Good morning! It’s Monday, November 6, 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.
1st Gear: Tesla Still Wants To Build A Cheap Car
Tesla is apparently still planning to build a 25,000 euro ($26,838) vehicle at its factory near Berlin, Germany, a source told Reuters. It makes sense, considering the fact Tesla has long wanted to build a cheap car that would appeal to a larger amount of the population who doesn’t have a ton of cash to spend on a car.
Right now, there’s no word on when production would begin on a vehicle at this price point. From Reuters:
Musk had long planned to make a more affordable electric car, but said in 2022 he had not yet mastered the technology and shelved the plan.
Still, sources told Reuters in September the carmaker was closing in on an innovation that would allow it to die cast nearly all of the underbody of the EV in one piece, a breakthrough that would speed up production and lower costs.
Expanding into the mass market is critical to meeting Tesla’s aim of increasing vehicle deliveries to 20 million by 2030, setting it apart from competitors like Volkswagen who have shied away from setting delivery targets and instead focused their strategies on protecting profit margins in the transition to EVs.
High prices, along with skyrocketed interest rates, are just a few of the obstacles holding back a larger slice of the population in Europe and the U.S. from buying electric vehicles.
Chief Executive Elon Musk visited the plant in Gruenheide on Friday and thanked staff for their hard work, a video showed on Musk’s social media platform X.
At the same meeting, he informed staff of plans to build the 25,000-euro vehicle there, the source said.
The German plant currently produces the Model Y, Europe’s best-selling EV.
The carmaker plans to double the German plant’s capacity to 1 million vehicles a year, but has not provided an update on how many cars it produces there since March, when it said it had produced 5,000 vehicles in a week – equivalent to around 250,000 annually.
Tesla also reportedly told workers at the German plant that they would receive a four percent pay raise starting in November, and production workers would get an additional 2,500 euros per year from February 2024 onward. That works out to an 18 percent raise in about one and a half years.
In 2022, a German union said Tesla’s wages were about 20 percent lower than those offered under collective bargaining agreements at other automakers.
2nd Gear: GM’s $2 Billion EV Investment
General Motors’ tentative agreement with the United Auto Workers union includes about $2 billion in new investment to build future electric vehicles and related materials at plants in Michigan, Kansas and New York, the union told Automotive News:
The deal, which now goes to GM’s 46,000 UAW-represented employees for a ratification vote, includes $1.25 billion for the automaker’s Lansing Grand River assembly plant in Michigan and $391 million for Fairfax Assembly in Kansas, both of which are for EV production, the UAW said in a summary of the proposed contract. GM also plans to invest $300 million at its engine plant in Tonawanda, N.Y., for production of electric drive units, according to the summary.
The agreement commits GM to more than $11 billion in additional manufacturing investments that the union said already was planned — a majority of which also is related to EV production. Combined, the UAW’s deals with the Detroit 3 call for $40 billion in investment through April 2028.
Ratification voting on the three agreements, which all include 25 percent total wage increases and a $5,000 ratification bonus, is happening throughout November.
“We were able to wrench back so much of what these companies have stolen from us over the past few decades,” President Shawn Fain, UAW President, said on a Facebook broadcast Saturday. “We won back our dignity as auto workers.”
The agreement brings employees at GM’s Ultium Cells LLC joint-venture battery plants under the national agreement. Workers at the first Ultium Cells plant in Warren, Ohio, already unionized and are negotiating their first contract. The UAW said Ultium Cells employees would receive hourly pay raises of at least $6 to $8 upon ratification, with new hires receiving at least 75 percent of the top wage rate.
Additionally, the agreement gives employees who worked at the former assembly plant in nearby Lordstown, Ohio, an opportunity to transfer to the Ultium plant. Anyone working at Lordstown, which built its last Chevy Cruze in 2019, in November 2018 will have six months to apply for a transfer to the battery factory and still maintain their current wage rate and seniority status, according to the union.
General Motors was the last of the Big Three automakers to come to a deal with the UAW after a six week-long strike that is said to have cost the company at least $800 million.
3rd Gear: Ford Lays Of 1,600 In Louisville
Ford announced temporary layoffs of about 1,600 workers at its Louisville Assembly Plant that are supposed to last though November. It’s apparently due to a “parts-related issue,” and the plant employs a total of 3,483 workers. A little under 3,230 of them are hourly, and they build the Ford Escape and Lincoln Corsair. The news comes just a few days after most Ford factories began returning to normal after the 41-day UAW strike. From The Detroit Free Press:
In late October, Ford offered two weeks unpaid personal leave to some UAW members at Louisville Assembly.
The UAW strike against Ford ended Oct. 25 when the union and automaker reached a tentative agreement. Ford workers around the country are now voting on the deal. Louisville Assembly never went on strike. The Kentucky Truck Plant in Louisville, which builds the highly profitable Super Duty truck, Ford Expedition and Lincoln Navigator, was the last of three Ford factories to strike. Workers walked out on Oct. 11.
Striking at Kentucky Trucks, which generates about $25 billion per year in revenue, was “key” to the UAW’s strategy to get a deal done and end the strike, according to Freep. UAW President Shawn Fain said people would notice if F-Series pickup truck production was impacted, and as it turns out, he was right.
4th Gear: Lyft Can’t Beat Uber
Lyft cut its prices to better compete with its main ride-hailing competitor, Uber, but it wasn’t enough to prevent its rival form reporting its second quarterly operating profit. From Reuters:
After the slowest sales increase in the second quarter in two years, Lyft is expected to post a bigger growth story in the September quarter as it attracted more riders with lower prices.
The average price of a standard Lyft ride as of September-end was more than 4% cheaper than Uber’s similar service, according to data analytics firm YipitData, a big change since February, when both the companies were charging nearly the same price.
For Lyft, which under new boss David Risher has signaled a more aggressive pricing strategy, market share wins have been slow. Lyft’s share has risen just 200 basis points to 29% since January, when the price war started, YipitData said.
It does not help that Uber has a larger presence than Lyft and a more diverse business that includes food delivery. It posted an operating profit in the quarter ending in June for the first time in its 14-year history, and the good news should keep coming for the July-September quarter, where it is expected to nearly double profit to $1.02 billion.
But Uber’s growth has slowed. In the quarter ended June, Uber’s revenue rose 14.3%, a pace almost half that of the previous three months. Analysts estimate growth in the September quarter to be about the same as the previous quarter.
Lyft will likely post an 8.4% rise in its third-quarter revenue on Wednesday, LSEG data, compared with a roughly 3% increase in the second. Adjusted core earnings – a closely watched metric of profitability – is expected to jump by a quarter to $82.6 million.
Reverse: This Guy Stinks
Neutral: Saw A Really Clean Ford Escort This Weekend
Look at this car. It is minty fresh, and judging by the plates, is on either its first or second owner. Really impressive stuff.
On The Radio: The Beatles – “Now And Then”
It’s pretty good!