The EU said this week that it is considering setting minimum import prices for Chinese-made electric vehicles (EVs), a move that would replace the steep anti-subsidy tariffs currently in place. The proposal is widely seen as a signal of easing trade tensions between Europe and China, aiming to protect European automakers while allowing Chinese manufacturers to preserve reasonable profit margins. China's Ministry of Commerce has welcomed the idea.

If the main stage at CES 2026 still tried to preserve a sense of future possibility for software-defined vehicles, conversations away from the spotlight told a different story. In private discussions among supply-chain executives and engineers, the tone was noticeably cooler; it is pragmatic, cautious, and marked by hard-earned restraint.

At CES 2026, the global auto industry's conversation has shifted. The focus is no longer confined to the aspirational language of software-defined vehicles (SDVs), but increasingly to the physical limits those ambitions must confront. Battery-electric vehicles are often cast as the most natural embodiment of this future. Yet quietly, and perhaps more consequentially, vehicles powered by internal combustion engines are running up against a harsh and largely irreversible constraint of their own: the physics of computing.

China's largest battery maker, CATL, said it had signed a strategic cooperation agreement with the electric vehicle (EV) manufacturer Nio, deepening ties between two of the country's most influential players in the EV ecosystem.