Photo: Raphael Orlove / Jalopnik
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Tesla’s valuation would leave Dr. Evil quivering, bombs might get in the way of a new factory in Germany, the EU has to deal with Trump, airbags aren’t your friend, and more in The Morning Shift for Wednesday, Jan. 22, 2020.

1st Gear: Eleven Zeros

After a decade of ups and mostly downs, Tesla has reached a record valuation of $100 billion. That’s eleven zeroes on the check, an unprecedented value for an American automaker, according to Reuters. Somewhere in the imminent beyond, Tucker, DeLorean, and Lee Iacocca are all wringing their hands at what Musk and Tesla have achieved.

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Here’s more on the significance from Reuters:

Tesla Inc became the first $100 billion publicly listed U.S. carmaker in extended trading on Tuesday, in a sign of Wall Street’s confidence in an all-electric future.

[...]

Tesla’s market value also puts Musk a step closer to earning the first $346 million tranche of options in a record-breaking pay package.

The $100 billion valuation needs to stay for both a one-month and six-month average in order to trigger the vesting of the first of 12 tranches of options granted to Musk to buy Tesla stock.

That first “tranche” of options is part of a record pay package that could see Musk earn over $50 billion if he continues to meet the ambitious goals outlined in the package over the next decade. That’s a lot of money to retire to Mars with.

2nd Gear: Tesla Joins Allies In World War II

Speaking of the plucky American automaker, Tesla just finished construction of its Shanghai Gigafactory in record time, and it’s already fast at work trying to kickstart construction of its next project—a manufacturing facility in Germany.

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But there’s a big, explosive problem: the lot Tesla plans to build on is full of bombs from World War II. Here’s more from the Wall Street Journal:

Tesla, which in November outlined its German factory plan, in recent weeks filled in some details for building on a site outside Berlin. The new facility in the state of Brandenburg is slated to go up quickly, if not quite within a year’s time as achieved in China. Mr. Musk, though, is known for aggressive self-imposed deadlines that are often missed.

Among the challenges for his German plan are two peculiar ones: colonies of bats and unexploded World War II bombs that would need to be removed from the factory site before construction can begin.

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If the bats and the bombs weren’t enough, it’s also unlikely Tesla will match the speed with which it built the Shanghai factory, which took only less than two years:

An auto factory was last built in Germany by Porsche AG for its first all-electric sedan. After the unit of Volkswagen AG broke ground for the body shop in 2015, it took 48 months before production began.

Porsche had to meet strict environmental and architectural guidelines. The assembly facility near Stuttgart had to be largely underground to restrict its height to 38 meters (about 125 feet) so as not to block the flow of fresh air into the city.

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3rd Gear: Tariff Threats, Again

Remember how the U.S. government has been seesawing over trade disputes with Canada and Mexico, China, and Europe over the last three years? Well, the scales have tipped back into the “threat” side, with President Trump again threatening the European Union over trade negotiations he provoked.

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From Reuters:

U.S. President Donald Trump on Wednesday threatened to impose high tariffs on imports of cars from the European Union if the bloc doesn’t agree to a trade deal.

[...]

The United States has also threatened duties of up to 100% on French goods, from champagne to handbags, because of a digital services tax that Washington says harms U.S. tech companies.

Trump told CNBC that the European Union had to make a deal on trade. “They have no choice,” Trump said.

In a separate interview in Davos with Fox Business News, Trump said the tariffs on EU cars could amount to 25%.

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Trump also revealed that negotiations with the UK for a post-Brexit trade agreement is apparently already underway, as the country is due to leave the European Union at the end of January.

4th Gear: Two New, Different Massive Airbag Recalls

Just when it may have seemed like we may have been near the end of the massive Takata airbag recall scandal, which saw millions and millions of airbag infiltrators recalled for risk of deadly shrapnel upon activation, but no. We have simply entered a new chapter, Automotive News reports:

Honda Motor Co. is recalling 2.7 million older U.S. vehicles in North America for potentially defective airbag inflators.

The defect involves a different type of Takata inflator than those that have prompted the largest-ever auto safety recalls worldwide covering more than 42 million U.S. vehicles by 19 automakers with Takata airbag inflators.

The new recall covers Honda and Acura automobiles from the 1996 through 2003 model years. Honda said it is aware of one field rupture of a inflator in the new recall campaign - a 2012 crash in Texas that resulted in an injury - and two in junkyards in Japan.

The campaign covers 2.4 million U.S. vehicles and 300,000 in Canada, Honda said, adding that it has not determined recall numbers for other countries.

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Toyota is also recalling millions of vehicles for airbags which may not inflate, Auto News reports:

Toyota Motor Corp. will recall 3.4 million vehicles worldwide because of an electronic glitch that can result in airbags not deploying in crashes.

The recall, which includes 2.9 million U.S. vehicles, covers 2011-19 Corolla, 2011-13 Matrix, 2012-18 Avalon and 2013-18 Avalon Hybrid vehicles.

The vehicles may have an electronic control unit that does not have adequate protection against electrical noise that can occur in crashes, which could lead to incomplete or non-deployment of the airbags. It could also impede the operation of seat-belt pretensioners.

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As alarming as all this may be, it’s comforting to know that I can buy an old car that may not even have airbags and feel just as secure in my decision as someone currently driving a 2019 Corolla. See, mom? Safety doesn’t matter. Being alive isn’t safe. Live a little.

5th Gear: Hyundai Breaks Up With Major Shareholder

It would appear that a major investment firm behind Hyundai and Kia ended its multi-billion dollar relationship suddenly at the end of 2019, causing a massive shakeup at the fifth-largest automaker in the world.

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From Reuters:

Elliott held more than $1 billion (£710.6 million) worth of shares in Hyundai Motor, Kia Motors and Hyundai Mobis , an Elliott unit said in April 2018. But it was not on the December 2019 year-end list of shareholders in any of the companies, the Korea Economic Daily reported, citing an unidentified investment banking source.

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But what would cause such a massive shakeup? Again, from Reuters:

A 2018 shareholder vote on a proposal to restructure Hyundai Motor Group, seen aiding the handover of the group’s reins to heir apparent Euisun Chung, had been canceled after Elliott put forth its own agenda for changes at the group.

But in March 2019, the companies’ shareholders rejected Elliott’s demands for a massive special dividend and board seats, dealing a blow to the hedge fund’s campaign to shake up South Korea’s second-biggest family-run conglomerate.

As of November 2018, Elliott held more than 2.5 percent of common stock in Hyundai Mobis, 3 percent in Hyundai Motor and 2.1 percent in affiliate Kia Motors, the fund previously said.

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It sounds like me when the family vetoes my restaurant choice.

Reverse: Monte Carlo Rally

There’s not a ton of car stuff for this day in history, but I did find this nice gallery of the Monte Carlo Rally. It began in January 1911, raced again in Jan. 1912, paused for a few wars, and then came back to still run today. Pretty cool!

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Neutral: Where Does Tesla Go From Here?

Tesla has recently screamed past the $420 stock valuation that Musk once claimed would be enough to take the company private (which got him a fine from the SEC). With such an astronomical valuation, is there any room left to grow?

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