Elon Musk have some lofty (and possibly impossible) goals for Tesla will be reached by the end of the decade, Toyota’s Global vehicle production fell again in July, and Tesla is facing a class action lawsuit virtual brake problem. All that and more in Morning shift for Tuesday, August 30, 2022.
First gear: Elon’s bold Tesla output target
Elon Musk has set a goal of selling 20 million cars by 2030. If that happens, Tesla will literally twice as large as any other automaker in history, and it will account for about 20% of the total global vehicle market.
As for the record, Tesla is only on track to sell about 1.5 million vehicles this year. That means they will have to increase production 13 times. That’s an order of magnitude to say the least.
Some analysts are equating it with something like the Manhattan Project, but for a car company. Are from Reuters:
Musk’s vision poses incredible challenges for the 19-year-old Texas-based automaker, especially in securing enough batteries and critical raw materials like lithium and nickel to power the car. 20 million cars.
In the process, Tesla will need to build seven or eight more “gigafactories” — once every 12 months on average — taking market share from every competitor and becoming a company the size of Volkswagen AG and Toyota Motor Corp combined. It will also need about 30 times more battery capacity to power all of its vehicle factories.
The price tag will be steep: Tesla could spend around $400 billion or more over the next eight years building new battery and vehicle assembly plants globally, and $200 billion or more building or buying batteries, including including raw material costs.
Multiple countries, including Indonesia, Canada and India are currently fighting to win Tesla’s next factory. A decision could come from the company by the end of 2022.
Producing 20 million vehicles a year would require Tesla to expand both its own battery-making capacity, and the capacity of its battery partners and the raw materials producers that supply them.
“Long-term, we’re expecting to make on the order of 3,000 gigawatt hours or 3 terawatt hours per year,” Musk told investors in July. “I think we’ve got a good chance of achieving this actually before 2030, but I’m highly confident that we could do it by 2030.”
Tesla’s current battery production capacity is 100 gigawatt-hours.
So, it certainly seems like a tall order for Tesla and Musk to hit this goal, but I suppose stranger things have happened.
2nd Gear: Toyota May Miss the Mark Again
Toyota is on board the struggle bus at the moment. The company announced that its July global vehicle production fell 8.6 percent compared to last year. That means it will miss its production target for the fourth month in a row.
The chip shortage, Covid outbreaks, severe weather and a recall probe have hampered production. From Reuters:
The world’s largest carmaker’s continued weakness in July’s overall performance in terms of sales has raised concerns that Toyota may have to lower its annual production target of 9.7 million vehicles. , even as China returns to pandemic restrictions and chip shortages are showing signs of abating.
Toyota produced 706,547 vehicles worldwide last month, well below its target of about 800,000 units and year-end production of 773,135.
Output for the first four months of the current financial year, which started in April, fell 10.3% from the original plan.
Toyota said domestic production fell 28.2 percent, surpassing the July production record overseas, up 4.5 percent, thanks to a strong recovery in Europe, China and the rest of Asia. .
Earlier this month, Toyota said it would keep its annual production target unchanged. It plans to raise production through November. That, of course, depends on the supply of both parts and people. The company said it expected a September Recovery output is about 850,000 vehicles. That would be a record for the month.
3rd gear: Tesla strikes with another lawsuit
A Tesla Model 3 owner in California is suing the company as part of a proposed class action lawsuit over the vehicle’s virtual braking problem. The lawsuit calls it “a terrifying and dangerous nightmare.”
The lawsuit from San Francisco-based Tesla owner Jose Alvarez Toledo alleges that the company has rushed self-driving vehicles to market with unsafe technology. Are from Reuters:
This adds to public and regulatory scrutiny of Tesla’s assistant driver technology, even though Tesla CEO Elon Musk has promised full self-driving capabilities by the end of the year.
“When an unexpected brake failure occurs, they turn what is supposed to be a safety feature into a terrifying and dangerous nightmare,” said Toledo’s lawsuit, filed Friday in federal court. state in the northern county of California.
The lawsuit seeks class action status against all U.S. owners or lessors of a Tesla that experienced a sudden and unexpected brake failure.
Earlier this year, NHTSA opened an investigation into more than 415,000 Teslas over reports of virtual braking when Autopilot engaged cars.
4th gear: Tesla Violated Labor Law
This is not Tesla’s day on The Morning Shift.
The National Labor Relations Board has ruled that Tesla violated labor law when the company did not allow employees to wear pro-union shirts.
This move overturns a Trump-era precedent that has made a difference opinion on this issue. Are from Bloomberg:
NLRB President Lauren McFerran said in a statement Monday following the agency’s 3-2 ruling by a Democratic majority: “Wearing a union badge, whether it’s a button or a t-shirt, is a form of formality. important protected communication. “For decades, employees have used badges to advocate for their workplace interests – from helping organize campaigns, to protesting unfair workplace conditions – and the law has always protected them.”
According to the ruling, the electric-car maker requires production workers to wear black shirts with the Tesla logo, or sometimes full-body black shirts when their supervisors allow it. The majority argued that this policy interfered with workers’ rights under the National Labor Relations Act of 1935.
Tesla argues that the dress code is designed to prevent clothing from “undermining” cars. It also states that employees are free to display other types of union insignia while on the job.
But during a 2018 hearing about the incident, former Tesla employees testified that managers had asked them to take off their United Auto Workers union t-shirts, even though their colleagues wore them. t-shirts support sports teams without incident.
The dress code change now allows employees to wear union shirts … as long as those shirts are black.
“When an employer interferes in any way with an employee’s right to display a union badge, the employer must demonstrate exceptional circumstances justifying the intervention,” the NLRB said. mine”.
5th gear: Find out What qualifies for the EV Tax Credit is not easy
As it turns out, guidance on what vehicles qualify for the $7,500 EV tax credit under the Inflation Reduction Act is confusing both car buyers and automakers, which isn’t great.
In an effort to comply with new regulations on how many cars must be made in North America and how many components must be sourced from trade-friendly countries, several automakers have implemented changes. Are from Detroit Free Press:
While it’s easy to figure out where to assemble a vehicle or battery, it can be difficult to keep track of where some battery parts and materials come from. Once that’s done, it will be more complicated to move operations to – or increase the extraction and processing of raw materials in – the United States or friendly countries with which we have free trade agreements and take much more time than building a new battery factory.
“At this point, it’s very difficult to say which electric vehicles will actually qualify based on the material and battery manufacturing requirements,” said Chris Harto, senior energy policy analyst at Consumer Reports. . Detroit Free Press. “Even the manufacturers themselves won’t know for sure until the IRS issues draft guidance later this year.”
According to Freep, these are some of the problems facing automakers and consumers.
It may take years before many vehicles qualify for the full $7,500 credit.
Vehicles currently eligible will not be assembled for the new $3,750 unless they are manufactured in the US, Canada or Mexico. That would eliminate many of the EVs that had previously received benefits.
The battery must not only be assembled in North America, but must use materials from friendly countries to qualify for the other $3,750.
Automakers that hit an initial incentive cap of 200,000 vehicles won’t be eligible for the new offer until 2023. That’s bad news for General Motors and Tesla, the leaders in terms of sales. electric vehicle sales.
There is a price limit on the price of eligible vehicles. Certain trim levels of a given vehicle may qualify while others may not.
No one, not a government regulator, car manufacturer, dealer or salesperson, knows exactly how it will all work – yet.
- Eligible vehicle price limits: $55,000 for cars, $80,000 for pickups, SUVs, and trucks. That seems simple enough, but the Cadillac Lyriq, an SUV under the EPA, should qualify. The Genesis GV60, which Genesis calls an SUV but classifies as a car by the EPA, may not be.
- Will the credit be given immediately, so dealers can reduce the sale price, or will buyers have to wait to make their taxes?
- Income limit of $150,000 for singles and $300,000 for married couples.
- And as mentioned earlier, used electric cars will be eligible for incentives up to $4,000 for the first time. The income limit is $75,000 for singles, $150,000 for married couples.
So it’s really going to take a while to sort all of this out. It will probably be a while before automakers really catch up with the new regulations, and it will probably be even longer before consumers really understand what does and doesn’t qualify for the new regulations. tax credit.