Good morning! It’s Friday, December 6, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Musk Dropped $250 Million To Elect Trump, Other Republicans
How much would you be willing to pay to elect the president you want? Well, if you’re Tesla CEO Elon Musk, that number is a quarter of a billion dollars, according to filings posted December 5. That’s right. Musk spent all of that money in the final few months of the election cycle to help win Donald Trump a second presidency, and it worked.
Sure, that’s just a minuscule fraction of Musk’s $344 billion net worth, but it’s still a nutty amount of money for one guy to spend on an election. He did it by sending the money to allied groups, and because of his good deeds for Trump, he gets to be a part of and shape the President-elect’s administration. We live in an oligarchical hell, folks. From the New York Times:
One of Mr. Musk’s most brazen moves — which emerged only on Thursday — was spending $20 million to prop up a super PAC that was named after Ruth Bader Ginsburg, the late liberal Supreme Court justice, but that sought to help Mr. Trump by softening his anti-abortion positions.
Mr. Musk put the lion’s share of the money he donated toward his main super PAC, America PAC, cutting three checks for $25 million each in the final weeks of the race, according to the new filings with the Federal Election Commission. Mr. Musk also spent $40.5 million on legally controversial checks to voters in swing states who signed a petition in support of the Constitution.
Over the course of the race, he gave America PAC a staggering $239 million in both cash and in-kind contributions.
America PAC conducted what it described as an expansive ground-game effort on Mr. Trump’s behalf. Mr. Musk came to see defeating President Biden as a vital imperative and swung hard toward Mr. Trump after the assassination attempt against him in July. He became so invested in the effort that he campaigned frequently for the Republican nominee in Pennsylvania, widely seen as the most important battleground state.
Mr. Musk also donated $4 million to America PAC on Nov. 12, a week after Election Day. He has vowed to keep his super PAC active by targeting progressive prosecutors and supporting Mr. Trump’s agenda.
[…]
Mr. Musk’s total spending on the election is not yet known — and may never be. He cut other political checks to conservative down-ballot groups this cycle, including $12 million to two groups trying to elect Republican senators, the Senate Leadership Fund and the Sentinel Action Fund. Mr. Musk, who originally wanted to keep his support for Mr. Trump quiet, may have also funded dark-money entities that will never disclose his involvement or donations.
The strangest part of all of this money is probably Musk’s funding of the RGB PAC.
On Thursday, Mr. Musk was revealed as the hidden funding source behind RBG PAC, a Republican group that worked to elect Mr. Trump but was named after a liberal jurist who despised him.
A trust belonging to Mr. Musk was the sole funder of RBG PAC, which had not yet disclosed its donors before a filing late Thursday. During the election, the group had run ads arguing that Mr. Trump’s position on abortion was not dissimilar from that of Justice Ginsburg, a feminist icon. “Great Minds Think Alike,” read the text on the super PAC’s website, featuring twin large photos of Mr. Trump and Justice Ginsburg, who died in 2020.
Her family bitterly opposed the ads. Ms. Ginsburg’s granddaughter, Clara Spera, said in a statement in October that the family condemned the use of her grandmother’s name and that doing so to “support Donald Trump’s re-election campaign, and specifically to suggest that she would approve of his position on abortion, is nothing short of appalling.”
The effort by RBG PAC was meant to reassure female voters who were wary of Mr. Trump because of his opposition to abortion rights. He has boasted of being proud of appointing the conservative justices, including Justice Ginsburg’s successor, who helped overturn Roe v. Wade.
When the group began running ads, there were hints of Mr. Musk’s involvement. The group’s leader, May Mailman, at times defended Mr. Musk on television.
Since the election, Musk has been tied at the hip with Trump, even having Thanksgiving dinner with him instead of his myriad of children and family members. Despite this, it doesn’t really seem like Trump or folks within his orbit, particularly like having him around. They just know he’s a small, insecure man who will gladly open his checkbook to finance their endeavors or post a tweet to drum up support.
Sad!
2nd Gear: VW Workers Prepare To Walk Out Monday
German Volkswagen workers at plants across the country are preparing for a second round of walkouts on December 9 as management and labor leaders hold a fourth road of talks over how to cut costs.
These walkouts are called “warning strikes” and they’re apparently designed to pressure executives during deadlocked negotiations. The last time VW workers walked out, it was for just two hours. Now, they’ll be off the job for four hours at nine of Volkswagen’s German plants. From Bloomberg:
VW is pushing for unprecedented factory closures, thousands of layoffs and 10% wage cuts at its flagship marque, which is struggling with poor demand in Europe and waning relevance in China, the world’s largest auto market. The company is trying to reduce expenses in Germany, where labor and energy costs are among the highest on the continent and its factories are being underutilized.
“It’s bordering on mockery when [Chief Executive Officer] Oliver Blume stands in front of the workforce and wishes them a Merry Christmas,” lead negotiator for Germany’s IG Metall union Thorsten Gröger said. “VW board members want nothing more than to put termination letters under their Christmas trees.”
With the stakes of the talks rising, the head of Germany’s IG Metall union Christiane Benner will join VW works council leader Daniela Cavallo and Gröger in speaking at a rally accompanying the walkouts in Wolfsburg.
Let’s hope the union and Volkswagen executives can come to an agreement soon, or things could quickly start getting very ugly for the Wolfsburg-based automaker.
3rd Gear: Tesla Gets Aggressive With Lease Deals
Tesla’s U.S. growth has stalled, and that makes a lot of sense. It has dominated the EV market for a better part of a decade at this point, but as more and more strong competition hits the market, it’s only logical that Tesla’s piece of the pie would get smaller. Still, losing any ground isn’t good enough for the Austin, Texas-based automaker, so to help boost growth it’s getting aggressive on leasing. From Automotive News:
“Tesla’s lease penetration has gone way up,” said Tom Libby, a senior analyst at S&P Global Mobility. “They are getting more and more aggressive because they need to — and because they have the financial resources to do so.”
Leasing is a underutilized option Tesla can use after slashing prices over the last two years and offering subsidized financing, including the current offer of 0.9 percent for 60 months on the Model Y crossover, according to Tesla’s website. The automaker is also offering three months of free charging and a free trial of its Full Self-Driving software.
“Tesla had a monopoly on the EV market in the U.S., but they don’t anymore and as time goes by they are adjusting to the marketplace,” Libby said. “They have no choice if they want to maintain sales momentum.”
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.
Leasing is a popular option for battery-electric vehicles because there are no restrictions on the federal tax credit for leased vehicles. In contrast, EVs purchased by consumers must be made in North America, and meet battery-sourcing requirements and price caps to qualify. Buyers also must meet income limits.
There is, of course, one minor issue: there’s no way of knowing whether the tax break will be there once Trump takes office in January 2025. If I were a betting man, I’d put a lot of money on his administration killing those incentives.
Regardless, Tesla has struggled with leasing. Some automakers have lease rates for their EVs as high as 90 percent. That’s vastly different from where Tesla is at:
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.
Tesla has taken actions in recent months to boost its leasing program. In November, Tesla announced it was allowing lease buyouts for the first time on its volume Model 3 and Model Y vehicles. In online forums, Tesla fans have pushed for lease buyouts since competitors offer them and some buyers prefer the option.
Before Tesla’s announcement, Model 3 and Model Y buyers had to return their vehicles to Tesla at the end of the lease. Tesla resold some lease returns as certified pre-owned vehicles with a warranty.
[…]
Tesla previously offered lease buyouts on its pricier Model S sedan and Model X crossover, but ended the practice in 2022. The automaker now offers lease buyouts on all of its vehicles, including the Cybertruck pickup, Tesla said on its website. Leasing on the Cybertruck began in November at $999 per month.
We’ll see how this all goes, but I don’t really think this will fix Tesla’s growth issue. It’s hard to maintain the dominance you had when you were the only guy in town when better, more compelling, guys start showing up.
4th Gear: Ford’s Posts Record EV Sales In November
Ford just had its best November for U.S. sales since before the COVID-19 pandemic, hitting a 14 percent year-over-year increase. If that wasn’t good enough news, November also represented an all-time monthly sales record for electric vehicles. From the Detroit News:
The Dearborn automaker sold 166,373 vehicles last month. That included 10,821 all-electric vehicles, representing 6.5% of sales that were up 21% from last year. Ford is running its “Power Promise” campaign, which is offering to cover the cost of a standard installation of a Level 2 home charger with each EV purchase or lease or an additional cash incentive. President-elect Donald Trump’s victory also may be prompting some EV owner wannabes to get one now, as the up to $7,500 tax credit for plug-in vehicles could be eliminated under the new administration.
The all-electric Mustang Mach-E SUV posted its best ever monthly sales, up 38%. The E-Transit commercial van was up 358%. But the F-150 Lightning truck saw sales fall 17%.
Adding in hybrids and plug-in hybrids, Ford’s electrified vehicles were 14% of U.S. sales and up 40% from last November. Internal combustion engine vehicles rose 13%.
Truck and van sales were up 23%. F-Series pickups had their best November since before COVID, increasing sales by 27% from a year ago. The hybrid version was up 52%.
The midsize Ranger was up by more than 23 times the amount sold a year ago after its plant had been affected by the United Auto Workers’ 41-day strike. The company sold 36% more Maverick hybrids than last November, though overall Maverick was down 34% year-over-year.
Transit commercial vans were up 52% for a November sales record.
SUV sales rose 8%. The Explorer, boosted by a refreshed model for 2025, was up 14%. Bronco, also hit significantly by last year’s UAW work stoppage, was up 255%, while its smaller Bronco Sport sibling fell 3.5%. Expedition increased 19%, and Escape fell 10%.
Mustang coupe sales were down 45%.
Even Lincoln had a great month. Sales of the luxury automaker’s SUVs were up 49 percent. The recently redesigned Nautilus saw its best month in 17 years, increasing 103 percent. Hybrids actually accounted for 49 percent of those sales, too. That’s a rather impressive number. Additionally, Aviator sales were up 86 percent, Navigator sales were up 11 percent and even the Corsair saw a 4.2 percent sales bump. Things are going well for the Blue Oval right now.
Boosted consumer sentiment and improved market conditions supported increased sales year-over-year across the industry last month, according to Cox Automotive Inc. Average new-vehicle interest rates decreased to 9.12%, and incentives are representing an increased percentage of average vehicle transaction prices, rising to 7.7% in October.
Good for Ford, man. In a year marred by more recalls and big losses in its EV unit, at least it seems to be finishing off strong.
