It's a hypocrisy of epic proportions. A company led by a CEO who vehemently opposes federal incentives is now leveraging them aggressively as 2024 draws to a close. Tesla CEO Elon Musk supports ending the consumer EV credits, arguing they would ultimately benefit his company and hurt competitors—but as the year winds down, Tesla appears to be leaning into these subsidies more than ever.
Welcome back to Critical Materials, your daily round-up of news and events shaping up the future of driving and clean transportation.
Also on our radar today: As Google's robotaxi service Waymo plans to expand to two new cities, the cars are witnessing more instances of vandalism. What is provoking these attacks? Plus, Volkswagen workers are embarking on a prolonged strike as the automaker prepares for historic plant closures in Europe.
30%: Tesla Leans On Tax Credits Even More
Tesla CEO Elon Musk walked into Capitol Hill yesterday wearing a black suit and a blue tie, with his four-year-old son X Æ A-12 perched on his shoulders. As he walked into the session, reporters swarmed around him and asked questions about the Department of Government Efficiency (DOGE). Musk didn't respond but reacted with a disapproving side-eye.
After meeting with government officials, though, he did respond. He reiterated that the government should "get rid of all credits." Musk has taken on a new role as head of DOGE, an internet meme-turned-advisory body in the incoming Trump administration that will propose ways to reduce annual federal spending and streamline regulations for autonomous vehicles.
But right now, Tesla needs the credits to meet its sales goals for the year, Automotive News reports. You can lease a Tesla Model 3 or Model Y for relatively cheap. Tesla is even offering 0% financing for up to 60 months on orders placed by December 15 and those delivered by December 30. There's even a $0 downpayment financing option available—with the point-of-sale federal tax credit serving as the downpayment for qualifying buyers.
It signals that Tesla needs the federal tax credits as much as any other automaker. Musk said in October that the automaker would beat last year's 1.8 million global deliveries. After a rough couple of quarters in the start of 2024, that doesn't seem to be the case. Now, Tesla is banking on holiday lease deals and offers to get closer to that figure.
Here's more from Automotive News:
Tesla’s leasing push comes after CEO Elon Musk said in October that the automaker would beat last year’s 1.8 million global deliveries. Through the first three quarters this year, global sales fell 2.3 percent, Tesla said. In the U.S., registration data showed Tesla down 7.3 percent in the same period.
Tesla’s monthly lease penetration has fluctuated over the last two years, but the trend has been toward sharply higher rates, S&P Global Mobility said.
In January 2023, Tesla’s U.S. lease penetration was 8 percent but rose to 20 percent in December last year, the data showed. This year, Tesla’s highest lease penetration was in April at 31 percent before falling to 22 percent in July and 15 percent in September, the most recent month available, S&P Global Mobility said.
It's not just the consumer credits that help Tesla. The automaker also hugely relies on some of the Biden administration's other EV policies, like the regulatory credit scheme and even funding for EV charging. So far this year, Tesla has earned over $2.1 billion selling regulatory credits to automakers that haven't reached their emissions targets. Over 40% of Tesla's profits this year came from regulatory credit sales.
Now that other automakers are also benefitting from some of these policies, Musk wants them gone altogether? I'm no arbiter of such matters, but that doesn't sound fair.
60%: Waymo's Growing Problem: Vandalism
Google parent company Alphabet's robotaxi service Waymo is operational in four U.S. cities: San Francisco, Los Angeles, Phoenix and Austin. These are self-driving Jaguar I-Pace electric crossovers that ferry passengers around town.
Waymo is now planning to expand to Atlanta and Miami as well. But it has to figure out how to deal with vandalism first. Social media is filled with videos of angry mobs smashing Waymos in San Francisco, lighting them up on fire and breaking their windshields. But why are people angry?
Here's an answer to that from Bloomberg:
In some sense, smashing a Waymo’s window is the latest instance in a long tradition of attacking new technology — in the style of textile-machine-smashing Luddites. In a more recent analog, protesters upset about gentrification in San Francisco in 2013 and 2014 staged elaborate stunts to blockade Google employee shuttle buses. They danced in front of them in clown suits, broke a window and in one case apparently vomited on a Yahoo bus.
Some of the rage against self-driving machines may have an obvious cause. Autonomous cars have created annoyances — endless midnight honking — and been involved in serious crashes. They also symbolize a very real threat of job displacement. And Waymos have been dealing with vandalism for years: During early testing in Arizona in 2018, people damaged the cars with knives and rocks.
Waymos are equipped with expensive lidars and a suite of cameras and sensors that help the vehicles navigate urban settings. According to Waymo's former CEO, each vehicle costs between $130,000 and $150,000. For companies aiming to mass deploy robotaxis, including Tesla and General Motors' Cruise, it looks like they may have to first figure out how to build public trust and confidence.
In case of miscreants—like some in the videos linked above seem to be—there will have to be a system in place to prevent them from harming these cars. Because that's not just a threat to the cars, but it could also be dangerous for the passengers riding in them.
90%: VW Union Workers Prolong Their Strikes
Volkswagen workers in Germany will go on an extended strike next week. The German automaker is planning historic plant closures in Europe along with mass layoffs as it aims to navigate the high costs of electrification and fierce foreign competition.
The nation's largest IG Metall union representing Volkswagen workers said strikes will be in effect at nine different locations starting Monday.
"It borders on mockery when Oliver Blume stands in front of the workforce and wishes them a Merry Christmas, while at the same time, the VW board would prefer to put letters of termination under the Christmas tree for the employees," IG Metall negotiator Thorsten Groeger said as per a Reuters report.
The strike will coincide with the next round of discussions between the Volkswagen Group management and labor representatives as they hope to manage costs while also protecting the manufacturing jobs, which are critical to Germany's economy, especially in the auto sector.
100%: Is Musk Being Unfair?
Tesla benefitted from billions in federal funding to sustain and grow its EV and charging businesses. Now, its competitors are also taking advantage of the Biden administration's consumer and manufacturing incentives to accelerate EV adoption. Musk himself supports industry-wide electrification. “Invest in electric vehicles," he said in 2015. "You won't regret it."
Is it fair that he wants the subsidies gone after benefitting from them for years? And does playing fair even matter anymore? Leave your thoughts in the comments.
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