By Nick Carey, European Autos Correspondent

Greetings from London!

I have given much thought of late to the unsung, underappreciated planning teams at automakers and suppliers across the global auto industry and the insane ride they have had over the last five years.

We’ve had COVID-19 to deal with – physically and figuratively – with shuttered factories and awful global supply chain problems. The worst of those of course was a shortage of semiconductor chips, though admittedly it did allow automakers to pad their profits by making only the most profitable cars and jacking up prices.

If that weren’t enough, we’ve wandered into a couple of trade wars: first, where Europe has levied tariffs on new Chinese EVs and then one started by U.S. President Donald Trump against everybody at once.

How on earth could you plan for all that?

Which brings us to today’s Auto File…

• Automakers’ broken crystal balls

• A new chief for Tesla?

• Volvo embraces Geely

Automakers’ unknown unknowns

In the runup to the 2003 invasion of Iraq, when asked about weapons of mass destruction then U.S. Secretary of Defense Donald Rumsfeld famously went through a list of the things we know – “known knowns”- all the way through to “unknown unknowns” or the things “we don't know we don't know.”

Major automakers exporting cars to the United States or building there but with imported parts find themselves in the “unknown unknowns” territory.

It has become so difficult for many of them to predict what impact Trump’s mutating tariff policy will have on profits this year – let alone what Trump’s tariff policy look like this afternoon or next Wednesday – that they have simply withdrawn their profit targets for 2025.

Unlike its rivals Stellantis and Mercedes-Benz, Volkswagen did give an earnings target, but as it did not include the impact of U.S. tariffs, one analyst decried it as "essentially a withdrawal of guidance."

Where automakers did assess the potential impact of tariffs, it was not cheery reading for investors. Mercedes said if Trump’s tariffs remain in place, it will reduce profit margins in its car business by 3 percentage points.

General Motors said it faced possible tariff exposure of up to $5 billion, while crosstown Motown rival Ford said the border taxes would cost the company about $1.5 billion in adjusted earnings before interest and taxes.

Meanwhile, far smaller luxury British automaker Aston Martin has reduced exports to the United States, relying on inventories it has built up there that should last until early June.

It’s anyone’s guess what U.S. trade policy will look like by then.

Recommended reading:

• Trump touts investments in America

• Stellantis, Renault urge new EU small car rules

• U.S.-Japan trade talks underway

Tesla CEO wanted?

Tesla’s board rushed last week to deny a Wall Street Journal report that it had been shopping around for a replacement for Elon Musk, who’s apparent lack of interest in actually running the EV maker has been the focus of a fair amount of investor anger.

Chairman Robyn Denholm assured everyone the board is "highly confident" Musk can execute Tesla’s "exciting growth plan ahead," but sticking with Elon or trying to push him out both pose huge challenges for Tesla, as my Reuters colleagues Rachael Levy, Abhirup Roy and Isla Binnie report. You can read about it here.

The latest drama underscores the unique dilemma Tesla's board faces in managing Musk as he oversees five other companies and, more recently, has focused primarily on advising Republican U.S. President Donald Trump - alienating Tesla's politically liberal customer base.

Yet seldom have a company's fortunes depended more heavily on the persona of its CEO, making even the notion of replacing him an enormous risk, according to investors, analysts and three people with knowledge of debates about Musk among Tesla executives.

Many analysts have attributed about three-fourths of Tesla's outsized stock-market value - which far outpaces its current earnings - to autonomous-driving technology and humanoid robots that Musk has promised but failed to launch for years.

And yet, Musk has also become a liability for Tesla, especially in Europe where his political views are especially unpopular.

Tesla’s sales in a number of European countries, including Spain, France, Germany and the United Kingdom plunged yet again in April, so it does not seem like the board’s dilemma will go away any time soon.

Volvo returns to Geely fold

Volvo Cars is perhaps the most vulnerable of Europe’s automakers to Trump’s tariffs on U.S. car imports, so it was not a huge surprise when the company announced a cost-cutting plan and a restructuring of its U.S. operations last week – as well as pulling its earnings guidance as many of its peers have done.

But the tariffs leave Volvo’s CEO Hakan Samuelsson – who recently returned to his old gig – in a bind. The company needs to win over U.S. consumers with fossil-fuel and hybrid models, while wooing Chinese buyers with cool new EVs.

Unlike Jim Rowan - the man who replaced Samuelsson only to be replaced by him - Volvo’s new CEO is embracing Chinese owner Geely to help the automaker cut costs, while also attempting to keep U.S. customers happy.

As one analyst said of Volvo’s embrace of Geely: “They have to do it to survive.”

Fresh California truck rule fight

The Republican-controlled U.S. House of Representatives opened up a fresh fight with California, by voting to bar the state’s plan to end the sale of gasoline-only vehicles by 2035 that has been adopted by 11 other states.

The House backed legislation to repeal a waiver granted by the U.S. Environmental Protection Agency under former President Joe Biden in December, allowing California to mandate at least 80% electric vehicles by 2035.

Major automakers had lobbied for the change, saying the rules were not feasible. California says the rules are essential to cut pollution and contends the House vote is illegal.

During his first administration, President Trump’s efforts to undo California’s emission rules became entangled in a long lawsuit that was ultimately dropped by Biden.

So it is unclear yet whether this will end any differently.

Fast Laps

* Ford killed a program to develop next-generation electrical architecture that executives called pivotal to competing with EV pioneers like Tesla.

* Alphabet's  self-driving unit Waymo said on Monday it will build Jaguar I-PACE and Zeekr vehicles with its autonomous technology at a new plant in Arizona as soon as this year with Canadian auto parts supplier partner Magna.

* Onsemi forecast second-quarter revenue above Wall Street expectations as demand for its chips used in EVs remains resilient despite Trump's tariffs.

* Rivian will invest $120 million in a supplier park near its plant in Illinois, as the EV maker gears up to produce a smaller, more affordable SUV next year.

* Volvo Cars'  battery company Novo Energy will cut its workforce by 50% to reduce costs after evaluating the bankruptcy of Sweden's Northvolt, which originally co-owned the venture.

* General Motors will cut a shift at its Oshawa pickup truck plant in Canada due to softening demand and trade-related challenges.

Think your friend or colleague should know about us? Forward this newsletter to them. They can also subscribe here.

(Editing by Tomasz Janowski)

((tomasz.janowski@thomsonreuters.com))