Core Insights - Traditional fuel vehicle manufacturers are facing significant financial challenges, with many reporting declines in revenue and profit due to the costs associated with the transition to electric vehicles [1][2][4][5] - Companies like Audi and BMW are adjusting their strategies, opting for a more flexible approach that allows for the coexistence of fuel and electric vehicles, rather than a strict timeline for phasing out internal combustion engines [9][12] Financial Performance - Major Japanese and German automakers, including Toyota, Honda, Nissan, Volkswagen, and BMW, reported a downturn in their financial results for the first half of the year, attributing this to the costs of electrification [2][3][4] - Toyota's first fiscal quarter saw a 3.5% increase in sales to 12.25 trillion yen, but an 11% drop in operating profit to 1.17 trillion yen, and a 37% decrease in net profit to 841.35 billion yen [2] - Honda's sales revenue decreased by 1.2% to 5.34 trillion yen, with operating profit down 49.6% and net profit down 50.2% [2] - Volkswagen's sales revenue fell by 0.3% to 158.4 billion euros, with operating profit down 32.8% and net profit down 38.3% [3] - Mercedes-Benz reported an 8.6% decline in revenue to 66.377 billion euros and a 55.8% drop in net profit [4] - BMW's sales revenue decreased by 8% to 67.7 billion euros, with net profit down 29% [5] Strategic Adjustments - Honda announced a reduction in its planned investment in electric vehicles from 10 trillion yen to 7 trillion yen and adjusted its sales targets for electric vehicles [6] - Audi has retracted its plan to stop developing internal combustion engine vehicles by 2033, opting for a more flexible strategy [9] - Mercedes-Benz has also adjusted its electric vehicle strategy, allowing for a coexistence of fuel and electric vehicles [9] Market Trends - Despite the challenges, there are signs of recovery in the Chinese market, with several brands reporting increased sales in the first half of the year [10][11] - The introduction of fixed pricing strategies and price reductions for fuel vehicles has contributed to a rebound in sales [12] - Companies are enhancing the intelligence of fuel vehicles through partnerships with technology firms, aiming to close the gap with electric vehicles in terms of smart features [15][16]