Group 1 - The European Commission plans to drop the effective ban on new combustion-engine cars from 2035, marking a significant retreat from its green policies due to pressure from the auto sector [1][2] - The proposal allows continued sales of non-electric vehicles, including plug-in hybrids and range extenders, as carmakers in Germany and Italy seek to ease regulations [2][3] - Volkswagen supports the proposal, stating it is economically sound and aligns with market conditions, while also advocating for support of small electric vehicles and more flexible targets for 2030 [3] Group 2 - The new EU targets would require a 90% cut in CO2 emissions from 2021 levels, a shift from the previous requirement for zero emissions from all new cars and vans by 2035 [5] - Automakers will need to offset remaining emissions using lower-carbon materials and synthetic or non-food biofuels, with a three-year window from 2030 to 2032 to achieve a 55% reduction in car CO2 emissions [6] - The EU's decision follows Ford's announcement of a $19.5 billion writedown due to the cancellation of several EV models, indicating a complex landscape for EVs in Europe [7][8]

Core Insights - Porsche has delayed the launch of its new electric vehicle (EV) due to weak demand, shifting focus back to petrol and diesel engines [1][2] - Volkswagen, Porsche's parent company, anticipates a €5.1 billion hit to its operating profit this financial year due to these delays [2][5] - The automotive industry is undergoing significant changes, prompting Porsche to realign its product strategy [3][6] Company-Specific Summary - Porsche's new EV series launch has been scrapped, with existing combustion engine models remaining available for a longer period [1][4] - The company is recalibrating for long-term success despite short-term financial impacts, with a revised forecast for operating profit margins for 2025 now between 2% to 3% [6] - Volkswagen plans to write down the value of its shares in Porsche by €3 billion following the luxury carmaker's revised long-term plans [5] Industry Context - European car manufacturers are facing challenges from competition with Chinese EV makers like BYD and financial impacts from import tariffs [7] - The automotive industry is described as operating in a "highly volatile environment," with calls from industry leaders for the EU to relax stringent emission targets [8] - The EU's plan to ban the sale of new petrol and diesel cars by 2035 is viewed as unachievable by carmakers [9]