Good morning! It’s Wednesday, January 15, 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: Trump Could Wipe 40 Percent Off Tesla’s Value
Of all the well-known double acts, it’s not Bodger and Badger or Max and Paddy who are dominating the news these days, it’s Trump and Musk. After Tesla boss Elon Musk plowed millions into the re-election campaign for convicted felon Donald Trump, the tech billionaire is predicting a meteoric rise for his wealth in the coming months, but that might not actually be the case.
Musk has been whispering in Trump’s ear at every turn in an attempt to win favor with the incoming president. That does appear to be working, as the man who once detested everything about electric vehicles has softened his tone and even said he was a “huge fan” of the Cybertruck once upon a time. Actions speak louder than words, however, and Trump is projected to bring in all kinds of anti-EV rules when he takes office next week, regardless of what his new best buddy wants.
Measures like an end to EV targets, a cut in investment in charging infrastructure across America and slashed emission goals could all crash Tesla’s valuation, reports Bloomberg. Trump’s anti-EV measures could wipe as much as 40 percent off Tesla’s value in the coming year, the site explains:
Analysts at JPMorgan reckon the market has this dead wrong — that Tesla may, in fact, have the most to lose from the shifting regulatory landscape. Their back-of-the-envelope math suggests that roughly 40% of Tesla’s profits could be under threat.
JPMorgan’s Ryan Brinkman recently met with management at General Motors, Ford, Stellantis and more than half a dozen suppliers during a trip around Detroit. Most of the executives Brinkman’s team met with expect Trump to make a series of moves to the detriment of businesses producing and selling electric vehicles:
– Curtail the up to $7,500 consumer tax credit toward EV purchases and leases
– Revoke California’s waivers to regulate emissions more stringently than the Environmental Protection Agency, thereby scuttling the state’s zero-emission vehicle mandate
– Relax federal standards for tailpipe pollution and fuel efficiency, the former of which allows over-complying companies to sell compliance credits to those with shortfalls, just as California’s program does
Should those three measures be implemented when the “Home Alone 2” actor takes office next week, legacy automakers like Ford and General Motors stand to benefit in the medium term as they will no longer be tied to EV targets. The companies can fall back on their old gas-powered ways and still make money, while Tesla doesn’t have that option.
A loss of carbon credits and incentives on EV sales could be coming Tesla’s way, which will further hit the share price of the EV maker. Tesla’s stock is already dropping and is currently down 18 percent from its record highs as the company deals with slowing deliveries, dropping demand and whatever the hell is going on with the Cybertruck.
2nd Gear: Texas Sues Allstate For Tracking Drivers
While home insurers in California face accusations that they secretly scrapped fire coverage from policies, car insurers in Texas are now being sued over claims that they monitored driver behavior as a means of increasing premiums for customers.
A lawsuit has now been filed by the state of Texas accusing insurance company Allstate of illegally tracking drivers through their phones, reports the New York Times. The company is said to have used a subsidiary called Arity to track its customers as part of what is called the “world’s largest driving behavior database, as the site explains:
“Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” Ken Paxton, the state’s attorney general, said in a statement. “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law. Texans deserve better and we will hold all these companies accountable.”
In a statement, Allstate denied that the company had done anything illegal. “Arity helps consumers get the most accurate auto insurance price after they consent in a simple and transparent way that fully complies with all laws and regulations,” the company said.
The New York Times reported last year that information about people’s driving behavior was being collected via smartphone apps, such as Life360 and GasBuddy, and sold to Arity, an analytics company founded by Allstate. Arity was able to analyze the data collected from people’s smartphones to determine how often they sped, braked suddenly or were distracted by their phones while driving. It used that analysis to give them driving risk scores.
Arity has collected location, movement and driving data from more than 45 million Americans, according to the lawsuit. In each case, the drivers “were never informed about, nor consented to,” the collection and sale of their data, the Times adds.
The lawsuit is calling for the destruction of all illegally collected data, as well as civil fines of up to $10,000 per violation.
3rd Gear: VW Sales Hit By Slowing Demand In China
Automakers across the spectrum have been announcing their sales in recent weeks, ranging from the good (BMW’s EVs), the bad (Tesla) and the downright awful (Stellantis). Now, German automaker Volkswagen has revealed that its deliveries were down by two percent in 2024.
The manufacturer saw sales decline as a result of reduced demand in China and issues with its electric vehicle rollout, reports Automotive News. Volkswagen’s deliveries were down by 2.3 percent in 2024 to 9.03 million vehicles, the outlet reports:
Global sales of the group’s battery-electric vehicles were down 3.4 percent to 771,100.
Sales of the group’s plug-in hybrid vehicles increased 5 percent to 270,000 last year on demand for second-generation plug-in hybrid drivetrains with pure electric ranges of up to 143 km, the automaker said.
VW’s issues are starkest in China, where overall deliveries fell 20 percent to 2.93 million last year amid what the automaker described as a “fierce price war.” China “continues to be characterized by a fierce price war between more than 120 competitors,” VW said, adding that it aims to sell 4 million vehicles annually in the world’s biggest auto market by 2030.
It wasn’t all bad news for VW, however, as sales in the U.S. were up over the past year. The German brand saw sales grow by 6.4 percent in North America and reported a two percent growth in the U.S.
The increase in the U.S. came despite a delay to the launch of the new ID 7 electric sedan and a stop on sales of the ID 4 electric SUV over issues with its door handles.
4th Gear: Boeing Deliveries, Orders Drop Amid Government Scrutiny
If car companies want to feel better about their sales figures for 2024, they just need to look toward Boeing. The American plane maker had an awful 2024 that saw it face government probes, production caps and all kinds of scandals that hit its deliveries and order books.
The Seattle-based airplane manufacturer said that deliveries dropped by a third in 2024 and orders were down by 50 percent, reports Reuters. The company delivered just 348 planes over the last 12 months, compared with 528 the previous year:
New orders for jets in 2024 dropped to less than half as many as Boeing recorded one year earlier.
The company also recorded 569 gross orders and 377 net orders after cancellations and conversions.
Production quality issues, stricter regulatory scrutiny, supply chain delays and a seven-week strike slowed the U.S. planemaker’s assembly lines. The company has taken a cautious approach to resuming production in the wake of the strike, which ended Nov. 5. Its 737 lines restarted in early December, as Reuters first reported.
Through 2024, Boeing delivered 260 of its 737 MAX aircraft, 51 787s, 18 767s and just 14 777s.
The drop in deliveries for the plane maker came as it was hit with a production cap by the federal government, which was probing its quality control and production practices at the start of the year. During that time, it could only build 38 737 max aircraft each month.
