Tesla Is Trying To Be A Less Terrible Business Partner

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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.

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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106 thoughts on “Tesla Is Trying To Be A Less Terrible Business Partner

  1. I’d be pissed if I had the super chill CEO of Chrysler job where you don’t have to do anything but maybe tweak a minivan every so often, and then you get “promoted” and suddenly you have actual businesses to run.

    1. She should have put out more computer generated renderings of fake future models to make it look like things were busier, too busy to take on extra responsibility

  2. Just named CEO of Dodge, make K-car platform 2.0 and slice it up as many ways as I can, Rampage Maverick competitor, Journey Rav4 Prime competitor, Raider looking Bronco Sport competitor, and so forth and so on.

  3. First matter of business: Bring back the Dodge La Femme. Women today still want a car that’s exclusively available in pink and comes with a matching purse and accessories.

    1. To be fair, that would’ve been a quick way to spin some easy money. Wouldn’t save the company, but it’s baffling they didn’t follow that inadvertent consumer demand.

  4. I could make a VW joke, but unnecessary electrical issues are multi-industry wide. Brilliant, this electrification of foolproof, long solved, simple mechanical features, like f’n door handles. I’d trust the competency of even the lowest graduating student of the lowest correspondence mechanical engineering school over pretty much any computer programmer of consumer grade shit that I’ve had to interact with from the last 20 years, but we don’t even need to do so as the problem’s already long been solved, yet here we are rethinking it again. Can’t wait for everything to go steer-by-wire!

    1. I despise the idea of putting an electric motor on anything that can move, especially door handles. We don’t need EVERYTHING automated and/or electric. This is all going way way to far for me. We DON’T need to add 10 more miles of range to the car over it’s lifetime by making the door handles just a little bit smoother to the wind, while adding allll the extra costs and complexities that comes with it.

      1. I have a 2022 car (I won’t say which one) that still has cables connected to a knob that actuates the air vents. It gives me so much joy to feel the clunk-clunk as it moves through its range. It just works and I know that 100 years after an EMP resets society, some kid will sit in the useless shell, cranking the knob back and forth and it will still work.

      2. We DON’T need to add 10 more miles of range to the car over it’s lifetime by making the door handles just a little bit smoother to the wind, while adding allll the extra costs and complexities that comes with it.

        Sometimes they add the complexity without the gains, too. The new Lexus RX has a door handle that looks normal, but you’re just pushing a button on the inside of the handle that makes the door latch motors itself open. Who wants these “features?”

        1. This, to be fair, is to allow the door to prevent itself from being opened when BSM detects you’ll open it into moving oncoming traffic. Unsure how Hyundai implements the same system without ruining the door handles though.

          1. There are a few ways to do things differently.

            They have a manual override for emergency egress, and it could be connected to the exterior handle.

            They could lean into it and also use an aero handle or the like. If you aren’t using a mechanical handle, there’s no real need to make it look like one. I hate the door button on the Mach E, but at least it’s honest.

            They could just use an alert and/or other features. A door handle positioned to be easier to grab with the opposite hand would turn a person to have a better view, for example.

            Also, the person who flings their door open into traffic or in front of a cyclist is likely impatient. The door will open on two quick pulls, if I recall. I am not sure it will have a lot of effect on just person. They’ll just tug until it opens.

      3. Years ago, some product team at Black & Decker apparently sat down and asked “now that we’ve got the cordless drill sorted out, to what other hand tools can we add batteries and a motor?”

        Among the “answers” was a powered measuring tape. It was bigger and heavier than equivalent units of the same length, and though it extended and retracted at a fast clip, it never seemed to be the right speed. Fine tuning positioning was difficult. What seemed like a great idea in theory turned out to be meh in practice. More hassle than it was worth.

        You don’t see them around anymore; just a little known factoid for trivial night at at the wood wright’s pub across the street from Torch’s favorite tail light bar.

        I’m guessing a lot of the ultra modern motorized crap in the current generation of cars will meet a similar fate.

        Motorized air vent grills? Why?? Just, why???

    2. It boggles my mind how many modern car issues exist for things that I’ve never had an issue with in a ~30 year old jeep, and thought were in the realm of way beyond mature technology. Anything from these door issues, to windshield wipers that stop working randomly in the snow, or even the entire vehicle software system disabling the vehicle. There have certainly been other areas with massive gains, but a lot of the basics seems to be “updated” with software just to do something different

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

    Cash checks and sell stocks and wait for them to realize they picked someone grossly underqualified.

    1. Christine Feuell has done a stellar job at Chrysler. They have a robust vehicle lineup and a clear vision of the future of the brand. I am sure she will do great at RAM.

    2. … while also using their skunkworks to build myself special custom cars. Including one of those Daytonas by Lamborghini. And registering a whole ton of JDM treasures.

  6. Kinda surprising, in a way, that the vote didn’t pass to join the UAW. However, when looking at the contract as a whole, and how it didn’t really include all that much for senior labor members, and was primarily directed at new hires and ancillary benefits, I can see why.

    The monthly dues weren’t worth it to the majority of the workforce, I suppose.

    1. I think it was the John Deer strike a year or 2 ago, where a major point was the tiered pay rated and the fact that the newer hires would never make what the senior employees made. While it did not directly affect them, I recall seeing interviews of senior employees saying they were doing this because the newer ones deserved the same standard of living they had.

      I was impressed that they did something to benefit others, I really hate this “I had to suffer, so should you” mentality that a lot of people have today when it comes to younger people.

      1. A contract that I voted to ratify had a pretty shitty provision that new hires would take 7 years to reach 100% rather than 5. The trade-off in that was the retirement age was reduced BACK down to 55, from 62. So, the theory went that while it took 3 contract to get the retirement age back down, we will (in the future) do the same for wage progression. The selling point in the whole shebang was an across the board 13% wage increase, effective immediately, with 2% raises annually afterward for the length of the contract. Also included in that was no raise in medical contribution for anyone.

        So, while the new guys kinda took it on the chin there, their base pay was effectively at 85% from the get-go, so it was a “phantom” lengthening of pay scale increases.

        It’s not so much, “I suffered, so you suffer”, it’s more that it will come to you in good time. Be patient, young grasshopper.

  7. If I am CEO of RAM first thing is to bring out a new Rampage with a PHEV drivetrain that would compete with the Maverick.

    Second thing would be to introduce a PHEV drivetrain to the 1500. Give it at least 40 miles EV range.

    Third would be my pet project. Start development of an EV drivetrain paired with a micro-turbine range extending engine.

    1. You don’t want a microturbine. Those typically have a thermal efficiency of only 15% vs. 40% for a modern Atkinson cycle piston engine.

          1. Performance.

            The low-end torque of the electric motor could be enough to maximize the traction limits of the tires for acceleration. Anything more than that, is wasted torque.

            But the microturbine could add thrust beyond that.

            Plus you could get away with a lightweight power-dense battery pack to keep total vehicle mass down. A small 10 kWh LiFePO4 pack weighing under 150 lbs is really all you’d need, and depending on choice of battery, peak power won’t be a limiting factor for this proposal.

            Making it a PHEV allows you to keep it running in some capacity if the microturbine fails, or for short trips where operating a turbine would be a massive hassle(especially when it comes to shutting it off).

            Imagine a modern interpretation of the Fiat Turbina. Somewhere around 2,500 lbs curb weight, a Cd value under 0.15, slightly-less-than-Miata frontal area. 1,600 horsepower electric drive system using two Dark Matter systems from Koenigsegg, AWD, and a microturbine of about 700 horsepower.

            On long trips using the microturbine, the car could still see 30 mpg. 0-60 mph times could be well under 1 second and 0-200 mph times well under 5 seconds using both the turbine and the AWD EV drive system together at full acceleration. In EV-only mode, this could be a car with an honest 60-80 mile range, and able to do 0-60 mph in about 1.9 seconds.

            It would be a delicious vehicle…

    2. Not directly related, but I watched the Hagerty documentary on the Chrysler Turbine car yesterday. I’ve watched others as well, but its just a fascinating subject.

    3. From a performance perspective, a microturbine PHEV makes sense.

      Whereas Tesla is using a compressed gas system to add thrust beyond the capabilities of DOT tires on pavement, it is a system that is of such limited use that it needs to be recharged after just one single acceleration run.

      A microturbine can add forward thrust beyond the capabilities of tires and use an energy-dense liquid fuel to do so, allowing multiple full-throttle acceleration runs.

      1. A microturbine can add forward thrust beyond the capabilities of tires…

        And melt the car behind you while deafening everyone within earshot at the same time.

        1. True. Tesla’s thruster system has similar issues regarding anything caught behind it when it accelerates.

          But damn it would be cool!

    4. Microturbines are stunningly expensive. So you’d have to charge defense contractor prices. A commercially available 8kw unit weighing 22 lbs is 20 thousand bucks. To get decent efficiency out of turbine engines you need high combustion temps which means exotic expensive materials.

  8. If I was CEO of Dodge:

    1) Revamp the platform for the Charger. Needs to have much more slippery aero, with a Cd value under 0.20. The car will also shrink and lose at least 400 lbs. There will be V8 parallel hybrid/PHEV options, including the Hellcat and Hellcat Redeye. The aero combined with the hybrid drive system should allow the new V8-hybrid Hellcats to approach 50 mpg highway when driven delicately(and into single digits when not). The new Hellcats will start at over 1,000 horsepower.

    2) New Viper. Same V10(maybe upgraded a bit), but in a smaller, lighter, more streamlined car. There would also be an electric variant.

    3) New Powerwagon. There will be PHEV and pure EV options. This vehicle will be an overpowered, low cost station wagon based on the new Charger’s platform. The goal will be to exceed 50 mpg highway while transporting a family of 6. Sub $35k base price.

    4) New Caravan. Either PHEV series hybrid, or the choice of pure EV. It will have an aerodynamically slippery shape like a Mercedes Bionic(2005) or Renault Vesta II, except scaled up into minivan form. The goal will be to exceed 40 mpg highway while transporting a family of 8. Sub $40k price.

    5) New SRT4, the base model being a subcompact hybrid. Streamlining like the Intrepid ESX2 or M4S Turbo Interceptor. Base model should cost under $30k, having 400+ horsepower, a curb weight under 3,000 lbs, and getting 60+ mpg. Pricier pure EV option as well.

    6) All of the above will use EV technology licensed from either Tesla or BYD to keep costs down and reliability high.

    Stellantis’ current EV lineup will probably sink the company as its customers get screwed over. That needs to change. Not sure it would survive under my proposal, but at least it would be an attempt to adapt to the reality of long-term resource constraints and consumer spending limits.

    1. #3; Where can I send my deposit for the EV Caravan? Please follow the old Chrysler rule that a 4×8 sheet of plywood can fit inside with the seats removed. I’m fine with bolts holding the seats in. No need for quick releases or seats that fold into the floor.

      1. Yes, being able to fit the 4×8 plywood is important. Even if you have to put it in at an angle and lower it onto the floor, as well as rotate it while lifting it out, as long as it fits is the important part.

    2. To point #1 – how is this different or better than the next-gen Charger that has already been announced with the pointy lobey triangle thing as the badge? Do you mean revamp it AGAIN, or are we assuming a slightly earlier time?

      1. I’d revamp it again. It would have a lot more emphasis on drag reduction and downsizing the platform(reduced weight, reduced frontal area). It would be turned into a much faster car as well as a slightly cheaper car and more efficient car as a result.

        The current Charger design is too conservative relative to what is needed. I’d want to save the Hellcat by putting the engine into a significantly more efficient platform, rather than kill it due to CAFE and a small incremental change being insufficient to get the mpg needed.

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

    Buy a bunch of cheap Chinese EVs and sell them here rebranding the cheapest, most basic one as the new Dart, Al Bundy edition.

  10. I’d bring back the Neon SRT-4, Magnum and Stealth. Hell since we’re playing silly games why not go with an EV Magnum with AWD and gobs of go fast electrons.

  11. First step, permanently slash retail prices on the Hornet, and roll out a series of special edition tape stripe packages with names licensed from some trendy influencers and designers to try and improve its image and get them moving. Maybe even ship some kits out to dealers to install on their stock to help that old inventory move out.

    Then leverage the global Stellantis network to fill gaps in the lineup – new Neon (Aeolus Yixyuan), new Avenger (Aeolus Yixyuan Max), new Colt (Peugeot 208), new Nitro (Peugeot 2008), new Journey (Peugeot 5008).

    Also, introduce a ca $33-35,000 entry level variant of the upcoming Charger sedan and coupe, RWD with a naturally aspirated straight six.

    Also, all ICE models, including that last one, will be available in either hybrid or PHEV form.

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

    Get a picture of that dog sitting in a cafe with fire all around. Then I’d paste a picture of my face over the dog’s face. Then frame it and hang on wall. Once that is done, check that my golden parachute straps are snug and wait. Yeah, I’ll do some work like trying to pull Ram back into Dodge, but otherwise I’ll wait for the end (and my big payoff).

  13. First thing I do? Like others have said, bring RAM back into the fold.
    Second thing is get a new Neon, a subcompact EV sedan bases on the e-CMP and make sure it’s a cheap and cheerful EV and do the damnedest and build it in America.

  14. The only way Tesla will be less shitty is if Elon is ousted. He is too childish and impulsive.

    If I was CEO of Dodge, this would be my lineup:
    Dodge Panda
    Dodge Neon (already sold in Mexico and Middle East)
    Dodge Berlingo
    Dodge Caravan (Scudo)
    Dodge Ducato
    Dodge Rampage (Strada)
    Dodge Dakota (Triton/Ram 1200)
    Dodge Charger/Challenger
    Dodge Magnum (wagon version of Charger)
    Dodge Ram (would be folded back into Dodge lineup)

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

    1) Lobby hard to get ‘RAM’ to be officially re-integrated back into the Dodge brand. The populace at large still thinks of them as Dodges, so it wouldn’t hurt the trucks’ reputation, but it would strengthen the Dodge brand by broadening the potential vehicles you could market, which leads to
    2) Develop a new Dakota as a direct competitor for the Maverick and Santa Fe. This could use the Hornet platform if the price could be made right.
    3) Develop a new Dart using the Peugeot 308 / Opel Astra platform, making sure to really lean in to the plug in hybrid powertrain. Same with the Dakota and Hornet. Making Dodge the ‘PHEV available for every buyer’ brand couldn’t be the worst way to differentiate it’s mainstream (non-performance) products from the other big players.
    4) Work like a madman to get the new Charger/Challenger/Durango platform out ASAP, and with an absolute minimum of quality issues. This should probably be in the number 1 slot, if these were in order of priority. The success or failure of this launch is existential for the brand.

    1. Oh man #3 would be hilarious to me. A car that a few generations ago was sold here as a Saturn, brought back as a Dodge? That would be awesome. As an owner of a (constantly broken) Peugeot 306, I am definitely in favor of this plan!

      As for #1, I would honestly push to get Dodge, Chrysler and Ram all under one brand at this point. All three have barely any products and are shells of what they once were, and not like they have different versions of the same car these days like the Charger/300 so there’s no overlap at all, folding the three into one brand would result in one brand that actually competes in most categories.

    2. This is what I was essentially writing myself so I’ll just piggy back on to this. I would also add to to bring back the Caravan as an affordable option to the Pacifica. Maybe, create a Ram 1500 based body on frame suv that undercuts the Tahoe/Expedition/etc and is PHEV or Ramcharger based.

  16. If I was just named CEO of Dodge, I’d be reaching out to head hunters and see if I can parlay that into a CEO position at a more stable company.

    On the Tesla front, a few years ago I worked for a company trying to do some work with Tesla. This is anecdotal, but it was a rough experience. From a technical perspective, Tesla engineers were sharp. But from a business perspective it was an absolute mess. We only made it a few weeks into the project before Tesla business managers killed the plans and basically told us “We don’t value what you want to do, so we don’t care about your money.” In hindsight, I’m sort of glad it only lasted a few weeks, because it was a very rough few weeks.

  17. Me as CEO of Dodge? First I’d stage a coup and reclaim Ram. Then I’d add a true small pickup truck to the US lineup, hybridize everything and get working on a cheap EV/PHEV/Hybrid design for the masses. Oh yeah, an EV version of the Viper that I’d call the Eel.

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

    Ride that gravy train until it goes off the rails. It’s not like you’re going to save it.

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

    Actually market the Hornet, and price it appropriately. Making it reliable would be nice, but it’s a Stellantis product, there’s no saving that.

    1. Nah, put it out of its misery. Discontinue, sell off the inventory with Maserati-level discounts, and blame your predecessor for the “misstep.” Ingratiate yourself with your opposite number over at Alfa, vacation together in Sardinia, and come up with a plan to Dodgify another Alfa.

        1. Despite finding that idea abhorrent, I do think there’s some more room in the Dodge lineup for performance offroaders.

          A version of the Wrangler, styled more modern and aggressively, with more of a focus on on-road handling and dune running would sell I think.

      1. Honestly a large part of my marketing budget would be spent on educating the public that Lamborghini did not develop the V10 and that it shares no parts with the iron block truck V10.

        I would not make a good CEO.

        1. You should name it, “Let Me Explain”, hire Ken Burns to create it, sepia and grayscale filter 100% of it, and release it as a 13-part series, 2.5 hours each, only available via mail order, only on VHS Cassette.

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