California Threatens To Suspend New Tesla Sales Over Misleading Autopilot Claims

Morning Dump Tesla Autopilot California

The California DMV is mad at Tesla, wholesale used car prices largely stayed stagnant through July, Maserati launches a 10 year extended powertrain warranty option. All this and more in today’s issue of The Morning Dump.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

The California DMV Is Pissed Off At Tesla

The Tesla Model 3 Performance, not a Level 3 autonomous vehicle
Photo credit: Courtesy of Tesla, Inc.

I think we all saw something like this coming, right? Reuters reports that the California DMV has an ax to grind with Tesla over the Texas-based automaker’s advanced driver assist systems and potential penalties could be severe.

In complaints filed with the state Office of Administrative Hearings, California’s Department of Motor Vehicles (DMV) said Tesla misled prospective customers with advertising that overstated how well its advanced driver assistance systems (ADAS) worked.

Tesla “made or disseminated statements that are untrue or misleading, and not based on facts,” the DMV said in complaints dated July 28 and which it made public on Friday.

Vehicles equipped with Autopilot and Full Self-Driving technology “could not at the time of those advertisements, and cannot now, operate as autonomous vehicles,” the DMV added.

The DMV is seeking remedies that could include suspending Tesla’s license to sell vehicles in California and requiring the company to make restitution to drivers.

You know what? Good. While Level 2 advanced driver assistance systems are interesting feats of engineering, Tesla has contributed massively to myths around advanced driver assistance systems, and the Full Self Driving Beta project has proven dangerous at best. We’ve already seen FSD attempt to go the wrong way down a one-way street and try to crash into a tram. Plus, Autopilot has been at the focal point of several fatal crash investigations. Here’s to hoping that the DMV’s complaints actually go somewhere and that Tesla will start to see consequences for misleading owners and the general public on the abilities of advanced driver assistance systems.

Used Car Wholesale Values Stayed Mostly Flat Through July

Car Dealership On Western Ave 2
“Car Dealership on Western Ave” by David Hilowitz is licensed under CC BY 2.0.

July recently ended, which means that it’s time for an updated from the Manheim Index. While used car wholesale values are a fairly selective view of the used car market, Manheim’s sheer scale as one of America’s biggest auction houses and the historical tendency for most private party used car prices to track along with wholesale values means that the index still offers useful data. Let’s see what the latest report has to say.

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 0.1% in July from June. The Manheim Used Vehicle Value Index declined to 219.6, up 12.5% from a year ago. The non-adjusted price change in July decreased 3.2% compared to June, leaving the unadjusted average price up 10.2% year over year.

Yep, no surprise to see not much change there. What’s unexpected is that wholesale value declines seem to be hitting most gas-guzzlers harder than sensible cars despite falling gasoline prices. On a month-over-month basis, full-size cars lost nine percent of their wholesale value, while vans, luxury cars, and sports cars saw wholesale values drop by between 1.5 and 1.6 percent. On the other hand, compact car wholesale values were up 0.9 percent, while midsize car wholesale values were up by 0.5 percent. Not bad news if you’re looking for a really, really, really ridiculously good-looking Volvo S90, but not great news if you’re in the market for a Toyota Corolla.

The latest Manheim Index report also estimates a 31-day supply of wholesale cars, up from 26 in June and 22 in July 2021. More potential inventory is typically a good thing for easing used car prices, as is greater consumer leverage. The report estimates that used car retail sales dropped 13 percent month-over-month and 16 percent year-over-year, so consumers appear to possibly be weakening their stance on buying used cars.

So what does this all mean? Well, there are two ways of looking at this latest Manheim Index report. The first is that we’re still in an absolute nightmare of a used car market. Wholesale prices are still up 12.5 percent year-over-year and wholesale value stagnation is unlikely to give buyers the relief they’re looking for. The second is that the chance of already having hit peak used car craziness is growing. Wholesale prices are still down from market peak earlier this year and an increase in wholesale vehicle supply tempers fears of a return to peak prices. Either way, don’t expect a crash in used car values. New car supply remains tight which should have an effect on used car values for years to come.

Carvana Goes Into Cost-Cutting Mode

Carvana Vending Machine
Photo credit: Carvana

Even an outsider could tell that Carvana’s business model wasn’t sustainable. With sky-high offers for buying used vehicles, big acquisitions, and aggressive hiring, Carvana really put “move fast and break stuff” into the automotive retail sector. Automotive News reports that Carvana is now working to cut costs as financial losses continue to mount.

Carvana’s back-to-back quarterly net losses in the first half of 2022 were the largest in company history. The second-quarter loss of $439 million came one year after the retailer announced its only quarterly net profit since going public in April 2017.

Carvana CFO Mark Jenkins last week said the company saw “meaningful” expense savings quarter over quarter, as it trimmed advertising costs by $24 million and payroll expense by $20 million.

“As we’re looking out over the rest of the year, we really do see opportunities across all areas of the business to continue to drive” expense efficiency, Jenkins told analysts.

While cost controls will happen across the business, payroll will be one “of the bigger buckets,” Jenkins said, as Carvana continues to work on better matching staffing levels to its sales volume.

I feel quite sorry for the Carvana employees who have the dark specter of potential layoffs looming over their heads. It’s not nice to potentially be out of a job in an era of rampant inflation, and it seems like a shaky time for the automotive retail industry so finding a like job might not be easy.

Maserati Launches 10-Year Extended Warranty

2348 Granturismosport28
Photo credit: Maserati

Italian cars. They’re known for passion, flair, and style, but not necessarily reliability. For a little peace of mind, Maserati announced last week that customers will soon be able to purchase a ten-year extended powertrain warranty. Details on the new warranty are a bit sparse, so we’ve reached out to the Italian company for more information. In the meantime, here’s what the press release says:

Maserati introduces the new Extra10 Warranty Program, to extend the coverage of powertrain components – engine, gearbox, transmission – until the car turns 10 years old. Offered in addition to the existing program to extend the warranty to four or five years (known as “Extended Warranty”), the service is available worldwide*, for all customers who own any Maserati model**

Aside from the fact that “gearbox” and “transmission” are generally interchangeable terms for the same thing, there are lots of asterisks in this chunk of body copy. Let’s see what’s really going on in the fine print.

* Available for USA, Canada, and Latin America starting from October 1st, 2022.

** Within nine years and six months from the registration date, with no mileage limit.

Ah, that’s certainly a big limitation. Fortunately, the ice-cool GranTurismo coupe ended production in late 2019, so there’s still some potential value here for enthusiasts rather than just real estate agents with Ghiblis. That old F136 naturally-aspirated V8 occupies the space between operatic and pornographic and is a wonderful shock to the senses in an age of turbocharged everything. Regardless, I’d love to know what the warranty actually covers and how much it will cost. There’s no way something like this could be cheap, right?

The Flush

Whelp, time to drop the lid on today’s edition of The Morning Dump. August is shaping up to be a busy month here at The Autopian which means I should probably start thinking about a winter car. For anyone outside of the rust belt, a winter beater is a cheap banger for salty conditions that lets you tuck away cars that you actually care about. For those of you subject to road salt, brine, and other corrosive nastiness for roughly half the year, what’s been your favorite winter beater?

Lead photo credit: Courtesy of Tesla, Inc.

Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit

34 Responses

  1. As far as winter beaters go, my big thing has always been a good strong heater/defroster. I want fast heat and clear windows more than anything else in the winter. Aside from that, as long as it starts easily and isn’t a nightmare in the snow, I’m good.

    1. I had a 1st gen Renault Megane that was given to me free, so it was a shitbox, but by God, that thing turned into an oven within moments of cranking the heater from a cold start. You could liquefy snowmen in there never mind defrosting the windows. Comfy seats too.

  2. An aluminum body Ford truck with an undercoated frame is my road salt cheat code.

    It’s shocking to me that Ford never used that selling point of the Al bodies vs going all in on the “military grade” nonsense. As someone who has reluctantly parted with several well-running vehicles due to structural deficiencies, the nearly rust-proof body was a no brainer for me when buying.

    1. I’ve been very much in the market for a 2017 or newer F-150 since 2017 for that reason alone.

      A truck that doesn’t rust? Sign me up. I think the only reasons people get rid of old trucks are severe accidents and rust. Everything else gets fixed.

      I don’t have a huge need for a truck, and don’t like the fuel economy penalty of a vehicle that large, so I’m still waiting for the used prices to come down just a little more. But while waiting, the Lightning came out, so I may end up with a new Lightning instead.

  3. Best winter beater is a small something that dog tracks. Why? Float over the snow, less compression of the snow and less likely as a result to be turtle stuck on a smooth underbelly. In slippery conditions then the scrubbing of the tires is less.

    And if the car is supposed to be junk anyways, that just means a costly fix is now a perk.

  4. “In complaints filed with the state Office of Administrative Hearings, California’s Department of Motor Vehicles (DMV) said Tesla misled prospective customers with advertising that overstated how well its advanced driver assistance systems (ADAS) worked.”

    In other news: water is wet, fire is hot, people are stupid. Call me when they actually do something about what has been false advertising from day one. False advertising that has gotten multiple people killed and has caused untold numbers of accidents because their “self-driving” still can’t fucking read things like railroad crossings, no left turn signs, or red lights.

    “Even an outsider could tell that Carvana’s business model wasn’t sustainable. With sky-high offers for buying used vehicles, big acquisitions, and aggressive hiring, Carvana really put “move fast and break stuff” into the automotive retail sector.”

    ProTip: if you ‘move fast, break stuff,’ the only thing you will ever accomplish is breaking stuff. Period. This is how it has always been and why actually serious companies don’t spout shit like that. But don’t worry, the C-suite of scumbags from BHPH and posterchild for predatory lending UglyDuckling (which is all Carvana has ever been) will be taking home very large bonuses for cutting costs by laying people off en masse.

    “Maserati introduces the new Extra10 Warranty Program, to extend the coverage of powertrain components – engine, gearbox, transmission – until the car turns 10 years old. “

    Calling it now. ‘Maserati declares bankruptcy’ as a Morning Dump headline by 2026.

    “For those of you subject to road salt, brine, and other corrosive nastiness for roughly half the year, what’s been your favorite winter beater?”

    Ford Escorts. They’re incredibly good in snow, especially if you have the Pony setup. And the rustproofing on third gens is actually insanely good. Even to this day you can find 1992-1996’s from the rust belt that are only starting to show rot through on the quarters. And P175/70R13’s on a 2200lbs car just laugh off the worst roads.

  5. How long before Musk gets pissed about not getting his way and claims that Cali is “just upset that we left them for Texas”?

    I wonder if its a good time to look at Carvana for deals? Think they’re in the offloading inventory phase, yet?

    1. Calling employees at Carvana working in “automotive retail” seems a bit off though. No person to person sales or really even car repair getting done at the Glass towers or by the delivery trucks. The issues they have with getting titles to purchasers timely is a big issue though, and those employees probably need replacing or were not necessary anyway.

    2. Based on my recent experience, not yet. Just last weekend I sold my 6 year old Optima with 63k mi for $17k. That was only $4k less than what the car itself cost after my trade in. I couldn’t say no to such a dumb offer, but that also means their retail prices aren’t coming down just yet.

      (Side note: The dealer I bought the new car from was only at $13,800 for a “counter” offer, and wouldn’t budge. They knew what was up, and also had no issue with me getting an extra $3k off Carvana.)

    3. Their car *buying* offers were still a bit above average last week, so if you want to sell them a car now is probably the time. Their *selling* prices, otoh, seemed to be a bit high. At least for the cars I looked at.

  6. I am familiar with the winter beater concept but it barely rains where I live.

    Tesla should have been slapped about their marketing long ago, I love my Tesla but Full Self Driving or Autopilot are terrible names because people believe what they say.

  7. My favorite winter beater has been the daily that got me through college: a 2001 A4 Quattro 1.8T with the 5-speed manual and all base equipment. No sunroof = no guttet rot, and even with base equipment I get lovely ride quality, a rear-biased Torsen AWD system, pretty good handling, and most importantly, absolutely blazing manually adjustable heated seats with SIX levels of heat! Not on/off, not the standard three levels, SIX! Front and rear fog lights were also much appreciated on those foggy days in the mitten, too.

    Downsides were the constant need for bushings and ball-joints: 5-link front and double wishbone rear suspension has (5x2x2)front-arm-ends+(3x2x2)rear-arm-ends+(2×6)sway-bar-bushings=1.8 trillion suspension bushings (Thus the name 1.8T, unrelated to the quite torquey cast-iron block 20V 1.8L turbocharged 4-cylinder heat generator). Also, the front lower valance panel and the aero undertray kept falling off in the absurdly steep Michigan parking lot entrances, the power steering system failed at every level except the low pressure line (My paracord and JB-weld patch is still holding on the high pressure line, according to the guy I sold the car to) and the headlights were unbearably dim (a broken level sensor arm on the front suspension pointing them at the ground certainly didn’t help).

    Overall a solid car, hell of a ride for $3500 back in the magical land of 2018.

  8. When I had my daily driver die an unfortunate early death, I tried to go through Carvana to replace it. Not because I like them, but they had by far the best selection and prices were fair. This was in late April/early May. The first car was delivered, I had my trusted mechanic check it. Found evidence of an unreported accident. I returned it per their guarantee. 2nd car didn’t even make it to me, because they couldn’t close the sunroof when they took it out for emissions the day it was to be delivered. I gave up after that.

    In short, the people I dealt with were great, but they are clearly either properly not vetting their cars or lying about their condition. Neither is good.

    1. Most likely they don’t check them, and the people selling them cars are telling Carvana everything works great and it was never in an accident.

      So they don’t know the sunroof doesn’t work until they try it, and may never know it was in an accident unless someone calls them on it.

    1. Are you really saying this is a personal political attack on Elon Musk and not a result of increasing frequency and visibility of ADAS-related crashes going back months? That’s…something.

  9. 1. Used car prices declining prices hit gas guzzlers harder despite falling gas prices? Well color me surprised I thought gas prices while not as high but still about double over this time last year.
    2. Brave California going after Tesla for false advertising for FSD lies? Yeah California was all yeah Tesla for years and helping them with the same death machine when set up in California. If you think it’s anything but payback for moving you’re wrong. But yeah they should still be doing it.

  10. If you want an electric car, fine. I’ll give you a ride to the dealer, tell you the car is good looking, your wife is lovely, your kids are above average, and wish you luck and happiness. If your goal is to buy a self driving car, I think you’re stupid, lazy, and every bit as dangerous as a drunk driver.

  11. My fave winter beater since I’ve lived in Wisconsin was an ’02 GMC Yukon XL that I had for a couple years. I stopped shoveling the driveway when I had that, I’d just drive right over the snow drifts. Kind of an impractical commuter, but the heated leather seats were awesome and I was never worried about what was going on outside while I was working.

  12. Last year’s winter beater was the best I’ve had in a long time. G35x sedan with a set of TALL snow tires. The AWD system sends most of the power to the back and a uses the front wheels to pull you out of trouble. In snow, it can hang the back end out for days and makes you feel like a rally pro….Only wish that it was available in manual with the AWD option. Unfortunately that is probably my last winter beater, I don’t have room for so many cars, so probably start using “disposable” new cars and replacing them every 3-4 years. Will retire the G35x to the cabin up North for trail duty, I like it too much to get rid of it.

  13. 1.) California, including the Feds should have done this along, along, time ago.
    2.) Carvana is an ugly duckling like their Corporate overlords.
    3.) Thanks to Iron Maiden every time I read or hear Peace of Mind, my Neanderthal brain spell checks it to Piece Of Mind. And 10 years for a warranty for a vehicle that might make it to it’s ninth birthday, is quite optimistic.

Leave a Reply