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.
1st Gear: Tesla Buyers Are A Patient Bunch
Many of them are unperturbed by the company’s recent track record of delays, especially surrounding the production of the Model 3, the car that Tesla has intended to be mass market. Bloomberg recently spoke to a bunch of buyers that spent $1,000 on a deposit on a Model 3, to get in line to get a car at ... some point in the future. That point may still be months away.
Even as the company led by Elon Musk struggles with manufacturing bottlenecks and pushes back production targets by at least a quarter, many reservation holders aren’t budging. Bloomberg News contacted 20 consumers
who paid deposits for the Model 3 and none had canceled their orders.
Model 3 reservation holders didn’t know the extent of the issues at Tesla’s battery factory in Nevada and its lone auto plant in California until the company released earnings on Nov. 1. If there was any shift in reservations following the announcement of production delays, it won’t show up in the company’s financial statements until the fourth quarter.
Still, of the 20 Model 3 customers Bloomberg News surveyed, only two were even considering canceling their reservations. Neither had actually done so. Another is trying to sell his reservation because he is moving out of the country.
Raymond Nash, for example, got up at 2:30 a.m. to be among the first in line to place a reservation at Tesla’s store in Santa Monica, California. “I wanted to be early in line to get that tax credit,” he said.
Still, Nash — who currently owns a Nissan Leaf and works as an Uber driver — said he likely won’t cancel his reservation even if he can’t get the tax credit.
“If it goes away, I’ll just have to adjust my budget and pay,” he said. “I’m not happy about the delays, but I’m willing to wait. We know that Tesla has made a few hundred Model 3s, so we know that it is real, and we know that more are coming.”
I suppose most buyers probably suspected from the get-go that Tesla may not deliver the Model 3 on time, exactly, and I guess once you’ve spent that $1,000, you may not miss it. And yet! It’s a long time to wait for a car that is still less than a sure thing.
2nd Gear: GM Says They’ll Meet China’s Electric Vehicle Production Quotas By 2019
The quotas are equivalent to about 10 percent of all vehicle sales for automakers in the country, and are intended to spur manufacturers into ever more electric vehicle production. If automakers fail to make the quotas, they will have to buy credits if they want to keep making and selling cars in the country. But GM and its Chinese joint ventures are on track to make the 2019 quota, if not exceed it, according to Reuters.
GM produces vehicles in China through a joint venture with SAIC, the country’s largest automaker, as well as a three-way tie-up with SAIC and Guangxi Automobile Group, formerly known as Wuling Motors.
[Matt Tsien, GM’s China chief] told reporters on Monday that both joint ventures will try to meet those requirements without having to purchase NEV credits from other automakers with excess credits.
“We intend to be able to produce enough products for those joint ventures to be able to meet the NEV quotas on their own,” Tsien said.
“I can’t give you any specific (NEV production and sales volume) numbers other than to say that through the complicated formula we will either meet or exceed.”
Tsien said GM is off to a good start with an electric battery car that it launched in July. The car, called the Baojun E100, is undergoing a feasibility study of a direct-sale method GM devised for it and is currently available only in the south China city of Liuzhou where GM’s three-way joint venture produces them.
GM is planning to have 10 electric vehicle models for sale in the country by 2020; they’ve sold nearly 4,000 E100s since July, according to Reuters. With government subsidies, the E100 costs about $5,400 for consumers.
3rd Gear: Dealerships In 29 States Will Get $335 Million In Payments After Supplier Price-Fixing
That amounts to some 8,000 dealers, all of whom overpaid for vehicles in a price-fixing scheme that had international reach and was uncovered in 2010 and eventually morphed into the largest antitrust investigation in U.S. history, according to Automotive News.
Dealers who overpaid in 21 other states won’t be eligible for the payments though because of laws in those states that prohibit indirect victims of price-fixing to recover damages. The full list of the states that do allow those victims to get payments, according to Automotive News: Arizona, Arkansas, California, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia and Wisconsin.
More, from Automotive News:
Figuring out what individual dealerships are owed is complex, in part because most suppliers shipped components to multiple automakers, which used the parts on some but not all of their vehicles.
One vehicle might have an alternator, a wire harness, an ignition coil and an inverter all sold to the automaker at inflated prices and thus subject to a settlement.
A vehicle from a different manufacturer might have one or two of those components, plus other affected parts. Also, some price fixing took place almost two decades ago, and some is alleged to have occurred as late as 2016.
Dealerships filing claims, however, need only submit year-end statements filed with their manufacturers as proof of claim for a given year.
“It’s a weighted calculation based on the number of vehicles you’ve sold over those time frames, weighted by the model and the make,” said co-lead counsel Shawn Raiter of St. Paul, Minn.
Around $1 billion in total has been set aside to settle claims in the case, meaning that consumers, manufacturers, parts retailers, and other claimants may expect to get some payouts as well. The case has been going on for a long time.
From Automotive News:
The U.S. Department of Justice’s investigation surfaced in 2010 when the FBI raided the offices of Yazaki North America Inc., Denso International America Inc. and Tokai Rika Group North America.
Investigators in the U.S. initially focused on Japanese suppliers and their U.S. subsidiaries, but parallel investigations launched in Asia and Europe.
The first plea agreement, in September 2011, involved Furukawa Electric Co. of Japan. Three U.S.-based executives agreed to plead guilty and the company agreed to pay a $200 million fine.
Altogether, 65 individuals and 47 companies have been charged, with the vast majority agreeing to plea bargains involving large fines and prison time for executives. Most also agreed to cooperate with investigators, according to the Justice Department’s antitrust division.
4th Gear: Nine Automakers Get A Perfect Score From The Human Rights Campaign For LGBTQ Worker Policies
This is good news. The automakers are the American divisions of Fiat Chysler, Ford, GM, Hyundai, Nissan, Subaru, Tesla, Toyota, and VW. The score is based on what benefits the companies offer LGBTQ workers, in addition to workplace policies and a company’s public statements on LGBTQ rights.
Among those in the auto world who missed the mark, according to Automotive News: Honda North America, Penske Automotive, Cooper Tire & Rubber, Bridgestone, Goodyear, and Daimler North America.
5th Gear: There’s A New VW Dieselgate Probe In Germany
This time it’s about when and how VW disclosed details of the emissions scandal to third parties. Some of those disclosures, Reuters reports, might have been illegal, prompting a new investigation by Germany’s finanicial watchdog that was announced on Friday. The scandal has been roiling VW for over two years now, with seemingly no end in sight, and numerous investigations and inquiries ongoing.
Here are details of the latest, from Reuters:
On Friday, German magazine Der Spiegel reported that Volkswagen’s (VW) CEO at the time, Martin Winterkorn, informed then-Transport Minister Alexander Dobrindt and the head of Germany’s KBA motor vehicle watchdog on Sept. 21, 2015, about the extent of the carmaker’s cheating.
But VW did not make public until Sept. 22, 2015, that about 11 million cars worldwide were fitted with emissions-cheating software and that it would set aside billions of euros to cover the potential cost of the scandal.
“We are looking at this process with a view to a potentially unauthorized disclosure of inside information,” a spokesman for BaFin said, confirming the Der Spiegel report.
VW declined to comment on the latest BaFin investigation, but reiterated its view that its management board “duly fulfilled” its obligations regarding capital market disclosure rules.
Reverse: Karen Silkwood Dies In A Mysterious Car Crash In 1974
Silkwood was on her way to a meeting with a reporter from The New York Times and a union official; she was also carrying a trove of documents implicating the plutonium plant where she worked in bad safety practices. But she never made it. The documents also went missing.
After work on November 13, Silkwood went to a union meeting before heading home in her white Honda. Soon, police were summoned to the scene of an accident along Oklahoma’s State Highway 74: Silkwood had somehow crashed into a concrete culvert. She was dead by the time help arrived. An autopsy revealed that she had taken a large dose of Quaaludes before she died, which would likely have made her doze off at the wheel; however, an accident investigator found skid marks and a suspicious dent in the Honda’s rear bumper, indicating that a second car had forced Silkwood off the road.
Silkwood was later played on the big screen by Meryl Streep in 1983's Silkwood. Streep received her fifth Oscar nomination for the role; she now has 20.
Neutral: How Long Would You Wait For A New Tesla?
Or any car, really? I tend to want the things I buy, you know, right now.