Good morning! It’s Friday, January 17, 2025, 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: Department For Efficiency Targeting DEI Schemes
It’s about to get a whole lot harder to ignore Tesla boss Elon Musk starting next week once his best buddy Donald Trump takes office and his role as an un-elected advisor becomes more clear. When that happens, Trump has promised Musk his own made-up government department to run, and that office could be about to cut more than $120 billion in spending on diversity, equity and inclusion schemes across America.
The new Department of Government Efficiency, which Musk will lead alongside Vivek Ramaswamy, is planning to cut $2 trillion in government spending, including $120 billion from DEI initiatives, reports the Independent. Programs to boost diversity in the workforce have been branded “unconstitutional” in a new report that outlines the made-up department’s spending plans:
DOGE, which is not actually a government department but is closely allied with the incoming Trump administration, is reportedly looking to a report from the right-wing Wisconsin Institute for Law and Liberty identifying at least $124 billion in annual DEI spending for guidance on the cuts.
The report touches on everything from homeowner assistance and housing vouchers for disadvantaged groups, to agricultural protection funding, to federal contract spending.
It alleges that DEI programs of any kind are “unconstitutional and unlawful, distort the free market through unnecessary regulations, and otherwise waste taxpayer money.”
“That’s been sent down from on high, that all this DEI stuff has to go,” a person familiar with the effort told The Washington Post. “Once all these guys get confirmed and he’s the president on Jan. 20, this is going to happen fast and furious.”
It should come as no surprise that an office led by Musk would take aim at DEI initiatives, as the Tesla boss has repeatedly claimed that “DEI must die,” adds the site. The world’s richest man argues that DEI schemes should be in place to end all discrimination, rather than “replace it with different discrimination,” he wrote on Twitter X late last year.
This is a similar belief shared by right-wing mouth breathers, who have successfully campaigned for an end to DEI initiatives at companies like Ford, Nissan and Harley-Davidson over the last year.
It’s obviously a ridiculous approach to take, as government offices should reflect the people that they govern. In the U.S., the population was classified as being 19 percent Hispanic and 12 percent Black in 2020, while just 11 percent of members of the Senate and the House identified as Black in 2023 and 10 percent were Hispanic.
2nd Gear: GM Banned From Sharing Driver Data
The state of Texas filed a suit against insurance company Allstate for tracking driver movements without consent, and General Motors has been caught doing similar activities. The American automaker has reportedly been sharing location and driving behavior data for millions of drivers without their consent.
Using the company’s OnStar system, GM reportedly collected driver data that could then have been used by insurance companies to raise premiums, the Detroit Free Press reports. The automaker has now been banned from sharing such data without driver consent for up to 20 years:
The proposed order would prohibit GM and OnStar from sharing such data to consumer reporting agencies for five years.
The agency’s complaint alleges that GM used a misleading enrollment process for its OnStar connected vehicle service and the OnStar Smart Driver feature.
“GM failed to clearly disclose that it collected consumers’ precise geolocation and driving behavior data and sold it to third parties, including consumer reporting agencies, without consumers’ consent,” the agency’s statement said.
Some of that information, if divulged to auto insurance companies, could increase a driver’s costs. Evidence of hard-braking, driving late at night and speeding could be used against that person.
The order will be in effect for 20 years and, should GM breach its terms, the automaker could be handed a hefty fine, the Free Press adds.
In response to the ban, GM said that the Smart Driver scheme was “created to promote safer driving.” However, investigators found that the system was monitoring and selling driving data “as often as every 3 seconds,” with information about harsh braking and late-night driving potentially leading to higher insurance costs.
As such, GM has ended the scheme following “customer feedback” and the Chevrolet owner added that “respecting our customers’ privacy and earning their trust is deeply important to us.”
3rd Gear: Polestar Won’t Make A Profit Until 2027
Electric vehicle sales might have hit a record in 2024, but that doesn’t mean that all EV makers are thriving now. In fact, while Tesla saw its deliveries drop over the past year, struggling EV startup Polestar has admitted that it might not turn a profit in 2025 and has pushed back its target to break even by two years.
Swedish EV maker Polestar has faced a tough few months after delays to the Polestar 3 SUV hit deliveries and the increasing tensions between the U.S. and China impacted the Geely-backed brand. This hit sales for the brand last year, and it now says it won’t make any profit this year and may not manage that feat until 2027 at the earliest, as Bloomberg reports:
Polestar is trying to recover from a difficult year marked by disappointing sales of its Polestar 3 and 4 models and market pressure from price discounts. After forecasting that revenue would be flat in 2024, the company now expects to report a “mid-teens percentage decline.”
Polestar’s American Depositary Receipts fell as much as 16% on Thursday. The delay of its breakeven cash-flow target to 2027 from 2025 increases the likelihood that the company will need another capital injection, according to Bloomberg Intelligence.
In December, Polestar secured more than $800 million in 12-month term facilities from several banks, and is seeking another for over $400 million.
The additional funds would be used by Polestar to support the rollout of new models, with the company still working to launch its Polestar 5 electric sedan and a sports car model called the Polestar 6 still on the horizon.
In order to reinvigorate sales, Bloomberg also reports that the automaker is working on a new compact SUV, imaginatively called the Polestar 7. This new model could be built in Europe in order to skirt high tariffs on vehicles imported from China, which is where the company currently builds most of its cars.
4th Gear: Biden Pushes Through Last-Minute EV Support
Support for the electric vehicle market will look very different on Monday, when “Home Alone 2” actor Donald Trump is sworn in as the next president of the United States. Before then, however, the Biden administration has rushed through some last little nuggets of funding for EV makers.
Joe Biden has snuck in billions of dollars in funding for clean transport options, reports Automotive News. The funds have been earmarked for EV startup Rivian, as well as hydrogen company Plug Power Inc, as the site explains:
The funding, expected to be announced by the Energy Department as soon as Jan. 16, includes a loan guarantee of almost $1.7 billion for Latham, New York-based Plug to construct hydrogen plants that are key to the company’s growth plans.
The department is also expected to announce as soon as Thursday the closing of a federal loan to Rivian for the construction of a Georgia manufacturing plant, the people said. The exact amount of the Rivian loan wasn’t clear, but one of the people said it’s in the neighborhood of the $6.6 billion conditional commitment the Biden administration made in November.
News of the support has worked wonders at Rivian, which saw shares raise by 4.4 percent, adds Automotive News.
Rivian has made no secret of its need to raise capital in order to expand its product range. Last year, the Illinois-based EV maker unveiled its R2 and R3 SUVs, which are set to launch in the coming years as more entry-level offerings for the brand.
