Some Deutsche Post Streetscooters. Photo Credit: Streetscooter

Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: A Quarter Of The European Market Is SUVs Now 

Today is a day of great reversals across the world of the automobile. For as long as I’ve been alive, Europe has been the holy land for American car dorks. American dweebs who’ve hated the hulking big SUVs and trucks that lumber across our landscape could always look to dainty Europe, which was full of spritely hatchbacks and little wagons.

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Now this, too, is changing, as 25 percent of the car market in Europe has gone to SUVs, as Automotive News Europe reports:

European demand for SUVs and crossovers of any size and price showed no signs of slowing last year, which is why the models benefited disproportionately from the region’s better-than-expected sales in 2016.

Combined sales of models that included the Renault Captur, Nissan Qashqai, BMW X1 and even the aging Volvo XC60 increased 22 percent to nearly 3.8 million units, according to data from JATO Dynamics. That rise easily outpaced the overall market’s 6.5 percent increase to 15 million.

We in America might look at a Captur and laugh that it’s no more an SUV than a Dodge Caliber, but things look different on smaller European streets. I will be in Germany shortly, and will personally weep beside all of the new crossovers I see over there.

2nd Gear: Trump’s Having A Hard Time With This End Emissions Regs Thing

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Last week, Trump proudly announced that “the assault on the American auto industry is over,” and we were finally going to get emissions regulations that matched the meaty goodness consumers want (beep beep) and not the gross vegetables that the dunderheads at the EPA think America should be eating.

But no matter what Trump has in store for the EPA’s federal regs, there will still be regulatory pressure on carmakers to build cleaner, more fuel efficient cars, as Automotive News reports. The first hurdle comes from California and its partner states, which are staying dead-set on tougher regs no matter what goes on at the federal level:

Despite what the EPA may want, California and nine other states in the Zero Emission Vehicle program — eight in the northeast, plus Oregon — are expected to move ahead on Friday with the previously established targets.

Those states account for nearly 30 percent of U.S. auto sales.

And international regs will also keep American carmakers honest:

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Kristin Dziczek, director of the Center for Automotive Research’s labor and industry group, said U.S. automakers could find it hard to export cars to markets such as China and Europe with tougher regulatory regimes if the U.S. targets were rescinded.

“I don’t think we’re going to see a rollback,” she said. “At most, I think we may see a slowing of the timetable” for implementing the tougher standards.

3rd Gear: Daimler Is Getting Investigated Over New Suspected Diesel Cheating 

For years now, carmakers in Europe have largely been getting away with emissions cheating through a loophole in EU law.

But now Europe’s governments are getting smarter at cracking down on the whole thing and investigators are now going after Daimler employees for potential fraud, as The Wall Street Journal reports:

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German prosecutors have launched an investigation into allegations that an undisclosed number of Daimler AG employees may have committed fraud linked to sales of the company’s diesel-powered cars, a spokesman for the Stuttgart state’s attorney said Thursday.

A spokesman for the prosecutor declined to provide any details about the specific allegations against the Daimler employees. He would only say that the individuals are suspected of committing fraud in connection with the sale of diesel vehicles with false emissions documentation. No one has been charged with any wrongdoing.

Daimler says that its engines all meet the relevant standards, but that’s exactly the loophole that’s gotten them through this mess in the past. We’ll see if it holds.

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4th Gear: German Enviros Are Pissed That VW Hasn’t Been Punished Enough

While America has been more than a little harsh on VW for Dieselgate, VAG hasn’t been hit with anything like that level of punishment over in Europe. Here’s a tiny window into how it’s getting by: German environmental group Deutsche Umwelthilfe (DUH) filed a lawsuit against Germany’s Kraftfahrt-Bundesamt (that’s KBA, sort of like Germany’s NHTSA or DMV) for going too easy on VW, as Automotive News Europe reports:

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The KBA approved plans for VW to refit affected vehicles in Europe, which included software updates on pollution control systems and some technical fixes.

DUH’s suit alleges the removal of illegal software from the cars was unlawful because the KBA’s original approval for the vehicles did not include any mention of the software, DUH Managing Director Juergen Resch said on Friday.

Am I starting to feel bad for VW at this point? No, not really.

5th Gear: Volkswagen Even Got Dissed By The German Post Office

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It’s almost like nobody wants to deal with Volkswagen anymore, up to and including the German post office. Deutsche Post recently bought a startup electric van maker, having found no vehicle on sale that could match its requirements for a dependable, all-electric delivery vehicle. The Post is even breaking even on the venture, as Bloomberg reports:

For now, Deutsche Post is in an enviable position, saying it breaks even on the venture after just 2,500 units. That stands in contrast to carmakers from Tesla Inc. to General Motors Co., which lose money on electric cars despite government incentives.

The mail company plans to churn out 10,000 e-vans annually starting this year, which would make the StreetScooter the No. 1 electrified light commercial vehicle in Europe, overtaking Renault’s Kangoo, according to Ian Fletcher, an analyst at research company IHS Markit. The company can boost output to 15,000.

Volkswagen, however, is mad. Volkswagen is salty, per Bloomberg:

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“It’s extremely annoying to me,” Volkswagen CEO Matthias Mueller said last August when asked about the StreetScooter. “I am asking myself why Deutsche Post didn’t work with us on this,” he said, adding that VW will still try and “get a foot in the door.”

Hm. I wonder why the Post never called.

Reverse: 28 Years Ago And This Is Still Happening

Neutral: How Much Do You Think Trump Is Really Going To Change The Automotive Landscape?

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I’ve read a lot of the history of automotive regulations and I generally support many of them as a positive force on cars for the past half century. But do you think Trump will really change things at this point? I wonder how much he’ll be able to accomplish, and I really wonder how much knocking back American car regs would fit into the global regulatory environment. Ugh, did I just type “global regulatory environment?” It’s too early for this shit.