Tesla Is Trying To Be A Less Terrible Business Partner – The Autopian

Tesla Is Trying To Be A Less Terrible Business Partner – The Autopian

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 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

 

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.

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.

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.

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.

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.

The Big Question

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

Top Image: Hertz

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