Good morning and Happy New Year! It’s Thursday, January 2, 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: Musk Could Kill Probes Into His Businesses
Elon Musk just spent over a quarter of a billion dollars getting Donald Trump elected president. From the looks of it, he didn’t do this because he thought Trump would be what’s best for the U.S. Instead, he sees Trump as a means to an end for him to get real power and influence over our government.
It also helps him get control over the myriad of probes and regulatory actions his various companies face. Right now, there are at least 20 different investigations ongoing at Tesla, SpaceX, Twitter and his other entities. From Reuters:
Last month, in the waning days of the Biden administration, the SEC set a tight deadline of several days for demanding that Elon Musk pay a settlement or face civil charges relating to alleged securities violations during his $44 billion takeover of Twitter in 2022.
Musk broke the news himself in a social-media post: “Oh Gary, how could you do this to me?” he wrote, referring to SEC Chair Gary Gensler.
He added a smiley-face emoji but attached a legal letter condemning the “improperly motivated” ultimatum: “We demand to know who directed these actions—whether it was you or the White House.”
Twitter (or X, I don’t care anymore) isn’t the only one of his companies facing scrutiny.
The inquiries include examinations of the alleged securities violations; questions over the safety of Tesla’s Autopilot and Full Self-Driving (FSD) systems; potential animal-welfare violations in Neuralink’s brain-chip experiments; and alleged pollution, hiring-discrimination and licensing problems at SpaceX.
Musk, Tesla, SpaceX and Neuralink did not respond to comment requests. Before the election, Musk posted: “I have never asked [Trump] for any favors, nor has he offered me any.”
A Trump-transition spokesperson called Musk a “brilliant” entrepreneur and said Trump’s administration would ensure law and order, “treating all Americans equally.”
The Musk-related cases could languish or be dropped by Trump-appointed agency and department heads, the current and former U.S. officials said.
Trump’s DOJ picks, for example, include lawyers who defended him in criminal and impeachment trials and a nominee for FBI chief whom Musk vocally supported and who has repeatedly vowed to pursue Trump’s enemies, one current and three former DOJ officials said.
Lower-level DOJ officials could also exercise prosecutorial discretion to avoid aggressively pursuing Musk companies in light of his relationship with Trump, said Barbara McQuade, a former U.S. attorney in Detroit during the Obama administration who also worked as a federal prosecutor during the George W. Bush and Clinton administrations. “To the extent they want to please the boss, I think they know how to do that.”
Since the election, Trump’s “First Buddy” has touted his newfound influence and given examples of how he might use it. One of the best examples of this is his whole dumbass Department of Governmental Efficiency project that he’s leading with Vivek Ramaswamy.
He has also talked about ridding the U.S. of those pesky self-driving vehicle regulations he so deeply despises.
NHTSA officials have repeatedly scrutinized Tesla for nearly a decade, at times enraging Musk. During one 2016 call, he screamed profanities at regulators launching the first of several investigations into Tesla’s Autopilot driver-assistance system after a fatal crash, according to two people familiar with the matter. There are currently five ongoing and open NHTSA probes covering driver-assistance technology and other operations in Tesla vehicles.
Tesla has blamed Tesla drivers in defending itself against lawsuits and investigations over accidents involving FSD and Autopilot, saying it had warned drivers to pay attention.
A DOJ probe into whether Tesla and Musk exaggerated its vehicles’ self-driving capabilities is among those where investigators have faced challenges. Prosecutors have grappled with demonstrating that Musk and Tesla crossed a line from legal salesmanship into knowingly making false claims that misled investors and harmed consumers. The probe had stalled before the election in part due to the legal hurdles, a person familiar with the investigation said.
Another probe, by the U.S. attorney’s office in Manhattan, involves the driving range of Tesla vehicles and followed a Reuters investigation that found the automaker had rigged its in-dash displays to give drivers “rosy” projections about how many miles they could drive on battery power. It was unclear how far the probe has progressed.
SpaceX is also facing scrutiny from the government, but not nearly as much as Musk’s other companies since they were already in bed together.
During a September summit, Musk labeled “insane” an EPA inquiry that resulted in SpaceX agreeing to a proposed $148,378 fine for dumping pollutants, which Musk said were actually “drinking water.”
The FAA separately in September proposed fining SpaceX $633,000 for allegedly failing to follow license requirements and not getting approval for changes during two launches in 2023.
Musk called for FAA chief Mike Whitaker to resign in September, shortly after the FAA fined SpaceX and delayed one of its launches. Whitaker said last month he would step down before Trump’s term.
Buckle up, because this probably won’t end anytime soon. However, when Musk and Trump finally do break up, I’m sure there will be fireworks, the likes of which we haven’t seen since the last “Real Housewives” reunion.
2nd Gear: Mazda Set For Record-Breaking 2024
Despite the fact that 2024 was a bit rocky for a lot of the automotive world, Mazda found a way to excel. Thanks to demand for small, gas-powered crossovers, the Japanese automaker delivered over 420,000 vehicles in 2024. That accounts for a 16 percent rise, according to Mazda’s North American president, Tom Donnelley. That number actually represents Mazda’s best sales year since 1986, and it looks to keep that momentum going through 2025 by selling north of 450,000 cars. From Bloomberg:
Overall new car sales in the US are set to grow 2.3% in 2024 to about 15.9 million vehicles, Cox Automotive’s Kelley Blue Book has projected. Mazda’s US volume tops luxury brands such as BMW and Mercedes-Benz, but still well below peers like Subaru, Kia and Nissan. This year’s surge marks a major turn-around since 2019 when sales hit a six-year low of 278,552 vehicles.
Mazda has tiptoed into the hot market for gas-electrics with three models: a standard hybrid version of the CX-50 compact crossover and plug-in variants of its CX-70 and CX-90 SUVs. The CX-50 hybrid uses technology from strategic partner Toyota Motor Corp. and all three have received mixed reviews.
Donnelly said Mazda plans to develop a new in-house system for an expanded range of hybrids and test the waters with a fully battery-electric vehicle by 2027 — its first in the US since the short-lived, limited distribution MX-30 EV.
“BEV penetration is at 10% right now and, given recent events, not likely to accelerate much beyond that,” he said. “We’re not a brand that is out there making a bold proclamation about 100% by any particular time frame.”
Mazda’s best-selling vehicle is also one of its oldest: the CX-5 compact crossover it builds in Japan. You can expect that trend to continue as the car is set to be refreshed in the next year or so. Rounding out the top three in sales is the tiny CX-30 and CX-50, which competes with the CX-5.
3rd Gear: China Bracing For Unsteady 2025
Electric vehicle manufacturers in China saw a robust sales boom to close out 2024, but it’s very possible those good times will not continue in the new year as carmakers, led by BYD, face demand issues in China and around the world.
A number of these companies saw their sales rise throughout 2024. However, that’s not the case for all of them, and it paints a bit of a rocky picture for what 2025 holds. From Bloomberg:
Industry heavyweight BYD shipped a record 4.27 million EVs and plug-in hybrids last year. Meanwhile, Li Auto Inc. delivered more than 500,000 cars, and Stellantis NV partner Leapmotor doubled sales to more than 293,700.
Other popular marques, including Nio Inc. and Xpeng Inc., fell short of their targets despite the end-of-year pick up in demand. Zhejiang Geely Holding Group Co.’s premium electric car brand Zeekr saw sales climb 87% to 222,123 last year, missing its 230,000 goal. The wider Geely auto group, including its namesake brand, delivered 2.18 million cars, up 32% year-on-year.
[…]
Brands under Huawei Technologies Co.’s Harmony Intelligent Mobility Alliance, including Aito, collectively delivered more than 444,000 cars last year. After smashing through its initial delivery target of 100,000 electric SU7 sedans, Xiaomi Corp. Chairman Lei Jun said the sales target for its EV division will be lifted to 300,000 for 2025, with an SUV slated for launch this year.
[…]
The mixed results signal another year of fierce competition for the world’s biggest auto market, which has endured a relentless price war that’s seen major manufacturers carve out a bigger share while smaller players are being pushed to the brink. Growing trade tensions with key trading partners like the European Union have hit China’s EV exports and the country’s top industry group has urged the government to extend concessions for trading in older vehicles to spur domestic sales.
Those uncertainties are clouding the start of 2025, despite the better-than-expected 2024 result. China’s total passenger car retail sales may increase just 2% to 23.4 million vehicles in 2025, from 5.7% growth last year, according to Cui Dongshu, secretary general of the country’s Passenger Car Association.
[…]
That’s likely to put even more pressure on Chinese carmakers to roll out newer models or tech-laden offerings that are popular with the country’s increasingly picky buyers.
Legacy automakers are also going to be hit pretty hard as home-grown products continue to dominate. SAIC and Guangzhou, which are partners of Volkswagen and Toyota, respectively, are expected to see their 2024 deliveries decline by 20 percent. Ouch.
4th Gear: Ford Recalls Hybrids For Battery Defect
Ford is recalling 16,480 Escape and 4,004 Lincoln Corsair plug-in hybrid crossovers because of a battery issue, according to documents filed with the National Highway Traffic Safety Administration. The Dearborn-based automaker said the problem started in manufacturing and resulted in “microdefects and local stress.” These issues could damage the high-voltage battery cell’s separator layer, which could lead to a short circuit and a potential fire. From Car And Driver:
A “Stop Safely Now” message will appear on the instrument cluster if the problem occurs, Ford said. The recall documents state that there have been four total reports of “thermal venting” as a result of the issue, but no accidents or injuries have been reported.
Affected vehicles are plug-in-hybrid models with a 2.5-liter four-cylinder engine and were assembled between July 10, 2019, and April 17, 2024. Ford will notify owners beginning on January 20. Dealers will update the affected vehicles’ Battery Energy Control Module software so it can detect the problem, and if it is found, they will replace the high-voltage battery pack at no charge.
Owners of potentially affected Escape and Corsair SUVs can check the NHTSA recalls site or contact Ford customer service at 866–436–7332.
This is not a very fun way to ring in the new year, Ford.
Reverse: I Wish There Was An Antique Bugatti In My Garage
On The Radio: Guy Lombardo – ‘Auld Lang Syne’
Happy New Year, folks.
