Auto File: Tesla’s Price Cut Damage Control
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May 20 -
Joe White
Global Autos Correspondent
Greetings from the Motor City!
No need to check your calendar! The Auto File is arriving on a Monday ahead of my trip to Munich for the Reuters Events Automotive Europe conference, starting Wednesday. I’ll be reporting from the conference and the next Auto File will arrive on Thursday.
Since it is Monday, and we’re all trying to catch up (or in my case, pack my bags,) let’s get straight to it.
Today -
Tesla pays the cost for its price war
The UAW loses in Alabama
Audi and SAIC team up for luxury EV
Tesla’s expensive European apology tour
Tesla is scrambling to repair damage done to its relations with big European fleet buyers by abrupt price cuts that tanked resale values, Reuters reported Monday.
Many fleet, rental car and leasing companies got burned over the past year as Elon Musk slashed prices on Tesla EVs as the tide went out on demand. Now, Tesla is offering discounts and other incentives to persuade European fleet operators to keep Tesla on their company car menus.
That’s critical because the leased company cars EU corporations provide to employees as part of their compensation account for a substantial share of overall European sales.
Leasing companies accounted for 44% of Tesla sales in the UK and 15 European countries. Now some of those companies are talking to Chinese EV makers who have plenty of EVs to offer to fill corporate clean car quotas – as do Volkswagen, Stellantis, Renault, Ford and others.
European fleet operators also are unhappy with Tesla’s service operations. The company doesn’t have dealers to handle repairs and customers complain Tesla’s in-house service organization hasn’t kept up as the number of Teslas on the road has surged.
Legacy automaker executives have warned for years that Tesla’s no-dealer model would backfire as service needs grew. They can now enjoy exactly one minute of schadenfreude – before they go back to worrying about how to stay competitive with Chinese manufacturers who are re-setting the industry’s price and production cost benchmarks.
Essential Reading
Consumer watch: Target cuts prices
F1’s Max Verstappen wins two races in one day
The UAW falls in Alabama
The United Auto Workers’ $40 million campaign to organize non-union auto factories in the United States hit a wall in Alabama on Friday.
A 56% majority of workers at the Mercedes-Benz assembly and battery factories near Birmingham rejected UAW membership in voting last week.
UAW President Shawn Fain alluded to the Biblical story of David and Goliath to put the best face on the results. “Sometimes Goliath wins a battle, but David wins the war,” he said. The UAW has complaints about Mercedes’ anti-union efforts pending with federal regulators.
The setback won’t stop the UAW organizing drive, experts said.
Still, the Mercedes result indicated that union organizers misjudged the strength of worker support when they pushed for the federally supervised vote. The union said a supermajority of Mercedes workers were ready to join up – and has in the past said it would call for votes when 70% of workers at a plant sign cards. As of Monday morning, the UAW had not identified another U.S. auto plant where support had hit that 70% threshold.
Other automakers can now go to school on how Mercedes resisted the UAW’s organizing drive.
Audi and SAIC plan a joint EV
Volkswagen’s Audi luxury brand and VW’s long-time Chinese partner SAIC said they will collaborate on a new “China-specific” electric vehicle architecture for China, with the first models due to hit Chinese showrooms next year.
The announcement expands Volkswagen’s EV alliances in China, and comes just days after VW walked away from talks to build a low-cost EV with European rival Renault, according to Reuters.
One clue to why VW is turning to Chinese partners: Audi said collaborating with SAIC will reduce the time it takes to bring new EVs to market by 30%. And of course, time is money.
The deal is one more example of how European automakers are putting aside “go-it-alone” EV and technology strategies, and instead hooking up with Chinese partners who can offer ready-to-go EV architectures and gateways to low-cost Chinese supply chains.
GM shareholders weigh in on EV strategy
General Motors shareholders will vote on four investor proposals related to the automaker’s electric vehicle strategy at the June 4 annual meeting.
One would have GM eliminate EV sales goals as a factor in executive pay. Another calls for GM to report on the impact of materials mined from the ocean. A third calls for a report on the use of child labor in the EV materials supply chain and a fourth calls for a report on sustainability risk in the company’s supply chain.
Management is opposed to all the proposals. But they make for interesting reading as illustrations of how the issues surrounding EVs have become complex and politically charged.
Fast Laps
Polestar could be delistedby the NASDAQ exchange if it cannot publish its fourth quarter financial reports within 60 days. The Swedish EV brand controlled by Chinese automaker Geely has delayed releasing Q4 results twice. The company disclosed the NASDAQ delisting warning, and scheduled the release ofQ1 results on May 23.
Tesla chair Robyn Denholmtold the Financial Times that winning shareholder support to reinstate Elon Musk’s $56 billion compensation package will be like climbing Mount Everest. Denholm and the Tesla board are campaigning to persuade shareholders to reauthorize a novel stock compensation deal that was invalidated by a Delaware Court. Shareholders at the June 13 annual meeting also will vote on reincorporating Tesla in Texas.
Indonesiais keeping hopes up that Tesla will build a battery plant in the Southeast Asian nation after a meeting between Elon Musk and Indonesian President Joko Widodo. Musk has said Tesla will pause new capacity investments. But Indonesia is a major producer of nickel used in EV batteries – and a new customer for Starlink, the satellite communications service run by Musk’s SpaceX.
Nippon Steelwill send a top executive to the United States on a mission to build support for its acquisition of U.S. Steel, a major auto industry supplier. Automakers, politicians and unions are edgy about the steel industry consolidation play for different reasons.
Chinalaunched an investigation into whether European and U.S. plastics producers are dumping their products in the Chinese market. It’s another warning shot in the trade conflicts brewing over EVs and other green technology.
Japanwill work with ASEAN, the group of Southeast Asian nations, on a coordinated auto production strategy, Nikkei reported. Central to whatever the strategy involves will be 140 billion yen ($899 million) that Japan has appropriated to help allies in less wealthy nations.
Editing by Bernadette Baum
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
