Auto File: Tesla Wants to be your Valentine

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13/02/2024 16:06

Joe White
Global Autos Correspondent
     
Greetings from the Motor City! 
 
    Happy Paczki Day! That’s the Detroit version of Brazil’s
Carnival. We don’t put on feathery costumes and dance in the
streets to usher in Lent in Michigan. We eat 2,000-calorie jelly
donuts. Don’t judge. 
 
You need a little extra sugar to get through February in the
Midwestern United States. And it’s shaping up to be a tough
month in the World of Cars, too.  
 
Let’s dive right in so you can get back to spinning virtual
Mardi Gras music!  
 
Today – 
 
    *  Tesla keeps the EV price war rolling
    *         Flaming robo-taxis in San Francisco
    *  Toyota cleans house at Daihatsu

 
Elon Musk has a $1,000 Valentine’s Day gift for you 
Tesla cut prices in the United States for certain versions of
the Model Y by $1,000 earlier this week, in a signal to rivals
(and would-be EV buyers) that the deflation in the EV market
isn’t done yet. 
 
EV prices overall fell nearly 11% in January from a year ago,
according to new data posted Tuesday by Cox Automotive’s Kelley
Blue Book. Prices for Tesla vehicles were down 20.6%
year-over-year in January. 
 
Tesla sent out emails inviting consumers to visit a store and
experience Tesla’s “Romance Mode” for Valentine’s Day. What’s
that, you ask? It involves heated seats, a virtual fire in the
dashboard screen and “your favorite love songs on shuffle.”
We’ll look forward to what late night comedians can do with this
raw material. 
 
“Since most people don’t love to buy cars in the middle of
winter, Tesla is offering a $1,000 incentive to do so,” Elon
Musk wrote on his X.com social media platform. “This is the
essential quandary of manufacturing: factories need continuous
production for efficiency, but consumer demand is seasonal.” 
 
That noise you hear is the sound of every legacy auto executive
and dealership operator smacking their forehead. They have known
about the seasonality of auto demand for years. Now Tesla
presents it as a novel justification for discounting?  Thwack!  
 
Here are some better reasons for Tesla to put Barry White moves
on balky buyers.  
 
Hyundai is offering a $7,500 discount on its lineup of EVs this
month – compensating for the loss of a federal tax credit of the
same size. Rivian has cut prices for its R1 series truck and
SUV. 
 
Volkswagen is offering discounts equivalent to 17% of the
average transaction price, according to KBB. That’s up from
about 6% of the average transaction price in January 2023. 
 
How long will this go on? Tesla’s operating margin in Q4 equated
to roughly $4,000 per vehicle delivered. Tesla’s Q4 operating
margin fell by 45% from a year earlier – but Tesla has margin
left to accommodate more price cuts. Rivian, Lucid, Polestar and
other EV startups do not.  
 
Legacy automakers are hitting the limits of how much they are
willing to lose on EVs.  
 
Nonetheless, if you want to buy your Valentine a Cadillac Lyriq
EV, you can get $7,500 off the price.  
 
    Sing it, Barry! 
 
Essential Reading 
    *  North American robot orders fizzled last year.
    *  Are purpose-built lounges the future of EV charging?
    *  Will each nation build its own AI infrastructure?

 
Fallout from the Waymo robo-taxi arson 
An empty Waymo robo-taxi that wandered into a crowd of Lunar New
Year revelers in San Francisco on Sunday night was smashed and
burned to a hulk.  
 
The crime is intensifying the debate in California over the
right way to regulate autonomous vehicles. The Waymo incident
came days after another Waymo car clipped a bicycle rider on a
San Francisco street.  
 
That minor incident in turn followed a more serious accident
involving robo-taxi rival Cruise.  
 
Taken together, the incidents give fuel to AV critics who argue
neither the technology nor society is ready for widespread
deployment of self-driving vehicles – despite years of
engineering work and millions of miles of testing.  
 
    City officials and AV experts questioned why the Waymo
vehicle was navigating through San Francisco’s congested
Chinatown at a time when human cabbies would know the streets
would be crowded with pedestrians.  
 
As videos of the Waymo car in flames zapped around on social
media, California lawmakers and AV critics, including the
Teamsters union, rebooted efforts to pass laws that would
restrict self-driving trucks, and give local governments a veto
on deployment of robo-taxis. 
 
Stellantis vs Italy 
Italian Prime Minister Giorgia Meloni has a beef with Stellantis
CEO Carlos Tavares that underscores a tough reality for European
politicians: The days of “national champion” automakers
supporting jobs solely out of patriotic duty are fading fast. 
 
    Meloni has demanded that Stellantis, as parent of Italy’s
Fiat, give Italy priority for investments and rebuild Fiat
production to 1 million vehicles a year. Tavares has countered
that can happen only if demand improves, or Italy puts up
subsidies. 
 
Meloni shares a problem with her counterparts in France and
Germany, who also want to defend auto sector jobs: Europe has
far more vehicle-making capacity than current sales can support.
A flood of EVs imported from China won’t help.  
 
Overcapacity is a challenge for Stellantis, but it also gives
Tavares leverage in bargaining for government support and better
labor terms.  
 
 
Toyota takes charge at Daihatsu 
    Toyota said the president and chair of small-car affiliate
Daihatsu have stepped down, clearing the way for a new direction
to recover from a scandal over rigged collision tests. 
 
The Daihatsu scandal, and separate test rigging affairs at
affiliates Toyota Industries and Hino, have distracted attention
from a solid year for the parent company. Toyota is the world’s
top-selling automaker, and its go-slow strategy on EVs is
proving to be a winner, at least for now. 
 
Uber, Lyft drivers call for a strike 
Drivers for Uber and Lyft are calling for a Valentine’s Day
strike to demand better pay from the platforms. 
 
Uber and Lyft drivers are independent contractors and not
unionized. Uber told Reuters it was not concerned about the
action.  
 
Lyft earlier this month said it will revise its pay policies to
assure drivers get a minimum weekly payout. 
 
Fast laps 
 
Germany won’t hit its target of putting 15 million EVs on the
road by 2030 if electric vehicle sales do not reach a “tipping
point,” Economy Minister Robert Habeck said. Increasing EV sales
a few percentage points a year won’t get the job done, he said.
Germany currently has 1.3 million fully electric vehicles on its
roads, and growth in EV sales has slowed. 
 
France will suspend a program that allowed low-income consumers
to lease an EV for 100-150 euros a month after demand swamped
the program’s budget. 
 
Shell is closing seven hydrogen fueling stations in California
built to serve fuel cell cars and light trucks. The company
blamed “hydrogen supply complications” and “external market
factors.” One of those factors is that very few hydrogen fuel
cell cars have been sold. 
 
Stellantis will invest $111 million to expand production of
electric drives at a factory in Hungary.  
 
Tata will cut EV prices in India. 
     
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 (Editing by Emelia Sithole-Matarise)