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Tesla Tops 200,000 US Sales; Set to Lose Fed Tax Credits

Being 1st could put EV maker at a disadvantage going forward.

by on Jul.13, 2018

Even when it wins, it loses. Tesla just passed the 200,000 vehicle mark, the most ever by an EV maker, but that brings to an end the tax credit.

Tesla is not just the country’s best-selling EV maker, but the first to sell more than 200,000 electric vehicles in the U.S. market. But that might not necessarily give the carmaker reason to celebrate.

Under guidelines set up by the Obama Administration and retained by Congress as part of last year’s tax overhaul, federal tax credits of up to $7,500 per vehicle apply only on the first 200,000 battery vehicles sold by an individual manufacturer. After that they begin to phase out, meaning that Tesla could be at a financial disadvantage once the company loses the incentives entirely by the end of next year.

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Other companies, including General Motors, Nissan and Ford, are approaching the threshold but their buyers will likely continue to receive some incentives well into 2020, barring any move by Congress – something considered unlikely – to extend the tax credits. (more…)

Tata Motors “Cheapest Car” is No More: Nano is a No-No

Series of fires, poor marketing doom entry-level sedan.

by on Jul.13, 2018

After several fires, demand for the Tata Nano plunged to just 500 units in 2011.

The car that was once considered the second coming of the Model T is now at the end of its run: Tata Motors killed the Nano.

The small four-door car that was developed because Tata’s Motors Chairman Rajan Tata saw a family of four trying to navigate a street on a motorbike in a rain storm hit the end of its nine-year production run yesterday.

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That was in 2003 and it took Tata about six years to get the first of the small cars to production, including having to shift the plant from one region in India to another after protests by farmers in the area. (more…)

Fiat Auto Union Protests Signing of Ronaldo

Fiat, Juventus owned by same company — that can't pay raises to union.

by on Jul.13, 2018

Unione Sindicale di Base, the union representing workers at the Fiat plant in Melf, Italy, are protesting the signing of Cristiano Ronaldo.

(This story has been updated.)

The World Cup will be decided this weekend but Italian auto workers are threatening to go on strike at a Fiat plant in Southern Italy over the Agnelli family’s decision to pay the equivalent $117 million for the services one of soccer’s superstars.

The Italian club, Juventus, which is owned by Exor, the Agnelli family’s holding company which also owns Fiat, signed Portuguese star Cristiano Ronaldo to a contract, stealing him away from Real Madrid, the high-profile club for which he played for the past nine seasons.

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Exor own 29.1% of Fiat’s shares and 64% of Juventus, which like other major European football franchises has exploded in value during the past decade and Fiat CEO Sergio Marchionne also serves on Exor’s board. (more…)

Hyundai Union Warns Tariffs Could Cause US Plant Closure

South Korean union contract calls for closure of foreign plants first.

by on Jul.13, 2018

Hyundai's plant in Montgomery, Alabama, could be impacted severely by a 25% tariff on imported vehicles by the Trump administration.

Up until now, China, Mexico, Canada and Germany have all been at the heart of unfolding controversy about trade and tariffs.

But a new report also suggests that tariffs could destabilize manufacturing base that the South Korean auto giant, Hyundai, has developed in Alabama.

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The South Korean labor union at Hyundai Motors has warned that the 25% tariff on autos being imported into the United States being considered by the Trump administration could jeopardize as many as 20,000 jobs in Alabama.  (more…)

Whistleblower Alleges Tesla Has Misled Investors

SEC received tip from former employee Tesla accused of “sabotage.”

by on Jul.12, 2018

Former Tesla employee Martin Tripp recently told the SEC that Tesla officials are lying about production numbers.

Former Tesla employee Martin Tripp has submitted a tip to the Securities and Exchange Commission accusing Tesla of both misleading investors and allowing potential dangerous vehicles to be sold to consumers.

Until about a month ago, Tripp worked at the Tesla Gigafactory battery plant in Reno, Nevada, but he was fired and subsequently accused by the automaker of committing sabotage in a lawsuit Tesla filed in federal court.

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The lawsuit and subsequent tip to the SEC stand to create some havoc for Tesla at a time when the automaker has been hoping to calm the concerns of analysts and investors who have been worried about the slow ramp-up of the critical Model 3 battery-sedan. (more…)

Tesla Set to Move on New Plant in Shanghai, Announcing Deal Even as it Raises Chinese Prices

Battery-carmaker is 1st from U.S. to raise prices as trade war escalates.

by on Jul.10, 2018

Tesla's new Shanghai plant is expected to be at least as large as its factory in Fremont, California - and include battery production, as well.

(This story has been updated with new information.)

Pres. Donald Trump’s trade war has claimed its first automotive victim, Tesla announcing it will raise prices on some models on sale in China by $20,000 or more to reflect the impact of new tariffs on American-made vehicles.

At the same time, CEO Elon Musk is on his way to China, numerous reports indicating Tesla is set to lock down a deal with authorities in Shanghai to set up the company’s first foreign assembly plant. Musk confirmed construction will begin in about three months and the facility will produce 500,000 vehicles annually once it is ramped up to full production.

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Despite the news about tariffs – which could depress sales in the world’s largest battery-car market in the near-term – investors appear to be buoyed by reports that Tesla will move forward on a Chinese assembly plant. Musk has also indicated that the automaker is working on plans to set up a second foreign plant somewhere in Europe.

(more…)

US Appeals Court Upholds $10B VW Deal With Diesel Owners

Court dismisses objections by small owners group to settlement.

by on Jul.09, 2018

Former VW Group CEO Martin Winterkorn was indicted by German authorities in May.

After a nearly two-year delay, a $10 billion settlement between Volkswagen AG and diesel car owners involved in the emissions cheating scandal has been approved by a U.S. appeals court.

The 9thU.S. Circuit Court of Appeals ruled the deal delivered “tangible, substantial benefits” and the federal judge who approved it did more than enough to ensure it was fair, despite several objections from some owners.

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VW will spend up to $10 billion compensating owners of about 475,000 Volkswagens and Audi vehicles with 2.0-liter diesel engines.VW agreed to offer owners of the 2.0-liter vehicles between $5,100 and $10,000 in compensation, in addition to the estimated value of the vehicle. (more…)

Bill Allowing National Testing for Autonomous Vehicle Testing Remains Stalled

Foreign competitors are gaining on U.S. in the arena.

by on Jul.09, 2018

Nissan is conducting on-road autonomous vehicle testing in Europe, including London, shown here.

As automakers scramble to find what U.S. states are best for testing autonomous vehicles, Congressional efforts to communize rules for all 50 states, once on the fast track, appears to have stalled and there is no timetable for a restart.

In today’s political climate, it would be easy to assume that partisanship is the reason the efforts have ground to a halt in the U.S. Senate, but the bill had strong bipartisan support coming out of committee.

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However, the Senate is tied up with other responsibilities, such as the looming Supreme Court justice approval process and other legislative agenda items, according to the Automotive News. (more…)

Wall Street Souring on Tesla

A good week gone bad.

by on Jul.09, 2018

Tesla CEO Elon Musk is promising the company will be in the black by the third quarter.

What was supposed to be a great week for Tesla turned out to be anything but, with analysts and investors largely ignoring CEO Elon Musk’s jubilant announcement of hitting the company’s production target, instead turning increasingly bearish amidst a sharp stock sell-off.

The roller-coaster ride could continue during the next few weeks as Wall Street waits to see what Tesla will report when it releases its second-quarter earnings announcement. The company delivered record losses during the first three months of this year and is expected to remain deep in the red through the end of June. The longer-term question is whether Tesla’s rising production of the critical Model 3 battery-sedan will finally translate into the black ink and positive cash flow Musk has repeatedly promised.

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For now, however, it appears that a growing number of analysts aren’t particularly optimistic. Of the 31 analysts who cover Tesla shares, 10 now offer “sell” guidance, nearly one in three. A roughly equal number list TSLA shares as “hold,” with only a third now recommending investors “buy.” It is rare, according to the Bloomberg news service, for analysts to go with a “sell” rating, most signaling displeasure with “hold” guidance. (more…)

Auto Industry in the Crosshairs as First Shots Fired in China Trade War

Ford, BMW, Volvo and GM could be particularly hard-hit.

by on Jul.06, 2018

President Donald Trump ordered $50 billion in new tariffs on Chinese goods.

Words, rather than gunshots, rang out overnight as the Trump administration officially enacted an estimated $50 billion in new trade tariffs on China, leading the massive Asian giant to strike back with new duties worth about $34 billion.

The U.S., Chinese officials declared, has launched “the biggest trade war in economic history.” The government, borrowing a page from the Trump playbook, called the U.S. administration “a gang of hoodlums.” The White House, meanwhile, said it was in for the long-term, if need be, and could levy billions of dollars in additional tariffs against one of America’s biggest trade partners.

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The battle, which few analysts expect to be resolved quickly, will impact a broad spectrum of industrial sectors, everything from entertainment to agriculture, though automotive manufacturers could be particularly hard-hit. (more…)