March 12, 2026 | Diesel price spike squeezes North American suppliers; Honda cancels 3 EVs

Welcome to Daily Drive for Thursday, March 12th, 2026.

I'm Kellan Walker in Las Vegas, today on the show, Honda cancels 3 EVs as losses mount.

Ice tries to cancel in order for thousands of branded vehicles, and diesel price spikes

squeeze supplier margins across North America.

Plus our own page hotter talks about the new Texas DMV rules that are causing pain for

dealers.

The dealers I spoke to are losing sales, or just like experiencing higher rates of

customer confusion and frustration.

Let's run through all the news you need to know to keep up in the auto industry.

Honda is canceling 3 electric vehicles planned for US production, the Zero Series SUV, Zero

Series Saloon, and the Acura RSX.

The automaker expects to book between $5.2 billion and $15.8 billion in losses.

The decision stems from declining EV demand following the repeal of federal tax credits,

US tariffs, and weak performance in China.

Honda had been retooling US plants to build these models targeting launches as early as

this year.

CEO Toshihiro Mibai called it an agonizing decision, and says he will take a 30% pay

cut for three months.

Honda's pivoting to hybrids instead, developing a new hybrid powertrain for commercialization

after 2027.

US immigration and customs enforcement is reportedly trying to cancel the remaining portion of an

order for 2500 SUVs and pickups.

I says it has no use for the vehicles.

Many were already delivered and were supposed to be wrapped with Ices logo and new slogan.

But the agency has never used marked vehicles.

One source told the Washington Examiner the vehicles are quote, hiding in a parking garage

somewhere.

The order was placed last August, it included high performance models like the Ford F-150

Raptor and GMC Yukon AT-4.

And a sudden 20% spike in diesel prices is squeezing auto supplier margins across North

America.

It follows disruptions to oil shipments through the straight of horn moves after US strikes

on Iran.

Trucking companies are passing fuel subcharges directly to suppliers, who often can't

avoid the costs because most auto parts move by truck on just-in-time schedules.

Smaller suppliers are getting hit hardest, according to Flavio Volpe of the Automotive

Parts Manufacturers Association, transportation typically accounts for 5-6% of operating

cost.

A 20% fuel increase adds roughly 1% to total cost.

And in a business with 6-7% margins, that's significant.

Joining me now to talk more about this is Greg Lasson, Automotive News Canada Digital

and Mobile Editor and host of the Automotive News Canada Podcast.

Greg, welcome back to Daily Drive.

Good to be here.

So Greg, what are suppliers doing to try to plan around this considering how volatile the

fuel cost situation is right now?

There is not much they can do other than hope and pray because the way the system works

is you're locked into your contract, your transportation contract, at a agreed upon rate

of fuel.

So in Canada, for example, $1.65 a liter, let's say.

And then if gas spikes by 35 cents or 21% as it has, you've got to pay that.

There's no escaping that.

This is an industry that works on just-in-time delivery.

So you can't stockpile parts and ship them at a later date when fuel goes down.

You can't turn to rail cars because they don't have access to the factories you need

to get to.

And remember, some of these parts cross the border upwards of seven times each before

they're used in final assembly.

So there is no escaping this sudden impact that has been caused by the war in Iran.

Fuel prices spike, auto suppliers have to pay it.

And as Flavio Volpe told me, no automaker is going to give their supplier a, quote,

gas voucher to help them out.

Wow.

Greg, this actually sounds like those EV semi-trucks would have come in handy right now.

Now what are you hearing from suppliers about how long they can sustain these kinds of

margin pressures before something breaks?

So the interesting thing is the bigger the supplier, the longer they can sustain these gas

hikes because they just have better contracts.

They operate in large volumes.

They have more revenue.

They can sort of sustain this for a longer period of time.

The big concern in Canada, and I would assume in the United States too, where, by the way,

diesel is up 24% over the same amount of time.

The smaller suppliers are the ones that are going to struggle, the Tier 2 and Tier 3,

because they might only have one customer or low volume or not many shipments.

So one of the experts I talked to likened it to an independent brochure dealing with

a huge chain.

So picture may be an independent brochure and a Walmart or a target getting their stuff.

Who can sustain financial impacts longer?

The ones with the bigger bank accounts.

The ones who have large trucking contracts.

Those are the ones that will be, I want to say, okay, in all of this.

But if you're a smaller supplier, this hits your bottom line almost immediately because

some of these trucking contracts are renewed in terms of the fuel surcharge weekly, monthly,

or quarterly.

And that can add up really fast for the smaller suppliers.

Woof, interesting stuff.

Greg Lassen always, thank you so much.

Anytime.

Coming up, new Texas DMV rules are creating friction at dealerships and threatening auto-loan

defaults down the line.

Our own Jake Near talks with retail reporter Paige Hodder about how the regulations are

affecting dealers and their customers.

Next, on Daily Drive.

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Welcome back to Daily Drive.

I'm Kellan Walker.

Texas dealerships are losing sales and frustrating customers thanks to new DMV rules that tighten

identification requirements for vehicle registration.

The rules went into effect March 5th, but dealers say the impact started back in November

when county tax offices began following similar guidelines.

Our own Jake Near recently spoke with automotive news retail reporter Paige Hodder about how

the new rules are affecting business and why auto-lenders are worried about loan defaults

when registration renewal requirements kick in next year.

Paige Hodder always great to have you here on Daily Drive.

Thanks for joining us.

Thanks for having me.

All right.

So it's not every day that we talk about a specific states DMV rules, but this is a big

market and it's also got dealers up in arms in Texas.

What are these new rules?

Why are dealers so upset about them?

Yeah.

So like you said, part of the reason we're paying attention to this is because Texas is such

a big market.

It's a big state.

Got to drive long distances to get places.

People need cars and there's a lot of people that live there and a lot of like high volume

really profitable dealerships there.

So these recent rule changes have to do with specifically the IDs, the photo identification,

you can use to register your car.

So prove you are the person who you say you are when you're either registering your new

car that you purchased in Texas or renewing your registration for the car that you own

and use in Texas.

Previously, Texas had rules very similar to most other states, which were ultimately just

not very specific, something like a driver's license, a passport, but in the fall last year

there was some concern that from various different parties raised that those rules would

allow illegal immigrants or people who were not like lawfully residing in Texas to purchase

vehicles, which technically was true.

You know, however you feel about that issue, that was a fact.

And so essentially they made the rules a lot stricter and added a lot of some new requirements

about what types of documents you could use.

The previously, if you had a normal Texas driver's license, even one that was expired like

a month ago, you could have used that to register your car.

Now it needs to be a real ID.

If it's not a real ID, you would have to bring in your birth certificate.

So it's that citizenship part or that like legal residence part.

So here's a photo ID that says who I am, and here's a document that says I'm allowed

to be here, and it's that parent of documents.

I won't get into the whole list because it's pretty complicated.

There's a lot of documents that people use to prove identity and residence, and you

don't have to be a citizen.

You can use a foreign passport as long as it says that you're allowed to be here and some

other different documents.

But basically, it just made it rules that were pretty broad and had been in place for

kind of a while much more specific and much more detailed and oriented at identifying

who and who is not allowed to reside in Texas.

And those people who are not, they don't want those people to be able to buy cars.

So is the issue for dealers just that they think that this is going to essentially have

people back out of deals or just get along in the process to buy a car.

And then they realize this is just too much of a hassle.

I think it's a lot of different factors.

One of them is previously they could have sold the car to someone who maybe was not legally

residing in Texas, but that wasn't their business and their business was selling cars.

And so they're going to lose some sales to those people.

Texas has a lot of undocumented immigrants living in the state, especially because of the

border.

And but also dealers like to use the word friction.

They're always trying to avoid friction.

This is just a new piece of friction.

Imagine you're someone who's been living in Texas your whole life, you've owned and

operated many vehicles and you know how the process goes.

You're pretty on it.

And then all of a sudden you're getting through the paperwork and they're like, actually

did you bring your birth certificate today?

That's something that you wouldn't think to do.

And so it's that piece of friction that might make someone go home that might make them

think about, do I want to do that?

You know, deal whatever and just that enough to interrupt the process that could prevent

them from selling cars to people who have the proper paperwork, but just didn't know

that they needed to bring it.

Do we have a sense of how this is affecting sales so far?

So technically the new vehicle registration rules went to affect March 5th, but this

has kind of been in the air since November.

So the DMV actually advised the Texas tax offices who processed the vehicle registrations

to follow a similar version of these rules way back in November.

And then they kind of decided, okay, if we're going to do this, we need to make an artificial

rule change.

So then they proposed a set of more specific rules that went through a period of like public

comment and then it was approved and now it's gone into effect.

But many of the Texas tax offices have been following a version of these rules since

November.

So the dealers have seen impacts.

And I think it really depends on where you are and who your customer base is.

But the dealers I spoke to are losing sales or just like experiencing higher rates of

customer confusion and frustration.

So Paige, you mentioned in your piece that April and serious dealership group is losing

anywhere from four to 10 deals per month at some stores.

That's interesting because she said, quote, the impact isn't overwhelming, but it's enough

to notice.

How are dealers like Anciera trying to adapt to this?

What does it mean for their customer base long term?

What are you hearing from folks like her?

Yeah.

So talking to her, she said, this isn't going to kill their business.

You know, they're not going to go out of business because of this.

But 10 deals a month, that hurts.

And you know, that can also cut into, you know, sales people's commission.

And it has an impact.

And you know, she, when we talked, it was actually quite like recently after the rules had

been officially approved, but not gone into effect yet.

And, you know, one of the big themes that came up while reporting the story was confusion.

It's pretty technical.

You know, I just speak to lawyers to be like, can you help me make sure I'm understanding

this all correctly?

So she was like, we're honestly still catching up, you know, in the process of the proposal

to the official rules, like changes happened as often does in legal spaces.

And so she's like, we're still trying to get our minds around what is the official rules.

And starting to think about, okay, how can we get ahead of this?

And you know, some of her ideas were if we have someone who reaches out about a car online,

you know, that's someone we're texting or emailing.

We can send them a little blurb to be like, if you want to close the deal today,

make sure you have paperwork like this.

These are the new rules.

But if someone comes and off the street, it's harder to do that.

And you also have to train your staff to maybe bring that earlier up in the conversation

than they might have because it's so new.

But you don't want to get so far in the deal and then have someone be really frustrated

that they thought they were going to get to drive their car home today and said they have

to go dig up their bus certificate or their passport, which they did not bring.

You also mentioned that auto lenders are also worried about this.

You quoted concerns about borrowers not being able to renew their registration

and potentially defaulting on their loans.

How big of a domino effect could that create?

So that's the second part of this.

The new vehicle registration rule went to effect last week.

But the renewals won't go into effect until January 1st, 2027.

And part of that is because renewals is complicated.

That's something you might do through the mail or like they're still having to maybe

try and adopt online systems to match that.

But the auto lenders are really concerned that they lent to people before March 5th

who do not qualify to renew their vehicles anymore.

You know, someone who might be an undocumented immigrant

or someone who might be just not have the correct papers.

You know, a poor person who might not have their bus certificate anymore,

who might have changed their name and don't have a passport or a passport.

Lots of reasons why you might not have the paperwork, even if you are technically allowed to be here.

Or maybe you weren't, but you still bought a car because under that rules,

like that was something that happened.

And so they're concerned that those people, when it comes time to renew their registration,

will not be able to.

And so then they also won't be able to keep up to date with insurance.

And so then they'll stop driving their car and maybe stop paying their loans.

And there's a lot of people, you know, if you can't use your car,

you might not be able to get to work.

You might not even be able to pay your loan.

And so it is that big domino effect of, you know,

there's a lot of people who bought cars under these previous rules.

And you know, loans don't go decades and decades long,

but you could think, you know, someone who just bought a car

before the rules went into effect, maybe in January,

might have like a six year loan that they're on the hook for,

but they don't, you know, qualify to renew that registration next year

when the new rules go into effect.

And some of the lenders who spoke in like the public hearings about this

asked for the DMV, the Texas DMV to grandfather in,

people who had already, you know, registered their car,

allow those people to finish out their, you know,

continue to register that car if they already own it.

And then if you get a new one, maybe you'd have to follow the new rules.

They declined to do that.

So, you know, we've got some time to see how that's going to play out

and for the lenders to make plans,

but it's something they're going to have to recognize.

All right, Paige. So all of that in mind,

what is Texas saying in response to this backlash?

You know, the Texas DMV was pretty firm.

You know, there's a lot of concerns raised,

but they stood firm on if you are not legally allowed to be in the state,

you should not be allowed to register a car with the state,

which means you're not allowed to buy a car in the state.

And that is a big deal.

And so, you know, there was, I read through pages and pages

and pages of these written comments that people said and the DMV,

again and again, we understand this concern.

But if these people are not legally allowed to be here,

they should not be buying a car.

And that was the official stance over and over.

Well, it sounds like Paige, there's a lot of follow up to do

in the coming months and so forth as this all plays out,

but really appreciate your reporting.

Paige Hodder is a retail reporter here at Automotive News.

Paige, thanks so much for joining us on Daily Drive.

Thanks for having me.

That's Daily Drive for today.

I'm Kellyn Walker.

Thanks to Automotive News journalist Hans Grimell,

Nato Akamora, and Nick Bunkley for their reporting

for today's podcast.

We also have reporting from Greg Lason of our sibling

publication, Automotive News Canada.

You can get the latest news on Texas dealership regulations,

Honda's EV strategy shift, and everything happening

in the auto industry at autonews.com.

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