Welcome to Monday! For the first time in a long time, today’s Auto File will not lead with an item about the United Auto Workers or the Detroit Three. Instead, we’ve got fresh news from Tesla and the troubled robo-taxi industry.
Don’t worry: The UAW story is not done. UAW President Shawn Fain is campaigning this week and next for ratification of the union’s rich contracts, and setting the stage for organizing drives at Toyota, Tesla and beyond.
I will be spending Wednesday and Thursday interviewing industry executives at the Reuters Automotive USA conference in Detroit. The Auto File will take a day off Wednesday since I will be on stage when I usually write the newsletter. (A journalist who can be two places at once: There’s a premise for a future Apple TV workplace drama.) I’ll be back Friday.
Shawn Fain and Detroit Three CEOs now share a goal
All smiles: Elon Musk in Berlin – Patrick Pleul/Pool via REUTERS
Tesla, Germany and the 25,000-euro EV
Tesla wants to use its factory near Berlin to build a model that could sell for 25,000 euros, CEO Elon Musk told employees at the complex, according to a source reached by Reuters. Tesla shares rose on the report Monday.
It is not clear when Tesla would launch this lower-cost vehicle – a project Musk has promised, and then delayed, for years. Musk said last month he was slowing work on a new factory in Mexico because he’s concerned about demand and rising interest rates.
The EU probe of unfair competition from China’s EV sector could help Tesla and other European auto producers in the near term. But cutting EV costs and prices is critical if Tesla wants to reach its ambitious growth goals – and justify its $689 billion market cap.
The board of directors for General Motors’ Cruise unit has hired an outside law firm and technology consultants to dig in to the robo-taxi company’s response to accidents and resulting investigations by state and federal regulators that have forced Cruise to suspend operations.
Cruise’s regulatory problems and operational stand-down come as GM is working on plans to inject new funds into the business. As of Sept. 30, Cruise had $1.7 billion in cash – enough to last just nine more months at the current $500 million per quarter burn rate. (See GM presentation here.)
Vogt and GM CEO Mary Barra have stuck by forecasts that Cruise and its technology could generate $1 billion in annual revenue by 2025, and $50 billion a year in revenue by 2030.
GM’s costly new UAW contract means the automaker will have less money for long-shot bets. That adds to the pressure on Vogt to rebuild trust and get back on the road to self-sustaining cash flow.
They’ll decide if those UAW contracts are “life changing” – REUTERS/Rebecca Cook
Those campaigns could start soon – capitalizing on the momentum created by the union’s success in winning record raises at the Detroit Three – if UAW-Detroit Three members don’t tell Fain to go back to the bargaining table.
NTT joins Toyota in an AV bet
Japanese telecom power NTT will test driverless vehicle technology with Toyota, and invest about $66 million in U.S. AV startup May Mobility.May Mobility, already backed by Toyota, has landed investments from other Japanese companies as part of a $111 million funding round last year.
Lyft’s price cuts likely helped it gain market share against rival Uber, but not that much, analysts said ahead of the ride-hailing company’s quarterly results report Wednesday. The average price of a Lyft ride is now about 4% cheaper than a comparable Uber ride.
Car dealers are not as bullish about the value of their stores as they were a year ago, and they are increasingly worried about Ford. Those are just some of the findings from a new survey of U.S. auto dealers by Kerrigan Advisors, which consults on dealer M&A.
Legacy automakers have a problem: Nearly half the customers who buy their EVs buy a combustion vehicle for the next purchase, according to a new study by S&P Global. In contrast, S&P found in a different study that more than 75% of Tesla owners stay loyal to EVs – although Tesla’s narrow product line means some Model Y customers opt for an internal combustion truck for their next purchase.
Sponsors are not involved in the creation of newsletters or other Reuters news content.