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Elon Musk Says a Cheaper Tesla Model Is Coming in 2025 as Chinese Competition Intensifies

Elon Musk Says a Cheaper Tesla Model Is Coming in 2025 as Chinese Competition Intensifies

A cheaper model of Tesla electric vehicle is coming late next year, CEO Elon Musk told investors today. If it launches on Musk’s ambitious timeline, it might arrive in time to help Tesla parry the growing might of Chinese EV makers.

The “next generation” compact vehicle Musk mentioned could represent the $25,000 entry-level EV teased in a recent biography of Musk by author Walter Isaacson. Musk didn’t mention a price point for the future vehicle on today’s call. But if Tesla hits that 2025 production target, the vehicle could become the cheapest EV on the US market and competitive with budget EVs offered by rival automakers in other countries. Tesla currently sells a base Model 3 for $35,100. Musk did not specify when customers might start receiving the new model.

The cost of EVs is a significant barrier to their further adoption. A recent global survey by the consultancy Deloitte found that, as high interest rates persist, cost is driving drivers’ purchasing decisions, especially in Germany, the US, and Japan. The total cost of owning an EV can sometimes be lower than for a conventional, gas-powered car because of savings on fuel and maintenance, but EVs are still pricier up front.The average US vehicle—including all drivetrain technologies—cost $48,800 in December, compared to $50,800 for an EV, according to Kelley Blue Book, an automotive research company.

Finding a way to lower the price point of EVs is also important to Tesla, which is in a global price war with other automakers that are going all in on EVs and threaten to unseat Musk’s company as the world’s top vendor of electrics. The Chinese automaker BYD delivered more EVs last fall than Tesla, though the US carmaker was ahead on annual deliveries. Chinese auto exports more than doubled last year, as the country sent more than 4 million vehicles abroad, according to a Chinese industry group. Protectionist trade policies mean Americans can’t buy cheaper Chinese-made cars domestically. But automakers including BYD are reportedly considering manufacturing in Mexico to avoid the heaviest tariffs.

On the investor call today, Musk signaled his respect for his rivals. “The Chinese car companies are the most competitive car companies in the world,” he said. “If there are not trade barriers established, they will pretty much demolish all other car companies in the world. They’re extremely good.”

Tesla last voiced plans for a “next-gen” vehicle during a March 2023 Investor Day presentation. Slides teased Tesla enthusiasts with images of cars draped with gray sheets. On the investor call today, Musk and other executives said the new vehicle would be made with “revolutionary” manufacturing technology but revealed no details of what that would involve.

Yet even as Musk announced the next-gen vehicle, he cast doubt on Tesla’s ability to produce it on schedule. The automaker often delivers vehicles—including the Cybertruck, Tesla Semi, and a “second generation” Roadster sports car—months and even years behind Musk’s initial deadlines. “I say things, and they should be taken with a grain of salt,” said Musk, who is notorious for his overly rosy product predictions. “I don’t want to blow your minds, but I’m often optimistic regarding time.”

The Real Problem With the Boeing 737 Max

The Real Problem With the Boeing 737 Max

Spirit AeroSystems, the Wichita-based aerospace manufacturer that manufactured the door plug that blew out on the Alaska Airlines flight, declined to comment on the incident. However, in a statement published on its website, Spirit says its “primary focus is the quality and product integrity of the aircraft structures we deliver.”

The company’s parts have caused issues for Boeing in the past. The Seattle Times reported back in October on defects in Spirit components that contributed to months-long delayed deliveries of Boeing 787 aircraft. Tom Gentile, the then CEO of Spirit, resigned following these and other production errors by the company.

But Fehrm hypothesizes the blowout may have been due to alleged oversights that happened after Spirit had added the door plug, once Boeing retook ownership of the plane. Fehrm claims Boeing uses the door in question to access parts of the plane during its checks ahead of the aircraft being cleared to fly. And so, in his opinion: “Someone has taken away the bolts, opened the door, done the work, closed the door, and forgot to put the pins in.”

In other words, he is leaning toward processes being at fault, not the plane’s design. This, though, raises concerns about the way plane safety checks are conducted.

In theory, in the US the FAA checks aircraft for their airworthiness, granting them certification to fly safely. Aircraft designs are studied and reviewed on paper, with ground and flight tests taking place on the finished aircraft alongside an evaluation of the required maintenance routine to keep a plane flightworthy.

In practice, these reviews are often delegated to third-party organizations that are designated to grant certification. Planes can fly without the FAA inspecting them first-hand. “You won’t find an FAA inspector in a set of coveralls walking down a production line at Renton,” says Tim Atkinson, a former pilot and aircraft accident investigator and current aviation consultant, referring to Boeing’s Washington state–based 737 factory.

The FAA relies on third parties because it’s already overstretched and needs to focus on safety-critical new technologies that push forward the latest innovations in flight. “It can’t [check all aircraft itself], because you’re producing 30 to 60 aircrafts a month, and there are 4 million parts in an aircraft,” says Fehrm.

“Designated examiners have always been part of the landscape,” says Mann, but he believes the latest series of events add to existing questions around whether this is the right approach. On the other hand, there are currently no practical alternatives, he says.

The plane in the Alaska Airlines incident was granted an airworthiness certificate on October 25, 2023, and issued with a seven-year certificate by the FAA on November 2. FAA records do not include who granted the certificate on behalf of the FAA, and the administration declined to identify the organization or individual who approved the plane’s airworthiness. The plane’s first flight took place in early November.

With this being a third major and potentially life-threatening incident for Boeing in little over five years—all involving a single type of aircraft—the company’s status has taken a hit.

California’s Governor Gavin Newsom Vetoes State Ban on Driverless Trucks

California’s Governor Gavin Newsom Vetoes State Ban on Driverless Trucks

California governor Gavin Newsom worked late last night, vetoing a law that would have banned self-driving trucks without a human aboard from state roads until the early 2030s. State lawmakers had voted through the law with wide margins, backed by unions that argued autonomous trucks are a safety risk and threaten jobs.

The bill would have seen California, which in 2012 became the first state to clear a regulatory path for autonomous vehicles, turn against self-driving technology just as driverless taxis are starting to serve the public. Autonomous truck developers now hope the freight-heavy state—home to two of the largest US ports—will one day become a critical link in an autonomous trucking network spanning the US.

Companies developing the technology say it will save freight shippers money by enabling trucks to run loads on highways 24 hours a day, and by eliminating the dangers of distracted human driving, which could bring down insurance costs.

The Teamsters union, which represents tens of thousands US truck drivers, mechanics, and other freight workers, organized a mass caravan to Sacramento this week to urge Newsom to sign AB316, which would have required a safety driver on self-driving trucks weighing more than 10,000 pounds through at least the end of the decade.

In a letter released yesterday, Newsom wrote that the law is “unnecessary,” because California already has two agencies, the Department of Motor Vehicles and the state Highway Patrol, overseeing and creating regulations for the new technology. State agencies are in the midst of creating specific rules for heavy-duty autonomous vehicles, including trucks.

Newsom’s veto won’t change much in the short-term. Because state rules are still in development, driverless trucks are not permitted to test on public roads in California. Newsom wrote in his letter that draft regulations “are expected to be released for public comment in the coming months.”

Most of the US companies working on autonomous trucks operate on highways in the southeast and west, especially Texas, where dry weather and a come-as-y’all-are approach to driverless tech regulations make conditions ideal. None of the companies testing autonomous trucks in the US have removed safety drivers, who are trained to take over when the vehicle goes wrong, from behind the wheels of their big rigs. (The controversial company TuSimple says it has completed a handful of completely driverless truck demonstrations in the US; it has since paused its US operations.)

Labor advocates argued the California ban on driverless trucks was needed to protect state residents from tech that’s not ready for prime time. “I’ve blown a perfectly good tire driving the speed limit in a truck and I had to cross three lanes trying to get it under control,” says Mike Di Bene, a truck driver of 30 years and member of the Teamsters. He’s doubtful autonomous trucks can yet handle such situations.

The Teamsters have also argued that driverless truck tech threatens truck drivers’ jobs. In a series of tweets posted Saturday morning, Teamsters president Sean O’Brien wrote that Newsom “doesn’t have the guts to face working people” and would “rather give our jobs away in the dead of night.”

Someone Has to Deliver Your Packages in This Scorching Heat

Someone Has to Deliver Your Packages in This Scorching Heat

FedEx spokesperson Adam Snyder says the company reminds contractors to closely monitor working conditions. “We encourage our team members and service providers across FedEx to take precautions in the hot weather by staying hydrated, taking frequent breaks, and recognizing the signs of heat related illnesses,” he says. UPS spokesperson Becky Biciolis-Pace says the company is increasing access to ice, water, and electrolyte drinks for drivers, and provides annual heat awareness training. The company also provides cooling sleeves and hats developed by a performance apparel company.

Heat stress can produce a range of symptoms, from muscle cramping due to electrolyte loss up through organ failure and death, says Brenda Jacklitsch, a health scientist at the National Institute for Occupational Safety and Health (NIOSH). Workers can be exposed to heat both from the environment and their own physical exertion like lifting boxes. High heat can affect the brain, interfering with signals it usually sends to blood vessels to dilate and cool the body. Humidity can prevent sweat from evaporating and transporting heat away from the skin, stopping the body from cooling itself.

The progression of symptoms, from dizziness or cramping to death, can unfold gradually or in as little as an hour, says Robert Harrison, a University of California, San Francisco physician and occupational health specialist who spoke at a press conference last week hosted by the Warehouse Worker Resource Center.

A lack of air-conditioning at home, which disproportionately impacts lower wage workers, can compound the problem after a worker’s shift is over. “If there’s not a place to cool down, many people become seriously ill,” Harrison says. A death at home would not be counted in work-related fatality numbers.

An analysis of US Occupational Safety and Health Administration data by The Washington Post found that seven delivery drivers died from heat stress between 2017 and 2022. The occupation ranked fifth among heat-related workplace deaths, behind construction, agriculture, landscaping, and roofing.

Health experts say that heat protection boils down to three basics: water, shade, and rest. Delivery drivers seeking those remedies can run into social pressure. When Gonzalez, the UPS driver, has ducked into air-conditioned businesses like Walgreens drug stores for relief, she says customers have made comments such as, “This is why my package is not getting delivered. You’re in here shopping.” Now she sticks to a Carl’s Jr. fast food restaurant where she’s gotten to know the employees and won’t be harassed.

“The protections that workers need aren’t rocket science,” says Juanita Constible, a climate and health advocate at the Natural Resources Defense Council, who maintains a map of the sparse occupational health standards in US states. “We’re mowing the lawn at home, and we get too hot, so we take a break and drink a cup of water. But a lot of workers just don’t have that ability.” She says the US needs more legal protections for workers toiling in the heat.

A series of heat-related hospitalizations among UPS drivers last summer helped spur a bill in New York state to protect workers from extreme heat, says Charlene Obernauer, executive director of the nonprofit New York Committee for Occupational Safety and Health. The Temperature Extreme Mitigation Program, or TEMP Act, is modeled on standards in California and Washington and would require employers to provide training and protections such as water, shade, and extra breaks on days when temperatures exceed certain thresholds.

If passed by state lawmakers, the law would be the first in the nation to protect workers not just from extreme heat, but extreme cold. “You also have to look at how the winters are becoming more extreme, especially in upstate New York,” Obernauer says. She hopes it passes before the pendulum swings in the other direction.

The Amazonification of Buying a New Car

The Amazonification of Buying a New Car

The jump in online car sales came in part from consumers doing more of everything online during the pandemic. Automakers responded to the moment by accelerating their existing plans for digital sales.

General Motors had launched a website years ago allowing customers to find, customize, and order a vehicle, but it saw a 50 percent spike in traffic by late spring 2020. Since then, the carmaker has said it will make it possible for customers to shop for, purchase, and finance their vehicles wholly online, and even take delivery of a car at home. Electric vehicles fit this strategy better than those that gulp gas, says Hoss Hassani, GM’s vice president of EV Ecosystem. Battery-powered cars have fewer parts, and the company’s EV’s have modular designs, which cuts down on the number of options offered. That makes it more straightforward for a customer to customize a car and preorder it online, he says.

Honda, which aims to sell only EVs by 2040, has said that its entire electric Acura line will be sold online in the US. “We see it as a convenience tool, basically meeting customers’ expectations in terms of how they purchase their vehicle,” Mamadou Diallo, senior vice president of sales at American Honda, said at a media event last month.

Ford is also driving toward a more streamlined, internet-based buying experience, CEO Jim Farley said last summer. “We got to go to non-negotiated price; we got to go 100 percent online,” he said, envisioning a future in which factories don’t send out vehicles to wait around on lots anymore, an arrangement more common in Europe. “It goes directly to the customer—100 percent remote pickup and delivery.” Ford is also rolling out an ambitious program for dealerships interested in selling electrics, which will require those who sign up to spend $500,000 to $1.2 million on site upgrades, including installing and operating onsite fast chargers.

Talk like Farley’s understandably makes dealers a little nervous. It raises the specter of dealerships being relegated to operating sales processing and delivery facilities, which also do car repair. Some worry the ultimate goal of the changes automakers are ushering in around their electric vehicles could be to become more like Tesla—an end run around the dealership model altogether.

The changes coming to car selling could deliver shocks to some dealerships, which have during the pandemic made record profits at a time of high demand for a limited supply of vehicles. “Dealers are still in this mindset of ‘come in and shake the hand of my handsome salesman,’” says Mike Anderson, the president of the Rikess Group, an automotive dealership consultancy. Selling online, at a fixed price, demands a whole new skill set: facilitating digital transactions, explaining new features online or over the phone, and finding a way to create relationships with customers without meeting in person.

Many dealers are protected, to some degree, from the chilling winds of digitization. In most US states, dealerships’ business models are shielded by the force of law—and also well-resourced state and federal dealership lobbies. Seventeen states prohibit direct-to-consumer sales by automakers, and nine others limit them, according to the Electrification Coalition, an advocacy group. Tesla and newer electric entrants Rivian and Lucid have pushed state lawmakers to reconsider these laws, which date back to the 1950s, but with little success.