Even Tesla Knows EV Sales Are In Trouble
Good morning! It’s Friday, October 20, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
2023 Mercedes-Benz EQS 580 4MATIC SUV | First Drive
1st Gear: Tesla Is Bracing For An EV Slowdown
After tempering expectations on the rollout of its divisive Cybertruck electric pickup, American automaker Tesla is now tempering expectations for sales of all its electric vehicles. Following the release of its latest financial results, company boss Elon Musk has warned that Tesla needs the economy to “stabilize” before it considers expanding production any further.
According to a report from Reuters, this means that Tesla is following General Motors and Ford in lowering their expectations for future EV demand. For Tesla, this means question marks are now swirling around a planned Mexico factory for the EV maker. Reuters reports:
Tesla CEO Elon Musk said he was worried that higher borrowing costs would prevent potential customers from affording its vehicles despite substantial price cuts, and that he would wait for clarity on the economy before ramping up its planned factory in Mexico.
“People hesitate to buy a new car if there’s uncertainty in the economy,” Musk said on a post-earnings call where he also talked about “paycheck-to-paycheck” pressures on American workers. “I don’t want to be going into top speed into uncertainty.”
Musk’s hesitancy to expand production of his EVs follows similar moves from across the auto industry. Just this week, GM announced it would delay production of Chevrolet Silverado EV and electric GMC Sierra pickup trucks by a year. That decision came hot on the heels of news that Ford was considering cutting one of three shifts at the plant that builds its electric F-150 Lightning pickup truck.
Tesla’s fellow EV startups are also facing questions over demand right now. In its third quarter, California-based Lucid reported a 30 percent drop in production, which means it is unlikely to meet its target for 2024.
2nd Gear: Union Demands Would Be “Devastating” For Jobs, Says GM
The United Auto Workers union has been striking at plants run by Ford, GM and Stellantis for more than a month now and it seems like we aren’t getting any closer to a resolution. Now, GM bosses have warned that the demands of the union are too great and could be “devastating” for jobs at the American automaker.
According to a report from the Detroit Free Press, Gerald Johnson, GM’s executive vice president of global manufacturing and sustainability, released a video message calling his company’s offer “historic.” So far, GM has offered workers a 20 percent wage, pushing most salaries up to $39.24 per hour. The Free Press reports:
“We believe we have met our commitment to provide historic improvements in wages and benefits, and have also addressed the future of EV battery manufacturing,” Johnson said in the video. “You might be asking yourselves, why can’t General Motors meet every demand Shawn Fain is asking for? Simple answer is because we need profits to invest in our future.”
Despite throwing all its weight behind its latest offer, GM refused to say this was a sign that it had reached the end of its rope in negotiations. Instead, GM spokesperson David Barnas told the Free Press that GM will continue “bargaining in good faith with the UAW leadership to reach an agreement as quickly as possible.”
GM’s update on its position follows a similar move from Ford, which recently said it had “reached its limit” on economic bargaining proposals. Bill Ford also came out the woodwork on Monday to claim that the strike against Ford, GM and Stellantis was “hurting them against nonunion competitors.”
3rd Gear: Suzuki Is Too Slow To Clean Up Emissions
It’s no secret that global automakers need to clean up their act, we even covered new rules forcing them to do just that here in America earlier this week. Now, a new study from environmental charity Greenpeace has dug into the data to find out which global automakers are taking the best steps to cut emissions.
While seeing companies like Mercedes-Benz, BMW and China’s SAIC in the top three might not be all that surprising, Suzuki placing at the bottom of the list could come as a bit of a shock. According to Bloomberg, that’s exactly where the automaker placed, alongside its Japanese stablemates Toyota, Honda and Nissan. Bloomberg reports:
While Japan’s top carmakers pioneered the use of small batteries and electric motors to make internal combustion engines more efficient, they’ve been slower in embracing fully electric vehicles. The companies have formed a united front in arguing the merits of using multiple approaches to decarbonizing cars, putting them at odds with Greenpeace and other advocacy groups.
“Suzuki’s decarbonisation and electrification performance is almost nonexistent in a time when nearly all major carmakers are transitioning away from ICE vehicles,” Greenpeace said in the report.
The Greenpeace report ranked automakers based on their pivot to more sustainable powertrains, such as the addition of hybrid motors, electric options and even hydrogen power. Each was then scored out of 100, with Suzuki falling in last with just 3.2 points thanks to a lack of EVs anywhere in its range. Mercedes came out on top, but only mustered up a rating of 41.1, showing that there is still room for improvement in Greenpeace’s eyes.
4th Gear: Ford Recalls More Mustangs
Ford has been forced to issue another recall for its all-electric Mustang Mach-E, this time because certain models are suffering from power loss issues. The recall, brought to our attention by a report in the Detroit Free Press, affects Mustang Mach-E and Mustang GT models fitted with extended-range batteries.
According to the Free Press, more than 34,000 2021-2022 Mustang Mach-Es fitted with the larger battery packs are being recalled. The issue stems from faulty battery pack connectors fitted to these models, which can overheat and fail. The Free Press reports:
This latest Mach-E recall is one of four recalls related to these model year vehicles and the second related to this issue.
Ford spokeswoman Maria Buczkowski said in a statement to the Detroit Free Press, “To make the repair process easy on customers, we are offering pick-up and delivery, along with loan vehicles while the vehicle is being serviced. Until parts are ready, we ask that affected customers limit repeated back-to-back wide open pedal accelerations and use DC Fast Charging only when necessary, such as on long journeys.”
This recall follows a 2022 repair order on Mustang Mach-Es that affected nearly 50,000 models. The recall was called for to fix battery circuit issues that could cause a loss of power while driving.
