Chairman’s Blog: Invested in America
Congress Enters the Red Zone
Chairman Connelly is back with a new blog post discussing what is currently happening in Congress. Right now, for Congress watchers it is the witching hour — the lame duck month at the end of a two-year term of Congress. Anything can happen and often does. Remember that even though the Republicans regained control of the House of Representatives, those changes do not take place until January. For now, Speaker Pelosi is still in charge and has the votes to pass legislation that targets our businesses. This Congress came within one vote of awarding tax credits to only union-made EV’s — we need to stay vigilant until the 117th Congress ends. As we have seen from the language included in the Inflation Reduction Act, there is currently a majority on Congress that supports programs that try to pick winners and losers in the transition to EV’s rather than letting the free market decide. Click here to read the full blog.
Biden Administration Pressed by Allied Nations to Revise EV Subsidy Program
The Biden administration finds itself caught between its domestic-policy goals and some of its closest allies as it races against the clock to set the ground rules for new electric-vehicle subsidies. The Treasury Department’s Internal Revenue Service faces a year-end deadline to propose a guideline for how to qualify for EV tax incentives of up to $7,500 per vehicle under the Inflation Reduction Act. The Wall Street Journal reports Congress designed the subsidy program to accelerate a transition to cleaner vehicles. But it also wants to use the program to turbocharge the domestic EV industry to create more U.S. jobs and to cut reliance on China, which now dominates production of EV batteries and their components. That has put the U.S. at odds with the European Union, South Korea, Japan, and the U.K., which object to measures in the legislation that require eligible vehicles to be assembled in North America and impose stringent rules for sourcing and manufacturing of batteries. The European and Asian governments say it discriminates against their companies and may violate World Trade Agreement rules. Click here for the full story.
Tesla Losing EV Market Share to Sub-$50,000 Rivals
Tesla Inc. CEO Elon Musk conceived the automaker's breakthrough Model 3 sedan as a people's car, an electric vehicle affordable to the masses. But the EV maker is now giving up market share to rivals undercutting Tesla on price. With the base Model 3 now starting at nearly $50,000 and the popular Model Y crossover above $65,000, Tesla is losing share to competitors that can deliver under the $50,000 level, reports Automotive News. Those fresh rivals include electric crossovers such as the Ford Mustang Mach-E and Hyundai Ioniq 5. Smaller hatchbacks with several years on the market, such as the Chevrolet Bolt and Nissan Leaf, start below $30,000. "Tesla's position is changing as new, more affordable options arrive, offering equal or better technology and production build," S&P Global said. "Given that consumer choice and consumer interest in EVs are growing, Tesla's ability to retain a dominant market share will be challenged going forward." The EV pioneer is also being pressured at the high end from luxury rivals that have finally embraced electric technology after watching Tesla run off with big chunks of their market share. Click here for the full story.
VW Boss Warns Europe Is Losing Competitiveness Due to Energy Costs
The head of Volkswagen Passenger Cars believes manufacturing battery cells in Europe could become unfeasible if energy prices are not controlled. Carbuzz reports, in a lengthy post shared to LinkedIn, chief executive Thomas Schäfer warned that Germany and the European Union are rapidly losing attractiveness and competitiveness compared to the likes of the U.S., Canada, China, Southeast Asia, and regions across North Africa. “Europe is not price-competitive in many areas,” Schäfer wrote. “Especially when it comes to the costs of electricity and gas, we are increasingly losing touch. If we do not succeed in reducing energy prices in Germany and Europe quickly and reliably, investments in energy-intensive production or in new battery cell factories in Germany and the EU will be practically impossible. Value creation in this area will take place elsewhere.” Schäfer used the example of the U.S.’s Inflation Reduction Act, noting that it offers “companies highly attractive incentives for investments in new plants and production.” By comparison, he says “outdated and bureaucratic state air rules are adhered to” across the European Union. Click here for the full story.
New-Car Sales Beating Expectations, Reports Cox
Cox Automotive has predicted that November’s new-car sales will be 10.8 percent higher than in 2021. This is a surprising shift in tone from earlier this year, when the media company expected numbers to fall substantially below last year’s. Although the communications brand saw a slight decrease in the seasonally adjusted annual rate from October (reduced to 14.3 million from 14.9 million), overall, it appears that the auto industry performance is on track to overcome the COVID-19 slump in new-car sales, reports CBT News. This is an encouraging development for both automakers and dealerships, who have struggled to navigate post-COVID-19 manufacturing disruptions, supply chain issues and cautious consumers. Computer chip shortages and factory disruptions in China, forced manufacturers to scale back production over the last two years. However, Cox analysts noted that the availability of parts and materials has improved in 2022, allowing carmakers to raise output caps. In turn the new supply allowed dealerships to finally restock their inventories, driving down prices and increase new-car sales. Cox senior economist Charles Chesbrough stated that, “the improving supply situation is likely something dealers and consumers alike are thankful for this year.” Click here for the full story.
Around the Web
Ferrari Purosangue Customers Face a Two-Year Waiting List [Carbuzz]
These Are the 10 Longest-Lasting Vehicles on the Road Today [Autoblog]
Nissan Gets $1.44 Bln Green Loan for Zero-Emission Mobility Investments [Reuters]
Lamborghini Has a Special Pop-Up Lounge in Qatar Just for The World Cup [Carscoops]
