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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Here in Detroit we are heading into Day 4 of the UAW’s three-plants/three companies strike. When will it end? Who knows. What will it cost? Well, as we’ll see in a couple of paragraphs, nothing comes cheap in the auto business.

The World of Cars is more than just Detroit’s union problems. Tesla’s in the news again, and Europe has a new China problem. Let’s get rolling!

Today –

• • Now the UAW-Detroit Three fight gets expensive

  • Are Chinese batteries the EU’s new Russian gas?

  • Saudi Arabia and Turkey want Tesla

Striking UAW workers at the Jeep plant in Toledo, Ohio

The three-plant walkout the United Auto Workers launched on Friday was a historic event – the first coordinated strike by the UAW against all the Detroit Three at the same time. But from a financial perspective, it was the equivalent of taking a long weekend.

Now, the cost meter is accelerating – though the Detroit Three are a long, long way from the catastrophe some executives have threatened, as Breakingviews points out.

There’s a lot going on, so let’s look at the situation one piece at a time.

• Losing a full week of production would cost the automakers real money. The walkouts at assembly plants in Michigan, Ohio and Missouri could deprive the Detroit automakers of about $150 million a day in lost revenue – more than $750 million for a five-day week. That’s based on estimates by S&P Global Mobility of 3,200 vehicles a day in lost production and Cox Automotive’s estimate of $48,000 for the average vehicle price. The actual losses will vary by product, and automakers could get some of the money back by raising prices as inventories run out.
• The strike will get expensive for the UAW, too. The union’s $825 million strike fund could start paying out as much as $6.4 million a week to 12,700 strikers. The outlay could be more if the union decides to pay the 2,600 GM and Ford workers the companies said they will lay off because their operations cannot get parts. GM and Ford said they will not supplement unemployment pay for workers idled by the strikes, because there is now no contract to require them to do so.
• Important new product launches are getting snarled by the strikes. Ford’s launch of a new generation of its Ranger mid-sized pickups is now on hold because the UAW is on strike at the Michigan Assembly plant that builds that vehicle and the popular Bronco SUV. You know who’s not on strike? Workers building Toyota’s updated Tacoma pickup that competes head-on with the Ranger. And down in Austin, Tesla employees are still on the job trying to launch the Cybertruck.
• The upside of a strike: UAW President Shawn Fain has said the automakers provoked the walkout by dragging their feet in negotiations ahead of the Sept. 14 deadline. GM, Ford and Stellantis executives say the union insisted on unreasonable demands. Now that picket lines are up and assembly lines are down, bargainers can focus. Strikers in Michigan told Reuters their top issue is bringing all UAW employees to the same top wage rate, and eliminating lower-paid “tiers” of junior or temporary workers.
• UAW actions that cut or slow production aren’t always a bad thing for the automakers. Labor-related shutdowns could give General Motors breathing room to work out problems in its EV production system. The walkout at the Toledo Jeep factory will help Stellantis burn off the stout 74 days worth of Jeep Wranglers and the whopping 188-days of Jeep Gladiator pickups built at Toledo counted by S&P Global.

Elon Musk and Turkish President Tayyip Erdogan

Saudi Arabia and Turkey are the latest countries to call on Elon Musk to choose their nations for a Tesla factory.

Automakers have long used Turkey as a low-cost production platform for exports to Europe and other markets. Turkish President Recep Tayyip Erdogan met with Musk in New York. Musk brought his toddler son to the meeting. Erdogan and Musk also talked about issues related to Musk’s SpaceX and Starlink satellite internet service.

The Wall Street Journal reported that Saudi Arabia is in early talks with Tesla about a possible factory in the Kingdom. Saudi Arabia is investing in EVs as a hedge against the sunset of combustion vehicles. Its wealth fund owns a controlling stake in Tesla rival, Lucid.

The new gas?

The European Union risks becoming as dependent on China for batteries are the EU was on Russian gas before the Ukraine war, Reuters’ Belen Carreno reports, citing an internal report prepared for EU policymakers.

EU demand for lithium-ion batteries will soar by 10 to 30 times current levels to support the bloc’s shift to renewable energy, a paper prepared for EU policymakers concluded.

As EU officials fret, Chinese battery makers are investing in European operations. China’s Gotion and Slovak startup Inobat confirmed plans today for a 20 gigawatt-hour factory.

Big retailers and other companies with goods to move are under pressure to get the carbon out of their logistics systems right now. That’s an opportunity for a gaggle of startups that have developed electric-van delivery services more nimbly than logistics industry giants such as UPS and DHL.

But as Reuters’ Nick Carey and Lisa Baertlein report, the delivery industry’s quick-moving, electric startups have a limited window before the sector’s incumbents rev up their own electric vehicle fleets, backed by superior economies of scale. Think small mammals running between the feet of the tyrannosaurs in a Cretaceous jungle.

San Francisco wants a do-over of a state agency’s decision that permitted robotaxi operators Cruise and Waymo to expand services in the city. The San Francisco city attorney’s petition comes less than a month after crashes involving Cruise robotaxis that led the General Motors AV unit to take half its vehicles out of service.

Vinfast said second quarter deliveries jumped to 9,535 vehicles, up five-fold from the previous quarter. Those are still negligible numbers compared to Tesla. Vinfast’s shares are down by more than 50% since their IPO last month. The company reports Q2 results on Thursday.

All-electric reefer trucks could be the way into China’s electric vehicle market for a Singapore startup, Singauto Technology. The company debuted its fully-electric, refrigerated trucks in Beijing.

There’s a new frontier for insanity in electric vehicle technology: A team of Swiss students built an electric race car that accelerates from 0 to 100 km/hour (62 mph) in under a second. Absolutely do not try this at home.

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