Because it’s election season there’s a lot of talk about “bellwethers.” These are counties or regions where the population just happens to have the right mix of voters to be predictive of larger trends. The Washington congressional primary, for instance, is one of the traditional bellwethers for the presidential race, as it features a voter skew that can be prescriptive of Midwestern and Rust Belt trends.
If there’s a place in America that’s a “bellwether” for electric vehicles it’s Silicon Valley and, specifically Santa Clara County. It’s also a place where Tesla is losing ground fast to its rivals. Why?
While we’re exploring the big questions in this chapter of The Morning Dump, why do we think used car sales suddenly took off in August? The UAW has a lot of questions for Stellantis. Specifically, the union would like to know if the company is going to ship Dodge Durango production somewhere else.
And, finally, how can Volkswagen save some money as it faces an uncertain future? Hint: It’s probably layoffs.
“More And More People Have Just Had It With [Musk]”
Tesla CEO Elon Musk famously moved the HQ of his company from Silicon Valley, where Tesla was born, to Austin, Texas. It could have just been about tax breaks, or whatever, but Musk himself has said it’s because of laws signed by Governor Gavin Newsom that create more protections for LGBTQ+ students. It’s part of a larger pattern of strong opinions from Musk, lately, especially on his own platform.
Do people care? There’s some evidence that people are not buying Teslas as Musk’s favorability slips, though Tesla is still by far the biggest electric carmaker in America and I know plenty of people who held their noses and bought Model Ys because they were such a good deal.
I think it depends on where you are and who you are. People in West Virginia, for instance, might support Musk’s views and be more amenable to buying Teslas, even if West Virginia has one of the lowest adoption rates for EVs in the country.
Earlier I mentioned that Silicon Valley is a bellwether for electric car purchases. I remember visiting Stanford right at the beginning of the EV revolution and marveling at how many EVs I saw (mostly Teslas and Leafs because that’s all there really was). The data backs this up. Two of the main counties that make up Silicon Valley (Santa Clara and San Mateo) are also two of the biggest counties in the United States by EV miles traveled per capita.
If you want to look anywhere to find out what people want in terms of electric cars it’s a great place to start.
So, how’s it going? According to S&P Mobility, via this Automotive News article, it’s not going well for Tesla:
“I pull up to an intersection and every car is a Tesla Model Y, and I’m also driving one because it’s the modern Toyota Camry,” said Loren McDonald, head of Silicon Valley consultancy EVAdoption. “But there are a lot of reluctant Tesla owners who don’t want to give Elon any more money. More and more people have just had it with him.”
In Santa Clara County, the heart of Silicon Valley, new Tesla registrations fell 22 percent from January through July from the same period a year earlier, while EV rivals saw 41 percent growth, according to S&P Global Mobility. The data includes new battery-electric vehicles but not hybrids.
Santa Clara is home to Google, Apple, Intel, Stanford, and a bunch of other traditionally EV-forward companies and institutions. The dramatic decline in Tesla registrations, while everyone else is going up, isn’t a great sign. Some of this is probably due to big price cuts in Teslas last year, which took some buyers out of the market. Tesla also fell 21% across all Silicon Valley counties, though rivals only grew by 1.4% when the other counties are considered.
So who is picking up market share from Tesla?
Tesla was still the top EV brand in California with 56 percent of the market, although that was a big drop from its 64 percent share in the year-earlier period, according to S&P Global Mobility.
Brands gaining on Tesla for EV registrations include Hyundai with 55 percent growth from January through July compared with a year earlier. Rivian had a 50 percent rise and Ford a 24 percent gain, S&P Global Mobility said. California’s total EV registrations reached 232,353 in the seven-month period.
Competition was always inevitable for Tesla and the degree to which Musk’s behavior is accelerating a market share decline is likely hard to prove. Still, if there’s any state in the nation to be turned off by Musk it’s probably California.
Used Car Sales Surge In August
I mentioned this summer that the used car market was acting in somewhat unpredictable ways, and it’s only getting weirder. If you’re a buyer you should embrace the weirdness like a dad who has been dragged to 100 gecs concert. It’s good for you!
In particular, sales are way way way up in August. A total of 1.7 million used cars were sold at retail dealerships, up 13.6% year-over-year and 8% month-over-month. Just look at that graphic. With new car sales held back by interest rates, economic uncertainty, the election, et cetera, why are used car sales suddenly doing better?
Cox Automotive has an explanation, and it’s a positive one for consumers:
“Used retail sales picked up steam in August as affordability in the used market improved slightly,” said Scott Vanner, senior analyst of Economic and Industry Insights at Cox Automotive. “The increase in sales is partly attributed to the change in inventory mix, with a notable rise in units sold priced under $15,000 in August.”
It’s almost like America wants affordable cars. Crazy!
Where Is The Durango Going?
The Dodge Durango is a vehicle sold in the United States, which is how I would describe it to anyone asking me if they should buy one. Some people like it. It does have an available V8 and has resisted the softening that’s plagued a lot of three-row crossovers. Sales are only down 11% year-over-year, which is better than a lot of Stellantis products.
It’s currently a vehicle built in the Detroit Assembly Complex-Jefferson, which is known to all normal human beings as Jefferson North. The UAW doesn’t think it’s going to keep being built there and is pissed. Everyone else is just confused as to why the UAW thinks this is happening.
What does Stellantis have to say?
From the Detroit Free Press:
“[T]he union said it filed unfair labor practice charges with the National Labor Relations Board against the automaker that owns the Jeep, Ram, Chrysler, Dodge and Fiat brands for its “illegal refusal to provide information about the company’s plans regarding product commitments,” which the union said also violates the contract.
Stellantis provided a statement about the unfair labor practice charges, which were confirmed by an NLRB spokeswoman. However, the company response did not answer questions about the alleged efforts to move Durango production.
Huh. That’s strange! I wonder why they won’t directly answer such a simple question.
Volkswagen Is Ditching Its In-House Captive Finance Company
If you’re an employee at Volkswagen Financial Services it might be a good time to update your resume as the company has announced it’s going to stop writing loans and instead kick that business to Wells Fargo starting next week. VWFS will still handle loans and other “usage-based” products.
What about the company’s employees?
According to a Volkswagen Financial Services employee who asked not to be identified, executive leadership has said organizational change would occur because of the Wells Fargo partnership but provided no details. However, team leaders have predicted large job cuts to the U.S. operation would arise, the employee said. Volkswagen had not responded about the employee’s account and assessment.
Bummer.
What I’m Listening To While Writing TMD
There’s a gray, cool sky out my window and it looks the way Belle & Sebastian make me feel. Piazza, New York Catcher, are you straight or are you gay?
The Big Question
Is Silicon Valley a canary in a coalmine or just a weird place whose experiences can’t be extrapolated?
Top photo: HBO/Silicon Valley
West Virginian here. People here who own electric cars also widely hate Musk. Also there are plenty of EVs in my tiny rural town (about 575 people) both locals and visitors (among the locals I can think of 3 Teslas, 2 hyundais, a kia, and a mustang off hand). Though I’m sure percentage of total registration is quite low, West Virginia is a challenging state for widespread ev adoption given the rural and hilly nature with few highways.
Also a note, the West Virginia comment feels a little like punching down. I’m from New York, I know all the West Virginia comments. My wife is 10+ generation West Virginian. People from outside have always punched down on this region despite the folks here being some of the kindest people around and it is a state with perhaps the strongest history of progressive labor rights until the US government and millionaire mine owners literally went to war with the miners. Anyway the point is, West Virginia is beautiful, full of great people (and some really shitty politicians) and for a century has been the butt of jokes from outsiders. We don’t need to get it here as snide commentary on a segment about how Elon Musk is a douchenozzle which is maybe hurting Tesla sales.
Well said.
I would own a Tesla already if not for Musk. Instead I have a Volt and will soon be trading it in for a Mach E. I don’t want to give that dipshit my money.
Elon Musk is a cunt.
That is all.
As much as many in the media, including here, blame Musk for Tesla sales dropping, why does little ink get used discussing how old the entire lineup is ignoring Cybertruck?
The S is almost 13 years old in its current form, and most wouldn’t be able to guess the year of any specific car.
X is nearly 10 years old.
3 is 7 years old.
Y just turned 4.
Any other automaker would have done a full second gen of the S/X and significant facelifts on Y/3. At best there’s been some minor styling changes, the S got new headlights, plus the technical upgrades fleet wide.
Oddly enough, Teslas are probably the most Autopian car (except Cybertruck), as there’s not much reason to buy one new unless you want the latest heatpump design.
I’m so interested in seeing how it all plays out. I am a utilitarian focused person to the utmost. I love the lack of a visual redesign while upgrading components. I’d personally be thrilled if a 2035 Model Y looked identical with a decade’s worth of technology improvements underneath. But that is just me! I’m so interested to see how it all goes down. New is not better if it is just for the sake of being new/marketable/fashionable! And so “any other automaker” would have done a new model / significant facelifts to unnecessarily sell product which I don’t personally like. I’m all for changes when needed, i.e. changed architecture requires redesign, but otherwise I’m all for the ancient designs still in production.
They haven’t had a formal generational change, but honestly the sum of the constant smaller changes easily adds up to one or two since release. Drivetrain, suspension, performance, batteries, infotainment system, interior, plus a couple exterior refreshes. I assume it makes replacement parts an absolute nightmare, but I don’t think they’re particularly old or outdated.
Living in Santa Clara county I can tell you reason Tesla sales are down is, everyone already has one. Teslas are more common than cockroaches around here. Plus, since the new ones looks like the old one, no one has a reason to upgrade.
“Is Silicon Valley a canary in a coalmine or just a weird place whose experiences can’t be extrapolated”
As someone whose lived in Santa Clara county for most of my life I’m surprised anyone here buys a BEV anymore. Sure they WERE great for virtue signaling while also flexing on the poors but now?
BEVs are SOO 10 years ago.
Seriously though when PG&E charges $0.31/kWh (or $0.43 at EA) and a gallon of regular is $4.25 there’s not much financial sense in getting a BEV over a PHEV. If you don’t have PG&E (lucky!) and/or you have a generous employer with free or subsidized charging that math changes but that is how it is for lots of folks here. BEVs also tend to have high depreciation so there’s that too.