Auto File: A new gig for Elon

ZEEKR Intelligent Technology Holding

19/11/2024 16:00

Nov 19 - By Nick Carey, European Autos Correspondent 

Greetings from London! 
    
It is still two months before Donald Trump takes office, yet
global automakers are already figuring out their strategy for
handling the next U.S. president after he spent the election
campaign threatening tariffs. 
Hyundai’s choice has been to promote its U.S. boss and company
COO Jose Munoz to be co-CEO, as part of a move to "better
prepare for uncertainties in the global business environment". 
For good measure, Hyundai also put Sung Kim, a former U.S.
diplomat who helped with Trump’s summit with North Korean leader
Kim Jong Un, in charge of global external affairs. 
Stellantis, which has U.S. plants and need only really fear
tariffs on Mexico, where it also has a lot of production, is
instead playing up its ability to offer electric, hybrid or
gasoline versions of its lineup models, with CEO Carlos Tavares
emphasizing it will adapt to any changes under Trump. 
 
Which brings us to today’s Auto File… 
    * Musk’s new non-Tesla gig   

    * So long, EV tax credit?  

    * CATL CEO still wants U.S. plant  

 
Trump to Musk: you’re hired  
As promised, Donald Trump named Elon Musk to co-lead an effort
to get rid of government waste.  
The Department of Government Efficiency, which Musk will head
with former Republican presidential candidate Vivek Ramaswamy,
is supposed to propose ways to cut bureaucracy, trim regulations
and slash wasteful spending by July 4, 2026.  
For such a plan to work, Musk will need to move much faster than
that. Trump takes office unable to run for reelection, so he
will be a lame-duck president from day one. And the middle of
2026 would be too close to midterm elections for Congress to
act, so time is short. 
Also, it remains to be seen how long Musk’s relationship lasts
with Trump.  
Musk is close to power, but by making public suggestions as he
did at the weekend on whom Trump should pick as treasury
secretary, he is acting like he does have power.  
As many people have learned, there is only room for Trump at
centre stage, as Steve Bannon learned after being hailed as the
architect of victory in 2016. Maybe Musk is different because he
is the world’s richest man, but if past is prologue then too
much limelight and too many laudatory headlines might not be
such a good thing for Elon. 
Still, so far so good for Musk.  
Tesla stock got another boost this week on reports that Trump's
transition team wants to draw up federal regulations for
autonomous vehicles, which could help the automaker push forward
with testing its Full Self-Driving (FSD) driver assistance
software. 
But even with regulation, as my Reuters colleagues Chris Kirkham
and Rachael Levy report, Tesla would still face steep
technological and legal hurdles in deploying driverless
vehicles. You can read about those challenges here.  
 
Recommended reading: 
    * Northvolt eyeing Chapter 11 bankruptcy  

    * Trump picks Duffy for U.S. transportation secretary  

    * European oil giants retreat from renewables 

 
Trump wants to kill EV tax credit 
Trump has long opposed the Biden administration’s $7,500 EV
consumer tax credit and as my Reuters colleagues Jarrett
Renshaw, Chris Kirkham, and Nora Eckert reported here, his
transition team aims to do end it.  
Such a move would be counterproductive and cede ground to
Chinese automakers, U.S. Energy Secretary Jennifer Granholm said
in response to the news. A group representing EV makers and
battery companies also urged Trump not to kill the tax credits,
saying doing so would hurt investments in production in key
states that voted for the Republican. 
Edison International CEO Pedro Pizarro also chimed in, saying
the U.S. utility industry wants Trump and the Republican-led
Congress to preserve clean energy and EV tax credits in the
Inflation Reduction Act, which contains hundreds of billions of
dollars in subsidies. 
Although Tesla has historically been the biggest beneficiary of
consumer EV subsidies, it could now gain from killing the
incentive because that could hurt its rising EV competitors. 
 
CATL to Trump: how about a U.S. plant? 
The world's top battery maker CATL would still like to build a
U.S. plant if Trump opens the door to Chinese investment in the
EV supply chain, founder and chairman, Robin Zeng, told Reuters.
You can read it here. 
As of now, that’s a big ask. Chinese-made batteries do not
qualify for Biden administration EV subsidies. Chinese EV
imports are subject to a 100% tariff, which Chinese automakers
might have circumvented with plants in Mexico. 
But a U.S. government proposal to block any vehicle with Chinese
connected-car technology would effectively kill that option. 
For Zeng, however, hope springs eternal, telling Reuters: "I do
hope that in the future they are open to investments."  
 
Activist investors go for Nissan 
Nissan shares received a big boost after reports that activist
investors Effissimo Capital Management and Oasis Management had
both taken stakes in the struggling Japanese automaker. 
The news came less than a week after Nissan issued a profit
warning  and said it would slash 9,000 jobs and cut a fifth of
its global manufacturing capacity amid slumping sales in its two
biggest markets, China and the United States. 
Shareholder activism has gained traction in Japan, where
international and domestic investors are demanding firms improve
corporate governance and capital allocation at a  record pace. 
What has been a bumpy ride for Nissan may get bumpier still. 
 
Fast Laps 
Chinese self-driving firm Pony AI is seeking a valuation of up
to $4.48 billion in its U.S. initial public offering as its
moves ahead with a long-sought plan  for a New York listing. 
Volkswagen raised its investment in Rivian  by 16% to $5.8
billion as the companies launched their planned joint venture to
develop EV architecture and software. 
China's Xiaomi Corp  raised its 2024 delivery forecast for the
third time to 130,000 EVs as the startup posted a 30.5% jump in
third-quarter revenue. 
General Motors' self-driving car unit Cruise has admitted to
submitting a false report to influence a federal investigation
and will pay a $500,000 criminal fine as part of a deferred
prosecution agreement.  
Stellantis  does not plan plant closures or mass layoffs in
Italy, an executive said during talks organized by the Italian
government to address concerns about the country's car
industry. 
China's Geely said its premium EV maker Zeekr  will take control
of sister brand Lynk & Co, the first big restructuring move in a
planned overhaul of the sprawling automotive group. 
 
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 (Editing by Alexander Smith)