The last four years in the automotive industry have been dominated not by electric cars or hybrids, but by the search for chips. For most automakers, this meant the kind of cheaper, less advanced chips designated for automotive use. Now, Elon Musk might be in trouble after reportedly taking the most advanced chips used for AI and designating them for X/Twitter instead of Tesla.
What a weird world we live in, where instead of horsepower we’re having to think about floating-point operation per second.
All that being said, electric cars are still important, and we have two somewhat competing views in Detroit on EVs and hybrids playing out right now. I’m going to take them individually and we can see where we’re going to land.
And, let’s end this hump day Morning Dump with cranky Senator Joe Manchin trying to get someone to sue the Treasury Department.
Chips Rule Everything Around Me, CREAM
I think I keep making variations of this Wu-Tang joke because I’m a Millennial. A Wu-Tang joke is the ultimate Millennial flex, I suppose.
You can read my very long article on Trimflation to understand how, early in the pandemic, automakers canceled orders for the microprocessors that are required for their cars in anticipation of shrinking demand. That’s not what happened. Demand soared, production slowed, and prices went way up.
I wrote that a reason why Tesla CEO Elon Musk might be rolling back his plans for a $25,000 car was that he’s more interested in AI and robotaxis and autonomy. This was only bolstered by Musk’s earnings call, wherein he explained:
“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company.”
To “solve autonomy” it’s assumed that Tesla is going to need a lot of chipmaker Nvidia’s H100 GPUs, which is sort of the Garrett Turbo of computing. And, in fact, Tesla ordered a bunch of them.
At the same time X/Twitter, also run by Elon Musk, has been touting its Grok AI as an alternative to services from OpenAI, Google, and Meta AI platforms. What does it need for that? Super fast GPUs. Nvidia’s stock has gone to the moon because the company can’t make them fast enough.
What’s a Musk to do? According to some great reporting from CNBC, the move might be to kick some of those Nvidia chips to X/Twitter first:
But emails written by Nvidia senior staff and widely shared inside the company suggest that Musk presented an exaggerated picture of Tesla’s procurement to shareholders. Correspondence from Nvidia staffers also indicates that Musk diverted a sizable shipment of AI processors that had been reserved for Tesla to his social media company X, formerly known as Twitter.
Tesla shares slipped as much as 1% on the news Tuesday morning.
By ordering Nvidia to let privately held X jump the line ahead of Tesla, Musk pushed back the automaker’s receipt of more than $500 million in graphics processing units, or GPUs, by months, likely adding to delays in setting up the supercomputers Tesla says it needs to develop autonomous vehicles and humanoid robots.
That’s, uh, not good. One of the big complaints that Tesla investors have is that Elon Musk is splitting his time between too many of his companies (Starlink, X, Neuralink, Cracker Barrel, SpaceX). This seriously bolsters that argument.
At the same time, Tesla is asking shareholders to give Musk a huge payout, and Musk has loudly said he wants more control/money or maybe he’ll stop caring about Tesla:
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
— Elon Musk (@elonmusk) January 15, 2024
Just to get one more reference that David might not understand in this post, this is basically the scene in Blazing Saddles where Clevon Little points a gun at his own head and threatens to shoot himself.
“Oh baby, you are so talented… and they are so dumb”
[Ed Note: Yeah, I got nothin’. -DT]
Ford Keeps Selling EVs At A Record Rate
If you put me in a footrace with Usain Bolt and three toddlers I could say that I came in 2nd in a race with Usain Bolt. That is roughly how it feels when Ford proclaims that it is the 2nd biggest EV brand in the United States after Tesla.
The gap is pretty large, though Ford keeps narrowing it (Tesla’s market share from Q1 2023 to Q1 2024 dropped from 62.4% to 52.1% whereas Ford’s increased from 4.2% to 7.4% over the same period). Also, if you count Genesis-Hyundai-Kia together it’s second at 8.5% market share.
Ford has made it clear it’s going all-in on hybrids in the near term while focusing on building a cheap EV for the long term. Nevertheless, Ford’s EV sales were up 64.7% in May of 2024 over last May. That compares to a 64.5% increase in hybrid sales for the month (to 17,631) and just a 5.6% increase in traditional ICE vehicles.
Leading the way is the Mustang Mach-E with 4,255 cars sold, up 45.9% year-over-year. At the same time, F-150 Lightning sales were up almost double with 3,260 trucks moved. Even the E-Transit broke into four-figures with 1,451 vans sold.
Ford has long said its current EVs are not profitable and, while it wouldn’t mind you buying one, its target is a cheaper, skunkworks car that is apparently coming.
GM Is Slowly Coming Around
GM is in a different position. It made its big EV investment earlier than Ford and we’re just now seeing all its efforts play out in the market. While GM is reluctantly coming around to hybrids, the company could also be EV profitable if it managed to sell enough of its current crop of electric vehicles.
CEO Mary Barra spoke to investors and there were a lot of questions about the EV transition, with Barra indicating that the company’s goals were a bit more of a moving target than they seemed a few years ago.
As reported by the Detroit Free Press, the first question was about how GM might adapt to the changes in consumer preferences.
Barra answered that GM leaders anticipated there would be “ebbs and flows in EV adoption,” which is why GM offers a diverse portfolio of gasoline-powered vehicles, electric and soon plug-in hybrid vehicles.
That’s a long way from GM’s initial (and abandoned) goal of making 400,000 EVs by the middle of this year.
Senator Joe Manchin Wants Companies To Sue U.S. Over Bill He Made Happen
There would be no Inflation Reduction Act without West Virginia Senator Joe Manchin. His surprise embrace of Joe Biden’s green initiative included a number of requirements, including ones focused on keeping content from China and other countries out of batteries.
While a lot of his requirements are being acknowledged and written into law, there are a number of caveats being pursued by the U.S. Treasury Department that get around these requirements. This has made Senator Manchin a wee bit upset, as one interpretation of what happened is that President Biden played the senator.
That’s a fun interpretation. The other way to look at it is that President Biden has to balance concerns from allies and certain realities in order to govern, and Senator Manchin isn’t the president so he gets to ignore reality a bit and act big mad.
Anyway, U.S. Treasury Secretary Janet Yellen was testifying before the U.S. Senate Appropriations Committee about the bill and this happened according to Reuters (you can also see it in the video above):
Manchin told U.S. Treasury Secretary Janet Yellen during a hearing of the Senate Appropriations Committee that U.S. manufacturers were being damaged by the content rules, which he said Treasury had halved from the original language in the law.
“I’m encouraging every manufacturer to sue you, and I will do the amicus brief on (their) behalf …. and you’ll lose every suit,” he said, holding up posters comparing the content requirements included in the legislation with those set in final rules by Treasury, which is implementing the IRA.
Yellen, always chill, said she shared his concerns and would love to chat with the senator about his issues.
What I’m Listening To This Morning
All Wu-Tang Clan videos are wonderful and chaotic, but not all start with a minty Infiniti Q45 and include a Mazda MPV shoutout.
The Big Question
Who will be the #2 EV brand in the United States in Q4 2024?
Top photo: The David Lynch “Dune”
See, Elon’s mouth reminds me more of this scene from Blazing Saddles: https://www.youtube.com/watch?v=FXHkFZ-nG4Y
As for the #2 largest EV maker, maybe Hyundai? Hyundai, Genesis and Kia seem to be the most committed to putting out new electric models at the moment, and they’re pretty compelling ones: long-ranges, a three-row SUV, luxe Genesis models, relatively reasonable pricing on its mass-market options and funky styling that isn’t eye-searing (…bcc: BMW).
I can’t help but feel that the hybrids are going to win out not just in the immediate near-term, but also in the medium-term. seems that there are so many people out there who are ready for partial electrification but can’t swing a BEV in their current situation. We’ve seen how the hybrid strategy has worked out for Toyota (really really well). Honestly Stellantis seems to have a really good idea on their hands with the new range-extended RAM truck, will be interesting to see how it performs on the open market
#2: KIA/Hyundai.
Musk – going MAGA – will turn Tesla to sh*t. Now supports a criminally convicted candidate who promised Oil execs he’d ban EV sales if they gave him a billion bucks. Musk has to go, he has no idea what it means to run a publicly traded company, and other peoples’ money is not just his entitled due.
Given that Manchin was trying to play Biden during that whole IRA “discussion”, I find it hard to have much sympathy for him if he was the one who got played instead.
I’m also curious which manufacturer he thinks is going to sue because the restrictions were too loose. There’s already been a huge influx of new factories in the US because of this bill, and the foreign manufacturers were pissed because it excluded them. The IRA did exactly what it was supposed to (at least in this specific instance).
I don’t often agree with Musk these days, but he’s spot on about that. Tesla is valued as something other than a car company, so if you think they’re just going to keep making cars you should run away. Like I did.
When car sales dip – tesla stock dips. That’s the reality no matter what dystopian dreamscape occupies what is left of Musk’s brain. He can play in his sandbox, but either he develops a coherent car strategy or he leaves and lets someone else do it. I thought geeeneeusses could do more than one thing at once.
But if it is valued as an AI company, how do explain his poaching AI employees from tesla to AIx, losing his Tesla head of AI, and diverting resources from Tesla AI? Breach of corporate duty. Cake and eat it too? Entitled POS pouting expensively?
So where in the process did Tesla get delayed again? Does Tesla already have the building to house and setup these supercomputers? Or are they just going to sit in a warehouse and Tesla will have to pay for storage? If so, I got get me some TSLA so I can join the lawsuit!
If GM didnt stop selling the Chevy Bolt and expanded their portfolio how they are doing today with the Equinox EV, Blazer EV, Lyriq and Silverado EV, they will be number #2. They are a little late to the game compare to Ford but they are covering a lot of segments with electrification options.
It’s an interesting point. I do think they can catch up quite a bit with the Silverado. I think that Ford’s lead is largely the F150 but there are also aspects that Make the Mach E a more compelling option than the Blazer so I’m sure that’s a factor too. If GM can just get production up on the Lyriq and the Equinox has fairly good adoption, I could see them catching up since those are two spaces Ford doesn’t have an option yet.
Where’s the sky blue Land at?
Wait for the Millenia green to pull up
The state pension funds (yes, government sponsored pensions still exist and control many billions of dollars) that are shareholders in Tesla are likely readying their lawsuits now.
Also, if you invest in a 401k, it’s likely that some mutual fund you own has a stake in Tesla. That may give the fund company standing to sue. IANAL.
Musk needs to shoot himself off to Mars yesterday. Then we won’t have to deal with his toddlerish behavior.
The
spicechips must flow! Wow, prioritizing one of his companies over another is bad, but Musk prioritizing his privately held company is worse. Between that and threatening to ignore Tesla if he doesn’t get his way, If I were an investor I would consider a lawsuit, but I don’t believe Tesla will solve autonomy, so I’m not an investor and I have no standing to sue. (Is that sentence long enough? Meh, I could probably add a couple more words.) All I can do is sit back with myspicepopcorn and watch it unfold.This dude is talking like solving autonomy like I talk about re-doing my bathroom. Man was given autonomy, depending on who you ask the moment we had self-realization and/or soon there after maybe involving a snake. We’ve spent the rest of time trying to figure out why, what and if that really is a good idea. Yet, this one dude is going to boil down the most impossible question of human existence, to a bunch of 0’s and 1’s for a few billion dollars.
The entire premise of autonomy is it is in fact unable to be calculated and literally anything that can happen could happen. The smartest machine on earth can not account for the shear variation of human thought. To even suggest that a machine can be autonomous, is so grossly flawed. Like this man is saying give me money so I can give Free Will to Model X. This isn’t tech, this is Divinity. And people will turn over their income, so this dude can pursue his true passion of becoming a literal Deity to a Cars universe.
Autonomy has been around far longer than humans have in everything from bacteria to dinosaurs to scorpions to ants.
This really depends on who you ask. When talking about Autonomy (in the context of existence), first you have to establish of definition. Step two, no one knows, because there too busy arguing about step one. Which animals it gets complicated mainly due to how you view the actions of animal as truly a voluntarily choice likely necessary in most- conceptual ideas of Autonomy. This get’s into the question, “Does the dog know it’s chasing the ball and doesn’t have to actually do that, and is choosing to do so?”. Most people would say yes, but I think the argument can be made that a dog does not inherently act on choice, but driven by instincts. And is that inherited drive Free Will or not? Well, we get back to how you define Autonomy. Which to me, is primarily driven by a structural understanding of the word that can vary wildly dependent on your personal development.
None of which is needed or desired for AVs. All an AV needs to do is get from point A to B following all the traffic laws while maximizing safety for everyone outside the cab and inside, energy economy and passenger comfort in blissful silence and without any exception of a #%&^ tip! If you want to call that “animal” autonomy that’s fine by me.
I’m sure someone will post something funny or poignant and that will be featured, but, really, this should be COTD
Well, I mean, they solved gravity in Interstellar, so anything’s possible.
Oh wait. That was a movie.
Never mind.
All sarcasm aside, I really haven’t heard the masses clamoring for self-driving cars, so this just sounds to me like a great way to attract publicity and more money ad infinitum.
So, Musk has caused harm to the publicly traded company that he’s CEO of in order to benefit the privately held company he owns on the side? That sounds like a huge conflict of interest and possibly a breach of fiduciary duty, if Tesla shareholders acted more like the shareholders of any other company, he’d probably be on his way out as CEO right now. Especially with the threats to stop spending so much time/energy on Tesla if he doesn’t get the money and control he wants, talk like that should get you fired, you know he wouldn’t hesitate to fire someone he felt had a questionable commitment to the company, should be held to the same standard. If your head isn’t in the game anymore, get out
^THIS^
(and yes, I’m pretty sure it crosses the line into breach of fiduciary duty)
Not only that, he did so while arguing he needs to have 25% interest in Tesla to feel like growing it into a leader in AI and robotics, so this is not just benefiting him in the private company, but also arguably an attempt to coerce shareholders into approving the massive payday they’re voting on. This is problematic on several levels.
Of course, with some significant portion of the shareholders being true believers in AI, Musk, or both, he may get away with it. You’re right, though. Any other CEO saying that they’d only be comfortable growing any part of the business if they had more shares would absolutely be ousted.
Nail, meet head. He doesn’t need more compensation — he needs to be shown the frickin’ door.
I keep saying that Tesla is a brilliant company in need of an adult at the top, and well. We’re waiting. Boot Elon out and get someone who actually wants to run a car company.
He’s not a mystical demigod, there are literally dozens of competent CEOs in the world who could run Tesla, maybe hundreds if we’re talking the whole world. But, on the other hand, no other company that he isn’t already involved with is going to hire him and let him waltz right in and get the same kind of deal/treatment he gets at Tesla right now, so, really, he needs Tesla more than Tesla needs him at this point and he’s delusional if he thinks that isn’t the case.
I find your offer acceptable.
Challenge accepted.
I just find it unbelievable that so many incredibly smart people work for this completely self centered and obviously stupid douche. I work with a guy like that – thinks he’s the smartest guy in the room while he’s far and away the dumbest guy on our crew. Constantly forking up our operation. Fire that dumbass!
I understand the Lightning isn’t currently profitable (no new vehicle is) but it still seems like the most practical EV truck for the foreseeable future, and the most likely to turn a profit given it shares a platform with the most common vehicle in the USA.
The Silverado EV is too expensive, and IMO dead on arrival. It’s going to cost like $150,000 Canadian. Sure some people can afford that, but why wouldn’t they buy like, a Range Rover or something instead of a behemoth with an interior like the Chevy Equinox?
Speaking of which, maybe the Equinox will work out, but it seems overweight and it’ll probably somehow still cost $60,000 here. All the Ultium vehicles seem expensive and overweight. I get the vision of a shared platform, but it’s starting to look like it may not live up to the hype.
The Equinox is for sale now and in the $35kish range if you can get the tax credit. In theory, by next year, the sub-$30k one (with tax credit) will be for sale.
Does Canada have an EV tax credit similar to the U.S.?
Yes. There’s a federal tax credit (7k ?? ) and then BC and Quebec offer an additional credit. Ontario had one but a government change made it go away; also, Quebec’s will be declining (currently 5k I think??) to disappear in like 4 years. This is a discount applied directly to vehicle sales price and applied at the dealership.
Thanks. I didn’t realize that.
I cannot wait for the day I don’t have to hear about Joe fucking Manchin anymore
Once he is replaced by a crazy actual republican you will start to miss him.
This is the insight that tempers my emotions about Manchin.
Gov Jim Justice is hot to take Joe’s seat. Overall worse, I think, but at least he won’t pretend to be a democrat.
Musk deserves a swift kick in the chips.
Mr Krabs best protect his neck if he keeps tying self-fellacio
As correctly summed up in the immortal words of Gabby Johnson, “Wu-Tang jokes are the ultimate Millennial flex, only because Gen X started them in the first place and moved on when it got ‘cool’. Dagnabit.”
As far as the IRA goes, there is no surprise there. Anytime a major bill passes, it always has clawback “loopholes” in it so that the end result is not nearly as drastic or effective as the press release. The bullet points are all that actually matters in D.C., not the actual execution.
‘Authentic frontier gibberish’
(ISWYDT)
Hey, Matt teed it up and DT whiffed, so I’m just trying to rebalance the universe.
I mean, I know you are pop culture obtuse, DT, but In what universe do you live in where Blazing Saddles is a black hole? It even has schnitzengrüben in it!
Perhaps DT is part of the ‘common clave of the New West’.
I’m a little curious–and more than a little nervous–about what David would say about an unbriefed viewing of Blazing Saddles.
Yeah, then Clevon Little got to trade his horse in for a Cadillac limo while being serenaded by Count Basie’s orchestra. So there’s that.
Would Manchin push for mandate that all EVs needed to be powered by coal power, if left to his own?
Natural gas production has grown so much in West Virginia that I believe it employs more people than coal now.
And if an EV startup set shop in WV that was able to benefit from this legislation, I’m sure he’d change his tune quick enough.
So domestic production like he has been pushing for years? I do not see how this would be changing his tune at all.
When I visit family in north-central WV, it seems that most of the gas operators are from out of state.
But their donations are in-state, and that’s what really matters.
I had noticed Cracker Barrel seemed more inviting to racists and seditonists lately. That explains things nicely.
Lol, unintentional but…
Is there a conversion ratio between a Barrel of Crackers and a Basket of Deplorables?
“You become what you give your attention to.” -Epictetus
I don’t care what people think. I’m still going to eat at Cracker Barrel occasionally because their breakfast menu is better than any of the local IHOPs or Denny’s. Am I wrong to want to eat in a place that doesn’t have missing ceiling tiles?
Not at all, and it is a better menu.
The joke was 80% about what Musk made out of Twitter, 20% “wow that’s a lot of customers wearing Confederate flag/Trump/Let’s Go Brandon” paraphernalia, 0% me actually having any idea what Cracker Barrel’s politics as a corporation are.
That’s like you choose to get poked in the eye because it’s better than getting kicked in the nuts or having your nose broken.
Cracker Barrel?
My google-fu left me with more questions than answers, too.
I do this joke a lot, maybe too often. Usually with Stellantis or VW, which owns so many brands, I’ll toss in a brand that isn’t at all related just to make myself laugh. See if you can find them all!
Don’t joke. Musk will bite and next thing you know he’ll own Cracker Barrel, rebrand it “Crack”, start listing menu prices in bitcoin, and sell special brownies instead of corn bread. He’ll run it into the ground and then somehow pretend like he’s doing God’s work to save mankind.
And he might walk into CB’s headquarters carrying a toilet this time.
I have no doubt he’d discontinue those fake sausage dishes, given his disdain for ‘wokeness.’
I’m sure it’d be great for the bottom line to entice all those right-wing offended masses back through the door.
Crack or barrel? – “I’ll take the barrel!”
I love it when you do this. Like little easter eggs.
With Elon, there’s never certainty.
So what I’m seeing here is that I should not use you as a source when trying to win an argument. Got it.
It’s supposed to be a random joke about how many unrelated companies he’s running simultaneously. Remember he was also reselling/rebranding boxed chocolates at one point in a half-assed effort to troll Warren Buffett (who owns an actual chocolate company that’s actually good)
I can’t remember something I didn’t know once already. But now I’m ready to remember next time!
Joe Manchin bad. Wu Tang good. That is all.
Manchin may be posturing a bit here, but his point seems to be a good one to me.
If the point of the bill is to boost US manufacturing and put soft sanctions on China (both of which we should be doing), allowing another year of exemption for Chinese materials defeats the entire purpose.
entire, no. Water it down a bit, yes.
He’s pretty annoying how he plays up his position and takes advantage when they need his vote to (primarily) elevate his standing.
But honestly I’d like more people in congress to start calling out the bills that don’t do what they say and just rely on overly hyped titles (like the Inflation Reduction act that does not reduce inflation) to drive support by dumb people that don’t read further.
In this case, he’s right. The bill is not being enforced the way it is written.