Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know about the coming people’s uprising.
1st Gear: Hear That Children? It’s Revolution In The Wind
The vast majority of the world continues to suffer under our broken economic system, with strains starting show across borders as most people struggle to buy basic transportation. But good news! Ferrari—yes, Ferrari—is doing GREAT. From Bloomberg:
Ferrari NV’s first-quarter profit jumped 36 percent as the Italian supercar maker benefited from demand for its priciest models, including the $2.1 million LaFerrari Aperta convertible and special editions created for its 70th anniversary.
Adjusted earnings before interest, taxes, depreciation and amortization surged to 242 million euros ($265 million) from 178 million euros a year earlier, Ferrari said in a statement on Thursday, beating the average 217 million-euro estimate of six analysts surveyed by Bloomberg.
Bloomberg goes on to note that the obscenely wealthy have such an appetite for the Italian supercars that Ferrari is set to smash through its self-imposed production limit of 7,000 cars, and will be raising that limit to 9,000 cars by 2019.
2nd Gear: Do Not Be Confused, The Tesla Model 3 Is Definitely Worse Than The Model S
In a deeply strange turn of events, Tesla has found that some of its prospective customers think that the new Model 3, which should sell for around $30,000, is actually drawing customers away from the Model S, which starts at $68,000, Reuters reports:
“We have seen some impact of Model S orders as a function of people being confused” that Model 3 is the upgrade to Model S, Musk said on a conference call.
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In its earnings release, Tesla stated that a key challenge for the company would be to eliminate misperceptions about the differences between the Model S and the Model 3.
“We want to be super clear that Model 3 is not version three of our car. Model 3 is essentially a smaller, more affordable version of the Model S with fewer features,” Musk said on a conference call, adding buyers erroneously thought the Model 3 would be more advanced.
“The Model S will be better than Model 3,” he added. “As it should be, as it’s a more expensive car.”
This is very bad for Tesla, yet somehow very funny to me.
Tesla is even going so far as to “anti-sell” the Model 3, offering no test drives or advertising for the first six months, as it apparently tries to desperately tamp down some of the crazy high demand for the car.
3rd Gear: Volkswagen Diesels Are Back, Baby
Volkswagen has slowly started to sell diesel cars in the United States again after the whole Dieselgate debacle, and the crazy thing is that people are actually buying them, Automotive News says:
Diesel models accounted for nearly 12 percent of Volkswagen’s U.S. sales in April, a sign that consumer demand for such models persists, even as the company recovers from widespread emissions violations.
Volkswagen Group resumed selling diesel cars in the U.S. last month.
I mean, the cars are fixed, so yeah, go ahead and nab one I suppose. Why the hell not? Our Managing Editor Erin Marquis just grabbed herself a manual TDI Golf wagon, all shiny and presumably not choking out children and small animals. Expect to hear more from her on the ownership experience.
4th Gear: The Creator Of The iPod Joins Magna
Our very own Ryan Felton wrote this up as its own blog yesterday, but it works better for you guys here in TMS. I’ll let Ryan explain:
The development of autonomous vehicles is moving at a rapid clip, and some companies are still trying to figure out where they fit in the mix—like Canadian auto supplier Magna International. That’s why, according to the Wall Street Journal, Magna’s bringing on Tony Fadell, the co-creator of the iPod to join its tech advisory council to grapple “with Silicon Valley’s increasing role in the automotive industry.”
Fadell told the WSJ that Magna’s looking to focus on the ““explosion of mobility that is occurring and will continue to occur because of electrification, because of connectivity, because of sharing, because of automation.”
Magna was supposed to be working on the Apple car, but now it looks like it isn’t. Weird.
5th Gear: Tinkering With NAFTA Will Not Be Easy
I know, I know, nobody knew that screwing with one of the world’s largest trade deals would be hard, much like it was completely impossible to know that being President was hard. But it turns out that the sovereign nations of Canada and Mexico are not, in fact, filled with dumb patsies, and if anything happens to NAFTA, they’ll be playing hardball, Automotive News reports:
The automotive stakes are high for both Mexico and Canada, which rely on the industry for thousands of jobs at several major assembly plants and many more parts operations.
Fearing the massive disruptions a U.S. pullout could cause, the United States’ neighbors and two biggest export markets have focused on sectors most exposed to a breakdown in free trade and with the political clout to influence Washington.
That encompasses many of the states that swept Trump to power in November and senior politicians such as Vice President Mike Pence, a former Indiana governor or Wisconsin representative and House Speaker Paul Ryan. Prominent CEOs on Trump’s business councils are also key targets, according to people familiar with the lobbying push.
The screws will soon begin to turn, and that’s when the real fun begins.
Reverse: This Isn’t Even Really About Cars
On this day in 1984, New Jersey rocker Bruce Springsteen releases “Pink Cadillac” as a B-side to “Dancing in the Dark,” which will become the first and biggest hit single off “Born in the U.S.A.,” the best-selling album of his career.
Neutral: Would You Buy A Volkswagen Diesel Now?
They can be had for pretty cheap. But do you trust Volkswagen?