Auto File-Elon Musk in Beijing with a Machete

Acea SpA

30/04/2024 15:13

April 30 - 
  
    
Joe White
Global Autos Correspondent
     

Greetings from the Motor City! 
 
We’ve got good news today for Tesla shareholders worried that
Elon Musk was spending too much time on social media and space
ships. The Tesla Technoking is back!  
 
Musk is doing deals in China like a head of state, firing senior
Tesla executives who fall short of his expectations and slashing
costs. Wall Street is loving it, though Tesla bears are not. 
 
You might think Musk was campaigning for shareholder votes to
reinstate a $56 billion pay deal. And you’d be right. 
 
Musk’s burst of activity at Tesla is the No. 1 subject for
today. There’s more: Europe’s automakers are having a rough
start to the year, and U.S. automakers face a new deadline to
install technology that protects pedestrians.  
 
Why wait until tomorrow? May Day! May Day! Let’s buckle up and
go. 
 
Today -  
 
    * Musk goes all in on China 
    *         Europe’s automakers hit a pothole 
    * Washington mandates tech to cut pedestrian deaths  

 
Musk puts his chips on FSD and China 
Elon Musk donned a suit and tie and flew to Beijing over the
weekend where he was greeted like a visiting head of state by
China’s Premier, then cheered like a rock star by investors. 
 
What he accomplished won’t be clear for months, perhaps years.
But investors were sure glad to see Musk devoting so much energy
to Tesla. Shares in the world’s most valuable automaker are up
36% since April 22 – adding roughly $165 billion to the
company’s market cap. Good timing – the shareholder vote to
reinstate Musk’s $56 billion 2018 pay deal, voided by a Delaware
judge, is six weeks away. 
 
News that Musk may have secured Beijing’s blessing to launch
Tesla’s “Full Self Driving” automation technology in China added
$90 billion to Tesla’s market cap on Monday and burned Tesla
bears who’d shorted the company’s shares. 
 
Tesla short sellers aren’t the only ones Musk is flaming. The
list of senior Tesla executives leaving or getting pushed out as
Musk reasserts himself keeps growing.  
 
    Musk dismissed the head of Tesla’s new product efforts and
its successful charging business and signaled plans to let go
hundreds of staffers in their departments, the Information
reported. The tech news site quoted a Musk email demanding that
Tesla executives be “hard core” about cost cutting. 
 
Musk’s renewed cost-cutting urgency makes sense in light of new
data showing an 8% drop in demand for new Teslas in California
during Q1. 
 
In China, the prospect that Tesla could start selling FSD
technology to new customers is a plus. But it won’t end the
grinding price war led by China’s BYD. 
 
FSD does not currently allow drivers to safely tune out and let
their Teslas navigate the road unsupervised. It is a so-called
“level 2” system that is a long way from Musk’s vision of
technology that allows Tesla owners (and the company) to make
money renting out their vehicles as robotaxis. 
 
Tesla’s FSD is entering a hypercompetitive market where Chinese
rivals have a head start in mapping and managing the
complexities of mega-city traffic, as well as a home field
regulatory advantage, Reuters reports.  
 
From the Beijing perspective, allowing Tesla to develop
automated driving in China is like throwing a big catfish into a
pool.  The other fish – Chinese autonomous vehicle companies in
this case - get stronger or get eaten. Win-win for Chinese state
planners who want to lead the world in AI. 
 
It is not clear what terms Musk accepted to bring FSD technology
to China. Beijing tightly restricts transfers of data out of the
country. Will Tesla be allowed to send data collected by cameras
on vehicles in China out of the country for processing by its
Nvidia H100 powered AI mega-computers? Washington currently
restricts shipments of the highest-powered AI computing chips
like the H100 to China – which could make it difficult for Tesla
to replicate its AI centers in China.  
 
Will the U.S. politicians who have blasted Ford for
collaborating with China’s CATL to build batteries in the United
States give Musk a pass on collaborating with China’s Baidu to
develop vehicle automation AI in China?  
 
Don’t touch that dial. 
 
Essential Reading 
    * Could your self-driving car become a “killer robot”? 
    *         Biden races to lock in EV, clean energy policies 
    * The automaker dating game at the Beijing Auto Show 

 
A chilly spring for Europe’s automakers 
Volkswagen, Stellantis and Mercedes-Benz all reported weaker
sales and revenue for the first quarter – declines variously
blamed on weaker demand, model changeovers and high interest
rates. 
 
The gray skies over Europe contrasted with the comparatively
upbeat outlooks from General Motors and Ford last week. But that
goes to show how exceptional the U.S. combustion pickup truck
market is, and how Ford and GM’s dominance of that market
offsets weakness nearly everywhere else.  
 
VW, Stellantis and Mercedes are more genuinely global
enterprises (notwithstanding Stellantis’ ownership of Detroit’s
Ram and Jeep businesses) – and the global auto market has hit
bumpy pavement.  
 
Looking ahead: Mercedes said it will hold firm on prices.
Stellantis vowed to reduce current hefty inventories. Volkswagen
stuck to its full-year profit outlook and said the second half
will be better than the first.  
 
Washington’s new drive for pedestrian safety 
The Biden administration issued a new rule requiring all new
vehicles to have advanced automated braking systems capable of
stopping for pedestrians both day and night. Automakers have
until 2029 to comply – two years longer than proposed earlier. 
 
Pedestrian fatalities on U.S. roads have risen to the highest
level since 1981 as motorists have shifted to ever-larger trucks
and SUVs.  
 
Most automakers in the U.S. already equip their vehicles with
automatic emergency braking systems designed to apply brakes
when sensors detect an imminent collision. The new rules set
more specific, rigorous requirements for those systems.  
 
U.S. regulators zero in on ‘hands-free’ driving 
The Biden administration’s highway safety regulators launched an
investigation of Ford’s Blue Cruise hands-free driving system
after two fatal accidents, days after re-opening a probe of
Tesla’s Autopilot technology. 
 
The National Highway Traffic Safety Administration has yet to
issue comprehensive rules to govern the design and performance
of systems such as Autopilot or Blue Cruise that allow drivers
to take their hands off the wheel but not to abdicate
responsibility for control of the vehicle to software and
sensors. 
 
UAW-Daimler deal clears the road to Mercedes 
United Auto Workers President Shawn Fain reached a tentative
contract agreement with the U.S. operations of Daimler Truck
just ahead of a strike deadline Friday.  
 
The deal – assuming it is ratified - allows the UAW leader to
keep his eyes on the bigger prize of organizing workers at the
Mercedes-Benz luxury SUV factory in Alabama next month. 
 
Fain’s $40 million effort to bring thousands of non-union U.S.
auto workers under the UAW umbrella faces a critical test at the
Mercedes Alabama operation, as outlined in this analysis by Marc
Robinson and John Jullen of the C-Suite newsletter. The union’s
landslide victory at Volkswagen’s Tennessee factory earlier this
month was historic. But the UAW faces more determined opposition
from Mercedes management.  
 
Fast Laps 
BYD increased profits by 10.6% during the first quarter, despite
the EV price war and weaker economy in China. That growth pace
was BYD’s slowest since 2022 – but it was still expansion. Tesla
revenues and profits fell during the same period. 
 
Hyundai is looking to hybrids to expand sales in India, Reuters
reported. The South Korean automaker is shifting focus to
hybrids in response to rising sales for gas-electric vehicles in
the Indian market – a consumer trend also taking hold in the
United States and Europe. 
 
The Supreme Court refused to hear Elon Musk’s arguments to scrap
elements of a settlement he agreed to with the Securities and
Exchange Commission. Musk wanted the high court to toss a
requirement that he get social media posts about Tesla approved
in advance by company lawyers. The SEC deal resolved a
securities fraud case brought after Musk tweeted that he had
“funding secured” for a leveraged buyout of Tesla when he did
not. 
 
SK Innovation delivered an upbeat forecast for EV battery
demand, saying its SK On battery unit is on track to break even
this year after a stronger-than-expected first quarter. 
 
The EU needs to install 1.2 million EV charging points a year –
eight times as many as put into service last year - to meet
projected demand, the European auto industry trade group ACEA
said Monday. European automakers have warned that they cannot
meet EU regulators’ demands for expanded EV sales without more
government effort to expand charging. 
     
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 (Editing by Mark Potter)