The auto industry is at a weird place right now: after years of pushing back against tougher regulations driving electric vehicles, the car business in America has finally leaned in, only for the incoming presidential administration to potentially pull EV tax credits away. But the industry needs that money flowing to fund this transition, and now it's starting to fight back.
Welcome back to Critical Materials, your daily roundup for all things electric and automotive tech. Today, we're chatting about the auto industry's plea to keep the EV tax credits, Waymo's way-up ridership, and GM's grim outlook for China. Let's jump in.
30%: The EV Industry Is Gearing Up To Fight Trump’s De-Electrification Plan
President-elect Donald Trump's incoming administration has been clear about how they stand on EV subsidies: get rid of 'em. That means ditching the $7,500 tax credit, production credits for critical factories, and any federal mandates, existing or not. Never fear, though, because the industry believes that the EV revolution is here to stay whether or not these subsidies disappear—the question is just how effectively, efficiently, and quickly the market is penetrated by battery-powered cars.
That being said, the industry isn't going down without a fight. Automakers, battery manufacturers, and key component suppliers are gearing up to ensure that the transition continues at full steam, or at least as closely as it can given the circumstances.
If you recall, one of Trump's campaign promises was to repeal the Inflation Reduction Act on his first day in office, as well as cut any rules that force automakers to meet an electrified sales goal of two-thirds of their fleet by 2032. Since the election, Trump hasn't spoken publicly on this promise.
Recently, The Information asked the Trump campaign about the status of his plans: are those items still on the chopping block? According to a campaign spokesperson, the incoming president will “Support the auto industry, allowing space for both gas-powered cars and electric vehicles"—which reads as an inconclusive nothing-burger that has industry lobbying groups like the Alliance for Automotive Innovation a bit riled up.
Shortly after the election, the Alliance's president and CEO, John Bozella, wrote to Trump, urging him to "preserve auto-related provisions in the current tax code" as they relate to "next-generation automotive technologies, including EVs." And that kind of lobbying is about all the industry can do right about now, especially when the first day of the Trump presidency—when those cuts were promised—is coming up very quickly.
The Alliance has since hosted a conference in Washington D.C. In attendance were auto, battery, and mining executives who passively pleaded to retain the existing credit. In fact, the National Mining Association even stressed the need to increase the existing subsidies to include the mining industry, since many of the precious ingredients in an EV battery actually need to be mined and refined in order to be turned into those sweet, sweet batteries.
Industry players also recognized that, despite the credit being in effect, EV adoption has slowed. However, they also noted that the IRA has rapidly fueled domestic investments into manufacturing and other blue-collar jobs—$123 billion since 2018 (including $90 billion in battery factories and $33 billion in EV plants, according to the report from The Information).
So while the U.S. EV adoption rate still currently sits around 10%, it's growing fast. Companies have already made vast investments into growing the EV industry, but that doesn't mean that adoption will happen without continued support and regulation. It's one of the ways that China was able to reach the major threshold of half of its new car sales being electrified (either BEV or hybrid) earlier this year.
And if the U.S. kills EV subsidies, it risks falling even further behind China's EV industry during one of the most critical times in the transition.
60%: Waymo's Ridership Doubled In The 90 Days Since It Opened Up To The Public
Waymo's robotaxis are on quite the roll. After opening up paid rides to the general public just 90 days ago, the Alphabet-backed company more than doubled its number of passengers (also called "ridership") in California.
According to the San Francisco Chronicle, Waymo hit just a hair under a half-million passengers in August, up from 204,000 passengers in May 2024 and 292,000 in June. This means Waymo managed an uptick of a whopping 295,000 passengers since May—quite the feat for the driverless ride-hailing service. Those passengers managed to log a total of 312,000 paid rides, which is more than double the number achieved at the end of Q2 (May).
So why the sudden uptick? Well, that's hard to say. Even Waymo can't attribute the reasoning to one single event. However, the company's recent expansion into Los Angeles almost certainly helped pad the numbers. And to sprinkle some more success into the mix, Waymo has also been steadily increasing the number of vehicles on the road in California and other markets like Phoenix.
Some quick napkin math from data collected by the California Public Utilities Commission shows that Waymo had around 479 vehicles in service in August, which means that each car serviced around 651 rides per month. For those keeping up, that's about one ride every 55 or so minutes. Not too shabby.
Riders are also increasingly interested in driverless cars. Some people want to try them out for sheer curiosity—I mean, it's kind of cool to be in a car and have nobody behind the wheel, right? Other folks say that Waymo's rides are typically cost-competitive when compared with ride-hailing apps like Uber and Lyft, though not always. However, some people are willing to pay a premium just to not have to make small talk with a stranger who just happens to be chauffeuring them around. The inner introvert in me loves that for them. Plus, there's no tipping a robot (yet.)
Of course, the ride has come with some bumps. Just like ridership is up, so are crashes. Waymo reported 55 collisions during Q3, which might not seem like much, but that's also double the number of crashes that occurred in Q2 (27), which doubled the number in Q1 (13). This figure appears to be very linear with the number of rides and total miles traveled.
Also, Waymo is coming to Miami next, CNBC reports. Florida Man is going autonomous, folks. Get excited.
90%: Things Are Looking Very, Very Grim For GM In China
Yesterday, we covered General Motors' $5 billion gut punch in China. Now, the whole Western auto industry is wondering if it still has a future in the world's biggest car market. Bloomberg explains exactly what's at risk:
Once a linchpin of GM’s global strategy, the company’s China business is in free fall. The automaker hasn’t given many details of its plans but the partners are looking at difficult options that will shrink its presence. The joint venture will likely cull workers and shutter plants, according to people familiar with the matter. GM is looking at axing specific models, turning brands like Buick—once the preferred car of the Chinese emperor in the 1920s—from a household name into a minor player.
Those decisions will have huge implications for GM’s willingness to stay in China beyond 2027, when its [deal with joint venture partner] SAIC expires. The company said it has no plans to leave and that the planned cutbacks will do the trick, but it will have to assess how long it can tough it out amid price wars.
GM is struggling to compete on price with domestic models subsidized by the Chinese government and could eventually leave the venture if losses persist, people familiar with the matter said. And if SAIC is no longer getting cutting-edge technology or a brand bump from working with a well-known American manufacturer, it may have a reason to walk away, the people said.
Affordable brands like BYD, Nio, and newcomer Xiaomi have begun flooding the local market. These aren't just cheap cars or clones of well-known American brands. No, they're actually extremely attractive EVs that stand on their own merits. Not only are they cheap, but they're packed full of tech and have enough range where buying anything offered by U.S. or European automakers seems silly at best.
Mike Dunne, a former GM exec and expert on the car market in China, says that the country is done with global carmakers. The country has collectively made up its mind and is flocking toward the home teams—even EV powerhouses like Tesla are feeling the heat.
“We’ve seen a collapse of market share and profits all at once and the established carmakers are powerless to stop it," Dunne said.
You can see why American automakers are sweating over the potential influx of affordable Chinese EVs in North America. And if tariffs aren't enough to protect domestic automakers from the tech prowess that overseas EVs appear to have, there's going to be trouble in Detroit.
China's car market is arguably the most competitive in the world and GM is feeling the same squeeze that just about every foreign automaker in China is feeling right now. There are more than 100 competing brands, many of which are staying nimble and innovative so they stand a chance at standing out in the crowded EV market. If GM wants to compete, it needs to rethink its strategy.
And this $5 billion reset could help it do that—well, combined with other efforts that it's trying to tackle stateside like tailor-fitting a new breed of batteries to its brand. But if GM doesn't succeed, or geopolitical tensions make selling its cars a burden, the General's future in China could be at risk.
100%: Would You Pay A Premium For An AV Ride?
You know, I found it interesting that some folks expect to pay more for a ride in a Waymo or other autonomous vehicle.
The entire idea of a driverless car is to make the long-term operating costs cheaper. When you don't have someone behind the wheel, you (ideally) reduce risk and have a robot essentially working for you 24x7 with no need for rest, sick days, or benefits. It's a capitalist market's dream. Sure, there are more upfront costs, but long term, there are projected cost reductions. Wouldn't you expect the ride to be cheaper?
Then again, others are happy to pay more to not have to deal with a better and more predictable experience. Whether it be Uber, Lyft, or a local taxi company, you never really know what you're walking into.
So now it's your turn: would you be willing to pay a premium to ride in an AV? Why or why not? Let me know in the comments.
