Greetings from London!

The biggest news so far this week is something that didn’t happen. Donald Trump did not, as he had promised, follow through with wide-ranging tariffs, particularly on Canada. Mexico and China.

This is Trump’s tried and tested modus operandi. Threaten tariffs – or something else – to use as leverage to get what he wants, in this case presumably more U.S. auto investments with eye-catching job numbers and declare victory.

Trump now says tariffs could come as soon as Feb. 1, hitting Asian car stocks and leading Volkswagen to warn of the “harmful economic impact” border duties would have, driving up car prices for U.S. consumers and hurting the global car industry.

Behind the scenes, automakers are busy talking to Trump’s administration to find out what he wants. Stellantis chairman John Elkann, laser focused as ever on the company’s fortunes, has spent four days talking to Trump and top officials in Washington to do just that. 

Which brings us to today’s Auto File…

The Chinese government and automakers are shopping around for German car factories slated for closure and are particularly interested in potentially bringing a fresh lease of life to Volkswagen's old plants, according to an exclusive from my Reuters colleagues John O’Donnell and Victoria Waldersee. You can read about it here.

According to a person with knowledge of Chinese government thinking, buying a disused factory would allow China to build influence in Germany's auto industry, home to some of the oldest and most prestigious car brands.

Building cars in Germany for sale in Europe would allow China's EV makers to avoid paying EU tariffs on electric cars imported from China and could pose a further threat to European manufacturers' competitiveness.

Investment decisions are likely to hinge on the new German government's stance towards China after an election in February.

Investing in Germany would be a departure for the Chinese, who have so far focused on production in low-cost markets, such as Spain or Hungary. Given its far higher labour and energy costs, setting up shop in an old German car assembly plant would be more of a political decision than a business one.

Mahindra EVs, facing a lot of competition. REUTERS/Nandan Mandayam

Despite a slowdown in EV demand, automakers operating in India plan a dozen new electric models this year, many in the premium market with longer driving ranges and faster charging times as they seek to lure buyers.

As my Reuters colleagues Aditi Shah and Mandan Mandayam report, EVs were front and center at India’s car show that started on Friday, with models from new Vietnamese entrant Vinfast , Maruti Suzuki, Mahindra & Mahindra , BYD, Toyota and Hyundai all vying for consumers’ attention. You can read all about it here.

India's EV market is small, with electric models making up about 2.5% of the 4.3 million cars sold in 2024 as high prices and a patchy charging network put off prospective buyers.

However, EV sales in India rose 20% in 2024 to about 100,000 units, outpacing overall car market growth of 5%.

Auto executives say new EVs with longer ranges and faster charging times could lift demand and analysts predict EV sales in India could double this year.

Polestar, in the slow lane to profitability — REUTERS/Brendan McDermid 

Polestar had hoped to be profitable this year, but now says that it will only happen in 2027. As my colleagues Akash Sriram and Marie Mannes report, the EV maker is also slowing its roll into new markets and considering a reverse stock split to keep it out of Nasdaq’s bad books. You can read about it here.

This comes after Polestar appointed industry veteran Michael Lohscheller as CEO and several other new executives last year to improve the struggling company’s fortunes.

As we may have mentioned a few times before on the Auto File (okay, yes, we say it a lot), it has been a long, bumpy – and for many, impossibly steep – road for EV startups trying to mass produce cars and survive in a bare knuckle business where scale is key.

Case in point, just last week erstwhile Tesla wannabe Canoo said it would file for bankruptcy and cease operations immediately, a far cry from its $2.4 billion SPAC listing in 2021.

Polestar is backed by China’s Geely, which has deep pockets, so it can still get funding where the likes of Canoo could not. But presumably Geely cannot keep on bankrolling a lossmaking venture forever, so Polestar is under a lot of pressure to start making money by 2027.

China’s subsidies for car sales will continue as the government tries to boost flagging economic growth, with an extension to a “cash-for-clunkers” program that helped lift sales in 2024.

Car sales in China grew 5.3% to 23.1 million units in 2024, compared to the tepid 0.9% growth reported for Europe.  

With additional support for its auto industry in 2025, watch for China’s car sales to continue outpacing Europe’s.

Chinese EV maker BYD aims to complete its $1 billion plant in Indonesia at the end of 2025, the head of its local unit said, underscoring the firm's aim to compete against Japanese automakers that currently dominate the market.

Chinese Vice President Han Zheng met Tesla CEO Elon Musk and other members of the U.S. business community in Washington ahead of Trump's inauguration, saying he hopes U.S. companies would "take root" in China and help stabilize bilateral relations.

General Motors signed a multi-year, multi-billion-dollar agreement for Norway's Vianode to provide synthetic graphite anode materials for EV batteries made by the Ultium Cells joint venture between GM and LG Energy Solution.

Renault's low-cost