I hope you’ve got a long, restful Memorial Day weekend ahead of you. It’s been a taxing year and you deserve a rest. But first, let’s use The Morning Dump to explore why Tesla CEO Elon Musk seemingly doesn’t worry about China destroying the American car market as much as he did, like, four months ago.
Oh, yeah, there’s a total coincidence that data seems to indicate that Tesla is cutting back production at its Shanghai plant. Nothing to see here folks. Fellow American EV automaker Lucid is also cutting back, but this time on staff.
And, finally, Chinese smartphone company/EV automaker Xiaomi is upping its targets as it expects to sell more cars.
Elon Musk: Wait, No, Tariffs Are Bad
Elon Musk spoke yesterday at the Viva Tech conference in France (via videoconference) and he said “I don’t quite know what the public perception [of me] is,” but noted that the representation of him is salacious because the “more crazy it sounds, the more clicks it will get.”
You know what, I’m gonna hand it to Elon Musk on this one. It’s probably a societal burden that Elon Musk lacks self-awareness, but it’s definitely better for his mental health. You gotta take care of yourself!
Musk also said he thinks people should listen less to headlines and more to what people say, so the link is above so you can hear what he says.
Here’s what he said regarding Chinese tariffs:
“Neither Tesla nor I asked for these tariffs, in fact, I was surprised when they were announced… Tesla competes quite well in the market in China with no tariffs and no deferential support. I’m in favor of no tariffs… Things that inhibit freedom of exchange or distort the market are not good.”
Musk then goes on to say he would be happy with no incentives either, assuming that incentives were also eliminated for all ICE-powered vehicles, which is a political non-starter at this point.
This is an interesting about-face if you remember what Elon Musk said in an Earnings Call way back in January:
“The Chinese car companies are the most competitive car companies in the world. So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established,” Musk said on Tesla’s earnings call Wednesday.
“Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.”
Ok, Musk! We’re listening to what you’re saying. These two things seem semi-contradictory so let’s try to parse it.
The Chinese car companies are the most competitive car companies in the world.
Yes, true. The companies are back-stopped by heavy incentives and, likely, sketchy labor practices (including forced labor), but even without that China has built a remarkable car industry remarkably fast.
So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.
This is probably true. There might be resistance in some markets, but most people just want good cheap cars.
Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.
Musk gets credit as a long-term thinker, and you have to grant that his long-term vision for space, renewables, and cars have panned out quite well. At the same time, Musk has extreme shot-term flexibility in order to meet his long-term goals.
He specifically said “most other companies” which, presumably, doesn’t include Tesla. Why would Tesla care if Mazda, Toyota, Ford, Opel, or any other automaker went away? This is consistent with what Musk has previously said about the world just being Tesla and a bunch of other Chinese automakers eventually.
From the perspective of a self-interested Elon Musk, all of these trade barriers just create problems for other companies, unless… China retaliates against all American car companies. I don’t think it’ll happen, but some kind of levy against American brands selling in China would likely hurt Tesla.
Also, it sure feels like Musk is trying to cozy up to China at a time when the rest of the West is pulling back, at least politically. Why? Elon Musk has made it clear he thinks cars are a boring business and he’s focused on AI and self-driving, which requires a huge amount of data. Data that, it seems, China is suddenly willing to give him.
It’s callous and simplistic to imply that, over the last 14 years, Musk has squeezed all the money and support out of the American government he thinks he’s going to get and is now more than happy to get that support from China. Which… makes me callous and simplistic I guess.
Tesla Cuts Model Y Production In China
Data from China shows that Tesla has cut production of the Model Y at its Shanghai plant by double digits.
The Shanghai plant, Tesla’s biggest manufacturing hub globally, planned to cut Model Y output by at least 20% during the March to June period, said the person, who declined to be named as the matter is private.
Data from the China Association of Automobile Manufacturers (CAAM) showed the output of Model Y in China stood at 49,498 units in March and 36,610 in April, 17.7% and 33% lower, respectively, compared to a year ago.
That’s not ideal, but you don’t cut back production of a car you think you’re going to sell more of, usually. But here’s the key bit from Reuters:
Tesla has left out its goal of delivering 20 million vehicles a year by 2030 in its latest impact report published on Thursday, another sign the company was moving away from electric cars as it shifts focus to robotaxis.
Yup. Robotaxis that likely would be helped by Chinese user data.
Layoffs Hit Lucid
Lucid, the there-but-for-the-Grace-of-PIF EV automaker, has decided to cut approximately 6% of its workforce, which is approximately 400 employees according to Bloomberg Law:
Job cuts will impact employees at all levels, including leadership and mid-level management, according to an email sent to employees by CEO Peter Rawlinson. Layoffs will not impact hourly manufacturing and logistics workforce.
If you were curious, Lucid recently dropped its prices and sold a total of 477 of its Lucid Air sedans in March. That’s slightly less than VinFast, which sold 496 cars in the same month.
Xiaomi Thinks It Can Sell 120,000 Cars This Year
Chinese smartphone maker Xiaomi did what Apple couldn’t do, and built a car, the Xiamoi SU7, a sub-$30k Tesla-fighter. The car looks good and the company has enjoyed a ton of hype.
Now, according to Bloomberg, the hype has translated into so much buzz that the company thinks it can increase its already lofty goals:
As of the end of April, orders for the SU7 series neared 90,000. On Thursday, Lu told reporters on a call his company was on track to ship 10,000 SU7s in June — about as much as Xiaomi moved during the first 43 days of sales — meaning it could shoot for a loftier annual goal of 120,000 units.
That’s a big number for Xiaomi and a sign for every other automaker that the market is still very much in the fast-paced Darwinian period.
What I’m Listening To During TMD Today
Here’s a thought for maybe exactly one person this morning: Beyonce’s “Break My Soul” is just a dancier, updated version of Kim Gordon/Sonic Youth’s “Ineffable Me.” If you’re gonna listen to this song, listen to it in a room by yourself.
The Big Question
Are you driving anywhere this weekend? Flying? Boating? Or staying put?
Staying put to avoid crowds. I almost never go anywhere for Memorial day; instead I’ll take a three day weekend (well probably longer) another time for travel.
This also serves as a reminder that people go gaga over having a holiday weekend. And we could have that every weekend if Sanders gets his way.
Agree with your comment. But the paradox of good ideas is that you need a critical mass of people to start the change, and that includes Morons. Morons will help you drill the Fountain of Youth then pee in it to spite you or steal all of it. A lot of Morons in this country, both left and right.
Sadly you’re spot on.
“Think of how stupid the average person is, and realize half of them are stupider than that.” ― George Carlin
I have to remind myself of this often.
I think there’s a decent chance for a four day workweek, at least in some industries, because many of the places it’s been tried, productivity has actually increased. There’s a lot of fucking around that goes on in the workplace that isn’t productive, starting with many meetings. Meetings are practically a life form; they multiply to fill all available niches.
If there’s anything the return-to-office movement has taught me, it’s that productivity is only valued because it is a necessary evil to continue profitability; managers and executives care primarily about having minions at hand to command and harass, as many as possible, as long as possible, and with as little restraint as possible. Work actually getting done at the office is a pretense and a side-effect. Even if you could prove that all the possible productivity of an office worker was doable in twenty working hours, they’d schedule them in blocks at 8am, 3pm and and 4.30pm on Friday.
As a manager myself, this is not true for any sane manager. Most of us want to do as little “managing” of my staff as possible. I assign them projects that require a resource from one of my teams, let them work on it, and come to me if they need assistance or help with roadblocks to their progress. I’ve got enough of my own shit to do, I don’t have time to micromanage people.
On top of that, in the office, performance wasn’t the issue; interpersonal issues were. Some people just can’t work six feet away from each other. Our HR department was against work-from-home, until COVID forced it, and they noticed that complaints to HR dropped 80%. I haven’t had to “coach” an employee since 2019.
I get that there are toxic workplaces galore – that’s why I’ve worked where I work for over a decade, whereas I never stayed more than five years anywhere else, primarily due to bad management – but don’t paint all management with this brush. For most of us managers, it’s just a way to make a living like everyone else.
This is absolutely fair. It’s easy to become bitter in times when it seems like the worst professionals in their fields are the ones driving policy and getting promoted and rewarded.
I’m driving out to the countryside to visit family and horses this weekend, in a EV. This is going to be fun.
Every time I see it, I’m gonna call it out. There are no actual subsidies for ICE cars in the United States. Yes yes I’ve seen the IMF report. When you peel back the covers, you see it’s almost all “indirect subsidies” like not taking pollution into account. How do you put a “price” on pollution? You make it up of course, making sure it’s big. Many of the direct subsidies are tax breaks or incentive programs available to lots of different businesses.
This is materially different from the government literally giving you money to buy EVs as they’re doing now.
Being in favor of a free, fair marketplace means supporting tariffs on Chinese cars. They subsidize at all levels, on the production and consumption side. This is to say nothing of their blatant currency manipulation either. We tried bringing the Chinese closer by letting them flood our markets with cheap goods in the hope they’d acquire a taste for our political systems and values. They did not. Time for a new plan.
Well, we have rewarded companies that were happy to cause harm to America by moving manufacturing over to China and other countries in the name of profits and shareholders.
I’m actually not in favor of such tariffs. Companies will continue to find ways to abuse their employees, lobby against worker protections, etc. Now, if these tariffs do include worker protection clauses, then I’d be more in favor of them. As it stands now, I view them as mechanisms to primarily protect the executives and such and not average Americans.
That’s an interesting view, but with so many states with “at will” exceptions (being that the employer can fire you on a whim), it would seem that people have been voting against their self-interest for quite a while now.
So why start now?
I find it funny how Right to Work is actually Right to Fire.
You’re not wrong, and I don’t see that changing with how people will weirdly get so emotionally attached to political parties and politicians. Which that in itself I never understood…
Pretty much our entire Middle East strategy is a subsidy to ICE cars
Yeah, that IMF report is a joke. The definition of a subsidy is “a direct payment made by a government or public body to assist an industry or business so that the price a commodity or service may remain low or competitive”. An “indirect subsidy” is by definition not a subsidy, and hence nonsense.
No, your bosses (read: CEOs, not trans people/jews/gun owners/w/e faction your politicans tell you to work yourself into paroxysm about) let the Chinese flood our markets with cheap goods so they could expand their reach and pump their numbers.
Everyone followed like lemmings, quietly whispering the beatitudes of “The Job Creators Are Always Right!” to each other as 2008 hit. Anyone opposed to this was a dirty hippie only fit to be abused and discounted.
Don’t pretend to be defending American interests now.
That MFr cost me over 20k because he can’t stop trolling on twitter. F Elon.
https://www.reddit.com/r/musked/
Breaking News!!!
“Billionaire contradicts himself in order to follow the winds of personal self-gain and extreme political views.”
– More News at 11.
Where’s Dyson’s HQ, now?
It’s that time a year again in Vacationland, soon a quarter of population of the greater Northeast corridor will descend on the quiet shores of Maine. They’ll sit in their cars on 95 and slowly inch towards the tolls that will cover the states budget for the year. Then they’ll get in line at Red’s Eats, or some other lobster shack, for a taste of the finest lobster from New Brunswick lobster that was trucked in on Wednesday. Then head to their cottage likely rented on AirBnb from some private equity firm. And we locals will head to our respective tourist bunkers, away from the chaos at the coast. Awaiting our return to society sometime after 5 p.m. on Monday.
Except all the massholes, 1/2 them go to the cape and the other 1/2 goes to that big lake in NH.
Oh, it’s mainly Mass plates. There is a lot of people Just Outside Boston, and can they sure fill a coastal town quickly.
Epic rant. Bravo.
I’m only going to the liquor store this weekend. Tonight, probably. After that it’s all car stuff. At home.
Drunk wrenching? Is that legal?
It better be, or I’m in big trouble.
It’s either drunk wrenching or wrenching then drunk because you dropped a vital part or your last 10mm socket into the dirt and you’ve run out of curse words and you just need to stop wrenching or you’re going to cut a bitch and that bitch is you.
EM realized no Chinese EV tariffs would help him destroy the US Big 3, which would give him X gold content and was kinda his dream long ago.
I’m not going anywhere this weekend. I am going to hit the grocery store on the way home from work tonight and barricade myself inside for 3 days. I may consider mowing the yard on Monday if it doesn’t rain on Saturday or Sunday (not likely).
The Big Question: I’m taking next week off. I’m driving to northern GA to see my son. We’re going to take in a Braves game while I’m there. Dang hotels are expensive now!
This weekend I’ll be driving about 3.5 hours to my parents, then about 3.5 hours back to pick up a boat. This one of the 1st runs of an LS swap I completed having not done anything like this before. I’m sure it will be fine, I can’t think of a single thing that could go wrong. Just me, my dog, and my emotional support fire extinguisher.
A relative of mine was caught speeding on his way to pick up a new boat. He told the cop exactly that. The cop let him off with a warning and thought it was funny.
Well I’m driving through Ohio on a holiday weekend I’m sure the police will be out in full force, time to see if my speedometer got calibrated correctly.
Competition between companies is very good for the consumer (us), because they have to innovate to remain on top. I can’t wait to see what happens.
Yet in their infinite wisdom the government deems it necessary to slap tariffs on imported cars to PREVENT you from buying them. Now that works well for domestic innovation, right?
Absofrigginlutly.
“Absofrigginlutly” was sarcastic btw.
I’ll be all for removing tariffs on Chinese cars just as soon as as we subsidize our domestic auto industry to the extent China does.
Oh and don’t give me this indirect subsidy horseshit, because it’s not like whatever goes on in the Middle East only helps American car companies. I’ve been putting gas in Japanese cars for over 25 years.
We never should have given China Most Favored Nation status. The horse has left the barn for most things, but I am a hard no on Chinese cars, not even if they build North American plants.
“We never should have given China Most Favored Nation status”
This right here.
Far, far worse for the US than NAFTA ever was.
I personally think NAFTA and its replacement are to our benefit. It’s in our interest for the two countries we share a land border with to have strong economies as well. I’d much rather pay for goods made in Mexico than China; they would cost more than Chinese-made, but less than those made in the US.
the difficult part of this is the miopic views of the competing labor pools. On one end you have what amounts to forced slave labor making goods and services so cheap you basically can buy 5-6 of them before you hit the prices that are set forth by installers requiring nearly 6 figure salaries/health benefits and all the while CEO’s needing multiple billions of dollars in pay to be retained. Both scenario’s are really the problem.
Putting together a suspension fix wishlist on FCP Euro, in hopes I can press Buy soon (I need a job, oof). Dovetailing nicely with that unemployment story, I’m watching the street like a hawk for the UPS truck with my copy of Paper Mario: The Thousand Year Door.
Edit: and riding in between the fits of bad weather, but that’s almost implicit at this point
Toyota will be fine. They seem to understand that making the best cars is sufficient to compete 🙂
I do wish Elon would be ousted from Tesla, though. Partly because of him, I hope Lucid and Rivian succeed, to have competition from something run by adults.
Need to touch up the horrible Bondo work I did on my 4Runner’s rockers, then prime, paint and put the running boards back on so it can’t be seen ever again
No real driving this weekend, but next weekend is Oppo Rally Cincy time!
Yes, I’m driving 1,000 miles to/from a music festival, 10 hours in holiday traffic (which includes DC/northern Virginia) is going to suck on the way back home, but it is what it is
No driving. I’ll be spending the weekend alone in my bedroom, possibly crying. Listening to ‘The Diamond Sea’ by Sonic Youth on repeat.
I mean… worse ways to spend a weekend.
No plans to go anywhere this weekend but if it is nice out I’ll get my mullet out, red white and blue wife beater on, t-tops off and cruise around in the fire chicken. Maybe get lunch/dinner and ice cream with the fiance. Would like to also start replacing my headers and exhaust on my firebird since those have just been sitting in boxes in the barn for ever now. (And no I don’t actually own wife beater or own a mullet/have long enough hair for a mullet currently haha)
I will be driving to the beach this weekend.
Unfortunately, that is only because my commute to work involves driving along the Gulf of Mexico for a few miles (if I take the long way, which I usually do) and I have to work in-person Saturday and Sunday.
Staying home this weekend. Why feed the inflation beast?
Good for you. There is a lot of power in refusing to feed the beast.
I do this all the time. It usually works out to our advantage too.
Hopefully flying some RC planes. I need a good headwind to launch one and today is delivering. Once I get my car back from the dealer. Forgot to do state inspection and that’s proving to be an expensive reminder. The issues are legitimate so I can’t even be mad at them. More irritated at myself that I forgot and didn’t catch those issues before now.
“I’m in favor of no tariffs… Things that inhibit freedom of exchange or distort the market are not good.”
Well, see, with labour ranging from cheap to slave and cheap coal with lax environmental regulations, it’s obvious the market is distorted, and tariffs are meant to level that so that the race to the bottom doesn’t end with us all working 996 or worse. Musk is a moron.
996 in China is something exclusively to big tech where young (programmers) were encouraged to work from 9 to 9 for 6 days a week. Note that those guys, if they were hired, also were earning 50 to 100% more than the people who did average 9 to 6 jobs, 5 days a week. It isn’t mandatory in China to get a job at Alibaba, Baidu etc. People want that. Because of money.
Labor in China isn’t cheap btw, it is that the production processes are highly optimized. Yes there are a lot of people but also a lot of robots doing things. Those can run 24/7 and achieve high quality output at the cost of a higher single investment (and maintenance). So Chinese workers maybe don’t earn as much as a US counterpart ; they often also have a higher efficiency. More output with less costs = cheaper cars.
The world was more than fine when China produced a ton of clothes, plastic crap and cheap electronics, but once it started to reach too high levels (high-end phones and now cars) the world starts to push back. “Hold it there, young buy ; NOW you’re becoming a threat to us”.
Meanwhile the GDP per capita in China is from 1/4 to 1/6th of what someone in the US earns, on average. If “the world” wants China to become more democratic and use higher levels of quality with emissions (for example) then it should pay more for goods made from China. But we are all addicted to the cheap stuff from China and once the cheap low quality stuff becomes “good” we close our door (slap tariffs on it). How can China solve that problem?
And yet they are solving it, without the help ‘of the world’. They’re building nuclear reactors (less emissions, cheaper, but more dangerous) and a TON of renewable energy generation with solar panels and wind turbines. Don’t be surprised if in a decade China might use 50% green energy. If there is anything they want is to be energy INDEPENDENT as soon as possible. Can’t blame them.
So isolationism will protect the US car market for a while, meanwhile those Chinese might develop better and better cars. After a while the difference will feel like a modern European car from 2010 vs an American made one from 1970. Even 100% tariffs won’t do then ; the consumers will ditch the domestic/local made cars because they just suck too hard.
Think Japanese cars in the 80s/90s. Such a trade war is likely to happen (if it hasn’t started already now) but the difference is that China has a lot to lose if it doesn’t do anything. We should be worried about that. Corning a cat as a human doesn’t sound that dangerous but cornering a Godzilla sized cat might not be the smartest ideas.
Note everybody is nicely echoing the slave/forced labor but even when VW did an extensive investigation they couldn’t find (themselves) any substantial evidence that in their supply chain any forced labor was used, at scale or not. Yet here we are ; we assume that every Chinese made EV was assembled by some shackled ethnic worker who is working for free while serving his life sentence….
Meanwhile workers in the US are fighting for proper pay per hour and often are forced to work 2 or even 3 jobs to survive every month. Yes they are ‘free’ but are they economically ‘free’ ?
It’d almost want to go as far as saying that modern capitalism is actually a modern way of slavery.
Thanks, Pooh bear. You almost got to my point a few times there.
Very sad to see that kind of copypasta astroturfing here. I’ve seen it most often on Reddit
Tankies find their way into everything sooner or later, unfortunately
Nice ad hominem. You are a bit wrong though. Just a little bit. Because someone has a different view than you and tries to right a wrong (why the F does the US need tariffs? It used to be the other way around ; developing countries had a ton of tariffs on imported US goods to protect their own developing industries. It’s pretty clear the opposite is happening now.
Copypasta ? I just spent 10 minutes typing. But feel free to find my post somewhere else. Are you wearing a tinfoil hat while reading this by any chance?
YW redneck.
LOL, cleaver stuff. Maybe come back after you get your facts straight. You can start with googling an average factory worker salary in China vs US. Even without any detailed analysis, it’s obvious it is cheaper to produce in China, because, well, everyone does it. And when you dig into why, well, you find all sorts of reasons that the playing field is not at all level. Tariffs help correct that so we don’t all end up living like Chinese workers do. I don’t want to work like that, so I support tariffs. I don’t want our rivers polluted, so I support tariffs. I don’t want governments to be able to plow over anything for the sake of progress, including using slave labour Uyghurs which is absolutely happening. Reality is much much different than what you painted in your post. The facts are out there, I’m not really sure where you get yours from.
Please link to the facts.
“You can start with googling…”
Not doing your homework for you.
The truth is everywhere. The evidence is everywhere. Meanwhile try to find something, on Google yourself. Don’t need to post it here. Seriously. Find a photo, video, audio fragment or eye witness report telling he did forced labor for years in the car industry in China. You would change my mind if you’d find that.
996 is like a walk in the park for many self-employed peeps like myself. I wish my day ends at 9pm and I actually get a day off a week.
It’s still nothing compared to junior I-bankers. My former classmates were more like 727–7am-2am, 7 days a week.
996 just seems rather meh by New York standards.
And that’s a good thing? Life isn’t about spending your time working.
Those junior I-bankers also get annual bonuses that are several times of what the average American makes, so there’s that. If they survive the first few years they can start adding zeros to their paychecks.
They know what they’re getting into. Who are we to judge?
I’ll likely use the following modes of Transporation over the weekend:
Car, Truck, Boat, PWC, Bike, SUP, and maybe some sort of riding lawnmower.
I’ll be on jet skis this weekend