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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Happy Paczki Day! That’s the Detroit version of Brazil’s Carnival. We don’t put on feathery costumes and dance in the streets to usher in Lent in Michigan. We eat 2,000-calorie jelly donuts. Don’t judge.

You need a little extra sugar to get through February in the Midwestern United States. And it’s shaping up to be a tough month in the World of Cars, too.

Let’s dive right in so you can get back to spinning virtual Mardi Gras music!

Today –

• • Tesla keeps the EV price war rolling

  • Flaming robo-taxis in San Francisco

  • Toyota cleans house at Daihatsu

Is this the future of the EV market? Reuters/Frank Polich

Tesla cut prices in the United States for certain versions of the Model Y by $1,000 earlier this week, in a signal to rivals (and would-be EV buyers) that the deflation in the EV market isn’t done yet.

EV prices overall fell nearly 11% in January from a year  ago, according to new data posted Tuesday by Cox Automotive’s Kelley Blue Book. Prices for Tesla vehicles were down 20.6% year-over-year in January.

Tesla sent out emails inviting consumers to visit a store and experience Tesla’s “Romance Mode” for Valentine’s Day. What’s that, you ask? It involves heated seats, a virtual fire in the dashboard screen and “your favorite love songs on shuffle.” We’ll look forward to what late night comedians can do with this raw material.

“Since most people don’t love to buy cars in the middle of winter, Tesla is offering a $1,000 incentive to do so,” Elon Musk wrote on his X.com social media platform. “This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal.”

That noise you hear is the sound of every legacy auto executive and dealership operator smacking their forehead. They have known about the seasonality of auto demand for years. Now Tesla presents it as a novel justification for discounting?  Thwack!

Here are some better reasons for Tesla to put Barry White moves on balky buyers.

Hyundai is offering a $7,500 discount on its lineup of EVs this month – compensating for the loss of a federal tax credit of the same size. Rivian has cut prices for its R1 series truck and SUV.

Volkswagen is offering discounts equivalent to 17% of the average transaction price, according to KBB. That’s up from about 6% of the average transaction price in January 2023.

How long will this go on? Tesla’s operating margin in Q4 equated to roughly $4,000 per vehicle delivered. Tesla’s Q4 operating margin fell by 45% from a year earlier – but Tesla has margin left to accommodate more price cuts. Rivian, Lucid, Polestar and other EV startups do not.

Legacy automakers are hitting the limits of how much they are willing to lose on EVs.

Nonetheless, if you want to buy your Valentine a Cadillac Lyriq EV, you can get $7,500 off the price.

Sing it, Barry!

A Waymo robo-taxi in flames in San Francisco. Courtesy of Michael Vandi.

An empty Waymo robo-taxi that wandered into a crowd of Lunar New Year revelers in San Francisco on Sunday night was smashed and burned to a hulk.

The crime is intensifying the debate in California over the right way to regulate autonomous vehicles. The Waymo incident came days after another Waymo car clipped a bicycle rider on a San Francisco street.

That minor incident in turn followed a more serious accident involving robo-taxi rival Cruise.

Taken together, the incidents give fuel to AV critics who argue neither the technology nor society is ready for widespread deployment of self-driving vehicles – despite years of engineering work and millions of miles of testing.

City officials and AV experts questioned why the Waymo vehicle was navigating through San Francisco’s congested Chinatown at a time when human cabbies would know the streets would be crowded with pedestrians.

As videos of the Waymo car in flames zapped around on social media, California lawmakers and AV critics, including the Teamsters union, rebooted efforts to pass laws that would restrict self-driving trucks, and give local governments a veto on deployment of robo-taxis.

Not your father’s Italian champion. REUTERS/Giorgio Perottino

Italian Prime Minister Giorgia Meloni has a beef with Stellantis CEO Carlos Tavares that underscores a tough reality for European politicians: The days of “national champion” automakers supporting jobs solely out of patriotic duty are fading fast.

Meloni has demanded that Stellantis, as parent of Italy’s Fiat, give Italy priority for investments and rebuild Fiat production to 1 million vehicles a year. Tavares has countered that can happen only if demand improves, or Italy puts up subsidies.

Meloni shares a problem with her counterparts in France and Germany, who also want to defend auto sector jobs: Europe has far more vehicle-making capacity than current sales can support. A flood of EVs imported from China won’t help.

Overcapacity is a challenge for Stellantis, but it also gives Tavares leverage in bargaining for government support and better labor terms.

Toyota said the president and chair of small-car affiliate Daihatsu have stepped down, clearing the way for a new direction to recover from a scandal over rigged collision tests.

The Daihatsu scandal, and separate test rigging affairs at affiliates Toyota Industries and Hino, have distracted attention from a solid year for the parent company. Toyota is the world’s top-selling automaker, and its go-slow strategy on EVs is proving to be a winner, at least for now.

Drivers for Uber and Lyft are calling for a Valentine’s Day strike to demand better pay from the platforms.

Uber and Lyft drivers are independent contractors and not unionized. Uber told Reuters it was not concerned about the action.

Lyft earlier this month said it will revise its pay policies to assure drivers get a minimum weekly payout.

Germany won’t hit its target of putting 15 million EVs on the road by 2030 if electric vehicle sales do not reach a “tipping point,” Economy Minister Robert Habeck said. Increasing EV sales a few percentage points a year won’t get the job done, he said. Germany currently has 1.3 million fully electric vehicles on its roads, and growth in EV sales has slowed.

France will suspend a program that allowed low-income consumers to lease an EV for 100-150 euros a month after demand swamped the program’s budget.

Shell is closing seven hydrogen fueling stations in California built to serve fuel cell cars and light trucks. The company blamed “hydrogen supply complications” and “external market factors.” One of those factors is that very few hydrogen fuel cell cars have been sold.

Stellantis will invest $111 million to expand production of electric drives at a factory in Hungary.

Tata will cut EV prices in India.

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