In China, they refer to HEVs, EREVs, PHEVs, and BEVs as “new energy vehicles,” or NEVs. The idea, in addition to simplifying the acronym soup, is to separate traditional gas-powered cars from everything else. Here in the United States, some automakers use the term “electrified” to cover basically anything that has an electric motor driving the wheels, even if it also has a gas-fueled engine.
For the purposes of today’s Morning Dump, and for getting a headline people will read, I’m going to point out that more than 1-in-5 new cars sold in America were “electrified,” and we’re getting awfully close to the point where it’s 1-in-4 cars. Can it last, though?
More cars could end up being electrified if Tesla builds a cheaper car, as many have been begging it to do. Unfortunately for people hoping for an all-new vehicle, the early indications are the vehicle will be more like a decontented Model 3/Model Y. Tesla is unique in some ways, but also not at all unique, which is why it’s at risk of tariff-related slowdowns just like any other company. Even OEMs that don’t sell in the United States are worried.
And, finally, Ford is going to save some money on executive bonuses as leadership didn’t hit quality goals for the year. I’ll explain why that’s sort of encouraging.
Hybrids And EV Sales Are Growing
I mentioned earlier this week that Tesla was absolutely taking it in the shorts when it comes to sales lately, both figuratively and literally, as anyone shorting Tesla this week has probably done well. The company doesn’t release monthly sales data, so we have to go by registration data, which lags.
The very nice folks at S&P Global Mobility sent me the full series of data, and it’s quite interesting. Right off the bat, we can see that Tesla’s market share dropped to 42% from 54% the year before. There was some inevitability to this due to competition, but you might not expect year-over-year sales to drop for the brand while they’re increasing for almost everyone else.
Rivian actually led the losers in January, dropping 21.6% year-over-year, compared to a decrease of 10.9% for Tesla, 6.9% for Kia, and 5.2% for Hyundai. Looking at the other big brands, pretty much everyone else is up by large amounts. Ford grew back into the #2 spot with a 54.8% year-over-year increase, followed by Cadillac (37.5%), and Chevrolet (36.4%). Technically, Volkswagen was up the most at 163.3%, but the company had a stop sale last year on its only EV so that doesn’t exactly count.
Looking model-by-model, the Model Y was still America’s most popular EV, albeit way down. The Model 3 grew in popularity, selling almost 14,000 units. Is the cheaper Model 3 cannibalizing Model Y sales or is this just a factory switchover issue? Or both? My guess is both, but we’re going to need more than one month to figure that out definitively.
The Mustang Mach-E was way up year-over-year at 146.8%, besting the ID.4, which barely stayed ahead of the popular Honda Prologue. So that’s the big data. What I’m a little more interested in this morning, though, is the overall mix of fuel types, as seen above.
For all of last year, solely gas-powered cars dropped to their lowest take rate since probably the end of the 19th century, with about 75.4% overall, though ICE in total was a little higher due to diesel and flex-fuel (ethanol). BEVs were at 8.1% and hybrids were at 12.1% of new car market share.
In the first month of the year, EVs were strong at 8.4% of the overall new car market, with hybrids up to a strong 13.7%. With more and more automakers offering hybrids, I don’t think anyone suspects regular hybrid sales will drop. PHEVs and EVs? That’s a little harder to predict.
If the up-to $7,500 tax credit enacted by President Biden is removed, EV sales could drop by 30% in 2027 and up to 40% off by 2030 according to a recent study from Princeton University. A lot of this has to do not only with overall pricing, but with the ability of companies to lease electric cars if they don’t qualify for tax credits the normal way. This would also have an impact on the construction of battery and car plants in the United States.
From one perspective, the fact that these cars need a tax break to be popular shows that they’re not competitive on their own in the way that, say, hybrids are. It’s a “new” technology and the goal was to jumpstart production in North America to better compete with China, which seemed to be happening.
It’s not clear if President Trump has the votes to remove the Inflation Reduction Act, but nothing the Democrats in Congress have done lately indicates that the party’s leadership in the Senate has any discernible backbone, so it’s very possible.
Is The ‘Cheap’ Tesla Just Going To Be A Decontented Car?
I’ll just get this out of the way immediately. It’s possible that nothing Tesla does is going to help the company if a large portion of its usual buyers get sick of the CEO. It’s also possible, like with just about everything in modern life, people will just move on. A just-released poll by Quinnipiac University (who will lose to the mighty Gaels of Iona today) shows that common ground might be hard to find, but a bunch of Americans agree they don’t like Elon Musk’s Department of Government Efficiency (only 36% approval). Worse for Musk, more than half of Americans think that Elon Musk and DOGE are hurting the country.
Would you buy a car from someone you think is actively harming the country? That aside, Elon Musk once touted the idea of a cheaper Tesla, though that was then rumored to be shelved last year. In October of last year, Musk said the idea of building a $25,000 car with a steering wheel “would be silly.”
Now it’s being reported by Reuters that there is a cheaper car coming, but it’s most likely a decontented Model 3/Model Y that can be built on existing production lines (which aren’t being fully utilized).
The U.S. electric vehicle maker is developing the model under a project codenamed “E41” and will build it using existing production lines, the people said. Mass production will begin at its biggest factory by output in 2026, said two of the people.
The car will be smaller and cost at least 20% less to produce than the refreshed Model Y launched late last year, two of them said. The Model Y, a mid-sized SUV crossover, retails from 263,500 yuan ($36,351).
The Shanghai output will be mainly sold in China to defend market share, one of the people said. The model will also be produced in Europe and North America, the person said, without providing a time frame.
Tesla really missed out by not calling it E-40, right? This is what happens when you leave California.
What does “smaller” mean in this context? Fewer seats? Actually smaller? Here’s what Chinese tech site 36Kr had to say:
People familiar with the matter told 36Kr that the new model is a “lower – priced Model Y”. Compared with the currently sold Model Y, there are basically no major changes in parts such as the battery, power system, and chassis of the new car.
“It is developed through the depop method,” revealed the person familiar with the matter. Depop is an internal development concept at Tesla, which means to quickly launch products by simplifying configurations while keeping the main functions unchanged.
Conceptually, a cheaper Model Y without all the fancy materials and stuff is a good idea. We’re in support of more affordable cars that are not overburdened by features people rarely use. But 20% off is not a $25,000 car. Maybe, maybe it’s a $35,000 car, or $34,420.69 because this is Elon Musk’s plan. [Ed Note: I don’t think sharing a common platform is bad, especially given how similar EV platforms are to one another. A smaller Model Y isn’t a bad thing so long as the new model offers some uniqueness. -DT].
The big questions are:
- Tesla’s margins are falling, will this hurt them even more?
- Will this be enough to overcome the competition?
- Will the market be excited by something that looks like a smaller Model Y?
I just don’t see the Model Y Play moving the market as strongly as a purpose-built, $25,000 car.
No Automaker Seems Happy About Tariffs
Like Jason when he starts talking about the Coptic Pope, no one is really quite sure where a trade war will go, but everyone is a little worried. BMW this week said they didn’t expect tariffs to last long, but expected to take a roughly $1 billion hit from them.
Even Škoda, which doesn’t even sell cars here, is worried, as CEO Klaus Zellmer said earlier today to Bloomberg:
The effect of US tariffs would be “indirect” as Skoda’s suppliers are based around the world and levies hitting them would raise costs and weigh on margins, the brand’s Chief Executive Officer Klaus Zellmer said Friday.
“If China can’t sell anything in America they will look for other avenues to pursue their growth ambitions — and of course that’s Europe,” Zellmer said in an interview with Bloomberg Television. Competition in its main sales region is increasing as a result, he added.
Using tariffs to protect and grow homegrown industries isn’t necessarily a faulty concept, although global trade in the 21st century is nothing like it was before containerization of goods was standardized. If you shut off one market, you end up impacting every other market. If Chinese suppliers can’t sell to the United States, then they’ll just look to Europe. Worse, if you’re, say, an American cattle producer, and can’t sell to China over a long enough time period, then, perhaps, your customers will find another source of beef.
Also, there’s just straight up retaliation. Tesla, in a letter to the US trade rep, complained that the company could be particularly singled out for retaliatory tariffs if a trade war continues.
Ford Execs Lose Some Bonus Over Quality Issues
Ford CEO Jim Farley will only get $24,861,866 in compensation for 2024, down from $26,470,033 in 2023 according to recent filings with the SEC. The reason, largely, is that Ford hasn’t hit the goals it set for itself to improve quality.
Farley was Ford’s biggest individual earning executive last year, but because his compensation is largely dependent on how the company performs, his total compensation declined year over year. Last year, Ford changed how it rewards executives, tying bonus payments to yearly performance rather than long-term focus. Farley said last year that executives were still getting bonuses despite disappointing performance, so he changed the practice.
In the filing, the company praised Farley for delivering solid financial results and revenues, recruiting top talent, driving a diversified product strategy, advancing a multibillion-dollar turnaround of Ford’s international operations, and building Ford’s software and services business. But it said he fell short on meeting quality improvement goals and cost-cutting targets.
As the article points out, this was mostly Farley’s own doing. Honestly, watching a CEO take some responsibility for a company’s problems is unfortunately a refreshing change from the usual. By comparison, ousted Stellantis CEO Carlos Tavares will probably end up with more money than Farley despite his company’s massive underperformance. Accountability, what a concept!
What I’m Listening To While Writing TMD
I am not going to play the song-that-shall-not-be-named because I know I’m going to get into trouble with a decent percentage of the readership here if I do, even if I think it is indeed a remarkable achievement in pop music. Instead, here’s Carly Rae Jepsen singing her not-quite-meteoric hit “I Really Like You” in the video… starring Tom Hanks walking around SoHo. What?
The Pop Question
What car needs a super decontented version?
Top Photo: S&P, Ford, Hyundai
When Ford released the Maverick pick up, the planned build ratio must have been developed by the people whose comments I just read. The deconted version was what everyone wanted but could not get.
The lower price Teslas might just be the ones that didn’t pass QA and will be sold with shortened warranties.
Here we go with “decontenting” cars again. The thing is, you could get away with it 40 or 50 years ago when we didn’t necessarily take things like AC and power windows for granted. If you wanted a stripped down Cavalier or Corolla it was right there on the lot.
Things are different now. Asking people to give up things they’ve come to expect in their cars is different from asking them to pony up extra for things they look at as luxuries. If you put a new Corolla with, say, no AC and crank windows on a lot in 2025 for $20k 99.9% of buyers will walk right past it to pay more for one with those features. Then they’ll bitch about an automaker DARING to offer a car without AC in 2025.
Not sure a decontented vehicle would save any money unless it was built specifically for that purpose on a separate line and then you might as well just optimize the design. They need to build econoboxes again. Make them BEV you don’t need the range just a two door thing like the Chinese do. They sell theirs for $5k. I bet if they scaled up and did the work they could sell it for around $10k. Will do better in crash tests because you don’t have to worry about the engine crashing into the cabin. Make a little truck version too basically American kei cars.
Lower price models are scheduled for completion in the next 12-18 months, right alongside the level 5 driving update, the taxis, robots, and all other claims meant to string along the investors propping up a comically silly P/E ratio.
It’s not like you can just make up some claims, and then make up news ones in 18 months because everyone has moved on. That would never work, right?
It’s almost certainly not that the CEO only cares about making money and only promises lower price models, but never actually intends to build any because they’re not as profitable as higher trims and profit is the game, not the environment.
Sometimes I feel like look out my window every day and all I can see are an endless stream of people lining up to voluntarily jump off a high cliff.
I’m going to go drive the car Thomas told me to buy.
Toyota Sienna cargo van. I know why they don’t make one – they’re not exactly in need of the extra volume with the high-margin people movers selling to a waiting list.
Back in the 90s-00s I thought they should’ve made the 2wd 4Runner the same low ride height as the base 2wd pickups and offered the same ultra Spartan base trim level.
Thanks to a lot of regulations is very hard to have basic vehicles from a safety perspective. Having power windows does not add a lot of cost at this point, and some cars I was thinking they already have “decontented” versions like the Toyota Camry Hybrid, Corolla, some KIAs, Chrysler released the Voyager. Basically all rental specs are the decontented versions.
You need to go back to the 90s if you want to see truly basic vehicles. I would love to see premium brands offering more basic versions how they do in Europe.
What car needs a super decontented version?
Every Single F***g Vehicle that abandoned knobs for an all-touch screen control system.
Found a Mennonite!
To be fair, I’m not a Mennonite, but I 100% agree with you. My needs for a car. Reliable, good seat, driver’s side window that rolls down, HVAC, a sound system that syncs up with my phone so I can listen to books or spotify or whatever. And that’s it. Vinyl flooring? Sure. Manual mirrors? Sure, I adjust them once and leave them. Manual seat, again, I adjust it once and leave it. Fixed windows outside of the driver’s side? Sure, why would I roll them down if the AC works?
I’ll just draw a line about painting the emblems black to hide the chrome.
Luddite? Mennonites hate vaccines, not screens.
Doesn’t your phone have a screen?
Jeep Wrangler.
2 door only, lose the A/C, no hard top option, no back seat, no touchscreen, no radio (just an empty single din slot), 4 cylinder only, vinyl seats, no carpet… doors optional.
And yet, Jeep would find a way to make that unreliable with electrical gremlins.
TJ owner here. Agree with your message IF the 4-banger offers enough torque to allow the vehicle to get out of its own way. Perhaps a NA Hurricane tuned for low-RPM torque.
How do you decontent a Tesla? Give it like a led screen or something? No back seats? There’s not much left to remove.
Cut a hole in the bottom of the driver’s seat and go full Fred Flintstone. New Energy Vehicle my ass. We’re going Old Energy.
The problem with decontenting is it usually doesn’t reduce cost for the manufacturer in the way that people think that it does. Most of the cost associated is baked into the platform design of a vehicle and the materials it is constructed out of. I constantly see this idea that cars would cost so much less if we just got rid of fancy infotainment and used crank windows but that’s just not really how it works. Tesla is going to decontent the admittedly already spartan Model 3 and Model Y but if the cost is much lower it is almost assured that the difference is coming more from the margin on the vehicle than the difference in cost to produce. Content and features in vehicles exist to justify the high prices of different trim levels, not the other way around with the content driving the high prices of higher trim levels.
It was pointed out in the article but I am not sure that a lower priced Tesla will solve Tesla’s demand problem. Resale values are stupid low for people trying to dump thier cars. Out of curiosity I browsed Model 3 Performance for sale and could easily find them for low 20s which would be a stupid good deal if it weren’t for all the, umm, baggage attached to the brand.
This is just a layman’s idle wondering, but what if the “decontented” model was designed (across any options or trims for it) to be one motor only, and not have “FSD” available?
By removing all cameras except basic parking aids (reverse, maybe front, maybe right blind spot), I imagine it could have a significantly lower-grade ECU or equivalent.
The cost of developing new computers that did less than the regular ones would probably be prohibitively expensive. I think people keep forgetting that we’re already at the point where, due to economies of scale and engineering complexity, auto manufacturers will sometimes include all the hardware for high-trim features in low-trim models and just turn them off in software.
I’m aware of that to some degree, and I’ve even witnessed it myself in retrofitting fog lights and a driver footwell light in my 2012 Prius v.
But in this case, I thought I’d read that some fairly graphically intensive games can be played in a Tesla while it’s charging. If they have the equivalent of a GeForce 4080 or something, perhaps (again, the whole line, not just lower-cost choice for buyers) a really low-grade GPU would still be adequate?
But, as I said, I’m speculating.
The current ethos in car manufacturing world would suggest almost the opposite is the probable reality. Meaning the car still ships with basically the same hardware but is software locked for capability unless you purchase or subscribe to have it unlocked. So the car is capable of FSD but only for a monthly fee. It can accelerate to 60 in 5s but you’re stuck doing it in 10s unless you subscribe. So on and so on. This is what manufacturers mean when they talk about the “software defined vehicle” which will, in my best marketing execuspeak “unlock recurring streams of revenue” they just won’t make any money on the sale of the car but assume that a non insignificant number of people will pay for these things at a later date or on an ongoing basis.
As we’ve been discussing lately “decontenting” a car really doesn’t save a manufacturer much money anymore.
Almost every vehicle sold in the US comes with power windows. In order to satisfy the pikers, manufacturers would have to spend money designing a crank window system and possibly a new door card (or at least a blanking plate for where the window switches go). All so they could offer a very slightly cheaper base price? The math just doesn’t math.
What car needs a super decontented version?
Rolls Royce and Mabach. That would be fun.
I’d say a Porsche but they already de-content it and charge you more.
A stripped out Prius or Civic Hybrid would be interesting. Maximum fuel economy and lowest maintenance possible
The real message I’m getting from Jimmy at Ford –
“Howdy Team! I couldn’t successfully achive the absolute minimal goals I self imposed on my position and this organization so I will have to take a hit to my salary, only taking home this year about 10x what most of you will make in a lifetime of wage slavery. In an unrelated note, multiply toilet paper will no longer be provided”
I can’t even fucking fathom an income like that.
In most cases it’s almost all stock/options, but it’s not like that’s a bad thing. Ford is rare in paying a 5%+ dividend so even if the stock is flat, it’s like getting an awesome savings account (even if you can’t easily cash in the millions below it, that’s a pretty nice living at 5% on top of the cash salary)
I despise it, and I despise pro sports salaries. Unfortunately, I can only boycott one of them.
I’d retire after one year and the world would never hear from me again. I loathe my job and can’t imagine ANY job I would love doing regardless of how much it pays. Once I have enough money to live a comfortable upper middle class life, I’m out. I don’t need 10 houses, a mansion, or to get into a mega-yacht dick measuring contest.
Maybe this exists…. Are there monster brodozers that exist for just doing work and are de-contented , AND are priced like they are de-contented? I don’t feel like I ever see them; I only see F-X50s with 12 lug nuts/wheel, more chrome than a boomer car meet, and a 6 foot tall hood.
I feel like they must exist. If they don’t, then that is my answer.
They exist and always have.
The majority of trucks on the road are low trim, cloth or vinyl seat work trim.
Lift kits are not equipped at the factory so that’s like complaining about fart can exhausts on compact cars or stanced suspension.
First, I wasn’t complaining.
Second, are you doing okay today?
Doing great, thanks for asking.
Most people who use the term “brodozer” do so to be pejorative, and your post certainly doesn’t seem *complimentary*, so I assume you can understand my confusion when you claim not to be complaining?
There are de-contented trucks, but people don’t buy them as long as they can get a nearly decade long loan to buy higher trim levels. Even the work truck trims have a nice profit margin built in, at least for the manufacturers.
There are a couple car lots around where I live that deal mostly in used ‘white’ trucks. Not sure how successful they are, but they’ve managed to stay open for years now.
New, they tend to be bought by corporate entities that buy a hundred trucks at a time.
I don’t know if I can call it quite “super decontented” but I think a Panel Van Leaf would be cool. Pull all the seats but the driver’s seat and possibly the front passenger seat, bed-coat the floors, optional steel panels instead of windows for the rear doors and the rear hatch.
I bet you could do that and charge standard Leaf prices or less for them. Sure as hell beats a proper electric van that you can’t get because demand is through the roof for them.
You just built a modern Grumman LLV.
I test-drove an E-Transit two weeks ago. Wasn’t any problem and I told them up front I wasn’t looking to buy.
Make the glass roof out of metal. Ditch the pleather for cloth. Nerf some of the software niceties like the arcade and streaming. Blank off the frunk. Do the same to the rear cargo well unless it’s part of the rear casting. 18″ wheels. Don’t even think of offering a trailer hitch or a third row of seats.
Oh, and ditch Musk with his ridiculous compensation package for doing exactly nothing.
Don’t forget to build it in China and have best bud Donny exempt it from all tariffs and import duties.
What physical content can they actually strip out of a 3 or a Y?
I think the “cheap” Teslas will just be paywalled software versions that they’ll offer online for with the bullshit “energy savings” price built in and via their bullshit math will be $27k and then they’ll quickly remove it overnight.
That’s what they did for the “Standard Range” Model 3.
It was supposed to have a manual interior and cloth seats. Instead they just software limited SR+ Model 3s to have less range and non-functional rear heated seats.
They did this without personally informing the reservation holders. The only reason I found out was because I follow electric car blogs and one of them mentioned the change. It took 1 call every day over 3 days to customer service before I got an answer, meanwhile Tesla was trying to dump this car on me that I didn’t want, I ordered the SR M3 not because it was the cheapest, but because of the manual interior. I would have happily ordered a long range RWD M3 at the time if I could have gotten the manual interior in it, but that wasn’t an “option” at the time.
When I found out it was in fact a software limited SR+ M3 and not the SR M3 I ordered I canceled my order. I lost a decent chunk of change on “restocking fees” on aftermarket accessories even after explaining what happened. At least Tesla refunded me in full and paid for the shipping for the Tesla made Tesla accessories I had to return.
They can strip out as much FSD hardware as possible but the results may be too popular for the good of the rest of the lineup.
Clips off turn signal stalk
“That’ll be $8 cheaper.”
(Remember that one movie about the guy who came here from Africa and acted really awkward and never really fit in, even though he was super rich? I don’t mean Elon.)
Coming to America with Eddie Murphy and Arsenio Hall?
Every time I start talking about boxing, the white guy has to bring up Rocky Marciano.
https://www.youtube.com/watch?v=tx_cXd_FFL4
The Lucid Air. Strip out anything you can, but keep the range, heated seats, and cruise control.
I agree in theory, but the range is probably 90% of the cost of the car.
It’s pack is smaller than a lot of long range EVs, in the 84-88kWh range. It could be doable.
Lucid is also bleeding money selling them where they are, I just don’t see anything major that could come out.
The minimalist designs of “luxury” EVs are basically to disguise the fact that you’re paying for a battery, motors, and not much else.
Which is exactly why I want EREV trucks. Stop cramming massive batteries in, give me one with 100-150 miles of range, and fill in the rest with a range extender.