Fine, one more day sort of talking about China. Happy Friday, Tesla slashed prices globally last year, much to the chagrin of its American and European competitors. Now Tesla is facing the same pressure in China, one of its major markets. Turnabout is fair play, I suppose.
The market for cars in the United States is bouncing back a little from a moderately slow January, which is probably the way it’s going to be all year. The market should continue to improve, haphazardly, unless something like a massive rate drop hits. Speaking of up-and-down, Fisker is on the ropes.
And, finally, the United Auto Workers are resurgent in the United States but that doesn’t mean the “new” UAW doesn’t have its share of old issues facing it.
Aight, let’s go!
For Tesla Customers What Goes Down (There), Must Come Up (Here)
Tesla has variously raised and lowered its prices on models so many times that it became difficult to track or even write about last year.
This is sort of an in-between year for the automaker as it tries to get Cybertrucks out the door while keeping a healthy and steady production of the refreshed Model 3 and the increasingly stale Model Y, Model X, and Model S. A newer, cheaper car is coming, eventually, so the move for Tesla seems to be to try to get as many vehicles out the door without sacrificing too much margin.
Where does that margin come from? Some of it will likely come from the United States, where both the Model Y RWD and Model Y long-range are up $1,000 each. That’s not a huge amount, and still down from where the vehicle was a few months ago, but Tesla seems to be betting that in a slow market, there are still many people who want a Tesla and there’s not much in the way of conquesting other EVs to be had.
At the same time, in China, Tesla is rolling out a bunch of incentives and insurance subsidies to try compete in what is the world’s most competitive EV market.
Customers picking up existing inventories of Model 3 sedans and Model Y SUVs by the end of March would be entitled to a maximum of 34,600 yuan ($4,807.76) worth of incentives, Tesla said in a post on its Weibo account.
Among the incentives are a 8,000 yuan discount in car insurance products with partnerships with Tesla, and a 10,000 yuan discount if the buyer chooses a change of paint.Tesla also offers limited-time preferential financing plans that could save up to 16,600 yuan for purchases of Model Y.
BYD, Tesla’s main competitor globally, has cut prices even more in China. Which company will end up on top at the end of the quarter? We’ll have to wait about five weeks to find out.
Sales Are Up A Bit In February
Car sales in February of 2024 were probably around 1.2 million units, slightly up from 1.1 million in January and 1.1 million last February. That’s good enough for a SAAR of 15.5 million units (that’s the seasonally adjusted rate of selling cars). The conservative guess for car sales this year are about 15.5-15.9 million units, so that’s in the range. I think we can break 16 million if the economy holds and rates drop, but I’m an optimist.
What’s S&P Global gotta say about this?
The S&P Global Mobility US auto outlook for 2024 reflects sustained, but more moderate growth levels for light vehicle sales. We expect production levels to continue to develop, especially early in the year as some automakers look to continue to restock in the wake of production shutdowns late in 2023 and decent December 2023 sales volume. The advancing production levels set the stage for incentives and inventory to continue to develop, potentially enticing new vehicle buyers who remain on the sidelines due to higher interest rates. S&P Global Mobility projects a calendar-year 2024 light vehicle sales volume of 15.9 million units, a 3% increase from the 2023 tally.
I’m calling 2024 the “Year of the Hybrid” but Beau is calling it the “Year of the Consumer.” I think to square it, let’s just call it the “Year of the good time to be buying almost anything but definitely a Hybrid, so maybe buy a Hybrid.”
Fisker Is Looking For Help
Things have been rough for Fisker as of late as the upstart electric automaker faces a lot of headwinds but lacks the big lead of Rivian or the giant Saudi pocketbook of Lucid.
Fisker finally released its annual report and the message reflected the challenges the company has faced.
“2023 was a challenging year for Fisker, including delays with suppliers and other issues that prevented us from delivering the Ocean SUV as quickly as we had expected,” Chairman and CEO Henrik Fisker said. “We also encountered unexpected headwinds in our efforts to establish a direct-to-consumer sales model in both North America and Europe at the same time. There were a number of unanticipated challenges, including rising interest rates, finding enough skilled labor, and identifying appropriate real estate locations to make the DTC model function effectively.
Because it’s a public company, Fisker is required to be pretty straightforward about its condition and so includes the subheading: Substantial Doubt About Fisker’s Ability to Continue as a Going Concern.
There’s a hint of a bright spot from Automotive News:
CEO Henrik Fisker said on the fourth-quarter earnings call that the company is negotiating with an unnamed “large automaker” for a strategic partnership. He also said the startup would rely on its nascent franchised dealer network to help with sales after moving away from its direct-sales model early this year.
I’m curious which large automakers this might be as I assume it’s someone not already with big EV plans in motion. Mazda, maybe?
UAW Disciplines Secretary-Treasurer Over Alleged Violations
With all the excitement over what the UAW has been able to accomplish over the last few months, it’s worth remembering that the current leadership only won by the narrowest of margins in a low-turnout election and there’s a lot of flux still in the organization.
One of the reform-associated candidates was Secretary-Treasurer Margaret Mock, who has just been removed from overseeing certain departments for alleged abuses of authority.
The Detroit News seems to have the most thorough version of this story, so I’ll quote from them. For context: the UAWD is the United All Workers for Democracy Steering Committee and the IEB is the International Executive Board.
A push to remove Mock from the departments occurred after a report by the UAW’s compliance director showed that Mock “repeatedly abused her authority and violated UAW policies,” according to the UAWD.
Specifically, the UAWD claims Mock “withheld approval of routine expenditures in an attempted exchange for votes on the IEB” and didn’t approve supplies purchased for the UAW’s Stand-Up Strike against the automakers last fall. She allegedly also “improperly denied” reimbursement requests and would not approve “legitimate expenditures for ongoing organizing campaigns in a timely manner, risking the loss of NLRB elections and the waste of millions of dollars.”
Here’s Mock’s side of it:
“It saddens me that many do not understand my responsibilities as UAW Secretary Treasurer,” Mock said. “I must protect the sacred dues dollars that our members work so hard to earn and that they policies are established by the UAW International Executive Board, and/or by the Special Monitor ordered by the court to oversee the UAW, and/or by federal laws or federal agencies, it is my responsibility when these policies are adhered to. While it saddens me ever further that I get criticized, attacked, and retaliated against because I insist on the policies that are in place be adhered to, I will not waver in enforcing financial policies intended to protect our members sacred due dollars.”
I’m not steeped enough in union politics to make a hard determination here of what’s really happening, but it shows that for all the unified spirit of last year, this is still a large, very political organization.
What I’m Listening To While Writing TMD
I was going to do Modest Mouse and “The Lonesome Crowded West,” and then I remembered that I’ve seen Modest Mouse in concert, twice, and neither time was particularly good. In particular, I went to see them at one of the first (the third one?) Austin City Limits Music Festivals and it was a hot day and so these dudes, maybe in their early 30s, got on stage and couldn’t even play a full set because of the heat.
Right after that Elvis Costello and The Imposters, much much older and in freakin’ full suits, happily finished their set, played another set, and then ran into whatever set was following them (Gomez?). It was amazing. So forget it, we’re playing “This Year’s Model” this morning.
The Big Question
Which automaker do you think makes sense as a potential Fisker partner?
It’s Nissan, apparently
I know they’ve blown up way, way, way more since then, but there’s a stuck-in-two-thousand-whatever part of my mind that still thinks of Modest Mouse as a local band out of Issaquah. So yeah, having lived in both places, that’d hella track for PNWers’ tolerance for heat.
Also, yeah—there’s some Lonesome Crowded West going on to the Lemons Rally playlists I’ve been messing with for later this month. That’s definitely my favorite album of theirs, although if I ever get a Dacia Sandero to run in anything, the team name/theme needs to be some riff on Good News for People Who Love Bad News.
“Which automaker do you think makes sense as a potential Fisker partner?”
I think an automaker that has a whole lot of nothing in the BEV segment would be a good candidate.
So Mazda would be one. I think Suzuki could also be a good fit as well.
And then there is an unexpected possible company… Apple Computer. Apple had a car project that they recently shitcanned.
If Apple bought Fisker, then they’d already be halfway to their original goal of making an autonomous car… in that they would have the electric car and would only need on the autonomous driving tech.
Also Fisker seems to be a premium product… and it strikes me as the kind of vehicle Apple could/would sell.
I could also see Google/Alphabet buying Fisker if someone high up there thinks they should expand into that segment.
Why would anyone partner with Fisker? Their brand is barely a blip. Go ask any random car buyer about Fisker and they’d probably ask what you are talking about.
So no brand awareness, no manufacturing capability, no dealer/distribution network…hmmm. I guess you could buy their designs if you think they are good enough.
I could see Geely becoming a partner with Fisker. Geely has Polestar, Lotus, and Volvo but adding Fisker to their stable might be a tactical move. They could sell their other EV’s under the Fisker name stateside while they build up a reputation and are able to sell more EV’s for the NA market.
Love Elvis Costello. Imperial Bedroom is his best. Man out of Time is one of the best songs ever written, IMO.
Should any of you ever choose to buy Mr. Costello’s best album, My Aim Is True, just know that the CD version master was terribly flat. Like one of the worst masters ever. Even with a mediocre cartridge, the vinyl version is so much better. I’ve checked out the Tidal FLAC to see if it might have been remastered but they don’t indicate such. If you have a Golden Ear, then be careful.
By “My Aim Is True” you mean “Armed Forces”, right?
Now that your picture’s in the paper being rhythmically admired and you can have everyone that you have ever desired.
No, I got it right. You’re mistake is probably due to having only listened to the CD version of MAIT. 😉
I see your excellent lyrics from “Welcome to the Working Week” (“rhythmically admired” is the best euphemism ever) and raise you this from “Two Little Hitlers” (isn’t this supposed to be a car blog? Whatever…)
You say you’ll never know him
He’s an unnatural man
He doesn’t want your pleasure
He wants as no one can
He wants to know the names of
All those he’s better than
Ehhh, cars have had radios since like the 1930’s or something so we’re still roughly in the topic zone. Besides, Matt started it.
I think he meant Imperial Bedroom. But that’s weird because I don’t recall there being a bad master of that album.
For the music part, I have seen Jimmy Buffet twice. Once in high school because of a girlfriend and it seemed like a fun concert to get drunk at. Uhh, sort of? I went again for free as I was a DD for co-workers and got paid $200 to do it, on top of the ticket.
I came to like Buffet as a person/businessman over the years. He seemed like a good dude that had a great hustle (much like Sammy Hagar). But those concerts were a capital “B” brutal experience.
As someone who grew up in SWFL, I can’t stand Buffett’s music. It was everywhere down here. You couldn’t get a damn drink at a bar without hearing half his greatest hits over the course of a couple of hours. Every idiot with a guitar insists on playing “Cheeseburger in Paradise”. If you’re lucky it’s the only Buffett song he knows. Later in life I found out what an interesting guy Buffett was, even if his entire discography is one enormous Dad Joke. (Seriously, he wrote a song about the time Jamaican police shot at his plane, which was carrying Buffett, his family AND FRICKIN’ BONO because they thought the plane was being used to smuggle weed. The name of the song? “Jamaica Mistaica”. Sigh…)
He got famous and made a billion dollars off like 4 novelty songs, which are the only ones anybody knows, but he started off as more of a folk singer/outlaw country type and was actually a very competent songwriter. Unfortunately, his best songs didn’t chart and his worst ones became the most famous
Frickin’ Bono?
Pity they missed.
https://youtu.be/ulFvk5fcOrs?si=qMfgSvE1LFxUckOW
He’s prob in my top ten comics right now. His podcast is pretty funny as well.
Does Fisker manufacture cars in the US? Could one of the Chinese car companies partner with/buy up Fisker to give them the in they need to sell in the US?
Fisker doesn’t even manufacture cars. The Ocean is being built under contract by Magna in Austria. Fisker doesn’t have a dealer network, manufacturing facilities, or even name recognition. They offer nothing to a Chinese OEM looking to enter the US market.
Fisker ALMOST made cars in the US, they got $22 million from the State of Delaware to reopen the former GM plant in Wilmington, but went bankrupt and pulled out before doing anything with it.
On the Tesla China discounts, it sounds like they’re seeing money going elsewhere and trying to keep it in house. I wasn’t aware manufacturers were also functioning as insurers, but if you give up a little money up front in exchange for the sale of a long-term subscription product it probably more than works out in the end. And looking back at that Chinese car spotting post from a few weeks ago and seeing how popular wraps were, I figure Tesla realizes people are willing to pay money for colorful cars and if they reduce the paint upcharge maybe that money goes to Tesla instead of a third party.
Regarding your music story, my wife is a big Paul McCartney fan so we’ve seen him four times since 2010. I think it was 2012 we saw him at Wrigley Field in the summer. It feels like it’s 120 degrees, this 70-something year old guy does a three-hour set and he never left the stage and I never even saw him drink any water. It was a really great show, but I’m just convinced that old dudes are built differently.
Caught Sir Paul in concert a couple of times. I’ve seen many concerts, and many artists who feed off of that live show energy, but McCartney is in a class by himself. He loves to be up on that stage and it shows.
I think he just likes performing. My parents went to see him and said the same thing. 3-hour long set, indoor show, so it wasn’t battling the elements but you’re lucky to get that from any artist, let alone a legit living legend.
I mean hell, it isn’t like Paul McCartney is hard up for cash and needs to keep working.
It’s unfortunate that Fisker didn’t go the dealer route from the start, they wasted a lot of time bungling the direct sales model which has only seemed to work effectively for one automaker. Kind of a shame, I’ve seen two so far, they seem nice; it’s the right product in a hot category, built by a company that ostensibly knows what they’re doing. All Fisker had to do was not F up distribution, but here we are.
Conceptually a partnership with Mazda seems to make sense-but I have to wonder if Mazda has the size or spare capital that Fisker probably needs. OTOH Mazda is really lagging in hybrid tech and depending on how things play out EV tech though their lack of investment in getting in early on EVs is starting to look like a smart play even if it wasn’t by choice.
Mazda has about $5 billion cash in hand. Toyota? $87 billion. I don’t see Mazda doing anything other than becoming the Buick (insult not intended) of Toyota, if the larger partner decides to increase its ownership stake.
Yeah fair point-though sadly as with Buick or some of GM’s other brands it’s hard not to see Mazda getting diluted down to being irrelevant if that happens.
I have slightly more faith in Mazda doing OK under Toyota than Subaru. Other than the Outback, Subaru doesn’t provide anything to Toyota that Toyota couldn’t just rebadge as one of their AWDs and call it
What would Mazda provide Toyota that they don’t already have/could have if they wanted?
Subaru at least has a great reputation/cult following in certain parts of the country.
Miata
It’s always the answer, right?
It seems to me that simply selling a drop-top 86 would provide 95% of the appeal of a Miata at 1% of the cost of acquiring Mazda.
Didn’t they have a convertible back in 2014? Maybe not available in the US?
Though name recognition counts for a lot-maybe I’m wrong but I don’t think a droptop 86 would ever hit even the Miata’s modest numbers-but to your original point I doubt Toyota is eyeing the Miata and thinking they need that slice of pie.
The buickification of Mazda would almost certainly break the last of my heart, either in the sense that it becomes a middle child, or a soft, pudgy middle child.
MM was okay back in the day. There are still a few of their songs I like.
Mazda does make a logical partner for Fisker. They have good engineering and definitely need to bootstrap themselves into the BEV era. But since Fisker is contract manufacturing with Magna on a Magna platform with a Fisker skin, Fisker doesn’t have anything besides design to offer. I’d bet Stellantis since they have similar platforms and enough spare change to purchase the Fisker design and adapt it to one of their platforms.
“Phtoo: Tesla” (photo credit below the Tesla image) =Exactly how I feel about them these days.
Also, “This Year’s Model” 100% slaps. Elvis at his absolute best.
I really want to like Elvis Costello, but I haven’t yet heard a song that I like.
I can’t put my finger on why I dislike Modest Mouse, but I’m glad to hear your story.
Fisker gets its batteries from CATL. I don’t think Stellantis will partner with them, as they will be looking for an American battery supply chain. I honestly don’t know what they bring to the table in a partnership, as they have contracted out their production. It’s possible that a European luxury-focused marque might be interested in diversification. I guess that Mercedes or BMW could make some sense
I think Stellantis makes sense. Mazda would make sense conceptually but they’re not really a large automaker.
Geez, I don’t know, Stellantis has a lot of their own internal crap to worry about, do they really need to hook up with a basket case like Fisker? I guess battery technology, but Stellantis doesn’t actually seem all that far behind there, they sort of have it, they’re just not rolling it out fast enough
I dont know itseems like history shows give an auto manufacturer huge sums of money that spend like submarines on shore leave. But with high interest rates invest the dollars in the Fisker company instead of starting to the EV Party late, take control, make your own EVs with the R&D already done.
Do sacred dollars still equal 100 pretty pennies? Can you spend them anywhere or are they only redeemable at the Ark Encounter in Kentucky?
I think Subaru would make a good partner for Fisker, but not sure they’d have the cash Fisker needs.
I’m glad I’m not the only one who maybe injured something doing an eye roll over sacred dollars.
Have a blessed day!
It depends. Mazda does make sense, but a pivot on Fisker’s part could make other manufacturers make a lot of sense. They could license use of the Ultium or E-GMP platform if they want to cut down on engineering (the difficulty in recruiting “skilled labor”). Stellantis or Ford might want to boost their own efforts with some Fisker help. Even Toyota could be looking to get outside help on EVs without diverting much of their internal efforts toward them.
U-Pull and Pay
It’s too bad Fisker is struggling; the Oceans I’ve seen on the road are really handsome, but the ownership experience sounds like a nightmare.
Mazda seems like a good partner for Fisker, given that everyone else is pretty well tied up … but could it be BMW/Mini?
Sounds like Marge got tight about funding the slush (or a cabin Up North), and some people got big mad.