Greetings from London!

Donald Trump said during the 2024 U.S. presidential election that “tariff” is the most beautiful word in the world.

If there was any doubt that Trump meant it after last year’s rollercoaster border tax ride after taking office, his latest threats to impose an additional 10% tariff on eight  European allies over Greenland – oh, and a 200% tariff on French wines if French President Emmanuel Macron doesn’t join Trump’s Board of Peace initiative – everyone knows by now that he did.

Set aside the fact that tariffs on a handful of European Union members are meaningless in a free trade zone of 27 countries, Trump’s favorite foreign policy tool is back with a vengeance and will very likely bring more uncertainty and planning headaches for the auto industry.

That does not, of course, include the impact of a conflict over Greenland, a concept that was until recently inconceivable.  

Which brings us to today’s Auto File…

Speaking of inconceivable moves, Canada and China announced a trade deal that includes slashing tariffs on Chinese EVs, as part of a push by Prime Minister Mark Carney to reduce Canda’s dependence on the United States.

Very close U.S.-Canadian ties have been a given for decades and under Trump’s predecessor, President Joe Biden, Canada moved to impose tariffs of 100% on Chinese EVs.

But that relationship soured last year after Trump threatened to make Canada a U.S. state, spurring Canadians to boycott U.S. goods like alcohol.

Under the new deal with China, Canada will allow annual imports of 49,000 Chinese EVs, which could rise to 70,000 vehicles within five years.  Trump administration officials say the Canadian government will come to regret this pact.

Tesla in theory stands to be an early beneficiary of the trade deal, as it has equipped its Shanghai plant to make a Canadian version of the Model Y for exports.

This will also test whether Canadian’s willingness to boycott U.S. goods will extend to big-ticket items like Teslas or remain restricted to cheaper goods like bourbon.

2025 was a tough year for Porsche. REUTERS/Go Nakamura.

Porsche’s new CEO Michael Leiters formally started his job on January 1 and the challenges he faces came into stark focus when the premium German automaker reported sales for 2025.

The company’s sales dropped 10% to hit their lowest point since the Great Recession in 2009, with sales in China slumping 26%. You can read all about it here.

Faced with weak demand for its electric models, Porsche has pivoted back to more profitable combustion engine models.

But that leaves the company trying to rebuild and refocus under Leiters as Chinese rivals launch spiffy new electric models at a rapid clip.

Investors will be impatient for results, but fixing Porsche’s problems will take time.

Toyota's battle with activist investor drags on - REUTERS/Mike Blake. 

Toyota’s bid to take its Toyota Industries unit private has hit a fresh snag.

After opposition from investors, the Japanese automaker raised its bid for the forklift maker by 15%. Toyota Industries also supplies engines to its parent company.

But activist investor Elliott Investment Management, which holds more than 5% of Toyota Industries, fired back, saying Toyota’s bid undervalues the forklift maker by almost 40%.

Elliott also proposed a growth plan that it said would more than double the company's value by 2028.

Elliott said it has been discussing a "standalone plan" - involving unwinding cross-shareholdings, improving governance and margins - with the company's board and special committee that would more than double its valuation to 40,000 yen per share by 2028.

Whatever Toyota’s next move, this fight looks far from over.

Electrified cars - either battery-electric, hybrid-electric or plugin-hybrid – made up more than 48% of new car sales in Britain last year and this shift to greener transportation has been accompanied by a growing shift to green-tinted vehicles.

According to UK car lobby group SMMT, sales of green-coloured cars hit a 20-year peak in 2025, with sales of fully electric cars almost doubling. You can read all about it here.

British motorists, associating the colour green with the country's decarbonisation drive, bought 99,793 green cars in the year, 46.3% more than in 2024 and reaching almost 5% of total cars sold, the SMMT said.

This comes after years in which the number of available car colours has dwindled – which saves automakers money – to many (perhaps 50?) shades of grey.

Despite the shift, grey remained the most popular colour for new cars sold in the United Kingdom for the eighth year, followed by black - the top pick for executive cars.

Renault said its sales volumes rose 3.2% in 2025, as strong demand for its passenger vehicles, particularly overseas, helped offset a plunge in European van sales.

Mercedes-Benz’s revenues in India hit a record high in 2025 thanks to strong demand for its high-end luxury cars, even as stiff competition from rival BMW in the entry-level part of the luxury market pulled down the carmaker's overall sales.

U.S. auto safety regulators have granted Tesla a five-week extension to respond to an investigation into whether its vehicles violated traffic laws while the company's Full Self-Driving system was engaged.

Germany will make electric cars with combustion engine range extenders and Chinese-made models eligible for subsidies under a scheme to assist small- and medium-income households buy EVs.

 An