Home » Tesla Is Trying To Be A Less Terrible Business Partner

Tesla Is Trying To Be A Less Terrible Business Partner

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Tesla has generated a huge amount of income for itself and, seemingly, for its suppliers. There are probably many companies that can point to Tesla as a great partner. At the same time, there’s a preponderance of companies that made deals with Tesla who reportedly got utterly hosed. Today we’ll learn about an entire industry walloped by the company and what Tesla is reportedly trying to do to fix it.

It’s been a full ten days since I’ve written a Morning Dump that didn’t have the word “Tesla” in the headline, which I take as a personal victory. Less victorious is the United Auto Workers union, which lost a vote at the Mercedes plant in Alabama.

Vidframe Min Top
Vidframe Min Bottom

Switching gears: Was the ID.4 launch a win for Volkswagen? I don’t think so. The vehicle is a mediocre player in the market and now is facing an investigation into a potentially failed recall involving doors that just randomly open.

And speaking of openings, longtime Stellantis exec Tim Kuniskis is retiring, which opens up two new CEO spots at the company in the Dodge and Ram brands.

Leasing Teslas Is A Bad Business

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Earlier this month CEO Elon Musk surprised everyone, including his own employees, when he fired the entire team behind Tesla’s extremely successful Supercharging network. The company was in the midst of an expansion that was quickly dialed back, reportedly leaving a lot of Tesla’s business partners (landlords who planned to lease spots, electricians, construction companies, etc) in the lurch.

In addition to people directly counting on Tesla for business, the Supercharger walkback happened right on the heels of almost every company switching over to Tesla’s standard in order to gain access to that network. So, yeah, not great for those companies that excitedly announced the move.

Remember when Hertz and Sixt bought a bunch of cars from Tesla? Yeah, that wasn’t great for them. Hertz lost a ton of money on the rental EVs. For similar reasons, Tesla has been a real problem for leasing companies in Europe.

Specifically, leasing companies have been hit by two big challenges related to Tesla. The first one is fairly obvious and not particularly unique to Tesla, but repairs have been exceedingly slow for the company’s electric vehicles.

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The second, and way bigger issue, is that leasing companies buy cars from Tesla and calculate a lease price based on the expected value of the vehicle at the end of the lease. These companies make money off the spread between what they charge and what the vehicle is worth. Tesla’s constant lowering of prices means that leasing/rental companies lose money because residual values plummet.

This is a big deal for Tesla as, according to a Reuters report, leasing/fleet/company cars account for about 44% of the company’s sales in the UK/EU. From the article:

There’s “nothing worse” than continuously dropping the value of a fleet buyer’s assets, said Richard Knubben, director general of Brussels-based Leaseurope, a leasing- and rental-industry group which represents national groups across 31 countries.
“Tesla is now actively telling our members: We can give you discounts and compensate you,” Knubben said. “But Tesla’s residuals have dropped so fast, I’m not sure the discounts they’re offering are enough.”
The same report says that Sixt, for instance, says it lost $42.7 million last year because of Tesla’s price drops. It’s a good sign that the company is trying to fix some of these issues but…

Arval, the car-leasing unit of BNP Paribas’, is now talking to three Chinese automakers about buying EVs after taking losses tied to declining Tesla values. When Tesla first started cutting prices last year, Arval told the automaker: “You are really shooting yourself in the foot,” said Arval Deputy CEO Bart Beckers.

Arval leases about 170,000 EVs as part of its 1.7 million-vehicle fleet, Becker said. He said Tesla is working to fix repair-and-service problems but added the automaker’s “new challengers” — Chinese EV makers — seem to be avoiding Tesla’s mistakes by focusing on maintaining strong resale values for cars.

It’s less of a good sign when some of your customers/partners look to Chinese automakers for stability.

Nick Saban Did NOT Swing Mercedes Union Election To UAW

Uaw Striking Workers
Photo: UAW

After negotiating historic contracts with Detroit automakers the UAW looked to see if there were foreign plants it could unionize. Volkswagen’s Tennessee plant was the first to pick up the union banner, but that facility had long been a union target and the subject of multiple votes.

In spite of a potential last-minute inadvertent push from Nick Saban, a total of 2,642 workers, or about 56%, voted against the UAW organizing the plant.

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From The Detroit News:

Jay White, lead of the MBUSI Workers’ Information Committee campaigning against the UAW, said “Thank God” when The Detroit News informed him of the vote’s outcome.

“I don’t know that I would call it an achievement from that perspective, I think it’s a team win for all the employees,” White said. “It’s hard to say what the deciding factor would have been for a lot of people but I’m sure politics played a part.”

This is a setback for the UAW and shows that local politics are hard to overcome.

NHTSA Looking Into VW’s ID.4 Door Fix

Id.4 Production In Chattanooga Us Plant Shapes Up For E Mobili
Volkswagen

Last year, Volkswagen had to recall its electric ID.4 crossovers because the door handles would malfunction and cause the door to either not work or, worse, randomly open at certain speeds.

Here’s what the original recall was about according to the National Highway Traffic Safety Administration (NHTSA):

To address issues of water intrusion in MY 2021–2023 ID.4s, VW issued recalls 23V-213 and 23V312. VW indicated the recalled population had been built with door handles that did not meet
manufacturer specifications for protection against water ingress. Water ingress into the door
handle can lead to door handle malfunction, including causing an “open command” to the door
handle. The door could open unexpectedly when the vehicle is subject to high lateral forces at
speeds below 9mph/ 15kmh. The recall remedies for 23V-213 and 23V-312 requires the technician
to inspect each door handle and replace, if necessary. Also, a vehicle software update is
performed to update the door handle operating parameters.

Not ideal. Now NHTSA is opening a Recall Query after getting 12 reports of doors opening again while driving the car from vehicles that had gotten the recall service.

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Dodge And Ram Get New CEOs

Christine Feuell

If you’ve enjoyed the super muscle-y turn of Ram and Dodge over the last few years you can thank long-time Chrysler/FCA/Gadzooks/Stellantis executive Tim Kuniskis. The dude loves speed and has pushed his brands towards performance, including the recent turn towards EV performance.

“I want to take the opportunity to warmly thank Tim for his passion, commitment and contributions to Stellantis and in defining the vision of the future electrified Ram and Dodge brands. I wish him well in his retirement,” said Stellantis CEO Carlos Tavares in a statement.

After 32 years and approximately 47 different corporate restructurings/mergers we all wish Tim a happy and, hopefully, calmer retirement. It’s kinda amazing that anyone has survived at the company for that long although it’s not that rare! I know a lot of people who have had long careers at the company and most of them are super chill folks with a mutual respect for others who have stuck it out.

So who is taking over? Matt McAlear, head of Dodge Brand Sales Operations, will head up the Dodge division. Christine Feuell, the current CEO of the Chrysler brand, will be adding Ram to her portfolio and serve as CEO of both.

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This move makes a lot of sense to me as Feuell is basically the CEO of a brand of one. Seriously, if you go to Chrysler’s website and click on the VEHICLES button it doesn’t do anything!

Chrysler Screenshot

That’s because Chrysler currently only sells the Pacifica, though the plan is for the brand to go exclusively EV at some point in the future. Maybe. Eventually.

What I’m Listening To While Writing TMD

If you know one thing about me, it’s that I love Rihanna. I just need some new music. It’s been too long! Just no more Drake, please.

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The Big Question

You’ve just been named CEO of Dodge. What do you do?

Top Image: Hertz

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Thomas Metcalf
Thomas Metcalf
1 month ago

Is Christine Feuell’s surname pronounced like “Fuel”? If so, that is some awesome nominative determinism!

Boxing Pistons
Boxing Pistons
1 month ago

Dodge CEO: as others have suggested, fold Ram back into Dodge and revive the crosshair grill for the trucks. Then do a clean-sheet design of a small, simple CUV and unibody truck on the same platform with trims ranging from a truly affordable hybrid base model all the way up to a high-strung PHEV ala RAV4 slammed to the ground. Hybridize all base trims across the board, and put out a halo car in the form of a high performance luxury PHEV (or EV) 300C.

MY LEG!
MY LEG!
1 month ago

Dodge CEO:

Kia Soul-esque EV, call it the Atom or the Ant. Full K-Car moment: target Thrifters, Oldsters, Hipsters. Barebones, manual gauges trading on the spartan aesthetic to attract hipsters and thrifters; manual crank windows, bluetooth/FM/XM only to minimize complexity for oldsters. NO ONE PEDAL DRIVING. NO GIMMICKS. Just a solid, basic EV.

Grand Caravan refresh. Unsure what to do to minivans, besides minimize, electrify and automate as much as you can, as it’s an appliance.

Refresh the Charger. PHEV/EV replaces V6 trims, maybe even badge-engineer it and revive the Diplomat nameplate; three v8 performance trims instead of the 58 and a half now. R/T, Superbee and Shitbird SRT-8 trims for V8s.

Give the Diplomat/Charger all the colors from the first trim up: Plum Crazy, Go Mango, Lime Green, etc.

Revive the Magnum for a new Suburban-fighter with the Durango being the midsize/Tahoe. Target cop/government fleets, primarily to generate interest and appeal to the Oakley shades and 5.11 Tactical pants dude who insists “I woulda joined up but I was too hardcore for the woke army”.

Manwich Sandwich
Manwich Sandwich
1 month ago

You’ve just been named CEO of Dodge. What do you do?”

Merge it with the Ram brand, rename all the Ram trucks back to Dodge and Ram goes back to being a model name undoing one of the dumber parts of Mergio Sarchionne’s legacy.

Boxing Pistons
Boxing Pistons
1 month ago

Yes!! Then you can bring back the crosshair grill for the trucks where it most belongs!

Gene1969
Gene1969
1 month ago

As the new CEO of Dodge and Ram I will do the following:

Make a Dakota and Rampage. Both will come in the old school option of regular cab long bed and extended cab short bed as well as the high selling crew cab tiny bed. I would make it so that every dealership out there has to have at least two of the regular cab and extended cab models on the lot.

Keep the Ram Classic going on but bring back the damn column shifter! (Regular cab and quad cab variations only. You want a crew cab? Get the newer Ram 1500.)

Bring back the LeBaron and Acclaim nameplate on a midsized hybrid taken from the Stellantis pool.

Do the same “badge engineering” for some EVs and slap the Cirrus/Stratus names on them.

And for the boutique car, a full on EV/Turbine hybrid exotic that utilizes a stout CVT to keep the “revs” up on the Turbine. You get alternative low carbon fuels with EV goodness in a mix that give power and some decent mileage. Then race the B****!

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
1 month ago
Reply to  Gene1969

You had me until the Acclaim/LeBaron/cloud revival. What’s the rationale?

Gene1969
Gene1969
1 month ago

Pure marketing.

Chevrolet dropped the Malibu, so I’m having Dodge pick up the slack but I don’t want to dilute/ruin the Charger name, so what name fits against the Accord and Camry? Acclaim. Chrysler gets a version called the LeBaron because I liked the GTS version when in high school. Buyers won’t expect chest thumping horsepower with these names so we can focus on family, features, and brisk speed. (I’m keeping the Charger and Challenger for the Hoonies)

As for the cloud cars, everyone sees lightning in the sky during storms, so cloud cars equate EVs.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
1 month ago
Reply to  Gene1969

Buyers who remember those nameplates with fondness are driving Buicks or in hearses by now though

Gene1969
Gene1969
1 month ago

Exactly! There’s very little baggage associated with them. The advertising dept can go wild.

ProfPlum
ProfPlum
1 month ago

Tesla: Many companies jettison their startup/first mover CEOs after a while because they lose the plot when growing the company. I believe Tesla is at that point, but since EM is a tremendous wanker and can not be dislodged from the company, it will auger in at some point.

I Could but Meh
I Could but Meh
1 month ago

So many of these comments are about Dodge bringing back old shit. Where are the new ideas?

Stoney got got (potentially)
Stoney got got (potentially)
1 month ago

Lol. It’s a car site message board.

“I’m right and this is how it needs to happen to save the industry!” – drywall hanger

Gene1969
Gene1969
1 month ago

I brought back old nameplates but changed it up a bit.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
1 month ago

Dodge’s continuing existence has been 100% due to its old glory. I don’t know that a “new idea” would help.

Bring back the Aspen!

Detroit Lightning
Detroit Lightning
1 month ago

I was a fan of tesla until I started working with them professionally.

Highland Green Miata
Highland Green Miata
1 month ago

Used to work for a company that supplied most major automakers with production equipment. Tesla was far and away the most difficult to deal with, most demanding, and least likely to pay.

Detroit Lightning
Detroit Lightning
1 month ago

100% same experience

R53 Lifer
R53 Lifer
1 month ago

Well, it’s Dodge, so I’d run a 2.9% 84-month financing special on all vehicles $40k and up, plus $299 lease deals on everything else. Sales would be through the roof, stale inventory would be depleted, and I would ride off into the sunset in my gold-plated Viper-powered Pacifica Heckcat… (Heckcat would subsequently become a new line of vehicles with the exterior enhancements of a Hellcat combined with the base model drivetrain…”goes like heck!”)

MY LEG!
MY LEG!
1 month ago

Dodge CEO:

K-car time. Fleets, fleets, fleets and practical vehicles. And then Harley Davidson a bit.

Kia Soul wannabe, call it the Ant or the Atom. EV drivetrain. Basic transportation for hipsters, elders and thrifters. Biggest luxury is the a/c and auto transmission maybe even forgo power windows. Bluetooth and radio, fuck you to anything else. Any color you want so long as it’s white or black.

Charger platform refresh, EV for what is now V6 trims while performance gets an ICE V8, manual only. Police Pursuits get a PHEV V6 with a upgrade to a V8.

Lifestyle accessories. People want other people to know they’re real Dodge drivers. Get back into NASCAR, and start shilling driving gloves with a revolving door of driver-branded merch. Dodge-branded long gun racks. Dodge thermos. Dodge underwear.

Last edited 1 month ago by MY LEG!
Ben
Ben
1 month ago

Build hybrid V8 versions of the Charger and Challenger and synergize* with Christine on reviving the 300 on the same platform.

Then I’d pull the rip cord on my golden parachute because I’m pretty sure V8 hybrid cars make no sense. I’m just going to miss the V8 rumble.

*: See, I’d make a great CEO!

Gene1969
Gene1969
1 month ago
Reply to  Ben

Good timing since they plan on rebooting “Christine”.

Timbales
Timbales
1 month ago

Electric Omni

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