AutoMobility Insights - December 2025 edition

2025 has been another tough year for the European automotive ecosystem: A soft auto market due to high EV prices and regulatory restrictions on ICE vehicles, together with a higher EV share and and stronger competition are weighing on OEM profits. Calls for a slower transition pace are understandable, but may not serve European OEM competitiveness in the longer term. Upcoming discussions about the 2035 combustion engine stop and the "Greening Corporate Fleet regulation" will be crucial for fixing the transformation speed in the European ecosystem. Transformation is clearly happening on the auto insurance front, where Suzuki and Wrisk continue the string of partnerships in embedded insurance. With all this uncertainty and movement, we are dedicating a full webinar to an "EV Reality Check" in December. Sign up or review the webinars for free with the links shared at the end of our article. 

2025 is shaping up as a “pause - or at least slowdown - moment” in the EV transition narrative, as industry and politics pare back their ambition: VW Group expected to be fully electric by 2030, is renouncing to EV sales targets, Porsche have come back from their 80% EV objective for 2030, reinvesting in "brand-defining vehicle models with combustion engines". We remember Mercedes-Benz targeting 100% EV sales by 2030 (where feasible), now planning to keep combustion engines well into the 2030s, Renault has pushed back its 100% BEV share ambition in 2030 to 2035, Stellantis has abandoned 100% BEV ambitions in 2030, even Volvo has diluted its 90% to 100% BEV target in 2030 to a BEV / PHEV target. While the European Commission had already relaxed CO2 objectives in July 2025, it remains under tremendous pressure, also by the German government, to soften CAFE regulations, and go easy on any additional demand-side "Greening Corporate Fleet" ambitions. A change driven by worsening OEM results, profit pressure on the supplier landscape, limited subsidies by EU states and key components of the EV ecosystem such as charging networks, battery capabilities... lagging behind.
 

CVA perspective:

This earnings season shows a clear shift: OEMs that once championed aggressive ICE phase-out timelines are now rowing back, despite warnings from leaders like Carlos Tavares that slowing the transition only raises costs. His call for faster EV volume ramp-up to reduce complexity aligns well with Ford’s view that affordable EVs will define the future (also in the US). The acceleration of EV adoption in 2025, after two years of stagnation, shows that relying solely on market forces ("supply-demand") will not secure the future of US and European players. OEM resistance to the 2035 ICE ban and to new fleet-green regulations may, in fact weaken their competitive position versus Chinese manufacturers and Tesla. The slowdown also exposes weak industrial policy in the US and Europe, from inadequate incentives to lagging battery and charging infrastructure. The result is a long, turbulent transition shaped by industrial, political and regulatory shocks on top of deep technological change - a landscape where success demands clarity on possible futures and disciplined, fast activation of strategic options. In an age of shrinking certainty, option-based strategy becomes a necessity, not a nice-to-have.

OEMs are rapidly pulling insurance into the core of the vehicle journey. Suzuki GB’s move to appoint Wrisk as its embedded insurance platform (offering monthly rolling cover, seamless in-journey integration and automated claims) is only the latest. Wrisk now supports programmes for roughly half of all car brands in UK.

This signals that embedded insurance has shifted from experimental side channel to standard OEM infrastructure. Executives see OEM-embedded distribution as the fastest-growing route in personal lines, powered by the rise of EVs and connected cars and by the ability to price and service policies using real-time vehicle data. This is also very much the case with new entrants to Europe who already built up such partnerships in China.

CVA perspective:

The shift is clear: insurance is being re-engineered as a flexible, data-driven  layer inside the vehicle ecosystem rather than a standalone annual product only tangentially linked to vehicle via TCO. Dynamic pricing, in-car FNOL, and subscription-style models tie coverage directly to the OEM’s app, repair network and customer lifecycle. For automakers, this unlocks recurring revenue, tighter control of EV total cost of ownership, and stronger loyalty loops. For insurers, it means operating increasingly as B2B partners powering embedded experiences, not just as consumer-facing brands. Insurers need to consider how to tackle their relationships with OEMs and their relative target positioning on both NC & UC going forwards.

While the precise announcement date is still unclear, there is more and more clarity on the expected regulatory proposition of the EU with regards to "Green Corporate Fleet" demand-side regulation. The German Handelsblatt has reported based on insiders in the  EU commission, that the current proposition is a bundle that also impacts CAFE regulation and the 2035 ICE ban. This “Green Corporate Fleet” regulation might require 50% of vehicles in corporate fleets to be BEVs by 2027 and 90% by 2030, with potential exceptions discussed only for rental fleets. In exchange, the 2035 ICE sales ban shall be relaxed (e.g. still allowing PHEVs) – which would indirectly also impact the CAFE regulation (target of reducing new vehicle CO2 emissions by 100% by 2035 vs. 2021). The new regulation aims to balance supply-side with demand-side constraints and has the potential to significantly change the market dynamic. However, before coming into effect, the regulation must be approved by the EU parliament and EU member states.

CVA perspective:

The ongoing debate around the new “Green Corporate Fleet” regulation is already generating uncertainty and early market reactions. While the impact will hinge on the final wording (e.g., whether LeaseCos count as corporate fleets) and provisions such as any “built-in-Europe” clause, first effects are visible: the anticipated softening of CAFE rules and additional BEV demand from 2027 give OEMs more room to offset current CO₂ underperformance, enabling more aggressive ICE sales today. What’s needed is a market-driven acceleration in BEV uptake supported by predictable improvements in the electromobility ecosystem. Instead, regulatory back-and-forth is worsening the BEV supply-demand imbalance, exposing both fleet owners and OEMs to significant value risks if conditions shift abruptly. In this environment, scenario-based risk management and the build-up of multi-cycle mitigation strategies continue to be no-regret moves.

In November's Qorus + CVA session, we discussed the progress of Chinese OEMs entering into Europe and what this means for different players. We were joined by Ronny Seidel (BNPP PF) and Christophe di Perna (Allianz Partners) to discuss how much Chinese players are expected to penetrate Europe (~15 - 30% MS by 2030) and what remain the key differentiators (cost positioning, battery technology, speed).

We invite you to join our next webinar on December 16th: "Reality Check on the EV Ecosystem: Where we stand & what's next". We will be joined by speakers from HCBE & Ayvens to get their perspective on how the transition is progressing.