California Has Had Enough Of Tesla As Model 3 Sales Drop 36 Percent In 2024
Good morning! It’s Tuesday, February 4, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.1st Gear: Tesla Sales Dropped 12 Percent In CaliforniaCalifornia is undoubtedly Tesla’s most important market in the U.S., and it’s struggling big time right now. The automaker registered fewer cars in the Golden State in all four quarters of 2024, and sales of its second-most important vehicle, the Model 3, dropped 36 percent for the year. All in all, Tesla’s sales were down 12 percent in 2024 when compared with the prior year. That is not ideal.This registration decline comes despite the fact the Austin, Texas-based automaker expanded its lineup in 2024 to five vehicles with the introduction of the Cybertruck. Of course, some of the downturns, especially for the Model 3, can be blamed on normal business factors like a mid-cycle refresh. However, you’ve got to imagine a big chunk of this sales dive has to do with CEO Elon Musk and his newfound influence over the federal government and the 2024 election. From Bloomberg:Musk, 53, spent at least $288 million to help elect Donald Trump and other Republican candidates during the 2024 cycle. California went for Democratic nominee Kamala Harris by 20.2 points in November.Tesla’s reputation has taken a hit among some US consumers recently. Survey scores measuring the trust and likability sentiment surrounding the EV maker touched their lowest level since at least 2023 in November and January, according to data provided by Caliber, a brand reputation analytics firm.Tesla did manage to maintain a majority of California’s zero-emission vehicle registrations last year, although its share dropped to 52.5% from 60.1%. All models across the Austin-based company’s aging lineup fell for the year, with the exception of the Cybertruck, which began selling in late 2023.Honda Motor Co. and Hyundai Motor Co. were the biggest gainers in the EV segment, adding 1.8 and 1.5 percentage points of share, respectively.Musk moved Tesla’s headquarters out of California in 2021 after defying lockdown policies during the pandemic. One of the company’s two EV assembly plants in the US is in Fremont, in the San Francisco Bay area.In July of last year, he announced that his companies X and SpaceX would also leave the state for Texas, citing a new law Governor Gavin Newsom signed that banned school districts from requiring teachers to notify parents of changes to a student’s gender identity.After the election, Newsom threatened to exclude Tesla from EV rebates that the state may offer if Trump follows through with threats to repeal federal tax credits for consumers.It’s important to bear in mind that Tesla is still by far and away the biggest and most successful EV maker in the U.S. and California. It’ll almost certainly hold onto that label for at least a few more years, but as Musk becomes more entrenched in far-right politics and Tesla’s lineup becomes less and less competitive, other automakers may soon catch up.2nd Gear: China Hits Some U.S. Goods With TariffsIn a shock to no one, China has decided to impose targeted tariffs on some American imports and put several U.S. companies on notice for possible sanctions. This, of course, is all in response to the 10 percent tariff President Trump imposed on Chinese imports.Luckily for us, China is taking a more moderate approach to these tariffs than the U.S. as Beijing attempts to engage Trump to avert an outright trade war between the two mega economies. It’s more about sending a message to the U.S. and Trump. From Reuters:Capital Economics, a U.K.-based research firm, estimated that China’s additional tariffs would apply to about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff that took effect at 12:01 a.m. ET on Tuesday (0501 GMT).[...]Trump plans to speak to Chinese President Xi Jinping later in the week, a White House spokesperson said.[...]China’s new measures, announced as the Trump tariff took effect, include a 15% levy on U.S. coal and LNG and 10% for crude oil, farm equipment and a small number of trucks as well as big-engine sedans shipped to China from the U.S.China said it was starting an anti-monopoly investigation into Alphabet Inc’s, opens new tab Google. It put PVH Corp, opens new tab the holding company for brands including Calvin Klein, and U.S. biotechnology company Illumina (ILMN.O), opens new tab on a list for potential sanctions.[...]China said it was imposing export controls on some metals, including tungsten, that are critical for electronics, military equipment and solar panels.The 10%-duty China announced on electric trucks imported from the U.S. could apply to Elon Musk’s Cybertruck, a niche offering Tesla), opens new tab has been promoting in China. Tesla had no immediate comment.These tariffs won’t take effect until February 10 in an effort to give the two nations more time to sort out a deal. Who knows if that’ll actually happen though? Trump says he may actually increase tariffs on China even further unless Beijing curtails the flow of fentanyl into the U.S. In the past, China has called fentanyl America’s problem, not theirs.I do not know what the future holds, but I can tell you with a lot of certainty that it is going to be very, very stupid.3rd Gear: Ferrari To Continue 2024's Success In 2025Ferrari says its revenue and core earnings are set to rise by at least five percent in 2025 thanks to strong product delivery and demand for more customized touches on its vehicles. After all, that’s where the real money is. These new goals come after it hit its targets in 2024.The Italian automaker says it’s forecasting earnings before interest, tax, depreciation and amortization grow by at least $2.77 billion (2.68 billion euros) in 2025. That’ll be a slight bump from the $2.65 billion (2.56 billion euros) it saw in 2024. From Reuters:Last year’s EBITDA result compares with Ferrari’s forecast for a result of at least 2.50 billion euros.Milan-listed shares in the company reversed limited losses after results were published and were up 3.3% by 1215 GMT.CEO Benedetto Vigna said a strong product mix and a growing demand for personalisations had driven the 2024 results.“On these solid foundations, we expect further robust growth in 2025,” he said in a statement, adding this would allow Ferrari to meet one year in advance the high-end of most of its profitability targets set for 2026.Personalisations refer to the finishing touches that Ferrari buyers add at extra cost to their cars, and mainly relate to paint, liveries and use of carbon.Ferrari, which last year delivered 13,752 cars, 89 more than in 2023, said product mix and pricing power contributed 386 million euros to 2024 EBITDA, sustained by the deliveries of the 12-cylinder Daytona SP3 and a few units of the track-only 499P Modificata.An increase in deliveries to clients in the United States also supported the result, the company said.It seems to be a particularly good time to be Ferrari, but it’s also not like it’s ever a bad time to be Ferrari. Mega-rich people have more money than they’ve ever had, and they’re choosing to spend that un-hard-earned money on the prancing horse.4th Gear: Detroit Axle Workers Avert Strike With New ContractWorkers at the Detroit Axle plant have approved a new contract that’ll give some workers a wage boost by as much as 50 percent over the life of the deal, according to the United Auto Workers union. It’s what we love to see, folks. From the Detroit Free Press:The union had previously noted that Detroit Diesel employees work in the same plant and were making about $10 more per hour for the same assembly line work. They produce front and rear axles as well as transmissions for Daimler Truck. The facility in Redford Township and Detroit supplies parts for the Freightliner, Western Star and Thomas Built Buses vehicle platforms.The union said workers voted by 84% on Saturday to ratify a new collective bargaining agreement covering more than 400 workers. In addition to pay increases, the contract includes profit-sharing and cost-of-living adjustments for the first time at Detroit Axle, according to a news release.The new contract expires on Oct. 26, 2029, according to the union.If this deal wasn’t reached, workers were prepared to strike. One worker told Freep that the unit had a 99 percent strike authorization vote.Solidarity forever, baby.Reverse: We Thank You For The BlackwoodOn The Radio: Lady Gaga - ‘Abracadabra’
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