Latest news with #StephanieValdezStreaty
Time of India
15-05-2025
- Automotive
- Time of India
Why losing EV tax credits could hit GM and Ford harder than Tesla in US
Sales of electric vehicles have been rising in recent years, partly because of a $7,500 tax credit from the federal government that helps lower the cost of buying one. But a budget bill that House Republicans released Monday would end that tax credit. Their proposal would also put new restrictions on other tax breaks that have encouraged automakers to invest tens of billions of dollars in new battery plants in the United States. By next year, the bill would do away with the $7,500 tax credit for buyers of new electric vehicles and a $4,000 credit that can be applied to the purchase of used electric cars and trucks. If signed into law, the change is likely to increase electric vehicle sales in the coming months as consumers race to take advantage of the tax credit before it goes away. But sales are likely to slow or fall once the credits end, analysts said. "It's definitely going to impact adoption and slow it down significantly," said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, a research firm. Cox expects electric vehicles to make up 10 per cent of all new vehicle purchases this year. If Congress makes no changes to the tax credits, that number should climb to almost a third by 2030, the firm estimates. But if Congress repeals the credits, Valdez Streaty said, she expects electric vehicle sales to make up 20 per cent to 24 per cent of new car sales by 2030. Losing the credits would deal another financial blow to automakers facing higher costs because of President Donald Trump's 25 per cent tariffs on imported cars and auto parts. The Republican tax proposal would hurt many automakers that have been racing to introduce new models. General Motors and Ford Motor may be hit particularly hard. Both have invested heavily in factories and supply chains with the hope of eventually producing millions of electric vehicles a year. GM has opened two battery plants, in Ohio and in Tennessee. The company built them through a joint venture with LG Energy Solution. Ford has three battery plants under construction - a wholly owned factory in Michigan and two in partnership with a South Korean company, SK On, in Kentucky and in Tennessee. Both Detroit automakers have also invested in mining operations to secure domestic supplies of lithium, a key material for batteries. Tesla, the largest seller of electric vehicles in the United States, will also be hurt. The company's sales have been sliding in recent months because it hasn't introduced new, more affordable models and because of a consumer backlash to its CEO, Elon Musk, who has taken a prominent role in the Trump administration. But Tesla has some advantages. While most automakers are still losing money on electric cars, Tesla has been making money on them for years. As a result, it might have more financial leeway to lower prices to prop up demand if the credits end. The company also relies less on imported parts than other U.S. automakers. Other large automakers have been racing to catch up to Tesla in electric vehicles, including by building many new factories, mostly in states that have elected many Republican lawmakers. Toyota has built a battery plant in North Carolina. Hyundai has started making electric vehicles at a plant in Georgia and plans to produce batteries there. Stellantis and a partner have two battery plants under construction in Indiana. The states hosting these plants have been counting on them to create thousands of well-paying jobs. If the tax rules change significantly, automakers could scrap, scale back or delay their plans. "If the government wants the U.S. to compete with China and the rest of the world in the inevitably large EV market, and wants GM and Ford to make large, long-term investments in EV development and U.S.-based production, it needs to extend the tax credit and wall it off from doctrinaire whiplash," said Erik Gordon, a business professor at the University of Michigan who follows the auto industry. China is the world's largest producer of electric vehicles and is the most important source of critical materials for batteries and electric motors, such as processed lithium and rare earth minerals. The elimination of the tax credits would make it much harder for the U.S. auto industry to catch up. "What this does globally to the U.S. auto industry and its ability to compete -- I think it's going to hurt us," Valdez Streaty said. "I think it's going to slow us down, and we are already behind China." Ford and Stellantis declined to comment, as did the Alliance for Automotive Innovation, a policy group. The federal government began offering the $7,500 credit under President Barack Obama, and it stayed in place during Trump's first term. The credit was renewed and expanded in the Inflation Reduction Act that President Joe Biden signed into law. Because electric vehicles are more expensive than internal combustion vehicles, the credits have been essential in getting more people to buy them. The credit is available on SUVs and pickup trucks that sell for $80,000 or less and sedans that cost no more than $55,000. Cars have to be assembled in North America, and their batteries must meet requirements on which countries their battery materials come from. To qualify, individual buyers have to earn no more than $150,000 a year and couples no more than $300,000. Many of those conditions do not apply to leased vehicles. But the tax credit on those cars and trucks goes to the company that leases the car to individuals, which is typically the finance arms of automakers. Many leasing firms have been passing the savings to their customers, a practice that has led to a sharp rise in leasing of electric vehicles. About 595,000 electric vehicles were leased in 2024, Valdez Streaty said, up from about 96,000 in 2022 before the leasing incentive was available.
New York Times
14-05-2025
- Automotive
- New York Times
Why Losing E.V. Tax Credits Could Hit G.M. and Ford Harder Than Tesla
Sales of electric vehicles have been rising in recent years, partly because of a $7,500 tax credit from the federal government that helps lower the cost of buying one. But a budget bill that House Republicans released on Monday would end that tax credit. Their proposal would also put new restrictions on other tax breaks that have encouraged automakers to invest tens of billions of dollars in new battery plants in the United States. By next year, the bill would do away with the $7,500 tax credit for buyers of new electric vehicles and a $4,000 credit that can be applied to the purchase of used electric cars and trucks. If signed into law, the change is likely to increase electric vehicle sales in the coming months as consumers race to take advantage of the tax credit before it goes away. But sales are likely to slow or fall once the credits end, analysts said. 'It's definitely going to impact adoption and slow it down significantly,' said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, a research firm. Cox expects electric vehicles to make up 10 percent of all new vehicle purchases this year. If Congress makes no changes to the tax credits, that number should climb to almost a third by 2030, the firm estimates. But if Congress repeals the credits, Ms. Valdez Streaty said, she expects electric vehicle sales to make up 20 to 24 percent of new car sales by 2030. Losing the credits would deal another financial blow to automakers facing higher costs because of President Trump's 25 percent tariffs on imported cars and auto parts. The Republican tax proposal would hurt many automakers that have been racing to introduce new models. General Motors and Ford Motor may be hit particularly hard. Both have invested heavily in factories and supply chains with the hope of eventually producing millions of electric vehicles a year. G.M. has opened two battery plants, in Ohio and in Tennessee. The company built them through a joint venture with LG Energy Solution. Ford has three battery plants under construction — a wholly owned factory in Michigan and two in partnership with a South Korean company, SK On, in Kentucky and in Tennessee. Both Detroit automakers have also invested in mining operations to secure domestic supplies of lithium, a key material for batteries. Tesla, the largest seller of electric vehicles in the United States, will also be hurt. The company's sales have been sliding in recent months because it hasn't introduced new, more affordable models and because of a consumer backlash to its chief executive, Elon Musk, who has taken a prominent role in the Trump administration. But Tesla has some advantages. While most automakers are still losing money on electric cars, Tesla has been making money on them for year. As a result, it might have more financial leeway to lower prices to prop up demand if the credits end. The company also relies less on imported parts than other U.S. automakers. Other large automakers have been racing to catch up to Tesla in electric vehicles, including by building many new factories, mostly in states that have elected many Republican lawmakers. Toyota has built a battery plant in North Carolina. Hyundai has started making electric vehicles at a plant in Georgia and plans to produce batteries there. Stellantis and a partner have two battery plants under construction in Indiana. The states hosting these plants have been counting on them to create thousands of well-paying jobs. If the tax rules change significantly, automakers could scrap, scale back or delay their plans. 'If the government wants the U.S. to compete with China and the rest of the world in the inevitably large E.V. market, and wants G.M. and Ford to make large, long-term investments in E.V. development and U.S.-based production, it needs to extend the tax credit and wall it off from doctrinaire whiplash,' said Erik Gordon, a business professor at the University of Michigan who follows the auto industry. China is the world's largest producer of electric vehicles and is the most important source of critical materials for batteries and electric motors, such as processed lithium and rare earth minerals. The elimination of the tax credits would make it much harder for the U.S. auto industry to catch up. 'What this does globally to the U.S. auto industry and its ability to compete — I think it's going to hurt us,' Ms. Valdez Streaty said. 'I think it's going to slow us down, and we are already behind China.' Ford and Stellantis declined to comment, as did the Alliance for Automotive Innovation, a policy group. The federal government began offering the $7,500 credit under President Barack Obama, and it stayed in place during President Trump's first term. The credit was renewed and expanded in the Inflation Reduction Act that President Joseph R. Biden Jr. signed into law. Because electric vehicles are more expensive than internal-combustion vehicles, the credits have been essential in getting more people to buy them. The credit is available on sport utility vehicles and pickup trucks that sell for $80,000 or less and sedans that cost no more than $55,000. Cars have to be assembled in North America, and their batteries must meet requirements on which countries their battery materials come from. To qualify, individual buyers have to earn no more than $150,000 a year and couples no more than $300,000. Many of those conditions do not apply to leased vehicles. But the tax credit on those cars and trucks goes to the company that leases the car to individuals, which is typically the finance arms of automakers. Many leasing firms have been passing the savings to their customers, a practice that has led to a sharp rise in leasing of electric vehicles. About 595,000 electric vehicles were leased in 2024, Ms. Valdez Streaty said, up from about 96,000 in 2022 before the leasing incentive was available.
WIRED
08-03-2025
- Automotive
- WIRED
What's Driving Tesla's Woes?
As Tesla faces a global sales slump, and with shares down for the seventh consecutive week, could Elon Musk's antics really be to blame? Photograph:Tesla sales fell in the US once again last month, following a wider global trend that further fuels the suggestion that the growing backlash against billionaire CEO Elon Musk could be impacting Tesla at retail. According to Kelley Blue Book, Tesla shifted 43,650 EVs in February, a decrease of nearly 6 percent from the 46,262 sold in the same month last year. It's far from the crash seen in much of the rest of the world, with drops of over 75 percent in Europe in the first two months of the year (the UK being one of the the only markets bucking the trend, with Tesla's February sales jumping by 20 percent compared with the same month last year), but—whatever the reason—sales are stalling. In the US, the month-over-month sales decline in February was primarily driven by significant drops in Cybertruck and Model 3 sales, which fell by 32.5 percent and 17.5 percent, respectively. But Stephanie Valdez Streaty, director of industry insights for Cox Automotive, says these drops aren't that bad when considered within the wider market. 'Compared to the overall EV market, Tesla's decline in February is relatively moderate compared to some other manufacturers," she says, "indicating that while there was a decline, it was not as severe as those seen by some competitors.' Some analysts blame Tesla's lackluster sales on inventory snafus, customers waiting for the refreshed Model Y, and fierce competition from auto rivals. Others point to the company's habit of making deliveries in batches, resulting in big variations in registrations between months. Tesla's Model Y is awaiting a refresh. Photograph:Morgan Stanley analyst Adam Jonas even suggests the downturn in sales is all part of a key turning point for Tesla, as it moves beyond a car company into a robotics-focused behemoth. 'Tesla's softer auto deliveries are emblematic of a company in the transition from an automotive 'pure play' to a highly diversified play on AI and robotics,' the Tesla bull told clients in a note. 'While the journey may be volatile and nonlinear," he continues, "we believe 2025 will be a year where investors will continue to appreciate and value these existing and nascent industries of embodied AI, where we believe Tesla has established a material competitive advantage.' However, there has been the feeling that at least some of the fall could be due to anger over Tesla CEO Elon Musk's political activism and the decisions made by the so-called Department of Government Efficiency under his leadership. Since mid-February, Tesla showrooms have attracted protesters in 100 or so cities across the US, eager to let passersby know their feelings about the chainsaw-wielding Musk. These largely good-natured, sidewalk-staged protests—some with Mariachi bands, puppeteers, and large cardboard Cybertrucks to decorate—have been organized by a website called TeslaTakedown, and they attracted plenty of media coverage in the process. Alex Winter, a Los Angeles-based documentary maker—and the titular Bill from 1988 time-travel comedy Bill & Ted's Excellent Adventure —is the creator of the website. He tells WIRED that the TeslaTakedown movement wants to topple Musk: 'We aim to devalue the brand. It's a very simple and effective means for people to get onto the street and protest.' Media coverage amplifies the movement's message, says Winter. 'We want to spread verifiable, factual information on Musk, DOGE, and why Tesla should be devalued.' 'Musk himself is toxifying the Tesla brand,' Winter says. 'We're just helping him.' TeslaTakedown started last month, kicked off by a February 10 posting on Bluesky by Joan Donovan, a disinformation researcher and assistant professor of journalism and emerging media studies at Boston University. 'Come out and participate in an international picket #TeslaTakeover locally,' she wrote, later agreeing with renaming the movement. 'I asked myself, what was I willing to physically do to raise awareness [about Musk]? Well, I'm willing to go out on Saturdays and protest in front of a Tesla dealership,' Donovan tells WIRED. 'I made a flyer and started circulating it online. Alex saw my post, and we started texting about what to do; it all came together super fast.' At the first demonstration in Boston on February 15, there were 50 people. By the third week, this had risen to 300. 'I've met teachers, people who work in public health, people who are retired, students at universities—all Americans who want to see DOGE disappear,' says Donovan. 'It's not only a strategic boycott of Tesla, it's a polyvocal protest where lots of grievances are aired.' Elon Musk and Tesla didn't respond to requests for comment. Erica Chenoweth, a political scientist at Harvard University, has studied over 300 modern uprisings worldwide and found that change usually becomes inevitable when just 3.5 percent of a population join a movement. 'There are typically far more people who sympathize with movements than people who actively participate in them,' Chenoweth tells WIRED. So might TeslaTakedown work quickly? 'Instead of thinking about how long it takes,' she says, 'I typically look to see whether a movement is building pressure and momentum with each subsequent action. "In the social science of these movements, many people talk about eliciting defections—making people within different pillars of support shift their loyalty away from the status quo. In the case of corporations, those pillars can include shareholders, workers, suppliers, distributors, advertisers, consumers, and those around them.' Losing Loyalties Those pillars may already be showing signs of instability. Across Reddit, TikTok, Facebook, and even X, posts have started to stack up of people saying they are ditching their Teslas. Singer Sheryl Crow was one of the more high-profile among them, who posted an Instagram video on Valentine's Day wishing good riddance to her Tesla as it was driven away on a flatbed truck. 'There comes a time when you have to decide who you are willing to align with. So long Tesla,' she wrote, adding that she was donating the sale proceeds to National Public Radio, because it was "under threat from President Musk.' Sleep researcher Asa Farnham lives in Rochester, New York, and used to work in a Tesla showroom. He has owned five Tesla EVs, previously owned company stock, and has attended shareholder meetings. He also made the decision to part ways with his Tesla recently. 'I'm not rich, so I really hemmed and hawed about getting rid of a perfectly fine vehicle but, not being a Vulcan, every time I drove the car I felt emotionally sick,' he tells WIRED. 'Finally, in December, I couldn't take it anymore, and traded my Model 3 for a Rivian and reduced a significant amount of cognitive dissonance.' 'The decision to ditch was difficult,' he remembers, 'like breaking up with someone. As an environmentalist, I was aligned with [Tesla's] mission statement to accelerate the world's transition to sustainable energy.' But Farnham started souring on Tesla in 2022 after Musk purchased Twitter. '2024 was the nail in the coffin,' he says. 'Musk amplified election conspiracy theories, extreme far-right views, and tweeted more vile things. I was done.' Photograph:Another Tesla ditcher who spoke to WIRED has been a staffer at the US Department of Transportation in Washington, DC, for 25 years. He asked to remain anonymous due to concerns he could lose his job for speaking out. He had been a Tesla owner since 2018, but replaced his 2023 Model 4 for a Kia EV6 late last year. 'I used to think Musk was a goofy but intelligent man [who] had good intentions,' he says. 'My feelings changed around the time he bought Twitter. I loathe that, as a government employee, I have to submit five bullet points each week detailing what I've been doing at work. I cannot imagine the shame I'd feel if I still owned a Tesla.' That sentiment is not an outlier—many more ex-Tesla owners reached out to WIRED to share their reasons for ditching their cars, but none were prepared to be named, due to concerns for their safety. 'I am the child of German immigrants,' another tells WIRED, 'and the [Nazi-style] salute was very much when I had enough. I owned a Tesla Model 3 RWD 2018 from the first year of delivery until last month; I got a Volkswagen ID4 instead. I am happier not to be driving a car associated with Musk. Every American knows that your car says something about you: Driving a Tesla used to say 'I am driving to a better future'—now it says 'I believe in destroying government.'' Company Politics And yet Tesla's US market dominance remains staggering. It has a 48.7 percent EV market share in the US, with the next biggest automaker being Ford at 7.5 percent. Ivan Drury, director of insights at car-buying site Edmunds, believes that when it comes a big purchase like a car, the majority of people are more focused on price and perceived value than the politics of a company CEO. 'There's a huge swath of the population that doesn't care about politics,' says Drury. 'Many people will put aside their feelings about politics when purchasing a car. Tesla is utilizing several incentivization methods, including low APRs, leasing, outright discounts, and free supercharging. These might be enough for someone who sees the protesting in front of the stores and thinks nothing of it, especially as you can circumvent the dealership experience and buy online with delivery to your door.' Whether anti-Musk sloganeering, ownership ditching, and showroom picketing can meaningfully reduce new car sales at the EV behemoth is moot. Tesla's share price might be trending down right now, but the gains made after Trump's election mean there's still a long way to go before the stock even falls to last year's lows. However, with the company's valuation recently dropping below $1 trillion, Musk has lost more than $100 billion from his paper fortune, and if Tesla tanks, he'll lose a whole bunch more. This isn't fanciful. Barclays research analyst and Tesla bull Dan Levy argues that Tesla shares are 'disconnected from fundamentals' with 'stock trading at [many] times earnings.' And for Levy, 'what matters is narrative,' with the 'markets not really challenging any of the things Tesla is saying.' Markets can be slow, somehow yet to realize that Tesla's price-to-earnings ratio don't really add up. It would take 140 years to recoup an investment at Tesla's current earnings rate. Ford's ratio of 6.5 and Mercedes-Benz at 5.7 are the realistic ones. But Tesla's share price is at profound risk from targeted activism. 'We're doing [TeslaTakedown] to devalue the stock,' says Winter. 'We could see the rapid decline of Tesla's stock value and the diminishment of sales. Musk's attachment to Trump did a lot of that. And I think his [Nazi-style] salute did a lot of that.' Tesla's share price is currently 263, down from the 480s following Trump's inauguration. 'If it gets down to 120, you'll start to see a lot of angry shareholders,' believes Donovan, 'people who bought the dream.' She, and many others, hope TeslaTakedown will become a nightmare for Musk.
