Good morning! It’s Wednesday, October 2, 2024, 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: The U.S. Spent $2 Billion On EV Tax Rebates
America’s pivot to electric vehicles has had a rocky few months, with hesitant consumers reluctant to shell out the premium EVs command and hybrid models somewhat stealing the sector’s thunder. Now, a report has calculated just how much the U.S. government has spent encouraging people to go electric and it’s an awful lot.
Tax breaks are available for many people considering an electric vehicle through the Inflation Reduction Act, which offers a $7,500 rebate on EVs that meet a few strict criteria. Now, Automotive News reports that more than 250,000 tax credits have now been cashed in by buyers, costing the U.S. government more than $2 billion, as the site explains:
The U.S. government has issued $2 billion in advance point-of-sale consumer EV tax credit payments since Jan. 1 covering more than 300,000 vehicles, the Treasury said Oct. 1.
Since new rules took effect this year allowing for consumers to take advantage of EV tax credits worth up to $7,500 at the point of sale, more than 250,000 tax credits have been issued for new EVs and around 50,000 for used models that carry up to $4,000 rebates.
Nearly all involve transferring the credit to a car dealer at the time of purchase resulting in a significant rebate.
Seems like a lot, but it’s worth noting that, according to the Natural Resources Defense Council, fossil fuels emissions costs the U.S. a staggering $820 billion in just health care costs alone. Two billion is a drop in the bucket
As it stands, the tax break on EVs is only available on select electric models and to select households across the U.S. Specifically, the tax break can only be claimed by households that earn less than $300,000 for married couples and $150,000 for individuals. A list of vehicles that qualify for the $7,500 tax break can be found here.
The $7,500 rebate offered by the government isn’t the only saving that EV buyers will pick up when they choose to switch to electric power. In addition to the savings at the point of sale, a report from the treasury found that EV owners save, on average, between $18,000 and $24,000 over a car’s 15-year lifespan compared with someone that bought a comparable gas-powered car.
2nd Gear: Tesla Performed Better Than Expected
One company that’s been on the receiving end of many of those EV tax breaks is Tesla, which up until this point has had investors worried as its sales dropped, demand fell and deliveries were down. Now, as the automaker prepares to announce its latest financial results, things could be turning around for Tesla.
The Elon Musk-backed electric car maker is set to announce its latest sales figures later this week, and Business Insider suggests that the filings could be much more positive than experts were initially predicting:
Analysts from Goldman Sachs, Barclays, and Wedbush all expect Tesla to deliver a beat when it reports deliveries, which are expected to be announced Wednesday morning.
Tesla stock has been on a wild ride this year. At its lowest point in the first four months of 2024, it declined 43%, but it has since surged 82% and is up 4% year to date.
Dan Levy, a Barclays analyst, expects Tesla to report solid vehicle deliveries later this week, according to a recent note.
Levy said that thanks to expected strength in Tesla’s China business, the company would announce third-quarter vehicle deliveries of 470,000, ahead of Wall Street estimates.
If the positive results do arrive for the automaker, it will put to bed some of the concerns raised by the automaker’s falling share of EV sales in America and its dwindling deliveries. In the deluge of bad news for the automaker, the company’s Cybertruck rollout has been something of a success, with the electric truck becoming the best-selling electric pickup in America and one of the best-selling cars over $100,000.
However, a long-promised cheaper version of the Cybertruck has been all but canceled by Musk, and any kind of budget-friendly offering from the brand appears to be permanently delayed. Still, at least we’ve got the autonomous taxi presentation to look forward to next week.
3rd Gear: Toyota Made More Cars In Anticipation Of Dock Workers Strike
U.S. dockworkers on the East Coast and Gulf Coast walked off the job Tuesday, kicking off the first large-scale work stoppage among dockworkers in nearly 50 years. The move is predicted to have an enormous impact on global shipping and the automotive industry as new vehicles are slow to come in and out of America.
Now, it’s emerged that Toyota saw this coming, so began ramping up production to ride out any strike action that may hit its ability to ship cars around the world, reports Reuters. The Japanese automaker, which operates plants in places like Mississippi, Alabama, Texas and Tennessee, built up its inventory of vehicles and parts ahead of the U.S. port strikes, as Reuters reports:
Toyota, which relies on the U.S. East Coast and Gulf Coast ports to import everything from vehicle components to fully-built cars, said it was closely monitoring the situation.
Dockworkers on these coasts began a strike, their first large-scale stoppage in nearly 50 years, after negotiations for a new labor contract broke down.
“We built up some extra stock here over the last couple of weeks to help us buy a couple of days’ worth of inventory,” said Jack Hollis, chief operating officer at Toyota’s North American unit.
The company had plans that it could implement to change ports and locations, Hollis said.
“It would just be crippling to the economy if this goes on for too long,” he added.
While Toyota might claim the increased inventory was in preparation for the dockworkers strike, it did also reveal this week that sales for the third quarter of 2024 were down by “about eight percent,” according to Reuters. The drop in sales was attributed to fewer selling days last quarter, as well as “inflationary headwinds.”
Toyota posted sales of 542,872 units for Q3 of 2024, which follows similar drops in demand from automakers like Nissan and General Motors.
4th Gear: Ferrari Goes Solar
No, the Italian automaker hasn’t secretly unveiled a new model that’s powered by solar power. Instead, Ferrari has shutdown the aging gas generator that was powering a section of its Maranello plant in favor of a new solar array that will help it clean up production at its Italian home.
Ferrari this week shut down a methane gas-fueled electricity generation plant in its home town of Maranello, reports Reuters. The move is part of the automaker’s ambition to double its solar power production:
The shutdown of the “trigeneration” plant, which was fuelled by methane gas, will ensure a 60% annual reduction in Scope 1 and 2 CO2 emissions, and a 70% reduction in methane gas consumption compared to previous levels, Ferrari said.
The group aims to reach a solar production of about 10-megawatt (MWp) by 2030, it said in a statement.
The move to renewable energy at Ferrari’s plant is part of its ambitions to increase its green credentials going forward. Sure, the automaker may have just put a V12 at the heart of its newest model, But Ferrari is taking other steps across its business to clean up its act.
As well as increasing its reliance on renewable energy, Ferrari has added hybrid powertrains across its range and, as part of its goal of becoming carbon-neutral by 2030, the company also installed filters to save waste aluminum from production and it’s working on fuel cell technology to run its sites.