Tesla Applies For Not-So-Robo Taxi Service In California, And Trump Tariffs Loom

Good morning! It's Tuesday, February 25, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, we'll look at Tesla's plan for a ride-hailing business in California that uses human drivers, and President Trump's renewed promise to hit Canada, Mexico and China with tariffs. We'll also talk about how Stellantis' ex-CEO, Carlos Tavares, had to get by on just a $24 million pay package last year, and how Mercedes-Benz plans to drastically cut its Chinese workforce by 2027.

It's shaping up to be another busy day in the automotive world.

Tesla is seeking approval for a ride-hailing service in California, but it isn't the autonomous driving fleet CEO Elon Musk has promised for over a decade at this point. Instead, these Teslas will be driven by humans for the (theoretical) time being. This, of course, comes as Tesla faces some of its toughest tests yet, as Musk continues to push just how much owners will put up with.

Anyway, the Austin, Texas-based automaker applied in late 2024 for what is known as a "transportation charter-party carrier permit" with the California Public Utilities Commission. It means that Tesla would own and control a fleet of vehicles. From Bloomberg:

In its communications with California officials, Tesla discussed driver's license information and drug-testing coordination, suggesting the company intends to use human drivers, at least initially. Tesla is applying for the same type of permit used by Waymo, Alphabet Inc.'s robotaxi business. While Tesla has approval to test autonomous vehicles with a safety driver in California, it doesn't have, nor has applied for, a driverless testing or deployment permit from the state's Department of Motor Vehicles, according to a spokesperson.

To start a human-driver ride-hail business seems a bit behind the times, especially when you consider what Waymo is doing with its driverless fleet around San Francisco. Of course, it's also antithetical to everything Musk has promised Tesla shareholders for years, but Tesla doesn't have an operational autonomous vehicle yet, and it could really use a stock boost, so I guess this makes sense. Per Bloomberg, it's going to be much easier elsewhere in the U.S.:

Tesla's path to launching robotaxi service is clearer in Texas, where autonomous driving is regulated much like any other vehicle. Its vehicles will be required to have cameras and be able to follow traffic laws and have insurance.

Uber is apparently planning to launch autonomous rides with Waymo in both Austin and Atlanta at some point this year. Its CEO said earlier this month that he had conversations with Musk, but the Tesla CEO eventually decided not to put his vehicles on Uber's platform.

Buckle up, chuckleheads. President Donald Trump says his proposed 25% tariffs on goods imported from Mexico and Canada will take effect on March 4. They'll go along with an extra 10% duty on Chinese imports. 

Trump is still blaming the flow of fentanyl into the U.S. for these moves. According to the CDC, 72,776 people in the U.S. died from synthetic opioids — chiefly fentanyl — in 2023. Still, U.S. Customs and Border Patrol agents seized 991 pounds of fentanyl at the southwest border in January of this year. That's down 50.5% from a year ago. Things are about to get expensive. From Reuters:

Trump told reporters in the Oval Office he decided to add the extra tariffs on China and stick to the Tuesday deadline for Canada and Mexico given what his administration sees as insufficient progress on curbing fentanyl flows into the country.

"There are ongoing discussions with the Chinese, Mexico and Canada," a White House official told Reuters. "We've gotten a good handle on the migration issue, but there are still concerns on the other issue of fentanyl deaths."

This move by Trump seems to be mostly done in an effort to decouple China and the U.S., the two largest economies in the world. Yikes.

The White House last Friday released an America First investment memorandum which squarely placed China in a list of "foreign adversaries" and accused Beijing of seeking to exploit investments in U.S. firms to steal cutting-edge technology and fund its military development.

"PRC-affiliated investors are targeting the crown jewels of United States technology, food supplies, farmland, minerals, natural resources, ports, and shipping terminals," the document said, using an acronym for the People's Republic of China.

Officials from Canada and Mexico were due to meet with their counterparts in the Trump administration on February 27 and February 28 to try to stall the tariffs since they're going to be a disaster for the North American economy. 

Mexico has also said it could adopt other trade measures beyond the recent tariffs it imposed to reduce cheap shipments from China. In Canada, officials say enough progress has been made on tightening security along its border with the U.S. and measures to combat drug smuggling should satisfy the Trump White House. Who the hell knows if any of that will actually make a difference, though.

As of December, Carlos Tavares is no longer the CEO of Stellantis, but he still went out with a bang in 2024, making more than $24 million in total compensation last year. That actually represents a pay cut, but it's an impressive number nontheless, especially when you consider the automaker just announced a 70% drop in net profits in 2024 compared to 2023, to just $5.8 billion. Here's more on Tavares' pay package, from the Detroit Free Press:

Tavares' compensation, which was down almost 37% from $39.5 million (36.5 million euros) in 2023, was 350 times that of the average worker's last year, which was listed as $68,609 (65,993 euros) and which had also dropped from $73,195 (79,404 euros), according to the filing. Profit-sharing checks of $3,780 for the company's UAW members, to be paid next month, will fall almost 73% from what was paid in 2024.

The company, which had been criticized for numerous rounds of job cuts, also reported a drop in the average number of employees from 271,292 to 259,118.

The filing also said Chairman John Elkann made $2.9 million in 2024, and Vice Chairman Robert Peugeot took home a measly $229,142.

Listen, I know Tavares technically took a massive pay cut, but when you're laying off that many people and doing as bad as Stellantis is doing financially, it's a tough look — even if the dude isn't CEO anymore.

Mercedes-Benz is planning to cut 25% of its workforce in China by 2027, including cutting 10-15% of its sales and finance employees. Not every department will see cuts, though. The roughly 2,000 folks it has employed in research and development are staying put. That could be looked at as a sign the German automaker currently preparing a new EV platform for launch is focusing heavily on adapting its products to the tastes of the Chinese buying public, as more home-grown competition enters the marketplace. 

Right now, Mercedes-Benz China employs about 5,000 people. From Reuters:

A spokesperson for Mercedes-Benz China [...] said the figure to reduce costs for office-based roles by 25% was incorrect, without elaborating.

Mercedes-Benz plans more partnerships with local suppliers to improve the competitiveness of its products, the person added, declining to be named as they were not authorised to speak to media. The cost-cutting targets could change depending on how the market develops, the person with direct knowledge of the matter said.

Mercedes-Benz CFO Harald Wilhelm told investors earlier this month that the automaker's joint venture with BAIC Motors–which employs its production workers in China–planned to cut material costs by over 10% and production costs by over 20%. However, he didn't mention any job cuts.

On this date in 2013, Pope Benedict XVI resigned from the papacy as the head of the Catholic Church, something that hadn't been done in nearly 600 years. It set up the Conclave that lead us to Pope Francis, the most based, but still flawed, Pope possibly ever. Here's more from History.com:

On April 19, 2005, following the death of Pope John Paul II, the 78-year-old [Joseph] Ratzinger was elected the 265th pope. During his eight-year papacy, Benedict championed a conservative agenda while also contending with scandals involving clergy sex-abuse and corruption at the Vatican Bank.

On February 11, 2013, Benedict, the oldest person elected to the papacy since the 18th century, announced he would resign, saying he no longer had the mental and physical strength required to lead one of the world's largest religious organizations. The move was all but unprecedented, as until that point all popes of the modern era had remained in office until death. The last pope to resign, Gregory XII, did so in 1415 to end a civil war in the church called the Great Western Schism. Prior to that, in 1294, Pope Celestine V quit after just five months in the job (he hoped to return to his life as a hermit but instead his successor had him imprisoned and he died in captivity).