Good morning! It’s Thursday, February 13, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: All Mentions Of ‘Tesla’ Scrubbed From $400M Armored EV Contract
Elon Musk plowed millions of dollars into the campaign to elect Donald Trump as president of the United States, and his investment is surely paying off. In the week of Trump’s election win, shares in Musk’s companies went up and now he’s practically been given the keys of power to make sure his rivals have a tough time in the world of electric vehicles, space travel and whatever else Musk wants to try his hand at.
Musk’s money may have also influenced the purchasing power of the U.S. government, as the State Department released a procurement list that said it intended to purchase $400 million of armored Teslas over the next five years, reports Business Insider. The list was quickly amended to say that the money would be spent on “armored EVs,” but with Musk parading around the Oval Office, will any other automakers get a look in:
The document on the State Department’s website has since been revised. The same line item now reads “Armored Electric Vehicles.” It is still listed as a five-year contract worth $400 million.
The latest version of the document does not mention Tesla.
“I’m pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least,” Musk wrote on X on Thursday about the department’s revised forecast.
The initial document had a timestamp of December 13, 2024. The revised document bears a timestamp of February 12, 2025, at 9:12 p.m.
Both the original and updated versions of the documents suggest that the contract will be awarded on September 30, which gives Tesla a little over six months to design, develop and produce a bulletproof car.
The automaker’s lineup currently includes four cars and the electric Cybertruck pickup truck, which Musk previously claimed was bulletproof before its windows were smashed by a man throwing a ball. The truck’s bulletproof credentials have also been tested by several of the truck’s owners, with disappointing results.
Spending $400 million on armored cars that don’t actually exist isn’t a great look for a government that’s pledged to cut unnecessary federal spending. To that end, Musk himself has been brought in as a “special government employee” to gut departments like USAID and the U.S. Department of Education, as Business Insider adds:
On Tuesday, Musk joined Trump at a press conference in the Oval Office, where he was asked about the potential conflicts of interest he could face from running DOGE and his companies simultaneously.
“No, because you have to look at the individual contract. First of all, I’m not the one filing the contract. It’s people at SpaceX or something will be putting for the contract,” Musk said.
“And I’d like to say if you see any contract where it was awarded to SpaceX and it wasn’t by far the best value for money for the taxpayer. Let me know, because everyone of them was,” he added.
There you go then, you have absolutely no reason to worry about Musk writing his own government contracts. Just like you have absolutely no reason to worry about Musk writing his own pay check at Tesla.
2nd Gear: Nissan’s Week Just Went From Bad To Worse
From its highs as the second-best selling Japanese car brand just a few years ago, Nissan’s fall from grace has been spectacular. The company’s sales are falling, its lineup is ageing and now it’s reported that profits are down an eye-watering 78 percent.
In the third quarter of its latest fiscal year, Nissan saw profits plummet as it continued to face troubles in markets like the U.S. and China, reports Reuters. The company has now slashed its full-year outlook and pledged to cut costs by as much as $2.6 billion to speed up efforts to turn around its fortunes:
It said it plans to cut costs by about 400 billion yen (US$2.6 billion) in fiscal 2026 as it moves to create a leaner and more resilient business, including by reducing labor costs and restructuring its manufacturing base.
About a fourth of the cost savings would come from measures related to vehicle manufacturing, such as consolidating its production lines, the closure of a factory in Thailand in the first quarter of next fiscal year and two other plants at later dates, it said, without specifying which plants.
Nissan also said it would restructure its top management by eliminating its corporate officer system and reducing top management positions by 20% starting from the next fiscal year, which begins in April.
Profit targets for the year have been lowered by 20 percent to 120 billion yen, which is about $780 million.
Talks had been ongoing with Honda for a merger that could save Nissan, but they broke down this week. Now, iPhone manufacturer Foxconn has revealed that it could swoop in and purchase a stake in Nissan, reports Fortune. The company is reportedly considering buying Renault’s 15 percent stake in Nissan should the French automaker want to offload the struggling company:
The Apple iPhone contract manufacturer has been eyeing an expansion into electric vehicles, a market Nissan helped popularize when it launched the Nissan Leaf EV back in December 2010, more than a full year before the Tesla Model S.
“Renault happens to own some stake in Nissan, and [we] discussed the stake,” Foxconn Chairman Young Liu was quoted by AFP as saying on Wednesday during a corporate event. “Our main purpose is to talk about cooperation.”
If you were Nissan, would you rather enter a partnership with Honda and become a subsidy of the automaker, or let tech bosses take over a stake in your company? After talks with Honda broke down, one of those scenarios is now looking increasingly likely.
3rd Gear: EV Owners Could Face $1,000 Charge For Road Repairs
Since taking office, president Donald Trump has promised to cut the $7,500 tax break available to electric vehicle buyers, paused funding for states looking to switch to electric power and frozen money that would have gone towards the installation of new EV chargers. Now, his attack on the electric revolution could step up a gear as Republicans propose a $1,000 tax on anyone buying s a new EV.
The four-figure payment would be collected at the time of purchase and would go towards road repairs, report Automotive News. As it stands, federal funding for highway maintenance is currently collected through taxes on gas and diesel:
The one-time $1,000 fee charged at the time of purchase would be roughly equivalent to what drivers of conventional vehicles pay in federal gas taxes over 10 years for highway funds, said Senator Deb Fischer, the lead sponsor of the measure.
“EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges. It’s only fair that they pay into the Highway Trust Fund just like other cars do,” Fischer said, saying gasoline-vehicle users typically pay $87 to $100 annually to the trust fund.
Transportation Secretary Sean Duffy said last month he thought EVs should pay for road use. “They should pay for use of our roads. How to do that, I think, is a little more challenging,” said Duffy.
Taxes on gas and diesel haven’t been raised over the past three decades, meaning that the rise in the cost of road repairs has been much more rapid than the increase in funding the government has to tackle potholes. To make up some of the deficit, more than $275 billion has been used to pay for road repairs since 2008. This money has come from general funds and measures such as the 2021 infrastructure law, adds Automotive News.
The addition of a $1,000 tax on new EV purchases comes as the future of a $7,500 tax break for EV buyers comes under increased scrutiny from the new administration. Trump repeatedly pledged to end the fund once he took office.
4th Gear: Motorbike Sales Boost Honda Profits
Let’s check back in with the dead Nissan/Honda merger and see how the other party in those talks is fairing, shall we? Well, you won’t be surprised to hear that Honda is doing better than Nissan, much better in fact.
The Japanese automaker saw its third-quarter earnings for the year rise by around five percent compared with last year, reports Reuters. The boost came as a result of strong demand for Honda’s motorcycles, which helped operating profit rise to 397.3 billion yen, which is about $2.58 billion:
Honda, Japan’s second-biggest automaker, saw quarterly operating profit come in at 397.3 billion yen ($2.58 billion), versus an average estimate of 403.7 billion yen in a survey of seven analysts by LSEG.
Its automotive business benefited from stronger vehicle sales in the crucial U.S. market while sales in China declined in the quarter, it said in presentation materials.
Honda has been among Japanese car brands that has faced growing competition, including on price, in China following the rapid rise of Chinese electric vehicle makers.
The company retained its full-year operating profit forecast of 1.42 trillion yen, while revising its global sales outlook to 3.75 million vehicles from 3.8 million expected previously, mainly reflecting a decrease in Japan.
Despite the increase in profits for the firm, Honda did fall a little short of estimates for the period, which led to the drop in its sales outlook for the year ahead.