The Inflation Reduction Act and its EV tax credit are among the most significant accomplishments (though not everyone is a fan) of President Biden’s single term in office and, most likely, they’ll be continued if Vice President Harris wins this November. What will happen if former President Trump is elected again? He’s indicated that he’s not so keen on the idea in an interview. He also said a lot of other things about EVs.
Ok, enough about politics… United Auto Workers President Shawn Fain spoke at the Democratic National Convention in Chicago last night. In his speech, he threatened a strike against Stellantis if the company didn’t meet certain timing in the reopening of the Belvedere plant in Illinois.
CDK Global, a company you didn’t think about until it got hit with a massive ransomware attack, is going to settle a $100 million lawsuit from dealers claiming it colluded with the competition to cause prices to go up. If a judge approves this lawsuit it’ll give the company more time to respond to all of its other lawsuits.
And, finally, the Pebble Beach auction market was a little soft this year.
Donald Trump’s Electric Car Evolution
It is well known that former President Donald Trump is a fan of Tesla CEO Elon Musk, and vice versa, with Trump calling Musk one of his biggest supporters. At the same time, President Trump has denigrated electric cars in the past.
Trump, it seems, has slowly come around to the idea of EVs. At least according to this Reuters interview from yesterday:
“I’m a big fan of electric cars, but I’m a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along.”
This was in response to a question about subsidies on electric cars, which President Trump is generally opposed to, saying “Tax credits and tax incentives are not generally a very good thing.” Changing the tax credits would likely require overturning them legislatively, which would probably require winning a large majority in both houses of Congress. Even if that doesn’t happen, a 2nd-term President Trump could encourage a reinterpretation of some rules that make it easier to get the $7,500 tax credit.
What’s interesting here is that Tesla benefits greatly from the EV Tax Credit, so removing it would make many of Musk’s cars more expensive.
That doesn’t mean Trump doesn’t like Musk. Quite the opposite, he said he’d consider making him an advisor or, even, a Cabinet Member:
“He’s a very smart guy. I certainly would, if he would do it, I certainly would. He’s a brilliant guy.”
Though Trump is generally combative with China, he’d be for incentivizing Chinese automakers to build locally in the United States. Since he’s against tax incentives, generally, I’m curious how that might work. Here’s what he said:
“We’re going to give incentives, and if China and other countries want to come here and sell the cars, they’re going to build plants here, and they’re going to hire our workers,” Trump said. “We will make our own cars. I want to make our own cars.”
Musk for Secretary of Labor. What a timeline we live in.
[Ed Note: We try to not to wade into politics here; this is a car website. But the truth is, the cars that end up on our streets are hugely shaped by politics (fuel economy regulations, crash test regulations, EV incentives, gasoline subsidies, etc.) — so sometimes it’s appropriate. -DT].
Shawn Fain Uses DNC Speech To Threaten Strike
Well, I suppose Anti-union Elon Musk as Secretary of Labor would make Shawn Fain and the UAW quite upset.
Fain spoke at the Democratic National Convention last night and did his usual “Donald Trump is a scab” routine. He also threatened to strike against Stellantis, which I think is a first for a nominating convention (unless Walter Reuther threatened to picket Packard in 1908).
“Let me be clear, Stellantis must keep the promises they made to America in our union contract. And the UAW will take whatever action necessary at Stellantis or any other corporation to stand up and hold corporate America accountable.”
What’s going on here? Let’s let The Detroit News explain:
Fain and the UAW have accused the automaker of failing to meet contractual timelines to reopen the Belvidere Assembly Plant in northwest Illinois. The union is preparing to file a series of grievances — and potentially go on strike — over its plans for the Belvidere plant.
They didn’t get a response, but Automotive News got a quote this morning:
“To ensure the Company’s future competitiveness and sustainability, which are necessary to preserve U.S. manufacturing jobs, it is critical that the business case for all investments is aligned with market conditions and our ability to accommodate a wide range of consumer demands,” the statement said.
“Therefore, the Company confirms it has notified the UAW that plans for Belvidere will be delayed, but firmly stands by its commitment. As always, the Company is committed to engaging with the Union on a productive, respectful and forward-looking dialogue.
Alright, enough politics.
CDK Global Agrees To Settle Anti-Trust Lawsuit
Dealer Management Software (DMS) company CDK Global, better known lately for its massive ransomware issue, is following up paying hundreds of millions of dollars to hackers by paying at least $100 million to settle a lawsuit from dealers who said it colluded with Reynolds & Reynolds, its competition, to drive up DMS costs.
The class-action lawsuit alleged, in part, CDK and Reynolds essentially formed a duopoly to corner the market for data integration service programs that extract information from dealership management systems that is then used by application vendors.
That’s not great. Reynolds already settled and it sounds like all the parties involved support the CDK offer of paying $100 million to avoid a trial.
Pebble Beach Auctions Were Soft This Year
One of the best parts of attending Pebble Beach every year is going to the many car auctions (Gooding & Co, Broad Arrow, RM, and Mecum) with our co-founder Beau. He’s a big dealer and car trader, so he knows more about what’s happening than anyone I’ve ever met.
While most people are drinking or noshing on kettle corn, Beau takes notes on the highest bid of almost every car that comes through the auctions when we’re there. I’ve been sitting at one auction with him while he’s tracking an auction across town on his phone.
The vibe he got early on was that the auctions were a little soft this year, with many vehicles not quite meeting their reserves. The vibe was confirmed by Hagerty, which said only $371 million cars actually sold, down from $469 million in 2022.
What’s going on? Our pal, Bloomberg‘s Hannah Elliott, is on top of it:
Insiders are characterizing the vibe as a temporary shift rather than an all-out bust; only small segments of the market are truly correcting downward and after-auction deals are already pushing final totals higher. Sell-through rates across five auction houses hit 71% as of Aug. 18, up from 69% last year, according to Hagerty.
“The most important takeaway from the sophisticated and highly intelligent long-term collector is simple—they didn’t buy or sell anything this weekend,” says Steve Serio, a longtime automotive broker for elite car enthusiasts. “They realize there will be opportunities for them [in future transactions] as they are patient.”
Think of it as corrective, not catastrophic, says Peter Brotman, an automotive agent who was buying and selling cars for international clients this week. He described many of the cars left unsold as having a case of “freezer burn.”
It’s true. A lot of the cars for sale had been listed in recent months and they gave it a try here and, well, that ain’t gonna work.
What I’m Listening To Today While Writing TMD
I forgot to turn on music this morning in the hotel room this morning, so let’s have Simon & Garfunkel’s “Sound of Silence.”
The Big Question
Are you a an of the EV Tax Credit? Why or why not?
Personally, I’m not really a fan of EV tax incentives. That money could go towards building infrastructure for much greener, healthier, and safer ways of getting around. Instead, we’re giving wealthy people tax breaks to continue our car-dependent transportation system.
Trump will say whatever the person with the fist full of money up his ass wants to hear. The current fist in question belongs to Musk.
Please don’t show pictures of that big turd. This was just such a nice place 🙁
Here’s a piano cover of The Sound of Silence by Gamazda (She has Mazda in her name so it’s car related! She’s also hot as hell)
I’m betting the available implementation is the actual intent; changing the requirements to qualify for $7500 in a way that hurts Tesla competitors with little to no harm to Tesla. The low hanging fruit is the lease loophole in the domestic requirements.
If there’s no music wouldn’t that be John Cage’s 4’33”?
That’s my favorite Simon and Garfunkel album, I just listened to it yesterday! Putting my old portable record player next to my desk in my home office is one of the best things I’ve ever done.
Says the felon who is in early stages of dementia and will most likely be in jail by the end of the year.
That business failure has been subsidized far too long.
How strange that someone who doesn’t pay taxes wouldn’t be a fan of tax incentives.
I’m going to bite my tongue about Stellantis though since I’m pretty salty at them for having backordered the parts I need to fix a very well known problem with their engines. That company is such a shit show right now.
Oops, so much for biting my tongue.