Tesla Doesn’t Know How To Sell Cars To Normal People

Good morning! It’s Wednesday, July 31, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

The Hype Behind Tesla Stock Success In 2023

Contents

1st Gear: Tesla Is Struggling To Find New Buyers

After years at the top of the electric vehicle hill, Tesla is facing challenges left, right and center. The company is fighting against dwindling profit margins as it keeps cutting prices, is seeing sales fall as it hits competition from legacy automakers and even has the fringe opinions of its own boss to contend with. Now, a new report has found that the company’s latest challenge is drawing in new buyers.

Tesla hasn’t had much of a problem finding buyers for its cars up to this point. For years, it faced little competition from other automakers and it amassed a legion of dedicated fans who hang on every word of company boss Elon Musk. Now, Business Insider warns that Tesla might not know how to draw in buyers who aren’t inducted into the church of Musk. As the site explains:

The typical Tesla driver is so stereotypical that they have a nickname: Tesla bro. These drivers are enticed by Tesla’s user experience and high-tech accessories — and have more patience for features that are hard to use or have initial bugs.

But the non-Tesla-bro contingent is looking for something more practical that mimics the experience of their gas-powered car.

The findings come from a JD Power survey, which quizzed almost 100,000 owners of new 2024 model-year vehicles after 90 days of ownership. The survey found that Musk’s car company is still popular among loyal customers, but its performance among newer buyers was described as “lackluster.”

Additionally, owners of EVs made by legacy automakers said they “felt more connected with their cars than Tesla owners did.” The findings should come of concern to Tesla, which has seen its sales fall in recent months. In the latest EV sales figures, Tesla’s share of U.S. electric-vehicle sales fell to 49.7 percent in the second quarter of 2024. That is still a lot, but it’s the first time the automaker’s share has fallen below 50 percent, reports Cox Automotive.

2nd Gear: Stellantis Threatens Layoffs As Profits Plunge

Stellantis is having a nightmare at the moment after worrying financial results and fears that it could offload flagship brands. Now, the company is threatening layoffs at its American plants if it can’t buy out enough workers in the coming weeks.

The Jeep parent is looking to buy out salaried workers across its sites in America, reports the Detroit Free Press. The move would see it cut its white-collar workforce, specifically employees that are not covered by the collective bargaining agreement of the United Autowokers Union. As the Free Press reports:

The automaker, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, told workers in an email Tuesday about its plans, suggesting the possibility of cuts if it doesn’t get sufficient takers but without specifying its headcount reduction goal. The company has previously announced that it has more than 11,000 U.S. non-bargaining unit employees.

“We wanted to give you some advance notice so you can thoughtfully consider whether this opportunity might be of interest to you. As always, we would prefer to meet our strategic headcount objectives through natural attrition and voluntary programs. Transparently, it is important to note that subsequent involuntary actions may be necessary if we do not meet our objectives through voluntary means,” according to the email, obtained by the Free Press and attributed to Tobin Williams, senior vice president of human resources and transformation for Stellantis North America.

The buyout, officially called the 2024 Voluntary Separation Program, will be offered to employees at the vice president level, reports the Free Press, and will come with an “enhanced benefits package” for anyone who accepts the deal.

Stellantis’ call for workers to up and leave comes after worrisome financial results in its latest earnings report. The company saw earnings drop by 48 percent in the first half of 2024. The drop came as a result of falling margins, dwindling shipments and struggles across North America for the company’s stable of brands.

3rd Gear: American-Made Stellantis Cars Need Fixing Fresh From The Factory

A swollen workforce isn’t the only problem facing Stellantis right now, however, as company boss Carlos Tavares has called out the quality of its products rolling off the line here in the U.S. The auto boss is reportedly fed up of having to fix problems with factory-fresh cars, which appears to be more of a problem for U.S.-made models.

According to a report from CarScoops, Tavares has lamented the production of models like the Ram 1500, which he says often needs fixing right off the production line. As CarScoops reports:

The engineer-turned-suit said that the need to fix problems on model like the RAM 1500 the minute they come off the production line and before they can be dispatched both slows delivery times and increases overall production costs. And that’s not his only concern about post-build repairs.

“The third impact is that it may create other quality issues if you don’t do it well,” Auto News reports Tavares telling journalists. “When you are making a repair outside of the main line, you can always fix what you have to fix but create another problem.”

Automakers monitor the number of cars that need work straight off the production line through something called a “direct run rate.” Tavares explained that at plants like the Sterling Heights assembly plant, the rate is below par and “something that we need to fix.”

Quality control is a problem hitting several American automakers right now. There have long been issues with production facilities for Tesla churning out cars with massive panel gaps and other inconsistencies. Now, Stellantis will be hoping it doesn’t take Ford’s lead at the top of the recall list with these issues.

4th Gear: Japan Hits Toyota With Another Certification Violation

Stellantis isn’t the only company facing issues, as Toyota has been hit with yet another certification violation by lawmakers in Japan. The latest violation comes as the Japanese auto industry fights to uncover a string of falsified certificates for safety and emissions that have surfaced at the likes of Toyota, Honda and Yamaha.

Toyota’s latest certification violation relates to seven models that had previously not been identified in the scandal, reports Reuters. According to the site:

The Japanese government issued a corrective order to Toyota Motor on Wednesday following newly discovered violations in the company’s vehicle certification procedures.

The transport ministry said that on-site inspections uncovered widespread, intentional misconduct and irregularities in seven additional models that had not been previously disclosed.

Toyota said in a statement the corrective order urged it to “make drastic reforms to ensure appropriate certification operations”.

The additional models covered in the new order include the Noah, Voxy, Harrier, and Lexus LM, which are still in production at Toyota’s plants in Japan. Three further models were found to have incorrect certificates, but Reuters reports that they are no longer in production.