For years, Elon Musk has been making big promises to Tesla owners about unsupervised autonomous driving and the ability to add their own vehicles to the company's robotaxi fleet. During today's third-quarter earnings call, the company finally gave itself a deadline.
According to Tesla VP for Autonomous Driving Ashok Elluswamy, Tesla owners will be able to add their own vehicles to the company's robotaxi fleet in the second quarter of 2027. Here's his exact quote (emphasis ours):
Like I mentioned earlier, the software for Cybercabs and Model Y is the same. And pretty soon we'll be able to release the same software as part of the V15 relea …
As the smoke clears from its outrageous Roadster demo, Tesla reported Q3 earnings on Wednesday - and the cold reality is that revenue has flatlined.
Tesla said it earned $1.7 billion in net income on $28.0 billion in revenue in the quarter that ended in September 2026. Revenues were flat, while profits dropped 4 percent compared to the third quarter of 2025, when the company earned $1.4 billion in net income on $28.1 billion in revenue. Tesla's revenue came in above Wall Street expectations of $27.9 billion, according to data compiled by LSEG. Tesla's own company-compiled expectations predicted Q3 revenues of $28.3 billion.
A vehicle is welded by robot arms as it goes through the assembly line at the General Motors Lansing Delta Township Assembly Plant March 10, 2010 in Lansing, Michigan. | Photo: Getty Images
General Motors is still very much in the business of selling gas-guzzling trucks and massive SUVs. But if you listen to its leadership, the Detroit giant is rapidly transforming into a nimble, software-defined tech player with a tightened grip on AI.
That was the pitch today, when GM hosted its tech-focused Onward event to unveil a wide-ranging slate of EV, autonomous vehicle, and AI initiatives - all aimed at fending off the rising threat of tech-heavy Chinese automakers.
The promises are big: GM claims it will use AI to cut vehicle development times in half, introduce compute units up to 40 times more powerful than its current hardware, …
Spotify announced Wednesday the launch of its next-generation, fully native in-car app, built directly on Google's Android Automotive operating system. The standalone app, which is launching today in select Audi models, runs directly on the vehicle's infotainment hardware - eliminating the need for phone tethering, Bluetooth connections, or aux cables.
It's the clearest sign yet that Spotify is ready to move beyond Apple CarPlay and Android, popular phone projection systems that currently dominate the way most people consume media in their cars. And with 34 percent of Spotify's monthly active users and 77 percent of Premium subscribers stre …
Tesla and SpaceX have formed special committees to discuss a possible merger, Elon Musk said during the latter's third quarter earnings call Tuesday.
Musk, who serves as CEO of both companies, said the special committees were formed at the request of shareholders and consist of independent directors (though he did not name them). He also noted that he is not a member of either committee, nor involved in any of the discussions.
"Because I'm a conflicted party, I can't actually be in the discussions of the special committees," Musk said. "So it's an odd kabuki dance where two groups of people are talking and I can't be in the conversation. …
LONDON — Beijing has threatened to retaliate if the U.K. raises tariffs on Chinese electric vehicles, aligning with the European Union.
Responding to POLITICO’s story that Britain was looking to act in “lockstep” with the bloc to counter China’s market dominance in electric cars, a spokesperson from the Chinese Ministry of Commerce said: “If the U.K. insists on imposing restrictions on Chinese electric vehicles, China will resolutely retaliate and safeguard the legitimate rights and interests of Chinese industries.”
The U.K. is currently working with its European partners to avoid a 10% electric vehicle tariff from the beginning of next year, when stricter rules of origin under the Brexit trade deal kick in.
The British government is also lobbying to be included in the EU’s Made in Europe policies, which give Brussels-made products preferential treatment in certain procurement projects.
U.K. Trade Minister Anas Sarwar told POLITICO on the sidelines of the German-British Business Summit at Mansion House last week that “the more that the U.K. and the EU work together and act in lockstep, the better it is for both the U.K. and the European Union.”
“The automotive sector and partnership remain strong, but do we have to grapple with the challenge that comes from rapid expansion in China? Of course we do,” he added.
China urged Britain to follow World Trade Organization rules and warned it against copying Brussels’ approach, arguing that tariffs on Chinese EVs would be discriminatory.
“China urges the U.K. to abide by WTO rules, think carefully, and not follow the European Union,” said the Chinese Ministry of Commerce spokesperson. “China will closely monitor the U.K.’s developments.”
AUSTIN, TEXAS - APRIL 8: Tesla Cybercabs are lined up on a lot at Tesla Giga Texas in Austin, Wednesday, April 8, 2026. | Image: Getty Images
This is The Stepback, a weekly newsletter breaking down one essential story from the tech world. For more on autonomous vehicles, policy, and road rules, follow Andrew J. Hawkins. The Stepback arrives in our subscribers' inboxes at 8AM ET. Opt in for The Stepbackhere.
How it started
The first state to pass a law legalizing self-driving cars operating on public roads was Nevada in June 2011 - long before such vehicles were operating on public roads. This was three years before the introduction of Tesla's Autopilot, five years before Waymo spun out of the Google self-driving car project, and seven years before the first commercial robotaxi …
Earlier this year, Mercedes' AMG performance brand grabbed our attention with the GT four-door coupe, a souped-up sports sedan with three axial flux motors delivering over 1,150 horsepower. Well, now meet its beefier cousin, the 2028 Mercedes-AMG GT SUV, an equally powerful, ultra-fast-charging electric people-hauler.
The AMG GT SUV (say that five times fast) marks the first time in the performance brand's 59-year history that it has developed a full-size SUV entirely in-house from the ground up. Scheduled to hit the US next summer, the new EV is built on Merc's high-performance AMG.EA architecture to combine sports-car handling with full-s …
After this horrific crash involving a Tesla driver who said he was asleep and using the driver assist mode, the California Highway Patrol warns that "Despite its name, full self-driving is not fully autonomous. Technology does not relieve drivers of their responsibility to safely operate their vehicles."
Video released by CHP shows the Tesla speeding past flares, cones, and emergency lights where officers were on the scene of an earlier accident, before ramming into the back of a parked patrol vehicle. CHP says two officers were seriously injured in the accident and taken to a hospital.
Two Solano CHP officers were seriously injured when …
Last night, Elon Musk gave the people what they want: a car driving vertically up a multistory ramp, launching off the edge, executing a midair "kickflip" over a lineup of Teslas, and landing via cold-gas thrusters.
That's what the people want, right? "We were promised flying cars," sure, but isn't the operative word in that statement "we"? Because as far as I can tell, everything we saw last night - while extremely cool and incredibly impressive - won't result in a real, production-ready car you can park, or, I guess, land in your driveway.
BRUSSELS — France and Germany said Friday they had struck a deal to favor European-made cars under a landmark EU industry bill in exchange for weakening a 2035 vehicle emissions target, ending months of wrangling between the bloc’s two biggest economies.
Under the agreement, Germany would accept stricter “Made in Europe” — or local content — requirements for the automotive industry in the proposed Industrial Accelerator Act, a longstanding French demand, while France would back Berlin’s push to relax the EU’s plan to phase out new combustion-engine cars.
The EU’s current target is for companies to reduce emissions from new vehicles by 100% from 2021 levels by 2035, with the possibility to “earn” 10% of emissions leeway through initiatives like offsets and investments.
France and Germany now want to soften the 2035 target to 90% but without having to offer investments in alternative fuels to compensate the remaining 10%, as proposed by the European Commission.
“This balanced approach will enable the European Union to pursue its climate objectives while strengthening the technological sovereignty, industrial base and international competitiveness of its automotive industry,” the two countries said in a joint statement.
“We hope that this Franco-German dynamic can swiftly lead to an agreement with our partners, for our jobs and our industry,” French President Emmanuel Macron said in a post on social media.
An Elysée official on Friday made clear that, under the Franco-German deal, the scope of Made in Europe for automotive can be extended to the U.K. and Switzerland under certain conditions. — addressing a key concern of Prime Minister Andy Burnham’s government ahead of a Nov. 20 U.K.-EU summit in Brussels.
The agreement was reached after the German Social Democratic Party, the junior partner in Chancellor Friedrich Merz’s coalition government, dropped its opposition.
“This is a modern realignment of German industrial policy that places significantly greater emphasis on preserving jobs and production sites,” said German Environment Minister Carsten Schneider, who is from the SPD.
“The clear expectation for German companies is that they will use these new opportunities to make investments and guarantee jobs here in Germany,” he added.
CORRECTION: This article was updated on Oct. 16 after an earlier version misrepresented the figures in the Franco-German proposal on the softening of 2035 targets.
Elon Musk promised a flying car. And the Tesla Roadster did exactly that.
Tesla demonstrated its next-generation Roadster at an event in Waco, Texas, where the electric supercar drove upside down, briefly flew, and accelerated to 60mph in under a second. It was an impressive demonstration of a car that likely will come with some heavy caveats and restrictions if it ever goes into production.
The event was less than 30 minutes and felt more like a stunt show than a product reveal. Indeed, there was no mention of price, release date, or other such mundane details. Musk promised the hypercar would go into production in 2028, but after near …
BRUSSELS — France and Germany on Thursday failed to agree a common position on the scope of the bloc’s future “Made in Europe” rules, as well as on greater flexibility for CO2 emissions cuts and the 2035 combustion engine ban.
The draft quid-pro-quo deal, which was first reported by POLITICO in July, marks a major convergence between the two countries and had been expected to be signed imminently. On Thursday evening, however, the agreement stalled amid opposition from Germany’s Social Democratic Party, the center-left junior partner in the ruling coalition, over concerns it dropped key environmental targets.
“A final agreement has yet to be reached,” a German government spokesperson said.
Earlier this week, French President Emmanuel Macron had suggested the ball was in the German court. “There are political constraints on the other side of the Rhine, and I completely respect coalition discussions,” Macron said Monday on the sidelines of the Paris car show.
Under the terms of the proposed deal, Germany would accept stricter Made in Europe criteria for the automotive sector in the Industrial Accelerator Act, which France has pushed for, in exchange for weakening the combustion engine ban, one of Berlin’s long-term demands.
“In light of the significant technological, economic and geopolitical changes since the existing regulatory framework was established, the Automotive Package should strike a better balance between climate objectives, industrial competitiveness, technological development and the strengthening of European value creation,” the two countries wrote in a draft agreement obtained by POLITICO.
“Based on the Franco-German Ministerial Councils in 2025 and 2026, Germany and France therefore propose a balanced negotiating package combining ambitious CO₂ reduction targets with additional flexibility and targeted incentives for European value creation,” the agreement adds.
Currently, the EU’s target is for companies to reduce combustion engine emissions by 100% from 2021 levels by 2035, with the possibility to ‘earn’ 10% of emissions leeway through initiatives like offsets and investments.
Under the proposed deal, France and Germany want to soften the 2035 target to 90%, and to offer a further 10% leeway in exchange for investments in alternative fuels (for a combined 80%).
Crucially for steel manufacturers and Germany’s leftist SPD, the French-German agreement would axe the green steel investment requirement, removing a key incentive.
“This destroys the lead market for the steel industry,” an industry lobbyist told POLITICO on condition of anonymity to discuss the sensitive topic. In failing to put pressure on automakers to source green steel, the draft deal makes it a “nice-to-have” extra, they explained.
In a concession to Berlin, the draft agreement stresses that the so-called utility factor — which calculates plug-in hybrid emissions based on how often a vehicle’s electric motor is used vs. its combustion engine — should be calculated on lab-based results rather than real-world data, as required by the Commission. The change will help automakers sell more plug-in hybrids while still reaching the broader emissions targets.
In exchange for these emissions concessions, Germany endorsed France’s demand that the scope of the Made in Europe rules under the bloc’s Industrial Accelerator Act be restricted when it comes to the automotive sector.
The text only covers the EU’s 27 member countries and will be extended to the U.K. under certain conditions.
EU industry chief Stéphane Séjourné told POLITICO on Tuesday that he supported the deal as a way of breaking the impasse, and said the U.K. currently qualifies for Made in Europe.
The agreement could resolve a stalemate over both the CO2 regulation and the IAA, in which France and Germany have been on opposite sides. “The elements of this combined package should be adopted as soon as possible and at the same time,” the two countries wrote.
The British government welcomed the potential inclusion of the U.K. in the Made in Europe rules for cars.
“This is a Franco-German proposal and there is still a European process to run, but if confirmed, we welcome the objective to have the U.K. included in the Industrial Accelerator Act, and this would be good news for the British automotive industry and the jobs and investment it supports across the U.K.,” a No. 10 official said in a statement.
If approved, the comprehensive Franco-German deal will still have to be approved by other EU countries and by the European Parliament, which are currently discussing the Industrial Accelerator Act and the automotive package, including emissions targets for automakers.
Carlo Martuscelli, Francesca Micheletti and Graham Lanktree contributed to this report.
Volvo plans to launch hands-free, point-to-point driving by 2030, powered by Nvidia's latest AI technology. The Chinese-owned, Swedish-designed automaker said Thursday it would use Nvidia's autonomous driving stack to power a new partially automated driving system similar to Tesla's Full Self-Driving (Supervised).
Volvo says the new point-to-point system will be Level 2++, meaning it can handle complex urban environments, including traffic lights, stop signs, and unprotected left turns without explicit driver control. In addition to Tesla's FSD, it will also resemble the Nvidia-powered system that Mercedes-Benz recently rolled out for the …
BRUSSELS — It was meant to be a debate on how to curb Europe’s soaring energy prices.
But the first session of talks at an EU leaders’ summit in Brussels Thursday quickly descended into a three-hour fight over whether the EU should put a carbon price on driving cars and heating buildings.
The delay got so bad, the roast veal and fig tartlet lunch awaiting European leaders was driven well into the afternoon.
Countries including Italy, Poland, Czechia and Hungary called for ETS2 — an already-legislated law that will put a carbon price on heating and transport from 2028 — to be delayed for two more years. Estonia suggested it could be scrapped altogether.
The push was rejected by a majority of the bloc, with several EU diplomats telling POLITICO it was, as one put it, an “unacceptable” offer. Another said the ETS2 launch date would never be changed. But the debate reflects a growing sense from right-leaning governments that the EU’s ambitious green agenda runs against their push to bring down energy costs.
While the main topic of today’s discussion was ETS2, its predecessor, the Emissions Trading System — which puts a price on carbon emissions from factories and power plants — was arguably the real target.
Put together, these two emissions trading schemes will be the EU’s most powerful policy tool for bringing down planet-warming emissions.
A proposed reform of the original ETS is currently being debated in the European Parliament and in the Council of the EU. Italy and Poland have been leading a gang of 10 member-countries which have been railing against the ETS since American and Israeli bombs started falling on Iran in March.
What they want is for the European Commission’s July review of the ETS to be further weakened, even though the proposal already softens carbon restrictions over the next decade to give industry more time to invest in cleaner production methods.
But by framing the ETS as a scourge on household bills, both Warsaw and Rome have found ready audiences at home and abroad. On Monday, hours before a meeting of EU environment ministers convened in Luxembourg, Poland led a meeting of member countries with concerns on the ETS. Their gang, which originally counted 10 countries in March, had now grown to 16.
While Italy and Poland did manage to get Czechia, Slovakia, Hungary and Greece to back their ask for a “reassessment of the ETS2” and to “further postpone its entry into force until at least 2030,” inside the room of European leaders the position mostly fell flat.
Five EU diplomats granted anonymity to discuss the ongoing negotiations said Nordic countries and the Netherlands were firmly against changes to ETS2 — a position backed by France and Germany.
But Paris and Berlin’s long-term reliability as ETS defenders is in doubt. French President Emmanuel Macron and German Chancellor Friedrich Merz both face threats from the far-right, where the ETS has become a dirty word.
Germany’s far-right Alternative für Deutschland, which is no fan of the ETS, is politically ascendant, having won the largest share of votes in two regional elections in September. In France, with elections only months away in 2027, Marine Le Pen’s far-right National Rally is leading in the polls.
How Le Pen would deal with the ETS isn’t certain, but Jordan Bardella, the French far-right lawmaker and rising star of National Rally, offered a clue in recent comments.
“ETS: three letters, an acronym that reeks of detached bureaucracy, with one question that keeps coming up: who’s going to pay?” he said to European Parliament in May.
BRUSSELS ― Political pressure is leaving Emmanuel Macron and Friedrich Merz poorly placed to break the deadlock over the EU’s next seven-year budget.
As EU leaders gather for a two-day summit in Brussels from Thursday, the heads of the bloc’s two largest countries hold the keys to breaking the impasse between capitals that has persisted for months, as a Germany-led group advocating a smaller budget clashes with those like France which are resisting reductions.
“Delays and persisting divisions in the Council [representing EU governments] are worrying,” said Siegfried Mureșan, co-leading the European Parliament’s work on the MFF, the multiannual financial framework. “The EU budget can only be built through compromise … The faster we adopt the budget, the faster we can implement it and become more competitive, safer, help farmers and researchers and protect our borders and cyberspace.”
Sealing agreement on the EU’s long-term central budget, worth approximately €2 trillion, is the biggest challenge over the next few months facing leaders, all of whom must sign up to the final numbers. While it isn’t just up to Macron and Merz, getting the chiefs of the bloc’s two most powerful countries to overcome their differences would be a massive step in making all the pieces of the jigsaw slot into place.
But with Macron soon to leave office and Merz under severe pressure domestically, officials and diplomats in Brussels, Paris, and Berlin are playing down hopes of a Franco-German breakthrough this week.
“If the French and German leaders come hand in hand, I think that could change the game,” an EU diplomat, granted anonymity to speak frankly, said. “You need [Italian Prime Minister Giorgia] Meloni and [Polish Prime Minister Donald] Tusk, but it starts with Merz and Macron.”
While Merz and Macron may talk bilaterally during the summit, according to an Elysée official, there were no firm plans for a more formal sit-down, two EU diplomats said, adding they were expecting them to use the two-day meeting to hash out positions.
Domestic political weakness makes both leaders less likely to yield ground, three EU diplomats said.
Backfiring
For the French president, who leaves office next year, the fear is that making big concessions — like accepting cuts demanded by Berlin — could be weaponized by presidential candidates vying to replace him.
“Macron should not appear too conciliatory” in budget talks, said an ally of the French president. “It would backfire in the presidential campaign.”
Indeed, Macron may be wary of striking a deal that could lead to attacks from far-right leader Marine Le Pen or far-left rival Jean-Luc Mélenchon, both of whom argue that France receives too little value for its contributions to the EU pot.
During a press conference in Brussels on Wednesday evening, Le Pen accused negotiators of speeding up talks as “an attempt to stifle future democratic choices before they even take place” — effectively warning Macron against locking in an agreement before France’s April presidential election and votes in other major EU countries, such as Spain, which goes to the polls next month, and Italy, which is due to hold a poll next year.
“All this is not serious,” Le Pen told reporters on the 26th floor of The Hotel in Brussels.
It’s complicated
Merz faces similar political pressures.
Following humiliating state election defeats to the far-right Alternative for Germany party, the Chancellor is wary of concessions that could be framed as sending more taxpayer money to Brussels. Berlin prefers no deal at all to one that increases the overall budget, Merz said.
But Paris and Berlin’s positions may not be as far apart as public statements suggest.
“It’s complicated because France and Germany both need to step outside of their comfort zone,” said the Macron ally. “But it will end with a deal between France and Germany,”
France’s Europe minister Benjamin Haddad told reporters on Tuesday that discussions should focus on raising money via taxes, or “own resources” as they’re known in the EU —such as online gambling levies—rather than “massive cuts.”
However, Paris also wants to “stabilize national contributions” ― in other words, keep its own payments level.
Berlin was “open to examine new own resources, but we are more skeptical than the French that it will generate enough money,” a German official said.
France is betting that when push comes to shove, Merz will give in to pressure from other countries — and German captains of industry — to abandon his demands for far-reaching cuts.
“I see that there is also a real debate in Germany as well on the fact of having a position that would only be focused on cuts to the detriment of future policies,” an Elysée official said Wednesday. This week, Germany’s industrial lobby BDI and top industry groups urged their government to defend a more ambitious EU budget.
Macron and Merz showed unity earlier this month by jointly urging the European Commission to toughen its stance on China. But they still struggle to agree on another major deal—first reported by POLITICO in July—where Berlin accepts stronger “Made in Europe” rules in exchange for France backing relaxed car emission targets and the 2035 combustion engine ban.
EU Industry chief Stéphane Séjourné told POLITICO on Tuesday he supported the deal to finalize both files. Macron recently called the agreement “imminent,” suggesting progress depended on German coalition talks. But their failure to present an agreement at this week’s Paris car show confirms Paris and Berlin still disagree on terms, with the Elysée confirming negotiations remain ongoing.
BRUSSELS — The EU and China are in a good place to talk after last week’s trade deal on hybrid cars, but challenges remain, panelists at POLITICO’s European Resilience Summit on Wednesday agreed.
“From the Chinese business perspective this is very welcome,” said Linlin Liang of the China Chamber of Commerce to the EU, calling the understanding reached in Beijing “quite balanced from our perspective.”
An agreement to halve China’s exports hybrid vehicles to Europe was the main deliverable brought home by Trade Commissioner Maroš Šefčovič.
The two sides said in a joint statement that they would keep talking about issues such as market access for medical devices and the Foreign Subsidies Regulation, an EU measure that scrutinizes foreign subsidies that distort competition in public procurement and corporate acquisitions.
Šefčovič will hold further talks with Chinese Commerce Minister Wang Wentao in January, and they will meet again in March, as he pushes to rein in a €1 billion-a-day bilateral trade deficit.
Liang said Beijing stands ready to act if further talks go off track.
“I would like to remind all what MOFCOM mentioned: that they reserve the right to retaliate in case that things … don’t go around as agreed,” she told the panel on Europe in global trade, referring to the Chinese Ministry of Commerce.
Kathleen Van Brempt, a Belgian MEP for the Socialists & Democrats, said the most important outcome of last week’s Beijing talks was that there was “some sort of trade deal or result.”
Yet Beijing’s aggressive subsidy policies remain a hurdle, the senior trade lawmaker said, referring to a widely cited OECD study which found that Beijing’s subsidies to industry are up to eight times higher than in other countries: “It’s not normal,” she said.
Liang said that China’s export success should not be attributed solely to subsidies, and was the result of “decades of investment in innovation.”
She also said there was “a super appetite” among Chinese businesses to invest in Europe, but that they needed to assess the profitability of the EU market just like European companies.
The discussion also revealed differences between policymakers and businesses over the EU’s proposed Industrial Accelerator Act, a flagship measure aimed at steering public procurement spending toward European companies in sectors ranging from renewable energy to steel and the automotive industry.
Van Brempt, the S&D group’s lead lawmaker on the file in the trade committee, said the parliament’s three co-leads are aligned on the bill. While the center-right European People’s Party was “very divided” over the measure, she said lawmakers should be able to come to a common position.
The bill’s “Made in Europe” provision is a cause for concern for industry, meanwhile, as it risks isolating the EU from global supply chains.
“I would be careful always saying, okay, localize, put fences up,” said Holger Weintritt of German pharmaceutical company Bayer. “Let’s make sure that we still remain globally connected and look for reliable partnerships instead of isolating ourselves .”
Imagine a light bar on this 2017 Roadster concept image, and you’ll start to see it. | Image: Tesla
For a car that's supposed to be one of the fastest ever made, the new Tesla Roadster certainly took its sweet-ass time getting here.
It's been nearly a decade since Elon Musk made the surprise announcement about plans to build a next-gen Roadster. Now, the Tesla Roadster is finally expected to make its production-ready debut at an event in Waco, Texas - and the timing couldn't be worse.
The new Roadster is set to arrive in an EV market beset by high energy prices, political turmoil, and consumer uncertainty. The tax-credit-fueled exuberance of the post-covid years has since given way to slower sales and fewer options. Automakers are scalin …
How Maroš Šefčovič talked his way to a China trade breakthrough
Europe’s trade chief has won a first concession from Beijing. Now he must convince EU leaders that dialogue can deliver more.
By Camille Gijs and Carlo Martuscelli in Brussels
Illustration by Natália Delgado/POLITICO
When Maroš Šefčovič set out his strategy for engaging with China to European Union ambassadors in July, he had a warning for governments urging tougher action on trade against Beijing.
“Sometimes, it’s even popular to start a trade war, but it’s very difficult to finish it,” the EU trade chief recalled later in an interview with POLITICO.
Three months on, Šefčovič has secured a first breakthrough, reaching a deal in Beijing last week to sharply reduce imports of Chinese hybrid cars. The symbolic win marks a small step toward stabilizing a trading relationship that Brussels believes has reached a dangerous tipping point.
The agreement, which will initially cap imports at 350,000 vehicles a year, marks a significant concession from Beijing, whose carmakers have been flooding the European market with increasingly competitive vehicles.
For Šefčovič, who negotiated last year’s tariff truce with Donald Trump, the agreement suggests his strategy of engagement backed by the threat of tougher trade measures may be starting to pay off.
By focusing initially on cars — an area where the EU has leverage as one of the few major markets still open to Chinese manufacturers — the Slovak commissioner hoped to secure a confidence-building win before tackling thornier questions, from critical raw materials to China’s vast industrial overcapacity.
At the same time, he worked to coalesce European governments behind a parallel effort to strengthen the bloc’s trade defenses, reinforcing his negotiating position with the threat of tougher action to bring down the EU’s €1 billion-a-day trade deficit with China.
The hybrid deal, however, is only the opening move in a much bigger contest.
EU leaders meet in Brussels on Thursday to take stock, weighing the benefits of continued engagement against demands for more aggressive action to protect European industry from a surge in Chinese imports.
The meeting will test whether a commissioner who has made a career of finding compromises with difficult partners can maintain Europe’s support for a strategy whose success is far from assured.
“You have to deal with the same partner across the table,” Šefčovič said of the risks of starting a trade war, in the interview with POLITICO in August. “So if you can avoid this, it would be much better.”
Market power
Šefčovič’s opening move was to focus on an area where Europe still has leverage: access to its market of 450 million people.
China’s fiercely competitive manufacturers have become global powerhouses, but they are struggling with weak demand at home. A prolonged property slump has weighed on consumer spending, while cutthroat competition has triggered price wars. Domestic sales of passenger vehicles fell 28% in September from a year earlier.
That makes overseas markets increasingly important. With the U.S. shutting out Chinese imports, Europe remains one of the most lucrative markets still open to Chinese manufacturers.
Šefčovič gambled that Beijing would prefer to accept limits on exports rather than risk losing access to the European market altogether.
He set his sights on the automotive sector, where Chinese manufacturers have been making rapid inroads. Chinese carmakers accounted for just 2% of both the European hybrid and plug-in hybrid markets in 2024; by the first half of 2026, their respective shares had risen to 14% and 25%, industry figures show.
The Commission was preparing to restrict hybrid imports even without an agreement. But a negotiated settlement also offered Šefčovič something valuable politically: evidence that engagement with Beijing could deliver tangible results.
BYD electric cars in a dealership in Berlin on April 5, 2025. | Sean Gallup/Getty Images
The negotiations were intense, according to a person familiar with the talks on the Chinese side.
“It was very, very tough,” the person said, speaking on condition of anonymity to discuss the closed-door negotiations. “Both sides hadn’t seen such intensity in a long time. No summer break, no holidays. They worked around the clock even one, two days prior to Šefčovič’s trip to Beijing.”
While pursuing dialogue, Brussels also wanted to convince Beijing that it was prepared to take tougher action if the negotiations failed.
Šefčovič had earlier flagged plans for a new “diversification instrument” that would require businesses in critical sectors to source essential inputs from at least three suppliers — a move to reduce China’s ability to exploit Europe’s dependence on its critical raw materials.
Then, just three days before Šefčovič’s trip to Beijing, France and Germany raised the stakes.
President Emmanuel Macron and German Chancellor Friedrich Merz called for a powerful new trade weapon that would allow Brussels to restrict — or even shut off — access to the European market within days for countries deemed to have severely distorted the bloc’s single market.
The proposal did not explicitly name China, but Beijing was its obvious target.
Keeping it together
EU leaders are expected to welcome the agreement but also press the Commission to act quickly to strengthen the bloc’s trade defenses, according to several diplomats. The understanding reached in Beijing has bought time, but hasn’t settled how far Brussels should go if Chinese exports keep rising or negotiations stall.
“We’re losing thousands of jobs in industry; olive oil and ice cream won’t solve the core issue,” said one EU diplomat after Šefčovič briefed ambassadors on Sunday, referring to reported deliverables from the talks.
A senior German official welcomed the Beijing deal as a first step in the right direction. “It’s a positive sign — which, of course, doesn’t fully solve the problem of the trade deficit with China,” the official said.
But Berlin’s support for a tougher line might prove short-lived.
Alicia García-Herrero, a senior fellow at the Bruegel think tank, argued that Beijing’s concessions had been calculated to assuage Berlin, given the importance of the automotive industry to the German economy.
Production line at the Stellantis multinational car manufacturer’s plant in Poissy, France on April 15, 2026. | Simon Wohlfahrt/AFP via Getty Images
“I’m just hoping Merz doesn’t turn away from the letter he sent to the Commission,” she said. With the German chancellor politically weakened at home, García-Herrero fears he may be reluctant to risk a prolonged confrontation: “I worry Merz will take this quick win and run.”
That leaves Šefčovič facing a balancing act: keeping EU governments on board with continued engagement with China while maintaining a credible threat of tougher action if the talks break down.
“I expect [leaders] to give the Commission a nod to move ahead with other trade defense measures. China may see this as a betrayal. If that is the case, we could return to conflict very quickly,” said Noah Barkin, a senior adviser at the Rhodium Group’s China practice.
The battle ahead
For Šefčovič, the challenge now is to turn a limited breakthrough on cars into a broader rebalancing of trade with China — while buying Europe time to strengthen its defenses should the negotiations fail.
“There is an argument for doing to China what China had done to Europe for years — bogging Beijing down in dialogue and process while Europe gets its tools in place. But the EU needs to make full use of the time that these talks provide,” said Rhodium’s Barkin.
The trade chief is expected to hold a video call with Wang in January, before the two meet again next March. Those talks will test whether Beijing is prepared to make further concessions in sectors where European industry is increasingly on the defensive, including chemicals.
Another priority is critical raw materials, where China has agreed to continue issuing export licenses for rare earths. Beijing’s grip on their supply gives it considerable leverage over European manufacturers, underscoring the limits of Šefčovič’s negotiating position.
The Commission is also preparing two proposals for December: the diversification instrument, aimed at reducing dependence on Chinese supplies, and a mechanism to shield European industries and regions from retaliation.
The scale of the challenge is daunting. Chinese hybrid imports were worth €6.7 billion in the first half of 2026, against an EU-China trade deficit of €360 billion last year. The agreement offers some relief to European automakers but does little to address the underlying imbalance.
Brussels hopes the hybrid safeguard can serve as a blueprint for protecting other industries facing a surge in Chinese imports.
“We hear our industry. That includes the chemical industry, the wind industry, the furniture industry. We know where there’s a surge, and we know what hits the hardest in terms of our deindustrialization,” a senior Commission official said on Monday.
Šefčovič acknowledged the limits of dialogue in his August interview, warning that negotiations would become harder to sustain without tangible progress.
“What would be very important is to come back to say there is acknowledgment of the issue and there are already some pilot schemes which we want to test and to see if they are working,” he said.
“But if simply there will be no action, then of course it will be much more difficult for us just to talk about these issues.”
Jordyn Dahl in Brussels and Hans von der Burchard in Berlin contributed reporting.
Rivian CEO RJ Scaringe's startup Mind Robotics announced the appointment of Doug Field as president in a major coup for the CEO's secretive robotics project.
Field was a VP of special projects at Apple, where he was the de facto head of the company's ultimately unsuccessful Project Titan effort to make an autonomous electric car. He had a previous stint at Apple as VP of Mac hardware engineering, but he left the company in 2013 to become Tesla's chief vehicle engineer, where he helped oversee the Model 3 sedan. He left Tesla in 2018 and rejoined Apple. In 2021, Field was hired by Ford to run the automaker's electric vehicle and software di …
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