I’m not saying Tesla created a standard range version of its Model S and Model X and launched it yesterday to distract from CEO Elon Musk’s cringeworthy attempt to fight Mark Zuckerburg, mostly because Elon Musk seems impervious to embarrassment, but it’s nice timing. Whatever the reason, the announcement of a cheaper Model S and Model X is good news for consumers and probably bad news for competing automakers.
While we’re at it, Lexus has a fancy version of its LC500, President Joe Biden makes a rare comment on the United Auto Workers contract negotiations, and U.S. Steel may have a new buyer.
The Tesla Model S and Model X Standard Range Are Cheaper… For Reasons
Tesla did its favorite thing, which is to announce news quietly overnight so that all of us can scramble to pull stories together. Honestly, as a newsman, it’s kind of fun. Who needs embargoes when you can just update your website and wait for Tesla watchers to notice?
Yesterday. Tesla modified its website to show a new ‘Standard Range’ trim level for Model S and Model X. For the Model S you get a vehicle capable of going a pretty good 320 miles on a charge for a price of $78,490, or exactly $10,000 off the old base Model S, which gets 405 miles of range. For the Model X, the same price drop gets you a $10,000 discount as well, dropping the price to $88,490. That gets you a less-good range of 269 miles. It’s unclear if the vehicles get a 100 kWh battery that’s been downgraded, a smaller battery, or if Tesla is swapping in a cheaper, lower-range LFP battery.
Why did they do this? Reasons abound. The company could have been doing it to distract from Musk’s weird Zuckerburg fight threats, but I doubt it. Reuters says this is the company “looking to increase sales as high borrowing costs hamper demand for expensive electric vehicles,” adding:
The Austin, Texas-based company has also offered other incentives to reduce inventory in a strategy that CEO Elon Musk said was part of Tesla’s recession playbook.
That’s probably true. Financing a $90,000 car with these higher rates is not fun, especially when you can get a Model Y for under $40k with over 300 miles of range. It’s not as nice as the Model S, but it’s also not as old.
Some of this feels also like a continuation of Tesla’s ongoing price war. This new sub-$80,000 Tesla Model S compares favorably to the $105,540 you’d spend for a Mercedes EQS 450+ that gets 350 miles of range or a base Taycan, which, for $90k delivers an EPA-estimated range under 220 miles. The Model X isn’t as good a deal, because $87,100 buys a BMW iX that goes over 300 miles and is a much newer (and arguably better) car.
It’ll be interesting to see if the LFP battery is actually being swapped in, because that would make for an attractive vehicle.
Biden Weighs In On UAW/Big Three Negotiations
In new statement, POTUS calls for “all sides to work together to forge a fair agreement” in UAW-Detroit 3 contract talks. “The UAW deserves a contract that sustains the middle class.” pic.twitter.com/lShvsse9in
— Riley Beggin (@rbeggin) August 14, 2023
Generally speaking, Presidents of the United States of America (not to be confused with The Presidents of the United States of America) do not weigh in on ongoing labor negotiations directly. The band probably does. As The Detroit News points out:
Presidential administrations have used economic spokespersons to comment on the potential economic impacts of bargaining, said Marick Masters, a labor expert and business professor at Wayne State University. But it’s uncommon for a president to weigh in on negotiations directly, “preferring instead to let the process work its will.”
As we have pointed out, this isn’t a normal negotiation and the new head of the United Auto Workers isn’t your typical union boss. Here are just some of the factors at play:
- EVs probably require fewer workers to create
- Tooling up for EVs is going to be expensive
- The Big Three are unionized, their competitors are not
- The union gave a ton of concessions to automakers during the Great Recession and hasn’t gotten most of them back
- The current contract still has a two-tier wage structure, which most unions are trying to do away with
- The new union leadership has promised no sweetheart deals
- Inflation
- The generally reliably Democratic-supporting UAW has not officially endorsed Biden yet, on purpose because of all the stuff going on right now
In the face of all that, Biden says he wants to make his intentions clear, stating:
I support a fair transition to a clean energy future. That means ensuring that Big Three auto jobs are good jobs that can support a family; that auto companies should honor the right to organize; take every possible step to avoid painful plant closings; and ensure that when transitions are needed, the transitions are fair and look to retool, reboot, and rehire in the same factories and communities at comparable wages, while giving existing workers the first shot to fill those jobs. The UAW helped create the American middle class and as we move forward in this transition to new technologies, the UAW deserves a contract that sustains the middle class.
That’s definitely a statement, but there’s nothing here particularly outrageous from the perspective of the mainstream Democratic view of labor. I think that’s about as far as Biden can reasonably go without rocking the boat too much.
U.S. Steel Might Get A New Owner
We’ve known for a while that U.S. Steel, one of the oldest and biggest producers of steel for the automotive industry, has been for sale. The expected buyers were expected to come forward and then, all of a sudden, a new challenger emerged.
Bloomberg has a play-by-play of all of the drama, which started with a big offer from rival Cleveland-Cliffs Inc.:
Here’s my favorite part of the story:
Commenting on the announcement, a U.S. Steel spokesperson said it was the first that the company had heard from Esmark. “We welcome them to join the multiple parties already in our previously announced strategic alternatives process.”
Bouchard said that his offer was motivated by a desire to ensure U.S. Steel remained American owned after the weekend’s announcements.
“They’ve made huge strides, but we have a lot of work to do and we can make U.S. Steel U.S. Steel again,” he said. “This needs to stay an American institution.”
What a fun bit of news if you are a U.S. Steel executive or shareholder. I’m assuming the swipe about “stay an American institution” is a reference to Cleveland-Cliffs, which is owned by various stakeholders in different parts of the world (the largest shareholder seems to be in Luxemborg), though it’s possible there are some Chinese or other firms in the mix as well.
Check Out This Fancy LC500
I’ve got a review of the new 2024 Lexus LC500 with the V8 coming out but, it’s not a secret: I think the thing is great. It’s also something I assume Lexus could never build a new generation of, so it’s good news they’re adding variants to the existing model.
The 2024 Lexus LC500 Inspiration Series is a V8 LC500 with some aerodynamic improvements, mostly notably the front bumper canards and a (coupe-only) carbon-fiber fixed rear wing. The $116,700 price for the coupe is high, but they’re only making 125 of these things, so act fast.
The Big Question
You’ve got $90,000 to spend on one electric vehicle. What are you buying?
Photos: Tesla, US Steel, Lexus
90k is too much for 1 EV so I’ll get a 2019 e-golf, a 2015 i3 REX, 2014 Rav-4 EV, a Fiat 500e, and a 2018 Smart ForTwo Electric drive. Should have some spare change after that as well.
A slightly less crazy-expensive Model S is attractive, but for the money, I’d rather have a better looking Taycan. Not that I’ll ever own either, but you asked.
I’m not much of a Lexus fan, but that LC500 looks nice. Except, I thought Toyota did away with the over-eyelinered look?
For 90k, Polestar 2 fully loaded AWD. Comes in about 66k.
One EV? Dang! Gotta be the F150 Lightning, though we’ll have to spend extra money to replace the truck camper with something else since it doesn’t have much payload capacity. We get power outages out here so we could sure use the V2H.
My vaporware dream EV would be the Alpha Wolf compact pickup though.
Hope the Teslas are going LFP, fewer EV fires is always a good thing.
Can’t belive it took this long for someone to get the right answer. I’d definitely option up a Lightning to $89,999.99 or as close as I could if someone else was footing the bill and it was use it or loose it. My own money, that is an entirely different story as I’m not spending $90k on any vehicle.
$90k is £70k. So I could buy an unloved slow 1.6 S3 Elise and have £45k left over to convert it to an EV.
I’d be happy with the weight, range and performance of the first Tesla Roadster, but I imagine I could beat that on all three fronts with modern EV tech.
None of the current EVs are sports cars, or small coupes, and those are the only cars I want.
Why would anyone trust Tesla about range numbers, especially reduced ranges? Reduced from what, the inaccurate ranges they’ve been advertising for years or the real ranges achieved?
If I had $90,000 to spend on an EV, I wouldn’t. It’s still too early for me. I’d rather wait for more mature EV technology and better choices. Spending $90k on any car is insane, though. If it was a buy or lose the money deal, then most likely I’d choose a Rivian pickup (or a Canoo, if that becomes real any time soon) and put the difference into lots of spare tires.
What am I buying? Probably a solid hobby-grade RC car kit They’re a known quantity for me. Fun weekend or two building the kit. Have to find somewhere and a group to do some races, but they exist. I can then pocket the remaining $89,000.
BEVs are still well in their early adopter phase, and there’s nothing I’d buy anyways. Other people can. I wait.
Polestar 3
Taycan probably but I would probably wait and see what next year’s Polestar 5 is like before committing.
90k Rivian for sure
I found a couple of used Polestar 1s right at 90k so I’ll take one of those. You never said my 90k needed to go to a new EV
The LC is the only car where the running eye-shadow and predator maw works. It is a striking design.
If I had someone else’s $90k for an EV I would buy a Rivian pickup.
It’s a nice thought, Mr. President, but a favorable UAW contract is only the tip of the iceberg of what’s needed to maintain or preserve the Middle Class. Our inflationary economic climate, circumstances favorable for the ultra-wealthy, along with decades of stagnant wages have worked together to heavily erode it.
Well, full employment, the lowest inflation in the industrialized world, a major expansion of construction and on-shore manufacturing are all helping there.
That’s what you say, but the reality of the circumstance, or at least sentiment on the ground, doesn’t really line up. We both know that the government manipulates economic numbers to the point that they’re at best a misleading reference point and, at worst, borderline lies. We’re supposed to blindly say, “Yeah, mmhm” when they give us their own report card? No, not when a majority of the American people are suffering.
This sounds an awful lot like “the government is covering up all the vaccine injuries”, or even “the government is covering up 9/11 and aliens”.
Unless the coverup formula has changed recently, the same numbers are better now than they were a few years ago when most thought the economy was good.
Consider instead the possibility that there might be a media ecosystem dedicated to the idea that the economy can only be good when one party is in power, and what effects that might have on the general mood of the country.
Nothing from a few years ago matters anymore, though. We are living in a whole different world globally in every aspect since Covid. There is no applicable comparison that would be valid.
Really? Not a single thing that compares to pre-2020? I grant you that some things have changed, but this isn’t even the biggest disruption to the economy in my working life, and we didn’t throw out our metrics in 2008 either.
2008? Actually, it was 2007 and I know this because I was writing mortgages in Detroit then. It just took a while for everyone on Wall Street to embrace the reality, which I also know because I moved to NYC during that initial loan options shutdown time and people laughed when I told them that shit was about to hit the fan.
Either way, that was “just” a financial crash. What covid brought upon the world was a fundamental change in how the whole world lived/lives in every aspect. Huge difference between losing your 401k and being forced into house arrest with many smaller countries that rely on tourism to almost implode on themselves.
Now, I’m not saying it was the wrong call at the time to have lockdowns, we (everybody) didn’t know shit at the time. In hindsight, it wasn’t the best way to handle it but the damage had already been done. People all over the world lost their shit mentally and you can’t just snap back from that.
We might as well just erase the chalkboard, clap the chalk off the erasers, and start from scratch with any statistical comparison between the “before” times and now. It’s futile to equate the two.
What, precisely, should prevent someone from comparing real wages, or unemployment rates, or prime age employment ratio, or homeownership rates, or any other relatively normal economic measure today with 2019 or for that matter 2022?
I understand and accept the argument not to put too much stock into numbers specifically from 2020 or 2021. But there are decades of trends before then for comparison, and the US economy is hardly suffering from pandemic direct effects now. Residuals, perhaps, but less and less each month.
Yes, of course, because the government in power never omits certain data points that would be damning in regard to their economic performance. Inflationary data is well-known to be manipulated in this way, as well as many other economic figures, such as employment, etc. If you think what I’m stating is rooted in partisanship, you’re mistaken. This is not an indictment against any specific party, it would be the same regardless of who is in power. In fact, that’s part of the reason why we’ve reached this point anyway.
To refute or disregard the truth of this matter is utterly pointless in the face of its conspicuousness.
Lol.
I wish you luck navigating this life full of coverups and conspiracies, all of which are “well-known” and “conspicuous” of course. Just like how 9/11 was an inside job, vaccines cause autism, and 5G towers are controlling our minds.
The rest of us will enjoy our higher real wages, extremely low unemployment, rising stock market, and falling inflation. All of which is readily apparent in the real world, regardless of any numbers that are published.
What do you think gives the auto workers the confidence to strike for 40% higher wages? The fact that they know the companies will have a hard time replacing them in this good economy! If everything was as gloomy as you guys profess, the workers would be in a 2007-style negotiation, not making maximal demands that they will probably receive.
Who’s really out of touch with reality between the two of us? Don’t bother; that was a rhetorical question. Hardly worthy of the effort of this response.
Economically speaking, the U.S. is the cleanest toilet bowl in a filthy bus stop restroom that hasn’t been cleaned in weeks.
I’m not gonna pick on the old man too much, but there is no way in hell he said/wrote or even is able to coherently think anything that complex anymore.
With that being said, I don’t see how anyone who is in any union could trust a damn thing from this current administration after how hard they fu@&ed over the railroad workers right up the butt. One of the grossest backstabs in modern American labor history.
Agreed. It upsets me that the government would simply intervene and undercut the function of the union “because the economy.” I understand the whole argument about the needs of the few and the needs of the many but that was an embarrassment. If the government is going to play its hand to force the railroad workers not to strike, they could have also forced their hand against the rail companies to do the right thing. You know, something actually resembling a compromise?
I think you’re confused. The old man got kicked out in 2020. You know, the one that can’t spell his name or form any sort of coherent thought. Magats gonna magat I guess.
I’d buy a RWD EV-6 in GT-Line trim and use some of the surplus to fuel my other cars for the next 15ish years. Less responsibly I’d buy the EV-6 and trade in my Elantra for a Kona N.
Did they ever get around to building that N Vision 74? Would $90K buy one of those? I’d very much like to have one of those.
I already answered the EV question. But then I read down the other responses and realized that this, this is a much better answer than what I said.
A Polestar 3 or maybe a Model S, if they come out with a new gen.
I would get an EV6 or Rivian
If they were actually for sale, an Aptera. If I have to spend close to the 90k, then however many I can get and modify the interiors to not ape Tesla.
Cliffs merging with US Steel would be wild locally.
25 years ago, there were four completely separate companies running fully integrated mills in NW Indiana, along with a few other smaller independent finishing facilities. If this merger/acquisition happens, a single company will own every mill and facility on the lake shore.
Just out of curiosity, where are you located? I used to live in Valpo for a few years.
I’m surprised that Tesla even sells the S and the X anymore. The 3 and the Y do pretty much everything the other two do at a fraction of the cost, and it’s going to be hard to convince me the features / interiors of the senior models are that much nicer to justify the price.
But then again, the S and X are older than dirt itself so the costs have been fully amortized by now, so if someone wants to buy them once in a while, they’ll keep building a few a year. The price drop is just an incentive to maybe move a few more than recent average.
Well, it’s quite possible that with the gigacasting for 3 and Y, the S and X are actually more expensive to produce than they should be. IDK why they haven’t updated them more thoroughly. The sales numbers reflect the reality
$90k gives you a lot of options, that’s tough. You could get a Rivian R1-S with some upgrades, and the Taycan extremely theoretically starts at $90,900 although that’s not the model I’d want. But I might go with a Lucid Air Pure just to have something very nice and very unusual.
Right now? Probably a EV6. Although the EV9 would also work if it could be delayed until Q4.
Polestar 3 🙂 (And Tesla is limiting the battery with software)
Sounds like a person who wants one just needs to find some info about that recent security chip exploit and they could have a full-range Model S at a 10k discount.
“Look, peaches come from a can, they were put there by a man, and that man deserves a living wage.”
So peaches should be put in cans by slaves?
$90k goes to a Rivian if we are talking about a production vehicle. Otherwise, I’d see what kind of custom EV swap I could get for it. Do I win? Do I get the money?
I saw my first R1-S in person yesterday and it was quite nice-looking.
Realistically, probably a fully optioned-out Ioniq or something.
As far as realistically buying EVs, there’s a local Kia dealer that’s willing to knock a fair amount off an EV6, and I am tempted. They’ve even got one in the color I want, but it’s AWD, and I don’t know about taking the range hit for that.