Although 2024 lacked the upheavals seen during the pandemic years, it will still be remembered as one of the most turbulent years for the global automotive industry. Following a review of local market events, here's what happened globally.
In 2023, China became the world's largest car exporter, overtaking Japan and Germany within two years. Its focus on electric vehicles (EVs) and its dominance in raw materials for battery production have made Chinese EVs a natural solution to Europe’s strict pollution regulations, posing a significant threat to the local industry.
The United States recognized this threat earlier and, despite the minimal presence of Chinese cars in its market, outgoing President Biden imposed over 100% tariffs on Chinese-made EVs, effectively barring their importation. Europe was slower to respond, imposing milder tariffs of up to 38%, applied unevenly across Chinese manufacturers. Both regions justified the tariffs by citing subsidies provided by the Chinese government to its automakers, with the goal of protecting domestic factories in Europe and the U.S.
However, those expecting the Chinese to back down likely underestimated their resilience. Major Chinese manufacturers announced plans to establish factories across Europe and Mexico (allowing duty-free imports to the U.S.) and introduced plug-in hybrid models exempt from the new tariffs. This conflict is far from over.
Major automakers face challenges
The rise of China’s automotive industry is also affecting Western automakers, especially in China, where German manufacturers sell a third of their vehicles. They are now witnessing their market share shrink in favor of local competitors.
Volkswagen initiated efficiency measures this year, threatening to cut 10% of its workforce in Germany, sparking protests from labor unions. Ford announced plans to lay off 14% of its employees. Mercedes slashed its profit forecast by a third, Jaguar shut down production lines to seek a fresh start with Chinese assistance, and Stellantis is in an even worse position. The company’s stock lost 45% of its value in a year, leading to the resignation of CEO and founder Carlos Tavares. In short, it’s a tough time to be a Western automaker.
Nissan’s struggles became apparent late in the year when the Japanese giant reduced its profit forecast by 70%, announced 9,000 job cuts, reduced production by 20%, and sold part of its stake in Mitsubishi. Rumors of a potential shutdown within 12-14 months prompted a lifeline: a merger with Honda.
The merger between these two Japanese giants, with Mitsubishi possibly joining, is expected to create the world’s third-largest automaker after Toyota and Volkswagen. Nissan sold 3.37 million vehicles last year, while Honda sold 3.98 million. The hope is that this merger will lead to a brighter future, unlike the troubled Stellantis merger, which is currently in crisis. Past industry mergers suggest this move might also impact importer decisions in the Israeli market.
Fully electric cars? Hold you horses
Over the past decade, automakers have made bold claims about switching exclusively to electric vehicles, with deadlines like “by 2030” or “starting from 2035.” These declarations aligned with global government goals, particularly the European Union’s push to end production of polluting vehicles.
However, industry leaders are now urging caution with such promises. Renault CEO Luca de Meo admitted this year that “we are not yet on track to reach 100% electric vehicles by 2035. That’s the reality. If customers don’t follow, it’s our responsibility to cut costs.” Audi CEO Gernot Döllner noted that the transition from internal combustion engines to EVs will be lengthy. Ford Europe’s EV head Martin Sander acknowledged that demand is lower than previously estimated, making it difficult to meet ambitious targets.
Similar sentiments were expressed by executives from Volkswagen, Volvo, Mercedes, Porsche, and Lotus. Toyota reduced its EV production plans by a third, while General Motors is still struggling to define its electrification goals. Governments are also reconsidering their policies—Britain decided to allow hybrid vehicles to be sold in the future, and Italy is lobbying the EU to revise its ambitious electrification plans. In short, while EVs are here to stay, gasoline isn’t going anywhere just yet.
The autonomous vision slows down
About a decade ago, Mobileye announced plans to launch an autonomous car by the summer of 2021. Years later, it’s clear that this vision won’t materialize anytime soon. BMW, which was supposed to partner with Mobileye on this initiative, received approval this year for partial autonomy (Level 3) on certain German roads at speeds of up to 60 km/h—not quite the grand promise.
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They’re not alone. Apple abandoned its autonomous car plans this year after a decade of efforts. Renault decided to forgo developing an autonomous car, instead conducting trials with a self-driving minibus in pre-defined closed areas. In the U.S., public interest in autonomous vehicles has dwindled, potentially due to the significant failures of Cruise, General Motors’ autonomous taxi venture, which shut down this year after over $1 billion in investments.
Tesla remains committed to the autonomous future, announcing plans to launch robotaxis this year, but Elon Musk’s promises have often been met with skepticism regarding their alignment with reality.