Autopilot and FSD buyers are suing Tesla, automakers are upset that dealers aren’t allowed to lie, and Tesla is moving battery production stateside. All that and more in The Morning Shift for Thursday, September 15, 2022.
1st Gear: Buyers Sue Tesla Over Claims That Autonomy Is Coming Next Year, Totally, For Real This Time
There’s a tradition in the automotive world, one that’s sprung up over the past decade. Once a year, Elon Musk comes out and says that Tesla cars will be capable of full autonomy within the following year. Then, presumably, he looks for his shadow to tell us all if there will be six more weeks of winter.
But customers are getting tired of the ever-shifting timeline, and buyers who put down five or six figures on a car in order to get technology that still doesn’t exist are starting to feel ripped off. So much so, in fact, that they’re suing Tesla. From Reuters:
Tesla Inc (TSLA.O) was sued on Wednesday in a proposed class action accusing Elon Musk’s electric car company of misleading the public by falsely advertising its Autopilot and Full Self-Driving features.
The complaint accused Tesla and Musk of having since 2016 deceptively advertised the technology as fully functioning or “just around the corner” despite knowing that the technology did not work or was nonexistent, and made vehicles unsafe.
Briggs Matsko, the named plaintiff, said Tesla did this to “generate excitement” about its vehicles, attract investments, boost sales, avoid bankruptcy, drive up its stock price and become a “dominant player” in electric vehicles.
“Tesla has yet to produce anything even remotely approaching a fully self-driving car,” Matsko said.
The lawsuit filed in federal court in San Francisco seeks unspecified damages for people who since 2016 bought or leased Tesla vehicles with Autopilot, Enhanced Autopilot and Full Self-Driving features.
In a shocking turn of events, people who spend a bunch of money on a car to get a specific feature are upset when that feature doesn’t actually exist. Who knew!
Earlier this year, the Federal Trade Commission set new rules about how much a car dealership can lie to its buyers. Dealerships, having grown fat and complacent on lies, were unhappy with the change. Now, it seems they’ve called in the big guns: Automaker lobbies. From Automotive News:
An Alliance of Automotive Innovation attorney on Monday advised the Federal Trade Commission to rethink its strategy for dealership price disclosures, calling the agency’s current plans “cumbersome to the conversational nature of many sales.”
David Bright, senior attorney for the automotive trade group, also requested language clarifying the FTC’s plan to ban duplicative F&I products and gave the agency a general warning that “excessive regulation and micromanagement” could hurt the car buying process.
“Manufacturers view their dealers favorably,” Bright wrote in the organization’s public comment on the FTC’s proposed new auto dealership regulations. “A regulation that unnecessarily burdens dealers and creates rigid processes in automotive retailing could frustrate consumers and have negative impacts on automakers through fewer sales and diminished consumer perception of their brands and the automotive industry as a whole.”
Now, this may just be my own naïveté, but I would think that “being lied to and slapped with four figures in last-minute mandatory fees” would lead to “diminished customer perception” far more than any FTC regulations. I guess that’s why I’m just a blogger and not a big-shot attorney for automakers.
The Inflation Reduction Act imposed a number of new restrictions on the $7,500 EV tax credit, because Joe Manchin makes his money on fossil fuels and he won’t have any clean-energy upstarts interrupting that sweet sweet cash flow. One of the most controversial restrictions is on battery construction, where as-yet-written rules will require automakers to build their batteries in the U.S. or risk being shut out of tax credits for their vehicles. Tesla, it seems, is moving quickly to follow the rules — shifting planned battery production from Germany over to the United States. From the Wall Street Journal:
Tesla Inc. is pausing its plans to make battery cells in Germany as it looks at qualifying for U.S. electric vehicle and battery manufacturing tax credits, people familiar with the matter said.
The company, which has been working to produce its own batteries, has discussed shipping cell-making equipment it had intended to use at its Berlin-area factory to the U.S., the people said.
Tesla didn’t immediately respond to a request for comment. In the days after the bill became law, the company told Texas officials that it was scouting regional sites for a plant that would refine lithium, a key battery input that today is mostly processed in China.
Of course, battery production is only a piece of the puzzle. To keep qualifying for every penny of the revised rebates, Tesla will also have to begin sourcing its lithium only from countries with which the U.S. has existing trade agreements.
Over in Ohio, there’s a factory that’s not exactly a General Motors plant, but not exactly an LG facility either. It’s both, a collaboration between the two companies that produces GM’s Ultium EV components. But the workers at that factory see themselves more as car manufacturers than chemists, and have organized with the United Auto Workers to be represented as such. Now, they’re willing to shut the plant down in order to get the companies to recognize the unit. From the Detroit News:
Workers at the Ultium Cells LLC plant in northeast Ohio have authorized a strike in a bid to get the company to recognize the United Auto Workers union as their bargaining agent.
On Friday, 94% of voting workers at the General Motors Co. and LG Energy Solution joint venture plant approved the strike recognition measure, UAW Local 1112 President Darwin Cooper told The Detroit News. There is no deadline for the strike to occur, he added.
Experts say the UAW will use the vote as leverage at the table in its effort to get the company to recognize the union. But Ultium said in a statement it is pushing for an election certified by the National Labor Relations Board, which experts say the UAW would like to avoid since it elongates the process.
Ultium is General Motors’ new ace in the hole, its vision for the future of the company. If it wants to bank on EVs, the workers that build them deserve proper representation.
Did you know that companies, when issuing shares on the stock market, can just issue however many shares they want? Porsche seems to, because it’s decided on 911 million shares for its upcoming IPO, in honor of the Porsche 911. Welcome to the economy, where the laws are mostly made up and the numbers never seem to matter. From Reuters:
Volkswagen’s (VOWG_p.DE) supervisory board is due to meet on Sunday to move forward with the IPO of its Porsche brand, which will comprise 911 million shares in a nod to its most famous model, two sources close to matter said.
Details on the price range, valuation and confirmed cornerstone investors are likely to be announced after the meeting, a third source said.
The 911 million Porsche AG shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares, according to the website for the share placement. Only the preferred shares will be listed.
Porsche SE (PSHG_p.DE), Volkswagen’s top shareholder, has already committed to buying 25% plus one of the ordinary shares at a 7.5% premium to the preferred shares.
So Porsche is owned by Volkswagen, which is in large part owned by Porsche, and Porsche will be purchasing Porsche back from Volkswagen through the IPO. I’m going back to bed.
Since time immemorial, my favorite car color has always been Midnight Purple from the ‘90s GT-Rs. Ford made a strong attempt to beat it with Liquid Blue, but that never saw production and didn’t quite have enough flake (though it did presage the Nardo Gray hell in which we all live). But Blue Ember, off the Mustang Dark Horse, may take the cake. Just look at it.