I will continue to insist that the unseen hand in most automotive transactions is currency. A weak Korean won and a strong U.S. dollar helped build Hyundai and Kia, whereas a weak dollar and a strong deutchmark killed Ford’s greatest product: the Merkur XR4Ti. While tariffs are taking a bite, the relative strength of the dollar over the Japanese yen could work to the advantage of some automakers.
Specifically, I’m talking about Mitsubishi. I haven’t written much about that automaker here in The Morning Dump lately, mostly because there hasn’t been much to write about. Now, with tariff rates down to 15% for Japanese automakers like Mitsubishi, fleet sales are suddenly in the mix again.
Toyota is smart, as I’ve said, and it’s also profitable. I doubt fleets will play a big role in the company’s strategy for the rest of the year, as the company has revised up its profit forecast (from ‘meh’ to ‘not so meh’). BYD is another company that’s smart, albeit new. It’s also starting to replace Tesla in certain markets in Europe.
What won’t replace Tesla is hydrogen, at least according to a recent forecast.
Currency Rules Everything Around Mitsubishi, CREAM
Mitsubishi is now a company that imports 100% of its cars, meaning that it is acutely at risk from trade war shenanigans. The recent lowering of Japanese import tariffs to 15% is maybe not as existential to a company like Toyota, which builds here, doesn’t discount much, and has a lot of higher margin vehicles. It is a big deal to Mitsubishi, and you can sort of suss out where the line is for the automaker from this Automotive News story:
When tariffs were at 27.5 percent, Mitsubishi dialed fleet sales down to zero, executives said.
“With the tariff now at 15 percent and considering the exchange rate situation, we’ll focus on fleet sales and company car sales for vehicles currently in stock that are profitable and meet customer needs,” Nakamura said, adding that talks are underway with rental companies.
“Negotiations are nearly finalized,” Nakamura said. “We expect to increase fleet sales toward the end of the year, which will help recover the volume.”
Fleet sales are usually to rental car companies and government agencies. Company cars these days are gas-monitoring companies, last-mile delivery, et cetera, and not as much traveling salesmen. These are bulk deals and come with bulk discounts, which means lower margins. If there’s a 27.5% tariff, then automakers like Mitsubishi have to sell to private customers at a higher margin to not lose money (or lose as much).
Somewhere between 15% and 27.5% there’s a zone where fleet sales are, if not profitable, more palpable. Given that the company is forecasting an operating profit below $70 million for the year, the margins are still probably as thin as the tires on my BMW.
But there’s another factor here, as the article points out:
Mitsubishi thinks the Japanese yen’s recent slide against the U.S. dollar enables exports to eke a profit, even with the 15 percent tariff rate, Executive Vice President Tatsuo Nakamura said.
CREAM! Mitsubishi builds cars in yen and sells them in sweet, sweet greenbacks. Back in 2020, a dollar bought you about 100 yen. Today, that same dollar buys you about 150 yen. So long as the yen stays down, there’s enough of a spread there to keep Japanese imports profitable enough to bleed inventory to fleets.
So, yeah, if you get a new Outlander at the Enterprise counter, you can bother the people waiting in line by using the word “arbitrage” a bunch of times.
Toyota Expects To Make $19 Billion, Which Ain’t Terrible
It’s purely a cultural thing, but I love that Japanese automakers always use this visual conceit of execs standing at a dais in front of a big screen. The lower angle always makes it look like they’re about to address the Imperial Senate or whatever. The dopey American equivalent may be an exec in Carhartt wearing a high-vis vest, like Paul Jacobson spends his off-time running the punch press at Hamtramck or whatever.
Anyway, Toyota is out with its latest numbers, and the big ticket items are a 900 billion yen ($5.8 billion) tariff hit and an expectation that the company will still make, like, $19 billion this fiscal year (which ends in March 2026). That’s way down from the $31 billion it made last year, but a positive number is probably better than what Nissan is going to do.
BYD Beats Tesla In The UK, Germany Is Not Far Behind
Last year, I filed a TMD from the Goodwood Festival of Speed in Britain, and I was impressed with how well the locals were taking to Chinese electric automaker BYD, which had one of the biggest displays.
[T]he whole BYD stand was full of people every time I walked by it, with potential customers checking out the various real vehicles on display. On one end were the Yangwang luxury cars and the Denza van. On the other side with the BYD Atto 3, BYD Seal plug-in hybrid, and the cute BYD Dolphin.
The nearby Honda stand had a few cars on display as well and did attract some attention, but only about half of the number of people were around Hondas as were around the BYDs when I checked.
I eavesdropped on a few conversations with British consumers checking out the various models and no one seemed to care or even mention the fact that they were Chinese-built/Chinese-owned cars. People were mostly curious about the cost and excited about the features.
That’s why I’m not surprised by this report from Bloomberg, showing that BYD is doing well in both the UK and Germany, and is supplanting BYD in both markets:
BYD Co. is building a lead over Tesla Inc. in the UK and is now neck-and-neck with the Elon Musk-led company in Germany, two of Europe’s biggest markets for plug-in cars.
In the UK, the Chinese manufacturer registered almost seven times more new cars than its American counterpart last month, the country’s automotive trade group said Wednesday. Year-to-date, BYD’s sales have soared more than sixfold, while Tesla’s have slipped 4.5%.
In Germany, BYD registered more than four times as many vehicles as Tesla in October, according to the Federal Motor Transport Authority. Through the first 10 months of the year, BYD trails by only 424 cars.
Is BYD gonna do it this year? I think BYD has the juice. Also, the CEO of BYD didn’t piss off something like half the German population.
Hydrogen Fuel Cell Vehicles To Make Up… 0.22% Of The Global Light Vehicle Segment By 2037
I am totally fine to be wrong about hydrogen cars never being a thing, no matter how hard some automakers try to make it one. More ammo in my belt is the latest forecast from S&P Global Mobility, which is for FCEVs to still only make up a tiny fraction of the total population of cars in 2037:
Compared to BEVs and hybrids, FCEV uptake is expected to be limited throughout the next decade. Even by 2037, FCEVs are expected to make up only 0.22% of the total global light-vehicle market, while BEVs are forecast to account for more than 50%.
S&P Global Mobility forecasts FCEV demand in the light-vehicle segment to increase from 9,211 units in 2025 to 220,000 units in 2037. As of 2025, Japan and Korea dominate the light-vehicle FCEV market, generating 71% of total demand.
This limited adoption is reflected in S&P Global Mobility’s fuel-cell stack demand forecasts from March, June and October 2025, which have notably declined. The June forecast is just 9,341 units, almost 33% less than the March forecast, while the latest October 2025 forecast predicts demand to drop further to 8,079 units—approximately 38% lower than March and 7% lower than June.
Unlike EVs, which you can just plug into a wall, FCEVs require filling stations packed with hydrogen. It turns out, running these is hard, and now most fuel companies don’t seem interested in supporting the tech.
What I’m Listening To While Writing TMD
Alanis Morissette sold 33 million copies of her first album, which is something that might never happen again. She can do whatever she wants, so she did a languorous cover of “My Humps” by Black Eyed Peas, and it’s ridiculous, but I love it. The video is also extremely silly. Apparently, Morissette was in a writing funk and thought it would be a fun thing to do to get out of it. Deep respect. I do that sometimes. I’m like “I’ll do a Matt Levine” or a “Dan Neil” or a “Jean Jennings.”
The Big Question
What’s the best rental car you’ve ever gotten? What’s the worst?
Top photo: Mitsubushi/Hertz
Toyota knows that its empire will last longer than any given government excepting China.
They’ll just wait out whatever silliness is happening with a long-term plan. They’re the real adult in the room (and generally not doing whatever Stellantis and/or Nissan are thinking of doing).
Best rental car: A nearly new 2010 Chevy Impala that was… fine.
Worst rental car: Story time – 2004, first trip to Brazil. My fiancé helped my rent a car from some sketchy outfit advertising out of the Hotel Atlántico in Copacabana where we were staying for a few nights. I can’t remember the year, but it was a very well-used VW Gol with enough dings and dents that had they filled out a “previous damage” form, it would’ve just been a scribbling exercise. It also had a non-functional outer door-handle on the passenger side we were told was disabled for our own protection (so someone couldn’t car-jack us from that side).
To start, it was red. Normally a plus in my book, but it made my fiancé’s family incredibly uneasy when we showed up to her aunt’s place in it due to rumored nearby activity of “Commando Vermelho”, a rather notorious gang that we were told didn’t like non-members displaying their color (red/vermelho).
What to do? Road trip! Another of her relatives asked if we’d like to take it on a four-hour trip to a rented beach house in a small town a ways north up the coast from Rio. Sounded like fun! Let’s load myself, my wife, her aunt, aunt’s husband, their kid, and just for good measure what appeared to me to be some random other kid from the neighborhood, but was actually family. Maybe a cousin? Who knows, my Portuguese was limited to around 500 words at the time with comprehension close to non-existent.
The language barrier proved to make the trip a bit longer than it probably should have. I missed several turns along the way because of that. My fiancé’s uncle was to be my “copilot”, and found it hilarious that I only understood “right/direita” and “left/esquerda” instead of whatever word he was using for “left” that sounded (to me at least) like the word for “right”. So, at nearly every left we were supposed to take, I’d end up either taking a right or starting to take a right. This led to something of a feedback loop of my wrong turns followed by him and his wife fighting, and finally him laughing while taking another slug off of his road-soda, a plastic bottle of cachaça. Dude was pretty tuned-up by the time we finally got there.
And the VW, trusty thing it was. Acceleration was non-existent which made sense given the 1.0L engine and five people load, everything rattled, the hood came unlatched at one point and caught on the safety catch, and it used a quart of oil on the trip. Also, I don’t know if the fuel pump was going out, there was a loose wire, we had some bad gas or what the deal was exactly because it would just randomly die. The first time I actually coasted off to the side of the road before restarting it. The next time I went to neutral, and the following twenty times or so right up to our return to Copacabana I just dropped the clutch for a quick restart. Every time I did that though the kids in the back would laugh, say something, and point. My fiancé later informed me they thought I just didn’t know how to drive a stick-shift.
The beach-house road-trip was quite the adventure, a fun coda following my earlier decision to propose to my Brazilian girlfriend shortly after arrival in her home country. It may have been the worst rental car ever, but it was rented on the best trip ever!