May 20 (Reuters) -

By Nick Carey, European Autos Correspondent

Greetings from London!

We’ve now reached the point where barely a week goes by before we see another automaker hiking car prices in the U.S. market in the wake of President Donald Trump’s Liberation Day tariff blitz.

In a nice exclusive from my Reuters colleagues Nora Eckert and David Shepardson, Subaru is raising prices on several models on sale in the U.S. market.

This will add between $750 and $2,055 to vehicles’ sticker prices depending on the model and trim, with the hikes kicking in for cars on dealer lots starting in June.

Ford has already raised prices and crosstown rival General Motors has warned its tariff exposure this year could hit $5 billion.

Other automakers no longer have to fear going first with price increases, so more are coming. Just how big an impact that will have on new car sales remains to be seen.

Which brings us to today’s Auto File…

• Xiaomi takes heat for crash

• Honda swerves towards hybrids

• BYD moves to Hungary

Xiaomi post-crash orders tank

Chinese smartphone maker Xiaomi took the country’s EV market by storm last year with its first-ever electric car, the SU7 sedan, which by December was already outselling Tesla’s Model 3.

But orders for the SU7 plunged 55% in April from March after a fatal crash where preliminary findings showed the car hit a roadside pole at 97 kph (60 mph) seconds after the driver took over control of the vehicle from its driver-assistance system.

This is quite the contrast with Tesla’s experience in the United States, where the automaker has either settled cases involving car crashes involving its driver-assistance features or has managed to limit the damages it could be forced to pay, all without losing sales.

Xiaomi’s woes have been compounded by customer complaints of false advertising.

The EV maker may now be hoping that the launch later this week of its eagerly-awaited YU7 electric SUV – touted as a challenger to the Model Y in China – will help it change the narrative and move on from the crash.

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Honda’s EV retreat

Honda has decided to hit reverse on some of its EV investments, opting instead to focus on hybrids and highlighting a tough choice for traditional automakers.

After all, what is a major Japanese automaker to do when the United States – a key market – under Trump is hitting the brakes on the EV-friendly policies of his predecessor and interest in electric cars there is not where it should be?

Honda CEO Toshihiro Mibe  now says that instead of 30% of its new car sales by 2030, EVs will account for about a fifth.

The automaker has slashed its planned investment in electrification and software by 2030 by 30% to 7 trillion yen ($48 billion) and plans to launch 13 next-generation hybrid models globally in the four years from 2027.

That all makes sense for the U.S. market where Honda currently just has three hybrids on offer.

But EV sales are not slowing in China, the world’s largest car market. This is where the dilemma comes in for Honda, which saw its Chinese sales fall 44% between 2020 and 2024, to 881,000 cars from 1.56 million – or about two car factories worth of production.

In a bifurcating auto world, traditional automakers cannot afford to spend a ton of money developing EVs, hybrids and pure fossil-fuel models all at the same time.

So Honda has to roll the dice and hope it keeps U.S. market share without losing too much more in China.

BYD says “igen” to Hungary

China’s No. 1 automaker BYD will establish its European headquarters in Hungary, creating 2,000 jobs.

BYD CEO Wang Chuanfu said during a press conference with Hungarian Prime Minister Viktor Orban in Budapest that its European headquarters will be a hub for sales and after-sales services, for testing and developing localised versions of its models.

Strategically, the move from BYD’s current offices in Amsterdam makes sense.

BYD built its first European plant, an electric bus factory, in Komarom in northwest Hungary in April 2016. A second Hungarian factory to make EVs is under construction.

Hungary under Orban has also gone a long way to attract manufacturing investments from China, unlike some EU nations figuring out how to become less dependent on the world's second-largest economy.

But while it makes sense strategically, it will be interesting to see how many of BYD’s European executives and experts want to move to Hungary from Amsterdam.

Tesla’s refurb gambit

For years Tesla prevented U.S. customers leasing its mass-market Model 3s from buying them at the end of their contract – an unusual move in an industry keen to sell lease-end cars to consumers – saying they were destined to become part of Elon Musk’s fabled robotaxi fleet.

But as my Reuters colleagues Chris Kirkham and Abhirup Roy report here, Tesla instead flipped many of the off-lease cars to new buyers at higher prices.

Rather than storing the used cars – a fast-depreciating asset – Tesla started adding features to them through software upgrades. It then sold the vehicles to new customers willing to pay thousands more than lease-end buyers would have.

The practice was an easy way to jack up used vehicle prices.

While legal, the practice denied lessees the option of buying their vehicles and perpetuated the myth among investors that Tesla was near fully autonomous driving technology.

Fast Laps

General Motors and battery partner LG Energy Solution  will launch commercial production of lower-cost cells for future EVs at a U.S. plant in 2028.

Battery maker CATL’s chairman said that half of the heavy trucks sold in China could be fully electric by 2028, up from 10% in 2024. 

BYD  became the most popular vehicle brand in Singapore so far this year, outselling Toyota for the first time, government data showed.

Nissan's  new CEO Ivan Espinosa faces an uphill task turning around the troubled Japanese automaker with no guarantee it can reverse sliding top-line sales, analysts said.

Harley-Davidson  defeated a proposal from investor H Partners to remove three directors, including the CEO.

Tesla will start shipping components from China to the United States to make Cybercab and Semi trucks from the end of this month, after the two countries agreed a truce over tariffs.

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(Editing by Mark Potter)

((mark.r.potter@thomsonreuters.com))