Yahoo Autos Everyone Expected More From Tesla's Big Day
Tesla CEO Elon Musk’s latest grand master plan didn’t blow anyone away, Germany and Italy are pushing back on the European Union’s combustion-engine ban and VinFasts are finally on American roads. All that and more in The Morning Shift for Thursday, March 2, 2023.
1st Gear: Not Impressed
So Tesla’s big Investor Day was last night, and we’ll have a bigger article here on the site delving into all the takeaways from it. But the Morning Shift digest version of it is that investors and analysts were, by and large, not impressed. At least if you’re going by the EV maker’s share price as of Thursday morning, which sat six percent lower during premarket trading. From Reuters:
Read more
Musk and more than a dozen executives laid out fresh plans to cut assembly costs by half, invest in a new plant in Mexico and discussed the company’s innovation in managing its operations at its investor day on Wednesday.
However, the event, where Musk revealed the EV maker’s ‘Master Plan 3', was short on details about the timeline or any new Tesla products.
“The markets were primed for a big announcement, perhaps on something like a more affordable new model,” said Russ Mould, investment director at AJ Bell.
“Tesla had been on a tear so far in 2023. Then Musk raises his head above the parapet in an investor day presentation and the shares are sputtering ... It may just have been a case of failing to live up to the hype.” [...]
“The timeline and cost details were limited, and the event lacked a Tesla-like surprise,” Wells Fargo analyst Colin Langan said.
This was a four-hour presentation. And everyone expected something big out of it. Many seemed to believe that the repeatedly ignored, $25,000 “Model 2” would get its moment in the spotlight, but that moment never came.
Maybe that’s for the best. Tesla has enough announced, unreleased vehicles — it certainly doesn’t need another that’s cheaper than all the rest, especially when it’s slicing into its own profit margins on every product across its range. But when you cultivate a culture of “one more thing” and then you don’t give it to the crowd, eventually it comes back to bite. Though there was certainly one tangible outcome from all this, as Reuters tells us:
[Tesla’s] plan to use 75% less silicon carbide vehicles without compromising the performance or the efficiency of the car also weighed on semiconductor maker and supplier STMicroelectronics’ shares.
The reduction plan was “bad news for the whole silicon carbide production chain and in particular for STMicro,” Brokerage Equita said. It estimates that Tesla accounted for 70% of 2022 semiconductor sales at STMicro.
Pour one out for STMicro this morning.
2nd Gear: Germany and Italy Aren’t Ready
The European Union’s prospective ban on internal combustion-engine cars is set to take effect in 2035, but two member countries are signaling that they won’t have it. They also happen to be among the largest by GDP, which might throw a wrench in lawmakers’ plans. From the Wall Street Journal:
Germany and Italy said this week they could block the plan’s formal approval at crucial meetings this week and next. Berlin said it would oppose the plan unless Brussels agrees to allow so-called synthetic fuels that can burn like gasoline and diesel but spew fewer climate-damaging emissions alongside fully electric vehicles. [...]
Under a compromise reached last October, lawmakers agreed that the European Commission could put forward additional rules allowing new vehicles with engines that use carbon-neutral fuels to continue to be sold, but it has yet to do so.
German Transport Minister Volker Wissing on Tuesday said Berlin now wanted Brussels to present this legislation ahead of the plan’s approval, saying that because it had yet to do so, “the German government cannot approve the compromise.”
Italy’s Environment Ministry said that environmental targets should be pursued in a way that avoids harming jobs and production and that electric vehicles shouldn’t be seen as the only route to zero emissions.
Germany’s really hitching its cart to the whole synthetic fuels thing, which may very well work out to be a solution but certainly not the only solution or even, say, a quarter of the solution. Producing e-fuels is an inefficient process by its very nature, which makes it an expensive process. At least that’s likely to be the case for the remainder of the decade.
Perhaps Germany knows something we don’t, and five more years will make all the difference in the world. The EU said it would offer a provision for such vehicles, so it should probably follow through on that, but you get the sense Germany and Italy are looking for a way out of what is at this point a pretty inevitable industry-wide shift.
3rd Gear: VinFast Did It
The EV startup said initial deliveries of its VF8 SUV to American buyers were imminent, and it’s finally followed through on that after two months of delays. According to the company, 45 examples are now in driveways in California. From Reuters:
At VinFast’s store in Marina Del Rey, California, James and Christine Wang took possession of a VF8 they had reserved earlier this year.
“We’re early adopters, we like to try things out,” said James Wang, 36.
Andrew and Nikki Le, who ordered 11 VinFast cars, took delivery of the first of those at the store. They had toured the VinFast factory in Haiphong, Vietnam in May as part of a promotion by the company, they said.
VinFast said insurers including State Farm, Allstate and Progressive would provide policies for the new model.
Vehicle subscription service Autonomy has a deal to purchase 2,500 vehicles from VinFast, the companies said last year. Autonomy did not respond to a request for comment on when it would take delivery.
