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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

We’ve got good news today for Tesla shareholders worried that Elon Musk was spending too much time on social media and space ships. The Tesla Technoking is back!

Musk is doing deals in China like a head of state, firing senior Tesla executives who fall short of his expectations and slashing costs. Wall Street is loving it, though Tesla bears are not.

You might think Musk was campaigning for shareholder votes to reinstate a $56 billion pay deal. And you’d be right.

Musk’s burst of activity at Tesla is the No. 1 subject for today. There’s more: Europe’s automakers are having a rough start to the year, and U.S. automakers face a new deadline to install technology that protects pedestrians.

Why wait until tomorrow? May Day! May Day! Let’s buckle up and go.

Today –

• • Musk goes all in on China

  • Europe’s automakers hit a pothole

  • Washington mandates tech to cut pedestrian deaths

Elon Musk’s jet in Beijing. Courtesy of Chang Yan/Handout 

Elon Musk donned a suit and tie and flew to Beijing over the weekend where he was greeted like a visiting head of state by China’s Premier, then cheered like a rock star by investors.

What he accomplished won’t be clear for months, perhaps years. But investors were sure glad to see Musk devoting so much energy to Tesla. Shares in the world’s most valuable automaker are up 36% since April 22 – adding roughly $165 billion to the company’s market cap. Good timing – the shareholder vote to reinstate Musk’s $56 billion 2018 pay deal, voided by a Delaware judge, is six weeks away.

News that Musk may have secured Beijing’s blessing to launch Tesla’s “Full Self Driving” automation technology in China added $90 billion to Tesla’s market cap on Monday and burned Tesla bears who’d shorted the company’s shares.

Tesla short sellers aren’t the only ones Musk is flaming. The list of senior Tesla executives leaving or getting pushed out as Musk reasserts himself keeps growing.

Musk dismissed the head of Tesla’s new product efforts and its successful charging business and signaled plans to let go hundreds of staffers in their departments, the Information reported. The tech news site quoted a Musk email demanding that Tesla executives be “hard core” about cost cutting.

Musk’s renewed cost-cutting urgency makes sense in light of new data showing an 8% drop in demand for new Teslas in California during Q1.

In China, the prospect that Tesla could start selling FSD technology to new customers is a plus. But it won’t end the grinding price war led by China’s BYD.

FSD does not currently allow drivers to safely tune out and let their Teslas navigate the road unsupervised. It is a so-called “level 2” system that is a long way from Musk’s vision of technology that allows Tesla owners (and the company) to make money renting out their vehicles as robotaxis.

 Tesla’s FSD is entering a hypercompetitive market where Chinese rivals have a head start in mapping and managing the complexities of mega-city traffic, as well as a home field regulatory advantage, Reuters reports.

From the Beijing perspective, allowing Tesla to develop automated driving in China is like throwing a big catfish into a pool.  The other fish – Chinese autonomous vehicle companies in this case – get stronger or get eaten. Win-win for Chinese state planners who want to lead the world in AI.

It is not clear what terms Musk accepted to bring FSD technology to China. Beijing tightly restricts transfers of data out of the country. Will Tesla be allowed to send data collected by cameras on vehicles in China out of the country for processing by its Nvidia H100 powered AI mega-computers? Washington currently restricts shipments of the highest-powered AI computing chips like the H100 to China – which could make it difficult for Tesla to replicate its AI centers in China.

Will the U.S. politicians who have blasted Ford for collaborating with China’s CATL to build batteries in the United States give Musk a pass on collaborating with China’s Baidu to develop vehicle automation AI in China?

Don’t touch that dial.

A VW car in Beijing – REUTERS/Josh Arslan 

Volkswagen, Stellantis and Mercedes-Benz all reported weaker sales and revenue for the first quarter – declines variously blamed on weaker demand, model changeovers and high interest rates.

The gray skies over Europe contrasted with the comparatively upbeat outlooks from General Motors and Ford last week. But that goes to show how exceptional the U.S. combustion pickup truck market is, and how Ford and GM’s dominance of that market offsets weakness nearly everywhere else.

VW, Stellantis and Mercedes are more genuinely global enterprises (notwithstanding Stellantis’ ownership of Detroit’s Ram and Jeep businesses) – and the global auto market has hit bumpy pavement.

Looking ahead: Mercedes said it will hold firm on prices. Stellantis vowed to reduce current hefty inventories. Volkswagen stuck to its full-year profit outlook and said the second half will be better than the first.

Testing pedestrian safety systems – REUTERS/Amanda Voisard

The Biden administration issued a new rule requiring all new vehicles to have advanced automated braking systems capable of stopping for pedestrians both day and night. Automakers have until 2029 to comply – two years longer than proposed earlier.

Pedestrian fatalities on U.S. roads have risen to the highest level since 1981 as motorists have shifted to ever-larger trucks and SUVs.

Most automakers in the U.S. already equip their vehicles with automatic emergency braking systems designed to apply brakes when sensors detect an imminent collision. The new rules set more specific, rigorous requirements for those systems.

The Biden administration’s highway safety regulators launched an investigation of Ford’s Blue Cruise hands-free driving system after two fatal accidents, days after re-opening a probe of Tesla’s Autopilot technology.

The National Highway Traffic Safety Administration has yet to issue comprehensive rules to govern the design and performance of systems such as Autopilot or Blue Cruise that allow drivers to take their hands off the wheel but not to abdicate responsibility for control of the vehicle to software and sensors.

United Auto Workers President Shawn Fain reached a tentative contract agreement with the U.S. operations of Daimler Truck just ahead of a strike deadline Friday.

The deal – assuming it is ratified – allows the UAW leader to keep his eyes on the bigger prize of organizing workers at the Mercedes-Benz luxury SUV factory in Alabama next month.

Fain’s $40 million effort to bring thousands of non-union U.S. auto workers under the UAW umbrella faces a critical test at the Mercedes Alabama operation, as outlined in this analysis by Marc Robinson and John Jullen of the C-Suite newsletter. The union’s landslide victory at Volkswagen’s Tennessee factory earlier this month was historic. But the UAW faces more determined opposition from Mercedes management.

BYD increased profits by 10.6% during the first quarter, despite the EV price war and weaker economy in China. That growth pace was BYD’s slowest since 2022 – but it was still expansion. Tesla revenues and profits fell during the same period.

Hyundai is looking to hybrids to expand sales in India, Reuters reported. The South Korean automaker is shifting focus to hybrids in response to rising sales for gas-electric vehicles in the Indian market – a consumer trend also taking hold in the United States and Europe.

The Supreme Court refused to hear Elon Musk’s arguments to scrap elements of a settlement he agreed to with the Securities and Exchange Commission. Musk wanted the high court to toss a requirement that he get social media posts about Tesla approved in advance by company lawyers. The SEC deal resolved a securities fraud case brought after Musk tweeted that he had “funding secured” for a leveraged buyout of Tesla when he did not.

SK Innovation delivered an upbeat forecast for EV battery demand, saying its SK On battery unit is on track to break even this year after a stronger-than-expected first quarter.

The EU needs to install 1.2 million EV charging points a year – eight times as many as put into service last year – to meet projected demand, the European auto industry trade group ACEA said Monday. European automakers have warned that they cannot meet EU regulators’ demands for expanded EV sales without more government effort to expand charging.

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