If you've ever wrenched under the hood of your own car, you know how important it is to be able to diagnose the car with your own tools and buy parts over the counter to button up any issue that might arise. It's why there are so many pushes for right-to-repair laws, and why so many consumer protection advocates argue that putting these tools behind a walled garden is an approach that only hurts buyers and small repair shops—and owning an EV doesn't change that.
Welcome to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about a class action antitrust lawsuit against Tesla moving forward after previously being thrown out, an annual mileage comparison between EVs, hybrids, and ICE vehicles, plus Hyundai readying its all-out assault on the U.S. EV industry that kicks off later this year. Let's jump in.
30%: Class Action Against Tesla's Parts and Service Empire Gets Judge's Sign Off
A U.S. District Judge in California breathed new life into a proposed class action lawsuit originally dismissed last year which alleged Tesla's violations of two key antitrust laws.
Judge Trina L. Thompson ruled this week that in light of new evidence, Tesla must stand trial. The automaker faces accusations that it violated the federal Sherman antitrust law and California antitrust law by blocking access to parts and diagnostic tools, as well as refusing to open enough service centers.
The judge originally dismissed the lawsuit last November where consumers had complained of long wait times and high costs of repair. At the time, the judge noted that the class could not prove that the problems were "not generally known," not that Tesla coerced the class into using its services and parts because consumers had brought the vehicles to Tesla willingly in the first place.
However, the newest ruling indicates that the judge has found evidence of illegal market "tying"—that is, attempting to sell a product that requires a buyer to purchase a second product that they did not intend to originally purchase, or cannot purchase that product from a third-party—which could coerce a customer into making undesired purchases.
From Reuters:
Thompson found evidence of a repairs monopoly in Tesla's alleged refusal to open enough authorized service centers, and its designing vehicles to require diagnostic and software updates that only the company could provide.
Evidence of a parts monopoly included restricting original equipment manufacturers from selling "to anyone other than Tesla," and Tesla's selling parts to consumers only on a limited basis, the judge said.
Thompson also found evidence Tesla's alleged illegal "tying" of various markets "coerces customers into undesired purchases."
Tesla argued that the lawsuit's complaint was "illogical," and that the automaker's more profitable side of the business is the sale and leasing of vehicles.
Tesla recently confirmed that its services arm has recently become profitable during its annual shareholder meeting, calling it "kind of a big deal." In 2023, the automaker posted an income of $8.3 billion for its services and other automotive revenue—roughly 9% of its total $96.8 billion revenue.
60%: EVs Driven Far Less Than ICE Counterparts In U.S. Says Department of Energy
Drivers of electric cars are racking up significantly fewer annual miles than drivers of vehicles with competing fuel types according to a publication by the U.S. Department of Energy.
According to the study, EV drivers averaged approximately 12,400 miles in 2022, which is around 12% less than the average driver of a gasoline-powered car. The DOE says that the average gas-powered platform travels around 14,100 annual miles, or just 100 miles shy of the average of all household vehicles across all fuel types.
EVs also average 29% fewer miles than the drivers of diesel vehicles which make up the highest annual travel at 17,500 annual miles. Hybrids (both plug-in and traditional) sit nested in the middle of diesel and gas.
What's interesting about these statistics, as Green Car Reports points out, is that it's basically the mirror opposite of other major nations that have heavily adopted EVs in recent years.
In other countries, EVs typically accumulate more mileage than their combustion counterparts. Bloomberg New Energy Finance points out that while other countries frequently rack up fewer miles than the U.S., cars with electric power are usually the vehicles with the highest uptick on the odometer. In Norway, for example, EVs travel 40% more than combustion-only vehicles. This number skyrockets to 56% in the Netherlands and 66% in China.
It's not immediately clear why the U.S. differs from the rest of the world in this respect. Could it be the charging infrastructure? We know that the U.S. is working to increase the number of DC fast chargers along major highway corridors to promote the adoption of EVs, and perhaps buyers of EVs now are more likely to be owners who are traveling shorter distances. If so, this figure could flip in the U.S. as EV adoption increases and more chargers are available for longer road trips.
90%: Hyundai's American Onslaught Really Begins In Q4
Tesla has some competition coming in the EV space, and it's quite literally the entirety of the competing auto industry. Despite a slowdown in adoption, the electric car market is just heating up, and frontrunners like Hyundai are looking to take a piece of that pie. There's just one problem: tax credits.
To solve this issue, many automakers are moving the production of key vehicles stateside. Hyundai is doing exactly that as it plans to open its newest "Metaplant" in Georgia later this fall—presumably opening up vehicles to become eligible for the $7,500 EV tax credit. And now we know it all begins with the 2025 Hyundai Ioniq 5.
Now, it's fair to assume that Hyundai already let this cat out of the bag last month. Hyundai U.S. CEO Jose Munoz previously noted that it was a "no-brainer" that the Ioniq 5 would need to be the car that kicked it all off in Georgia, but the automaker didn't officially confirm that detail until today.
Here's what Hyundai has to say about its Metaplant opening up:
While the 2025 model of the popular all-electric SUV has yet to be officially unveiled for North America, HMGMA is currently training and preparing to begin production in the fourth quarter of this year. The new plant will produce all trim lines (except IONIQ 5 N) and will eventually be the sole facility building IONIQ 5 models for the U.S. market.
The Ioniq 5 will be just the first vehicle that Hyundai builds there. The plant is planned to have 8,500 employees and a production output of around 300,000 units. For comparison, Hyundai sold just a hair under 34,000 units of the Ioniq 5 in 2023, which means that there is a ton of room to grow. Fortunately, it plans to fill that gap with Genesis and Kia vehicles as well.
This factory launch is key to Hyundai's grasp on the U.S. EV market, and at full capacity, it would enable Hyundai to produce around 25% of the 1.2 million new EVs registered in the U.S. during 2023. Hyundai plans to open its plant in October, almost exactly two years after it first broke ground.
100%: If Every EV Was Eligible For The Tax Credit, Which Would You Choose?
Before I bought my Tesla Model 3, I was eyeing a Kia EV6 GT. It was my top pick by a long shot, especially after spending a few weeks with the Ioniq 5 just a few months before I was shopping around.
Unfortunately, it wasn't eligible for the EV tax credit—which at the time couldn't be applied at the point of sale, either. Now that the tax credit is revamped and even fewer vehicles are eligible for the credit, it becomes even more challenging to find a new EV that actually qualifies.
So that makes me wonder: if the tax credit could be applied to every EV on sale in the U.S. today, regardless of its country of origin or sourcing requirements, would if affect what vehicle you would purchase? And if so, which vehicle would end up in your driveway? Let me know in the comments.
