+++ FIAT will begin production of the new 500 Hybrid in November and the first official pictures reveal it has received an overhauled interior and a 6-speed manual gearbox. More than 100.000 examples of the new model are expected to roll off production lines each year at the company’s Mirafiori plant in Turin. Both hatchback and cabrio models will be sold. The first images of non-camouflaged pre-production models show that it will look identical to the electric 500e except for a reworked front grille to feed more air to a petrol engine. That engine will be the same 1.0-litre 3-cylinder mild-hybrid Firefly engine that powers the old 500 and the Panda. The new Fiat adopts the 500e’s interior, which includes Stellantis’s 10.25 inch touchscreen. Alongside this, the dashboard features a larger and squarer new storage cubby and the gear lever is elevated alongside the steering wheel, as in the old petrol 500. The move to retrofit an electric car with a petrol engine is unprecedented in the European car industry. Several reports in March 2024 suggested that the bold measure was borne out of 2 key challenges. First was the need to up production rates at the Mirafiori factory amid slow sales of the 500e and its Abarth 500e hot hatch sibling, which led Fiat to pause production on several occasions last year. Meanwhile, it ended production of the old petrol 500 (which accounted for the majority of 500 sales), as the 17-year-old model fell foul of new EU legislation on cybersecurity, which would have required a costly re-homologation effort. Fiat CEO Olivier François acknowledged the challenges, saying in a statement that the 500 Hybrid will boost production at Mirafiori “to ensure the plant’s productivity”. He added that launching a new combustion-engined 500 in response to flagging sales of the EV serves as “proof that social relevance is at the core of the brand mission”. Fiat previously said it would also invest €100 million into the 500e, with plans to redesign its platform for new battery technologies aimed at improving its affordability. This suggests that an update for the EV is also due around 2026. +++
+++ The future of LOTUS ’s British factory Hethel is under review, as its Chinese owner, Geely, takes drastic action to fix the loss-making British sports car brand. The car maker is trapped in a perfect storm, buffeted by tariffs that have inflated the cost of UK sports car exports to the United States, and exorbitant American import duties on its Chinese-built lifestyle EVs that make sales commercially impossible. Lotus is also grappling with inconsistent electric car demand, and growing the brand from a tiny customer base. Geely has pumped billions of investment into Lotus, funding the clean-sheet electric technology that underpins the Eletre SUV and Emeya sports saloon and a factory in Wuhan, China, with a 150.000-unit capacity. It has also invested £100 million in its Norfolk site, yielding new production lines to build the petrol-powered Emira sports car and pure electric Evija hypercar. Nonetheless, Lotus sold only 12.134 vehicles in 2024 and deliveries slid 42 percent in the first 3 months of this year to just 1.274. Sports cars contributed 555 of those, but volume will have taken a further dive since, with Hethel having to stop production in May in the aftermath of President Trump’s announcement of global tariffs. The US is a critical market for the Emira sports car, accounting for a fifth of Lotus’s global volume in 2024. “We hit a bump in the road”, Lotus Europe boss Matt Windle told a few weeks ago. “But pricing is agreed and cars will begin flowing again”. With the new prices incorporating the 10 percent import tariff agreed between the United States and United Kingdom, deliveries are scheduled to recommence in August. But the structural decline in sports car sales, the recent production hiatus and underperforming sales to date for the €2.8 million Evija electric hypercar have triggered multiple rounds of job cuts in Norfolk. And now Geely has ordered a strategic review into Hethel, as part of its drive to get Lotus to break even in 2026. The review will look at ways to boost sales of the existing line-up, decide whether a hybrid or pure electric sports car should replace the Emira, and even consider closure of the factory. News of the review, including the extreme option of shuttering Hethel, leaked to the Financial Times, which reported in late June that Geely had decided to shift sports car manufacturing to the US. The report sparked intense talks with the Department for Business and Trade, with state support potentially on the table to help Lotus through this bleak period. The following statement was also issued: “Lotus Cars is continuing normal operations, and there are no plans to close the factory. We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market”. Shifting sports car production to the US is unlikely: more logical is that Geely fast-tracks US localisation of the Eletre and Emeya, which will introduce ‘hyper-hybrid’ powertrains from next year. It already owns a factory in South Carolina producing the Volvo EX90 and Polestar 3, although Volvo expects to add the XC60, eating up capacity. The hyper-hybrid powertrain will be shared with Chinese entrants Zeekr and Lynk & Co: Geely chairman and founder Li Shufu outlined his plans to scale technologies more deeply across group brands (including Lotus, Volvo and Polestar) in his Taizhou declaration in September 2024. Zeekr and Lynk & Co have a plug-in hybrid set-up that combines a 2.0-litre turbocharged petrol engine packing up to 280 hp with front and rear electric motors. Total output can eclipse 880 hp, 0-100 kph takes less than 5-seconds and the system is supported by a big battery with more than 160 km of electric range. Lotus will have access to this hardware to deliver its hyper-hybrids, starting with the Eletre in 2026. Chinese executives are said to be acutely aware of the iconic status of Hethel, home to Lotus since 1966, its triumphant Formula 1 racers and competitive sports cars. “I think there’s a place for Hethel, it’s the home of the brand”, Matt Windle told me. “When I spend time in China with my Geely colleagues, they really buy into the brand story; other companies just haven’t got that legacy or history”. Geely plans to decide Lotus’s future unilaterally: it has exercised an option to buy Malaysian partner Etika Automotive’s 49 percent stake in the Hethel sports car business and engineering consultancy. The deal should be complete by the end of the year. +++
+++ The Internet hasn’t exactly been kind to the new CLA, but the World Wide Web isn’t paying MERCEDES to keep the lights on. Buyers are, using their hard-earned money. The three-pointed star is happy to report that demand for its electric sedan is strong, with production chief Joerg Burzer describing the order intake as “very encouraging”. So much so that the compact luxury car will enter a 3-shift production schedule later this year to keep up with the high, albeit unspecified, number of orders. Mercedes has been taking orders since April in Germany, but some domestic buyers might have to wait until 2026 for delivery. Long delivery times are usually a sign of strong demand, unless there are bottlenecks in the production process. There had been some issues with securing rare earths, but Burzer says those problems have been resolved and there are currently no restrictions. CLA production is still in the ramp-up phase, with plans to add a gasoline version near the end of the year. It’ll be a mild-hybrid model featuring a turbocharged 1.5-liter gasoline engine and an 8-speed dual-clutch automatic transmission. The ICE version should significantly lower the starting price compared to the base electric model. Demand should grow even further with the launch of a new CLA Shooting Brake. Mercedes is doing another compact wagon, and this time, it’ll also be sold as an EV. It will also be assembled at the German plant in Rastatt, where the next-generation GLA crossover is expected to be built as well. Burzer didn’t rule out extending the life cycle of the A-Class and B-Class. The 2 model lines built at the same factory remain popular despite their age. However, replacements for the A-Class hatchback and sedan, along with the B-Class minivan, are not planned, effectively making the CLA the new entry-level model. Another boxy GLB is on the way with gasoline and electric versions, plus a so-called “Little G” slated for later this decade. +++
+++ PORSCHE may be getting ready to reverse course on one of its biggest bets. A new report suggests the automaker is reconsidering its decision to retire the internal combustion version of the Macan, its bestselling SUV. Not long ago, the company was confidently signalling the end of the petrol-powered Macan. Now, that stance appears to be shifting. I’ve heard rumours that this could happen already this year. Lutz Meschke, Porsche’s Chief Financial Officer stated in January that, “We are exploring the possibility of equipping some of the originally planned electric models with hybrid technology or petrol engines in the future”. Now, his words have sparked further investigation and one insider says an announcement could come soon: “A combustion version, presumably sharing underpinnings with the new Audi Q5, would most likely take 3 years to develop, meaning a long absence from the market of one of Porsche’s biggest sellers. An announcement is expected in March”. Sure, that’s months away, but these things take time. If true, it would mean Porsche working hard between now and then to revamp its plans. Announcing a new Macan ICE in March of 2026 could also have the benefit of making its launch feel closer. No doubt, if Porsche does decide to go this route, and all indications are that it’s at least considering it, we could see test mules before the end of the year. With the latest Audi Q5 already on the road, Porsche wouldn’t be starting from scratch. Sharing a platform could accelerate development and help control costs. The real challenge will be figuring out how to keep Macan customers engaged in the meantime. That’ll be the toughest hurdle but the Macan Electric isn’t exactly a flop. Porsche sold 18.278 of them in the final quarter of 2024. While regulation in Europe spelled the demise of the Macan ICE, it’s encouraging for Porsche that the EV version made up 66 percent of the model’s sales for the year. That’s an encouraging sign, though the company is clearly watching what happens next. Models like the Taycan have shown how EV sales can soften over time. The task now is to maintain momentum while preparing for a possible return to combustion. +++
+++ After months of lacklustre showroom performance, TESLA is once again thriving in the British sales charts after what has been described as a “bumper” month for new registrations, with 1 in 4 new cars sold being an EV. In June, the Tesla Model Y was the United Kingdom’s best-selling electric car and the third-most popular car in general, closely followed by the Model 3, which was the 6th-most registered car last month. This comes after months and months of poor sales for Tesla; in May, Elon Musk’s EV brand was outperformed by the likes of BYD and Dacia. However, while Tesla’s market share is still down marginally from 2.29 percent to 2.18 percent year-to-date, it remains ahead of the aforementioned competition. Tesla also admits that its sales do tend to peak towards the end of a quarter, whenever shipments arrive from its Gigafactory in Berlin, while many of this month’s registrations are pre-orders for the newly facelifted Model Y, which is just starting to trickle on to British roads. There is reason to be cautiously optimistic for the UK’s EV market. As said, in June, one in four (24.8 percent) of new cars registered were fully electric, adding up to 21.6 percent year-to-date. It represents a massive 34.6 percent jump year-on-year. UK car registrations as a whole are also up 6.7 per cent year-on-year in June, with the Ford Puma retaining its position as the nation’s favourite choice of car. Tesla did also well in Norway. In June, Tesla sales jumped 54 percent in this country. The arrival of the new Model Y was a major boost, with registrations increasing 115.3 percent to 5.004 units. Similarly, Tesla sales rose by a considerable 60.7 percent in Spain to 2.632 units. This was also largely down to the new Model Y, with its sales rising 127.2 percent to 1.179 units. Sales in Portugal also rose 7.3 percent. Despite these strong-performing markets, there was a bloodbath in many other countries. In Sweden, things were particularly bad, with Tesla scoring a 64.4 percent decline last month compared to June 2024. Sales in Denmark have collapsed by 61.6 percent. Despite the new Model Y now being available in Denmark, sales of Tesla’s best-selling model still dropped 31.2 percent to 1.155 units. Other countries followed the same trend. In France, Tesla sales are down 10 percent, while in Italy, they fell by 66 percent. Tesla has endured 6 year-on-year losses in quarterly new registration volumes across Western Europe, and is now staring down a 7th. Tesla’s share of the EV market shrank across the region to 7.2 percent in May, down from the 12.6 percent share it had in May 2024. While Tesla CEO Elon Musk is no longer a special government employee under the Trump administration, it seems his involvement in politics is still having a major impact on European car shoppers. In addition, an ever-growing number of EVs from China are making their way to local shores, stealing market share from Tesla. The firm recently reported that worldwide sales had dipped for the second quarter in a row, down 14 percent year-on-year. And things could get worse, with President Donald Trump threatening to cut Tesla’s government subsidies as part of his ongoing feud with CEO Musk following his exit from the US Department of Government Efficiency. +++
+++ In the UNITED KINGDOM , the Ford Puma is still standing strong at the top of the list of the UK’s best-selling cars, 7 months into the year. But can the small crossover hold firm until the end of 2025? If it does, it will be the second consecutive year as the UK’s top model. While it has been a successful start to the year for the Puma, the overall new car market is struggling slightly, but there are signs of progress. New car registrations increased 6.4% year on year in June to 191,316. Additionally, electric car sales remained robust, increasing by 39.1% year on year to 47.354. The top 10 best-selling cars of the year so far are: 1. Ford Puma – 26.355 units, 2. Kia Sportage – 23.012 units, 3. Nissan Qashqai – 22.085 units, 4. Vauxhall Corsa – 20.128 units, 5. Nissan Juke – 18.527 units, 6. Volkswagen Golf – 16.884 units, 7. MG HS – 16.115 units, 8. Hyundai Tucson – 15.496 units, 9. Volvo XC40 – 15.267 units and 10. Volkswagen Tiguan – 15.223 units. +++
+++ VOLKSWAGEN of America didn’t have a great second quarter. The German automaker has reported results for April, May and June, revealing a 29 percent decrease in sales year-over-year. Every model saw a drop in sales, save for one: The Golf R. Sales of the hot hatchback were up 12.1 percent versus the same period last year. The sudden jump in Golf R sales can be traced to a model changeover that happened late last year. The all-wheel drive hot hatch and its sibling, the Golf GTI, received a facelift that included a slightly altered design and more power. That meant a retooling at the factory, and subsequently, a delay in production. Only now is production finally back up to full speed, hence the increase in sales. Here’s the full sales breakdown: Tiguan -45.4%, ID.4 -65.0%, Jetta -29.1%, Arteon -99.5%, Golf GTI -29.1% and Golf R +12.1%. Total sales were 71.395 (-29.0%). “Increase” is, of course, relative. The Golf R makes up a tiny fraction of VW’s volume, accounting for just 873 units in the past 3 months. The more affordable Golf GTI fared a bit better in the second quarter, with dealers moving 1.877 units; a drop of 770 cars versus the same period in 2024. The decrease isn’t terribly surprising, seeing as how Volkswagen dropped the manual gearbox option for the 2025 model year. In its suspiciously short press release, VW didn’t cite a reason for the sharp decline in sales beyond calling the current market a “challenging environment”. If we had to guess, tariffs placed on foreign vehicle imports likely had a material impact on supply and pricing. The company paused shipments to the US in April, but also promised to keep prices tariff-free until the end of June. It’s still unclear how much more expensive VW’s line-up will get, though any increase certainly won’t help sales. +++