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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

We’ve a busy day in the World of Cars – and that’s without counting the declaration from Dubai that the end of the age of oil and combustion vehicles is coming someday. Maybe.

Usually, companies and regulators wait until the Friday before a big holiday to get bad news out of the way. But everything’s happening earlier this year – including a recall of more than 2 million Teslas to revise their Autopilot/Autosteer software.

Is that really such bad news for Tesla? Keep reading.

There’s plenty more. First, a quick note: The Auto File will be taking a break after Friday. Starting on Jan. 2, it will appear on Tuesdays and Fridays. If this was forwarded to you, please feel free to subscribe. It’s free.

And now, away we go!

Today –

• • Tesla’s not-so-bad Autopilot recall

  • Driverless delivery startups keep it simple

  • EV charging industry drives toward consolidation

A recall can be just a bump in the road. REUTERS/Arnd Wiegmann

U.S. auto safety regulators have pushed Tesla to recall more than 2 million vehicles and revise software to make it harder for drivers to keep Autopilot engaged when they are not paying attention or are operating outside the system’s design envelope.

Tesla did not agree with the National Highway Traffic Safety Administration’s conclusion, after more than two years of investigation, that any action was necessary, according to a NHTSA document. But the company agreed to send an over the air software fix to resolve the investigation.

Tesla and NHTSA did not give details on how that software update will change the driver experience of using Autopilot.

The recall and NHTSA’s framing of its findings look like a win for Tesla overall, Reuters colleague David Shepardson reports.

Regulators did not conclude that Autopilot is fundamentally unsafe – as lawyers for accident victims and some safety advocates outside the agency have charged. NHTSA instead said drivers are responsible for the operation of their Teslas when Autopilot is engaged – the same position Tesla has taken to defend its technology.

Regulators found fault with “the prominence and scope” of controls and warnings designed to prevent driver misuse of Autopilot – which the agency (and Tesla) describe as a “Level 2 advanced driver assistance system. That is, a technology similar to advanced cruise control systems offered on scores of models from other manufacturers.

Tesla spread foam on the media runway ahead of the announcement with a lengthy post on Elon Musk’s X.com arguing that the company has a “moral obligation” to push forward with automated driving technology. The tweet repeated Musk’s assertions that Teslas operating on Autopilot are ten times safer than the average U.S. vehicle.

The regulatory investigations, Justice Department inquiries and litigation over Autopilot are not done.

But the scorecard for today looks like a win for Tesla which can keep selling Autopilot, as well as what it calls a more advanced “Full Self Driving” system. Revising and pushing out a software upgrade isn’t free, but it costs far less than a mechanical repair or disabling Autopilot altogether. Federal regulators have now formally adopted Tesla’s view that drivers are responsible for using Autopilot safely.

More of these please.  Reuters/Joseph White

South Korea’s big battery makers, suppliers to the Detroit Three and other legacy automakers, are under pressure to produce lithium-iron batteries, LFP for short, that can match the performance and low cost of LFP batteries made in China by CATL.

Automakers serving the United States need LFP batteries to reduce costs and overcome consumer reluctance to pay premium prices for electric vehicles. Ford and GM have both said they would buy LFP batteries from China in the short term.

But long term, U.S. automakers need LFP batteries to come from Anywhere But China because vehicles with Chinese batteries don’t qualify for Inflation Reduction Act EV tax credits – as Ford and Tesla have reminded would-be buyers in recent days.

South Korean battery industry sources told Reuters colleague Heekyong Yang that while they are racing to get automotive LFP batteries into production, it is not certain they can match the cost benchmarks set by CATL and other Chinese rivals.

Chinese producers control key links in the LFP supply chain.

SK On, Samsung SDI and LG Energy Solution are also wary of getting caught with excess LFP battery capacity if U.S. EV sales continue to fall short of previous, bullish expectations.

All your chargers belong to us. REUTERS/Gonzalo Fuentes

The fragmented EV charging industry is heading toward consolidation as big investors, including global oil companies, buy startups struggling to compete with Tesla’s Supercharger network, Reuters colleagues Nick Carey and Paul Lienert report.

The shakeout in the U.S. and European EV charging sector is getting turbocharged by intense competition for prime charging station locations. Gas stations may be going out of style with climate diplomats, but they are sitting on the high-traffic corners where EV charging stations would go.  

A measure of just how ripe this industry is for a good shake: A Reuters analysis finds there are 900 EV charging companies vying for land and a now-shrinking pool of capital.

Venture capital firms have pumped nearly $12 billion into EV charging startups – but the investment wave peaked in 2022 and has fallen sharply this year as rising interest rates forced recalculation of risk.

The U.S. government has $7.5 billion earmarked for EV charging infrastructure. But that money is dripping out slowly. The first charging station funded by the Biden infrastructure bill opened just this week.  

United Auto Workers President Shawn Fain is revving up his campaign to organize all non-union U.S. autoworkers, using some of the same tactics he employed to push Detroit’s automakers to agree to 25% wage increases.

The UAW hit Honda, Hyundai and Volkswagen with unfair labor practice charges, accusing the companies of illegal efforts to thwart employee organizing efforts. The companies denied the charges. But the Biden administration and federal labor regulators are on notice that the UAW expects their support.

Fain relaunched his social media video series on Monday with an appeal to non-union auto workers that used the record pay raises won at the Detroit Three as the main selling point.

The UAW president also set a high bar for success. The UAW will not hold organizing votes at non-union factories until 70% of workers sign cards showing support for joining up, Fain said. That makes sense. The UAW can ill afford another failed organizing attempt.  

Driverless vehicle startups including automated semi developer Aurora Innovation, middle-mile delivery company Gatik and shuttle operator May Mobility are weathering the latest storm over AV safety by sticking to fixed routes, serving business or government customers and staying out of the headlines, Reuters colleague Abhirup Roy reports.

The high-profile robo-taxi industry is taking a beating after a driverless car vs. pedestrian accident involving General Motors’ Cruise operation in San Francisco.

B2B operations such as Aurora, Kodiak Robotics and Gatik have kept chugging along. Their formula: Limit operations to well defined, well-mapped routes in states such as Texas where regulators are friendly and anti-AV advocacy groups are not as powerful as they are in San Francisco, Cruise’s home base.

That does not mean AV truck operators have a clear path to commercial, profitable deployment. Truckers and unions want a ban on driverless trucks – which they see as job killers. Investors have pulled away from AV truck company shares. Several operators, including Alphabet’s Waymo One AV truck unit, have shut down or suspended operations indefinitely.

The coming year will be critical. Aurora and Kodiak are aiming to launch human-free driverless operations on Southwestern U.S. highways.

GM is shaking up leadership in its vehicle development operations following a year of struggling to launch its next-generation electric vehicles and their “Ultium” batteries. Retiring executive vice president of product development Doug Parks will be replaced by two executives: One overseeing vehicle engineering, safety and motorsports and another responsible for “key areas critical to accelerating the company’s electrification strategy, including battery development and manufacturing engineering activities.” Problems with manufacturing engineering were one factor behind the EV output miss this year.

Swedish unions will stop collecting trash from Tesla stores, the latest escalation of the brawl between Nordic unions and their supporters and Elon Musk over his refusal to deal with unionized Swedish mechanics.

U.S. car dealers will be prohibited from charging “junk fees” and using bait-and-switch sales tactics under new rules approved by the Federal Trade Commission. The U.S. auto dealer lobby has objected and signaled it will continue to fight the rules.

Renault booked a 1.5 billion euro loss on a sale of Nissan shares connected to the restructuring (and unwinding) of the alliance between the automakers.

The auditing firm that conducted a review of human rights compliance at Volkswagen’s factory in China’s Xinjiang province is now distancing itself from a report that found no evidence of human rights abuses.

Indonesia is opening the door to imported electric vehicles, so long as the company is planning investments in the country. Indonesia has rich deposits of nickel, an EV battery mineral, and has been courting Tesla and other EV manufacturers.

GM’s fuel cell business will supply technology to Komatsu for development of a hydrogen-fueled mining truck. GM also has a deal to supply its fuel cell systems to heavy truck maker Autocar.

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