Trump had big plans to boost up the auto industry and it’s gotten the Big Three nowhere. But don’t worry, it’s also come at the expense of American workers, too! All that and more in The Morning Shift for October 15, 2020.
Back in July, Trump set up one of his more cartoonish press events at the White House. Two weighed-down trucks stood on pedestals marked “40 Years Of Regulatory Burden” and “4 Years Of Regulatory Freedom.” A crane labeled “Trump Administration” lifted the weights out of the second truck, which happened to be red, in the case you were confused by all the words. Trump gave a speech on how he’d saved American automakers with deregulation:
We’re here today to celebrate and expand our historic campaign to rescue American workers from job-killing regulations. Before I came into office, American workers were smothered by a merciless avalanche of wasteful and expensive and intrusive federal regulation. These oppressive, burdensome mandates were a stealth tax on our people — slashing take-home pay, suppressing innovation, surging the cost of goods, and shipping millions of American jobs overseas — millions and millions and millions. It never ended.
As you can see behind me, we have removed the gigantic, regulatory burden Americans have been forced to carry for decades, freeing our citizens to reach their highest potential.
This... didn’t work out, as Bloomberg reports today:
Shortly after President Donald Trump was elected in 2016, he made a proposition to the CEOs of the three largest U.S.-based automakers at a White House meeting: I’ll cut taxes and regulations, and you increase jobs and investment.
He made good on the tax and regulatory cuts, handing corporate America hundreds of billions of dollars in tax breaks and repealing Obama-era fuel-economy rules, though that rollback has fractured the industry. For all of the policy moves he made, there’s little evidence so far that the trajectory of the industry and its job growth changed markedly — even before the pandemic.
Bloomberg notes that while new factories have sprung up in the time Trump has been president, the trend for new factories opened actually started in 2012, as the economy stumped out of the Great Recession. Actual auto industry jobs, meanwhile, have been down and have been dropping in the same time frame.
This is all to say that for everything Trump has made regular Americans sacrifice—strong regulations, taxes on big business—we’ve gotten zilch out of it. Cool.
The other day we reported that Tesla was cutting prices on the Model S. Today we’re happy to report that Tesla is again cutting prices on the Model S. We have dropped down to $69,420. That’s the sex number and the weed number, together. Incredible.
Via Automotive News:
U.S. electric vehicle maker Tesla Inc cut the price of its Model S “Long Range” sedan in the U.S. to $69,420, its website showed, following a tweet flagging the cut earlier Wednesday from CEO Elon Musk.
The cut is Tesla’s second this week for the high-end sedan, following a 4 percent cut to $71,990 on Tuesday.
[A Credit Suisse analyst] said the Model S price reduction was likely in response to price cuts by electric vehicle startup Lucid Motors, which sells its luxury sedan Air model at a starting price of $69,900. That includes a $7,500 U.S. government electric vehicle tax credit, for which Tesla vehicles are no longer eligible.
Renault is scrambling to pad out its plug-in lineup as Europe goes in on EVs and hybrids, as noted in a Bloomberg report today. This was a good reminder that the actual best-selling EV over there is a pointy little egg from Renault called the Zoe:
Renault SA’s promotional blitz for its growing electric lineup may be too late for the maker of Europe’s best-selling EV to stay atop the region’s expanding market for battery-powered cars.
The French manufacturer and its partner Nissan Motor Co. have long enjoyed a first-mover advantage in the market. But their alliance has seen its share of Europe’s EV market shrink by almost half during the past four years. Tesla Inc. took over the pole position in 2019, and Volkswagen AG is now closing in fast.
I can’t say that I love the Zoe in any particular way, but it’s nice that Europe is buying up totally normal-ass EVs. It’d be like if Americans actually bought the Bolt!
We’ve written before about how Europe’s EV gains are being made on the back of heavy fines imposed on any manufacturer not greatly cutting its emissions footprint. Car companies in Europe are scrambling to keep hybrid and EV sales up to dodge fines, and they’re on a bit of a tightrope, as the Financial Times reports:
Ford has been forced to turn to rival carmakers to help it meet European emissions goals, after a recall of its hybrid cars left the US company facing the prospect of fines for falling short of tough new targets set by Brussels.
The Detroit-based company said that it plans to buy carbon credits from rivals that have sold more electric or hybrid cars. Under the EU scheme, carmakers earn credits from selling electric vehicles that offset more polluting models.
To allow manufacturers some leeway, the EU rules allow rival companies to “pool” their efforts, meaning that a laggard can benefit from high electric car sales at a competitor. The deadline for forming a “pool” to meet emission targets for 2020 is the end of this month, prompting a scramble among those carmakers at risk of falling short.
The FT also notes that Fiat Chrysler has already pooled with Tesla to hit its goals.
Speaking of, FCA has dodged a strike by getting a last-minute agreement with the Canadian union Unifor, as The Detroit News reports:
Canadian labor union Unifor, representing 9,000 employees at Fiat Chrysler Automobiles NV, reached a tentative contract agreement late Wednesday, avoiding a strike at the Italian American automaker.
Details of the deal were not provided immediately as Unifor announced a deal had been struck minutes before an 11:59 p.m. deadline, and the company confirmed the agreement. More information is expected to be provided during a 10 a.m. news conference Thursday.
Of the Big Three, Chrysler employs the most Canadians, so this is a big deal.
If you were in charge of our regulatory landscape, would you be trying to cut our auto industry loose, or doubling down on protectionism? Do you see a clear path to global competitiveness? No answer is an easy one, I fear.