When I went camping with some friends this past weekend, the conversation turned to cars, as it typically does. And when one asked me what my favorite electric vehicle was, I didn’t hesitate: it’s the Porsche Taycan.
The Taycan gets everything right. Depending on the trim level, it’s somewhere between “obscenely quick” and “so fast that maybe it shouldn’t be sold to civilians.” On top of that, it’s a range, charging and technology monster. The biggest issue I have with the Taycan is that I can’t afford one, and that’s more of a personal struggle than anything wrong with the car.
But here’s the thing: The Taycan is the ultimate proof of concept. If an automaker that’s most famous for flat-six engines can get an EV so right, then surely, there’s hope for an all-electric future, right?
But being very good at EVs isn’t enough to shield Porsche from what’s happening in the world. That kicks off this Monday edition of Critical Materials, our morning roundup of industry and technology news.
Also on deck today: rising Chinese tech giant turned automaker Xiaomi issues what it calls a fix for a critical safety issue. And speaking of safety, America finally gets a new chief vehicle regulator. Let’s dig in.
30%: What Porsche’s EV Woes Say About The Auto Industry Right Now
2025 Porsche Taycan 4S Cross Turismo
Photo by: Chris Perkins / Motor1
Like many automakers, Porsche once announced a bold plan to go 80% electric by 2030, which basically meant a pivot to EVs while continuing with the 911 until Europe would no longer legally allow them to do so.
The plan hasn’t turned out so well, Bloomberg explains today. The latest development is that a planned large three-row SUV will no longer be all-electric, while Porsche now sees more of a future for hybrids and gas cars as well.
There are three reasons for this. The first is that, despite the Taycan’s initial sales surge, it too has fallen victim to the phenomenon of luxury buyers wanting the “experience” of owning internal combustion cars. I do think this is a problem for higher-end brands; when an electric Kia can smoke a Ferrari, what can the Ferrari offer that’s worth paying six figures for?
The second and third problems for Porsche, Bloomberg explains, are China and now U.S. tariffs that will increase costs and potentially spike prices. And the latter comes at a time when EVs could face a broader downturn in sales as incentives end:
Part of the problem is Porsche’s struggles in China, the world’s biggest auto market, where luxury spending remains muted and local manufacturers led by BYD Co. are dominating on EVs. The company also is among the hardest hit by President Donald Trump’s tariffs in the US, Porsche’s single biggest market, where it relies solely on imports.
[…] To be sure, Volkswagen has made some headway on EVs this year. It’s outselling Tesla Inc., Stellantis and BYD in Europe and has unveiled several affordable battery models to further stoke demand. And automakers in the region may get regulatory relief after politicians including German Chancellor Friedrich Merz backed industry warnings that the European Union’s plan to have them sell only new EVs in ten years’ time is unrealistic.
But Volkswagen’s luxury brands, which used to bolster margins, are struggling. The Audi group — which also includes Bentley, Lamborghini and motorcycle maker Ducati — in July lowered its outlook for the year after shipments fell in most major markets in the first half, including North America and the former profit driver China.
Meanwhile, in Porsche’s backyard, the European Union has not backed off its ban on new gas and diesel car sales after 2035. So Porsche, like many other automakers, is caught in the middle. It must continue to invest in EVs to meet European regulations, all while it faces a sales drop in China and a resurgence of gas-car demand in America.
None of this is to be down on Porsche, which has done an excellent job lately with the Macan Electric (albeit one more expensive than the gas SUV it replaced) and looks to pull off something even more promising with the new Cayenne Electric. Its EVs are getting better all of the time. But the storied performance brand proves that “switching” to an all-electric future won’t be so simple.
60%: China’s Xiaomi To Fix Automated Driving Assist Safety Issue
Xiaomi Store Shanghai/Xiaomi Su7
Photo by: Patrick George
Speaking of China, one competitor that’s really shown up to eat Porsche’s lunch is Xiaomi, the smartphone and gadget giant that’s recently branched into high-performance EVs. But not all has been perfect with Xiaomi’s much-lauded foray into cars.
Back in March, a Xiaomi SU7 crashed into a guard rail in China seconds after its automated driving assistance systems switched off and demanded the driver take control. Three students in the car were killed. The crash spooked the entire Chinese auto industry—it was very much the topic of conversation at April’s Shanghai Auto Show—and sparked concerns that ADAS systems there need to be regulated more tightly.
Revised rules are coming in 2027. Until then, Xiaomi has offered an over-the-air software update to fix the issue, presumably to offer drivers more of a warning time before they must take control. Here’s the South China Morning Post with more:
A total of 116,877 fully electric SU7 vehicles produced between February 6, 2024, and August 30, 2025, would be recalled, according to a statement released by the State Administration for Market Regulation on Friday.
The statement said that Xiaomi’s driver-assistance system had “insufficient recognition capability and may not adequately detect and warn drivers in certain scenarios”, as per the standards of Level 2, or L2, self-driving systems.
The company’s shares fell less than 0.3 per cent to close at HK$56.70 on Friday.
Most self-driving systems available in mainland China are classified as either L2 or L2+, both of which require drivers to keep their hands on the wheel at all times, according to SAE International, a global standards organisation based in the US.
“A recall due to a faulty driver-assistance system may deter some Chinese consumers from buying Xiaomi cars,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “But the recall also shows Xiaomi’s commitment and confidence in resolving the issues.”
China’s autonomous vehicle industry and ADAS game are all quite advanced. But its much more restrictive national government seems less inclined to authorize fully hands-off driving across the board, and tragic incidents like these are why.
90%: America Gets A New NHTSA Chief, Finally
Tesla Cybertruck NHTSA Crash Test
Photo by: NHTSA
Here in America, the National Highway Traffic Safety Administration (NHTSA) is a Department of Transportation agency tasked with creating and enforcing federal vehicle safety rules. But it’s been without a permanent chief since the first Trump administration; President Joe Biden only ever had an interim one.
Now, it finally has one in Jonathon Morrison, a former lawyer for Apple and chief counsel at NHTSA during Trump’s first term, Reuters reports. Morrison was confirmed by the U.S. Senate last week. (If you want, you can read more of his exchanges with senators here, and some of it’s pretty interesting.)
I’d argue Morrison is taking charge at NHTSA at the most crucial time for auto safety since perhaps the 1970s. That’s because he’s got to deal with the issue of automation—the rise of robotaxis on American roads, as well as ADAS technology on normal cars. And he’s also under pressure not to push regulations that will drive car prices higher, something several senators expressed concerns about.
Here’s more from Reuters about how Tesla is just one example of things he’ll have to deal with:
“NHTSA cannot sit back and wait for problems to arise with such developing technologies, but must demonstrate strong leadership,” Morrison said.
Last month, NHTSA said it would investigate Tesla’s delays in submitting crash reports involving advanced driver-assistance systems or self-driving vehicles. Since last October, the NHTSA has been investigating 2.4 million Tesla vehicles equipped with full self-driving technology after four reported collisions, including a 2023 fatal crash.
The agency separately opened an investigation in January into 2.6 million Tesla vehicles over reports of crashes involving a feature that allows users to move their cars remotely.
Transportation Secretary Sean Duffy has vowed to take steps to speed the deployment of self-driving vehicles. NHTSA said this month that it plans to revise several regulations that assume a human driver is in command.
Emphasis mine there. Welcome to a new age of “driving” in America. And our patchwork system of state-by-state and even city-by-city regulations won’t cut it anymore.
100%: What Rules Should Exist For ADAS Systems And AVs?
Tesla Autopilot Danger Sandwich
Photo by: InsideEVs
Let’s say you’ve been tapped by Morrison to serve on some NHTSA task force that deals with both hands-off driver assistance systems in consumer vehicles, as well as autonomous taxis that operate without human drivers. What rules do you think we need to have in America as both of these technologies become more popular, and over a long enough period, probably converge? Share your thoughts in the comments.
Contact the author: patrick.george@Ev Authority.com
