juicy double digit percentages. Some markets less than others of course but the net effect is that all that legacy business keeps on shrinking because all that EV growth is at the cost of that legacy business.

The main issue with Honda and other Japanese manufacturers is that they are hopelessly dependent on Chinese suppliers to ship any EVs at this point. They've dragged their heels on doing their own tech and at this point while they might have some promising things in their labs, they lack supply chains and factories to mass produce any of it by themselves. That's going to take many years to turn around. Without guarantees that they'll be able to match the Chinese on cost. And the EU, Koreans, Chinese, and even US companies like GM are picking up the slack and growing EV sales at their cost.

Toyota seems to finally be producing a lot of EVs now to counter that. They've been catching up fast in the last year or so. But most of these EVs come with a lot of Chinese tech inside. Their alternative was to cede that market to competitors. Which seems to be what Honda is doing. I don't think that will end well for them.

Is your point that the western car companies are doomed no matter how aggressively they jump into EVs now, and that Chinese EV producers have too much of a lead for them to recover, or that they have time to catch up later and can take it slow for now?

China is already selling EVs to countries that haven’t even had many cars before, like Nepal. Is 75% of the world car market just going to be there’s because western auto manufacturers overfixated on their own very mature car markets?

The EU regulations are in many ways built to prevent this kind of free riding, for the sensible reasons that if everyone free rides, aiming for excess profits on the short term, the transition doesn't happen and the Chinese eat your whole market.

If you want to sell cars in the EU you have no future without EVs. The fleet emmision fines are quite high already, will be much higher from 2030 and will kick in from 0g CO2/km from 2035, basically killing any ICE passenger vehicle. That's in 8,5 years.