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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Happy New Year! It’s good to be back. After two weeks off duty, I was able to log on to my work computer in one try without resetting my password. That’s an auspicious start to 2024.

Not only that, the Detroit Lions are going to the NFL playoffs and the University of Michigan won the Rose Bowl. This must be Detroit’s lucky year. Right?

The last days of December are supposed to be a quiet time in the world of cars. Not so anymore. There’s not space to review everything that happened over the period once known as the Christmas break. We’ll hit the high points and look ahead to some of the events kicking off the year. Welcome back!

Today –

• • BYD vs Tesla

  • More EVs lose S. purchase subsidies

  • America’s vehicles get heavier and faster

BYD – on a roll. Reuters/Tingshu Wang

Tesla reported Tuesday fourth quarter and full year vehicle delivery figures that beat most Wall Street estimates.

Tesla delivered 1.8 million vehicles in 2023 – the company’s release is here. The final tally fell short of Elon Musk’s aspiration for 2 million vehicles.

Tesla fared better than rival Rivian, which dismayed investors on Tuesday with Q4 deliveries that fell short of analysts’ expectations. Rivian shares slumped 6%.

But when it comes to selling electrified vehicles, China’s BYD is now the one to beat.

BYD said deliveries of its EVs and plug-in hybrids surged 62% last year to just over 3 million vehicles – 1.6 million of them battery electrics, the rest plug-in hybrids. China lumps both categories together as new energy vehicles.

In the global market for electrified vehicles, Tesla and BYD are pulling away from the field. Both have highly vertically integrated operations – in contrast to legacy automakers that still outsource much of their manufacturing.

Both are moving aggressively to expand capacity, sales, and technical capability. BYD said last week it plans a production base in Hungary – the better to circumvent potential EU tariffs. BYD also got approval last week to start testing an advanced assisted driving system – aka, an Autopilot fighter.

Tesla is pushing ahead with plans for a plant in Mexico, and using the launch of its Cybertruck to showcase innovations – including a 48-volt electrical architecture and even bigger body castings – that put it years ahead of legacy rivals.

How many Cybertrucks Tesla will build in the near term is another matter.

Bottlenecks in production of Tesla’s next-generation 4680 batteries could keep the Cybertruck in production hell for months, sources told Reuters.

BYD and Tesla make money on their electric vehicles – most rivals do not. Still, investors will be watching Tesla’s fourth quarter results to see how much of the company’s profit margin was given away to sustain sales momentum.

Tesla continues to demonstrate enviable brand power, despite controversy created by Elon Musk’s social media side gig and Tesla’s pugnacious stances toward unions, regulators, and customers (more on the latter below.)

Tesla boosted sales in Norway and Sweden, despite an escalating fight with Nordic trade unions that has hobbled vehicle shipments and prompted stern words from Nordic investors.

Sorry, no subsidy for you. Reuters/Mike Blake

As the old year slipped away, so did U.S. tax subsidies for two dozen electric vehicles, including certain versions of the Tesla Model 3 and the Cybertruck, the Nissan Leaf and General Motors’ recently launched Chevy Blazer EV.

The U.S. Treasury’s online guide to which vehicles qualify for tax credits up to $7,500 is here.

On the plus side, EV buyers who qualify for a tax subsidy under the Inflation Reduction Act (IRA) can now get the value of that credit at the dealership when they buy the vehicle, instead of waiting months to get the credit via a tax return.

But the complexity of the IRA’s domestic content rules and income limits will challenge consumers and automakers alike. GM, for example, is scrambling to find a compliant source for components for Ultium platform EVs such as the Cadillac Lyriq to push their domestic content back to levels that qualify for subsidies.

At the same time, U.S. Sen. Joe Manchin, a principal architect of the IRA and not a fan of EV subsidies, said he wants the Treasury to write tighter rules to prohibit subsidies for EVs with Chinese content.

Meantime, take Q4 sales for EVs with a grain of salt. Customers racing to grab tax subsidies before they vanished could have juiced December sales at the expense of demand in Q1.

America’s best-selling car. Reuters/Rebecca Cook

The Biden administration released the annual scorecard for new vehicle fuel efficiency on the shortest day of the year.

The numbers, which you can read here, tell different stories depending on how you look at them.

Average fuel economy for 2022 model year vehicles rose to a new record of 26 miles per gallon (mpg) and is projected to rise to 26.9 mpg in model year 2023, thanks in large part to increased sales of electric vehicles.

Climate action groups, however, pointed out that average CO2 emissions/fuel economy for gasoline vehicles have barely improved since 2015.

Overall, the vehicles American consumers favor are getting larger, heavier, and faster, the Environmental Protection Agency said.

The average 2022 model vehicle packed 259 horses under the hood, and that average is expected to rise to 272 horsepower in 2023. Pickup trucks and SUVs accounted for 73% of 2022 model year sales.

Faced with thousands of complaints about suspension system failures that sometimes caused wheels to fall off, Tesla blamed customers for mistreating their vehicles, Reuters reported.

Tesla records showed that engineers were aware of widespread problems with certain suspension parts. The company conducted a recall in China under pressure from regulators. It did not order a recall for similar problems in the United States or Europe.

Tesla’s handling of suspension problems is now under investigation in Sweden and Norway. Two U.S. Senators called on Elon Musk to recall vehicles with faulty suspensions, citing the Reuters report.

Tesla responded via Musk’s X.com platform that the Reuters report was “riddled with incomplete and demonstrably incorrect information.”

The post noted a key issue for Tesla customers and regulators: Tesla “has the most advanced vehicle telemetry system that can identify emerging issues, determine scope, and allow for faster vehicle and service improvements than has ever been seen in the auto industry.”

Tesla also can use that data to challenge customers who complain that a defect caused an accident.

A woman in San Francisco complained to police that her abusive husband was using the mobile internet connections to her Tesla Model X to stalk and harass her – and Tesla denied her requests to turn off the tracking capability, Reuters reporters Kristina Cooke and Dan Levine report.

The case exposes the dark side of the connected vehicle revolution that will be celebrated at next week’s CES convention in Las Vegas

Tesla won a lawsuit brought by the woman in the San Francisco case, successfully arguing that the woman had no proof its technology enabled stalking. Other automakers are working on ways to allow vehicle operators to mask their locations.

Chinese smartphone maker Xiaomi unveiled its first electric vehicle and CEO Lei Jun said he expects to be among the world’s top 5 EV makers within 20 years.

Diesel engine maker Cummins agreed to pay a record $1.675 million fine to U.S. regulators for installing “defeat devices” in Cummins diesel engines used in Ram pickups to cheat federal emissions tests. Cummins said it will take a $2.04 billion charge related to regulatory claims.

Germany cut EV subsidies as part of a broader budget overhaul. German automakers said they would replace the lost subsidies.  

Volkswagen outlined plans to get smaller and faster – slashing product development times and reducing staff as part of an effort to shed 10 billion euros in costs.

Toyota’s production surged to a record in November of nearly 926,000 vehicles. The jump put Toyota on track for global sales of roughly 10 million vehicles.

A scandal over rigged safety tests forced Toyota’s Daihatsu mini-car brand to halt production and offer compensation to suppliers.

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