Volkswagen Says Car Buyers In Europe Want Buttons
As someone who owns a
previous-generation Skoda Octavia
, I find my car's dashboard to be borderline perfect in terms of layout and user interface. It strikes just the right balance between buttons and screens, a feature that virtually all Volkswagen Group products had until the late 2010s or so. After that, VW began shoving nearly everything into the touchscreen in the name of minimalism. They wouldn't call it cost-cutting, would they?
But
VW
is aware that a large portion of its customer base prefers a more analog interface. Ralf Brandstätter, the company's head honcho in China, explained that customers in Europe tend to favor 'tactile controls, long-term durability, and driving dynamics.' It's a different story in China, where buyers prioritize 'AI-first, connected vehicles, with seamless voice control and smart cockpits.'
2024 VW Passat Variant
Although Brandstätter was comparing EV shoppers in Europe and China, VW's combustion-engine cars have also largely abandoned physical buttons and knobs. The latest,
wagon-only Passat
is a clear example of how tablet-like displays have taken over dashboards in recent years. The similarly sized ID.7 Tourer electric wagon also keeps hard buttons down to a minimum.
In VW's defense, it has promised a
return to form
. We've already seen tentative steps, with the Golf GTI and R reintroducing real buttons on the steering wheel. Additionally, future models will include tactile controls for frequently used functions. Earlier this year, the company's design chief admitted that going screen-heavy was a mistake. Here's what Andreas Mindt said:
'From the
ID.2all
onwards, we will have physical buttons for the five most important functions—the volume, the heating on each side of the car, the fans, and the hazard light—below the screen. They will be in every car that we make from now on. We will never, ever make this mistake again. On the steering wheel, we will have physical buttons. No guessing anymore. There's feedback, it's real, and people love this.
Honestly, it's a car. It's not a phone.
'
Since VW-badged cars are always twinned with other Group products to spread out costs, there's a good chance that future models from Skoda, SEAT,
Cupra
, and the rest of the gang will also revert to
proper
dashboards. Including more separate controls will undoubtedly drive up production costs, which, logically, will be passed on to buyers. It's a sacrifice some of us are willing to make.
Circling back to Brandstätter's statement, he pointed out that the average age of an electric car buyer in Europe is 56, whereas in China it's under 35. His post on
LinkedIn
addresses the question of why cars developed by the VW Group in China aren't sold in Europe. It all comes down to differing regulations, costs, and customer preferences.
Buttons > Screens
Hyundai Gets It: Buttons Are Safer than Screens
Hyundai Realizes People Find Touchscreens Annoying
Get the best news, reviews, columns, and more delivered straight to your inbox, daily.
back
Sign up
For more information, read our
Privacy Policy
and
Terms of Use
.
Source:
Ralf Brandstätter / LinkedIn
Share this Story
Facebook
X
LinkedIn
Flipboard
Reddit
WhatsApp
E-Mail
Got a tip for us? Email:
tips@motor1.com
Join the conversation
(
)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
E.l.f. Beauty: Can Market Share Gains Outrun a Tariff Trade War?
In my previous article on e.l.f. Beauty (NYSE:ELF), the stock had plunged over 40%, yet I remained optimistic. Despite short-term headwinds, e.l.f.'s exceptional revenue growth and market share gains underscored its status as a standout performer in the beauty industry. Back then, I highlighted the risks around the reliance on TikTok marketing and an 80% China-based supply chain. Although the TikTok ban now seems to be in the rearview mirror, the heavy reliance on China continues to significantly impact e.l.f. However, management's track record suggests these challenges are navigable. Now, with fourth-quarter fiscal 2025 results in hand and a major acquisition announced, it's time to reassess. In this article, I will break down e.l.f. Beauty's latest financial performance, analyze the tariff situation impacting the outlook, examine the strategic Rhode acquisition, and update my investment thesis. E.l.f. Beauty is a cosmetics and skincare company known for delivering eyes, lips, face products that are high-quality, cruelty-free, and vegan, all at drugstore prices. Its core business spans color cosmetics and an expanding skincare line, distributed through mass retailers such as Target (NYSE:TGT), Ulta (NASDAQ:ULTA), drugstores, and direct-to-consumer (DTC) channels. The company has built a passionate customer base, especially among younger generations, by offering premium-quality products at an accessible price point and by leveraging savvy digital marketing. For instance, e.l.f.'s viral TikTok campaigns, with over 2.3 million followers, have driven brand awareness and engagement, solidifying its position as a top brand among Gen Z and Millennials. In just a few years, the e.l.f. Skin line has become a top 10 brand in U.S. skincare. This combination of value, innovation, and digital engagement has fueled e.l.f.'s growth and differentiated it in the beauty industry. The brand has built a loyal following, particularly among younger consumers, by offering prestige-quality formulas with a sharp focus on affordability and digital engagement. Its viral TikTok campaigns, with over 2.3 million followers, have driven exceptional awareness, making it a top brand among Gen Z and Millennials. These campaigns have also kept customer acquisition costs low despite rapid growth, enabling short payback periods and high marketing ROI. In just a few years, e.l.f. Skin has also become a top-10 brand in U.S. skincare, showing strong traction in a category that carries higher average selling prices and longer product cycles. Much of e.l.f.'s growth has come from consistent market share gains, a core pillar of my e.l.f. Beauty investment thesis. The fourth quarter of fiscal 2025 marked the 25th consecutive quarter of both net sales growth and market share expansion. According to Nielsen data, no other cosmetics brand (among nearly 1,000 tracked) has maintained such a streak. These gains span multiple demographics and regions. But growth isn't only coming from share gains in U.S. mass retail. The company is also broadening its geographic and category footprint. International revenue, which now accounts for 20% of sales, grew 60% in FY2025. In fiscal 2025, e.l.f. increased its U.S. market share by 190 basis points, alongside 170 basis points in Canada and 270 basis points in the UK. E.l.f.'s brand strength with young consumers continues to shine. In Piper Sandler's Spring 2025 Taking Stock With Teens survey (a key barometer of Gen Z trends), e.l.f. was ranked the #1 favorite cosmetics brand among teens for the 7th consecutive survey. E.l.f. captured a 35% mindshare among teens, which is 3.5 the next closest competitor. Beyond Gen Z, e.l.f. is also the #1 purchased brand among millennials and Gen Alpha. The company reports that in the U.S., more than one in three households now purchase e.l.f. products. Its household penetration jumped 400 basis points in the last year alone. This means there's still room to grow. While legacy brands boast over 50% household penetration, e.l.f. is steadily closing the gap. While the U.S. beauty market is highly fragmented, with no single player holding more than 15% market share, in the cosmetics category, E.l.f. is the #1 brand in the U.S. by unit share and #2 by dollar share, and it is the fastest-growing among the top 20 brands by a wide margin. The company has expanded its #1 rank in Target, holding 21% of their entire cosmetics category, and has climbed from the #4 to the #2 brand in Walmart. In skincare, E.l.f. Skin and Naturium are recognized as two of the fastest-growing mass skincare brands. Internationally, E.l.f. has successfully launched with Rossmann in Germany as well as expanded into over 1,200 Kruidvat stores in the Netherlands and Belgium, 1,000 Rossmann locations in Poland, and more recently into France and Italy. These moves signal e.l.f.'s intent to become a global player. These rankings are supported by third-party data, including Nielsen and Piper Sandler. These gains speak to e.l.f.'s strong consumer appeal and effective execution at the store level by expanding shelf space and distribution. Despite its significant growth, the gap in unaided brand awareness for e.l.f. has climbed to 33% (as of 2024) from just 13% a few years ago. The leading mass cosmetics brand has around 55% awareness, so e.l.f. still has upside as more consumers become aware, a significant runway for continued organic growth through increased marketing efforts. These share gains validate e.l.f.'s competitive moat. Its combination of on-trend products, value pricing, and marketing savvy. While many retail/consumer brands are struggling to maintain relevance, e.l.f. is consistently taking share from legacy brands like L'Oreal's (LRLCY) Maybelline or Coty's (COTY) CoverGirl. E.l.f. Beauty's fiscal 2025 (year ended March 31, 2025) capped off another strong year, albeit with some signs of growth normalization. For the fourth quarter alone, net sales came in at $332.6 million, a modest 4% increase year-over-year (YoY). This single-digit Q4 growth marks a sharp deceleration from prior quarters (which were lapping exceptionally high growth a year ago), but notably it still represents e.l.f.'s 25th consecutive quarter of positive sales. Full-year FY2025 net sales surged 28% to $1.31 billion, reflecting robust expansion across product lines and channels. Management emphasized that growth was broad-based, with strength in both domestic and international markets, retail and e-commerce. Importantly, profitability remained solid. Gross margin for Q4 expanded about 60 basis points to roughly 71.3%, showcasing pricing power and cost efficiencies despite geopolitical constraints. Adjusted EBITDA for FY2025 was $296.5 million, up 26% YoY, with a 23% EBITDA margin. At the bottom line, Q4 GAAP net income was $28.3 million, and GAAP EPS was $0.49. Management withheld issuing fiscal 2026 guidance this quarter, due to the uncertainty around tariffs. Tariffs have emerged as the biggest near-term cloud over e.l.f. Beauty's outlook. The company's supply chain has long been concentrated in China, as of mid-2025, about 75% of e.l.f.'s product volume is manufactured in China. This wasn't a major issue in recent years (in fact, e.l.f.'s China-based sourcing was perceived as a cost advantage in normal times). However, U.S. import tariffs on Chinese goods, originally imposed during the Trump administration, have come back into focus with potential increases that could materially raise e.l.f.'s costs. At the time of writing, U.S. imports of cosmetics from China face a steep 55% tariff rate. This rate is composed of the prior 25% Section 301 tariff (in place since 2019) plus an additional 30% incremental tariff that recently took effect. The 30% increment is currently set to last through mid-August 2025, pending further government review. E.l.f.'s management quantified the risk: if that extra 30% tariff remains, it would hit the company's cost of goods sold by roughly $50 million on an annualized basis. To put that in perspective, this represents nearly half of e.l.f.'s annual net income. In a worst-case scenario, the impact would scale accordingly. Facing this uncertainty, e.l.f. has paused FY2026 guidance and is focusing on mitigation. Management has a three-pronged plan to blunt the impact of tariffs: Pricing Power: E.l.f. will implement a $1 price increase across its entire product assortment globally, effective August 1. This across-the-board price hike is designed to pass through some of the tariff cost to consumers. Despite the price hike, e.l.f. Beauty proposition is still below competitors. As CEO Tarang Amin noted, The average price point for e.l.f. is about $6.50 today, as compared to nearly $9.50 for legacy mass cosmetics brands and over $20 for prestige brands. As we look ahead, we expect many brands to take pricing in response to tariffs and macro environmental pressures, further accentuating our core value proposition. Supply Chain Optimization: E.l.f. is accelerating efforts to diversify its supply chain outside China. The company actually began this process years ago. By the end of fiscal 2026, e.l.f. expects China to account for significantly less of its production, as they work with key Chinese suppliers to set up operations in other countries. Rather than abandon its China partners (which are a core strength for e.l.f. in terms of cost, quality, and speed), the company is helping them expand into places like Vietnam, Mexico, or elsewhere to mitigate geopolitical risk. Additionally, e.l.f. is pursuing cost savings and supplier concessions to offset tariffs, such as negotiating lower manufacturing costs or finding efficiencies in packaging and logistics. Business Diversification: Another vector of mitigation is to grow revenue streams that aren't subject to tariffs. International sales have become e.l.f.'s fastest-growing segment, up 60% in FY2025 and now accounting for roughly 20% of total revenue. These overseas sales (to Europe, Canada, etc.) do not incur the U.S. import tariff, so expanding abroad naturally dilutes the impact of U.S. trade policy. E.l.f. is aggressively expanding distribution in Europe. It plans, for instance, to launch in 1,200 stores with Kruidvat (a major beauty retailer in the Netherlands and Belgium) and to enter 1,000 Rossmann stores in Poland this year. Adding another layer of complexity to the tariff landscape, a U.S. federal court recently blocked President Trump's sweeping tariffs. The court ruled that the 1977 International Emergency Economic Powers Act (IEEPA), which Trump cited as his authority, does not grant the president unilateral power to impose such broad tariffs. While the White House immediately appealed this decision, and the long-term legal outcome remains uncertain, this ruling introduces a layer of legal and political unpredictability to the tariff environment. It is important to note that this ruling does not directly remove the current 55% tariffs on China, which are still in effect for the time being. Source: E.l.f. Beauty E.l.f. Beauty has announced it is acquiring Rhode, the upstart beauty brand founded by celebrity Hailey Bieber. E.l.f. is set to pay $800 million upfront ($600 million in cash and $200 million in stock), with an additional $200 million earnout contingent on Rhode's growth over the next three years. All-in, that values Rhode at up to $1.0 billion, a 4.7x price to sales (P/S) multiple. To put that in context, $1 billion is 76% of e.l.f.'s entire FY2025 revenue, a hefty investment for a three-year-old brand. So, what does e.l.f. see in Rhode? Rhode was founded by Hailey Rhode Bieber in 2022 and has quickly gained traction in the skincare market. The brand focuses on a minimalist lineup of products (such as peptide glazing fluid and barrier restore cream) with a clean aesthetic and a devout following on social media. According to e.l.f.'s CEO Tarang Amin, Rhode achieved $212 million in net sales in the last twelve months, an impressive ramp for a new beauty brand. Unfortunately, more financial details haven't been disclosed, so we can't dig into the numbers. For e.l.f., acquiring Rhode is about bolstering its skincare portfolio and expanding into a more premium, DTC arena. E.l.f. has been primarily known for color cosmetics, though it's been pushing into skincare (e.l.f. Skin and the 2023 Naturium acquisition). Rhode is purely a skincare player with a high-profile founder. This gives e.l.f. a bigger foothold in skincare, one of the fastest-growing segments of beauty, and potentially access to customers willing to spend more on prestige products. Rhode has an intensely engaged fanbase; the CEO recounted how people camped out for 14 hours at a Los Angeles pop-up just to buy Rhode products and meet the team. This kind of brand loyalty and buzz is invaluable. E.l.f., of course, has its own army of fans and a savvy social media presence. By joining forces, e.l.f. can amplify Rhode's reach (e.g. introduce Rhode to e.l.f.'s millions of customers and retail partners) while Rhode's hype and celebrity aura rub off on e.l.f. The founder, Hailey Bieber, will stay onboard. Rhode has primarily been a DTC brand with limited physical retail presence. E.l.f. can leverage its robust retail distribution network to scale Rhode beyond DTC. There's an opportunity to get Rhode products on shelves worldwide, dramatically increasing their availability. E.l.f.'s international infrastructure can accelerate Rhode's overseas growth. After the stock's rollercoaster in late 2024 and early 2025, e.l.f. shares have partly recovered but remain below their previous highs. At the time of writing, ELF trades around $112 per share. At this price, e.l.f.'s market capitalization is $6.34 billion. That puts EV/EBITDA at 22 using FY2025 adjusted EBITDA of $296.8 million, and P/S at about 5. On an earnings basis, the stock trades at around 58 price to earnings (P/E). Source: Gurufocus A closer look at these multiples reveals the current P/E ratio is 37% below its 10-year historical average of 93x. It also falls below its 5-year average of 90x and its 3-year average of 68x. The current P/S is also below its historical average. While elevated in absolute terms, the current multiples are below e.l.f.'s historical range, highlighting potential upside. Still, part of this compression likely reflects investor caution amid macro uncertainty and tariff-related risks. Source: Author When compared to select beauty industry peers, e.l.f.'s valuation looks expansive at first glance. Aside from global giant L'Oreal, most competitors trade at around 1x P/S (both trailing and forward) and similar multiples on price-to-gross-profit. However, those same peers are expected to post negative revenue growth over the next two years, while analysts project e.l.f. to grow revenue by around 18% annually. While I take these projections with a grain of salt given the macro uncertainty, e.l.f. warrants a premium. The company has disrupted the market by offering high-quality products at low prices, while sustaining gross and EBITDA margins above industry averages. e.l.f. is also better positioned to raise prices if the tariff war intensifies, given its value positioning and built-in pricing elasticity. That combination is precisely why the stock deserves to trade at a higher multiple than slower-growing peers. Finally, it's also worth noting that, despite the heightened uncertainty, Baillie Gifford (Trades, Portfolio) has maintained 14% of e.l.f. Beauty shares outstanding, reflecting institutional confidence in its position. As I've discussed throughout the article, there are several risks to consider. The tariff overhang is the most immediate risk. If the 55% import tariff on China-made goods remains in place or worsens, e.l.f.'s costs will rise significantly, squeezing margins or forcing further price hikes. E.l.f. has been outperforming rivals, but competition in beauty is fierce and relentless. Giants like L'Oreal, Estee Lauder, and Coty won't cede market share without a fight. Additionally, the rise of new celebrity brands (every influencer and celebrity seems to launch a beauty line nowadays) means e.l.f. must keep its edge. E.l.f.'s products are affordable, but they are still discretionary purchases. A downturn in consumer spending, whether due to recession, inflation reducing disposable income, or shifts in preference, could impact sales. E.l.f. now has the task of integrating Rhode and realizing the growth that justifies the hefty price tag. We don't know its full financials, and Rhode could become a drag on e.l.f.'s earnings. Also, mergers can be distracting and sometimes fall short of expectations. There's a risk that management bandwidth is stretched, or that Rhode's growth slows under a new corporate structure. Additionally, the deal's financing involves $200 million in new stock issuance (diluting existing shareholders) and a large cash outlay that will increase debt. E.l.f. Beauty results demonstrate strong momentum and gaining share globally. It has been gaining shelf space and remains the #1 brand across Gen Z, millennials and Gen Alpha. E.l.f. continues to disrupt the sector, but now its supply chain has also been disrupted by external forces. The tariffs from China are a real headwind, and they warrant caution in the short term. The stock has surged over 25% post-earnings, driven by strong results and the news that a U.S. court blocked Trump's tariffs. However, there are tools at the Trump administration's disposal to reinstate back tariffs. With that in mind, the 25% jump might have been overexcited. The ride in the short term will be wild. For long-term investors, the company is executing well on the matters that are under management control, with expanding market reach and a clear strategic vision. Given the strong fundamentals and long-term upside, I will continue to hold. This article first appeared on GuruFocus.
Motor 1
an hour ago
- Motor 1
Toyota's Smallest Car Gets the GR Sport Treatment
The funky Aygo X is the smallest model Toyota sells outside of Japan's kei car segment. It's a diminutive vehicle competing in Europe's rarefied A-segment, especially after the exit of the Volkswagen Group's trio (VW up!, Skoda Citigo, and SEAT Mii) a few years ago. Previously a traditional hatchback, the Aygo X adopted crossover styling cues with the launch of its latest generation in 2022. A mid-cycle refresh now brings substantial changes. Not many may recall, but the Aygo X was once available with a five-speed manual gearbox. Well, that's no longer the case. The facelifted version is now automatic-only and features a new engine. The naturally aspirated 1.0-liter unit has been replaced by a larger 1.5-liter powertrain sourced from the Yaris supermini. It produces 114 hp, which, although nothing to write home about, is still a healthy 43-hp increase over its predecessor. Photo by: Toyota This power bump has dramatically improved performance, reducing the 0–62 mph (100 km/h) time from a sluggish 14.9 seconds to just under 10 seconds. Toyota is also electrifying the Aygo X, making it the only full hybrid in its class. Emissions are impressively low at just 86 grams of CO₂ per kilometer, the best figure among non-plug-in vehicles. Fuel consumption is rated at only 3.8 liters per 100 km, which translates to roughly 61.6 miles per gallon. To accommodate the hybrid bits, the front overhang has been extended by 76 millimeters (nearly 3 inches). Given the Aygo X's compact length of just 3.7 meters (145.7 inches), engineers had to innovate with the battery packaging. For the first time in a Toyota, two stacks of battery cells are installed side by side across the floor beneath the rear seats. This longitudinal layout contrasts with the parallel configuration found in larger vehicles, which have more space to spare. These mechanical upgrades are accompanied by design tweaks, including a new grille, updated headlights, and a revised hood. For the first time, the Aygo X is available in a GR Sport trim. While it doesn't receive extra power, it promises sharper handling through quicker-reacting electric power steering and revised tuning of the coil springs and shock absorbers. Photo by: Toyota Despite the addition of hybrid hardware and the relocation of the auxiliary battery beneath the cargo floor, luggage capacity remains unchanged at 231 liters (8.15 cubic feet). Elsewhere, Toyota has added more soundproofing for a quieter ride, with higher trims also benefiting from thicker window glass. And yes, the rear doors' windows still pop out. The analog instrument cluster has been replaced with a seven-inch digital display, and an electronic parking brake is now standard. Although it's Toyota's smallest car, the Aygo X comes well-equipped, offering features such as a wireless smartphone charger, power-folding mirrors, and Panasonic's nanoeX air purification system. Additional highlights include dual USB-C ports, over-the-air updates, and a comprehensive suite of safety and driver-assistance features. The updated Aygo X will go on sale in Europe later this year. As Toyota's most affordable offering on the continent, it has sold over 287,000 units since its debut three years ago. Unlike previous generations, which had Peugeot and Citroën counterparts, this iteration is an in-house effort. 2026 Toyota Aygo X 36 Source: Toyota Catch Up With Toyota: Confirmed: Toyota Will Make the GR Corolla In the UK Why Is Toyota Showing a V-8 Engine In a 2026 RAV4 Video? Get the best news, reviews, columns, and more delivered straight to your inbox, daily. back Sign up For more information, read our Privacy Policy and Terms of Use . Source: Toyota Share this Story Facebook X LinkedIn Flipboard Reddit WhatsApp E-Mail Got a tip for us? Email: tips@ Join the conversation ( )
New York Times
an hour ago
- New York Times
Man United fans' survey: Your views on Ruben Amorim, INEOS and the players
That season is now (finally) behind us, with the Champions League final played out on Saturday and the new Club World Cup-related transfer window open. United's on-pitch performance in 2024-25 was more than disappointing; the run to the Europa League final being a rare positive until even that was ended by Tottenham. Advertisement The Premier League finishing position need not be repeated here… let's just hope we never see the like of it again. Off the pitch, United have confirmed they have reached an agreement with Wolverhampton Wanderers to sign Matheus Cunha. While Bruno Fernandes is giving serious consideration to a move to Saudi Arabia. All this and we haven't yet mentioned head coach Ruben Amorim or the decisions made by INEOS and Sir Jim Ratcliffe. Well, now is your chance to have your say on all the above topics (and more) below. (NOTE: Readers using our app on an Android device may need to use two fingers to scroll through the survey. Still unable to get to the survey, though? Try this direct link) Loading…
