Things are looking up for Tesla and Elon Musk again. A jury finds that both the company and CEO are off the hook for tweets Musk sent in 2018 about plans to take the company private. The multi-billion dollar bullet they dodged in that case more than makes up for the $140 million the company reports losing on Bitcoin. Plus, Tesla’s stock continues to tick up; it’s now reversed its December plunge.
In good news for Tesla, Ford and GM, the Biden administration has revised its definition of SUV in a way that will allow a number of pricey crossovers to qualify for the $7,500 EV tax credit.
Ford fails to turn a profit in 2022, which its leaders concede reflects problems with its cost structure. Meanwhile, EV and other mobility companies that were once Wall Street darlings announce major layoffs: Arrival cuts 50%, Getaround axes 10%, and Rivian lays off 6%.
Lyft announces a big plan for docked scooters, Minneapolis’ transit agency tries to crack down on fare cheats, and the Biden administration announces its first round of infrastructure “mega-grants,” which earns mixed reviews from advocates of multimodal mobility. Finally, why is it so hard to build things in America these days?
Elon & Tesla prevail in court: A jury finds that Elon Musk is not liable for any losses incurred by shareholders due to comments he made on Twitter in 2018 about taking Tesla private. The case hinged largely on whether Musk was knowingly misleading the public when he claimed that he had secured the necessary funding to purchase the company. The stock initially skyrocketed in response to the tweets but then later plunged when it became apparent the deal wouldn’t materialize. The plaintiffs argued Musk didn’t have deal sewn up and knew he couldn’t get the financing. Musk and Tesla argued that he likely could have; the jury agreed. The upshot is that Tesla and Musk dodged a potentially multi-billion dollar judgment. Now they can breathe easy and move on to their many other legal battles…
…but loses on bitcoin: Tesla lost $140 million on bitcoin in 2022. The company purchased $1.5 billion of the cryptocurrency in the first quarter of 2021.
Uncle Sam’s new definition of SUV: The U.S. Treasury Department has revised its vehicle classifications in a way that will allow some large electric crossovers to qualify for the $7,500 tax credit. The Inflation Reduction Act established a $55,000 price cap for sedans and wagons to get the credit, but for SUVs the cap is $80,000. The department’s initial classifications meant that the Cadillac Lyric, the Ford Mustang Mach-E and the Tesla Model Y were too expensive to qualify. Now, however, they are classified as SUVs and are well below the price threshold. Whether enough of their parts and batteries are made in America to qualify remains an open question…
Ford flops in 2022: The Detroit giant fell far short of its own targets and Wall Street’s projections, posting a $2 billion loss for the year and selling 100,000 fewer vehicles than expected. That’s way down from the roughly $18 billion profit it turned in 2021. CEO Jim Farley did not downplay his disappointment, saying that it should have been a much better year for the company. The company made mistakes, including with supply chain management, that “left $2 billion in profits on the table,” he told shareholders. CFO John Lawler said the company’s cost structure is “not competitive” and its “quality is not where it should be.” Granted, the company would have been profitable if not for the $7.4 billion it lost due to its stake in Rivian and the $2.8 billion it lost from disbanding Argo AI.
Lyft unveils docked scooter plans: The ride-hailing company lays out a vision for integrating e-scooters into its more than 100,000 bike-sharing docks in cities around the U.S. This month it will deploy an additional 1,000 scooters in Washington D.C., where it already offers scooter-sharing, and potentially add new docking stations. It will gradually do the same in Chicago, Denver and Minneapolis, where it also operates scooter-sharing. Focusing on docked scooters, rather than free-standing ones, distinguishes Lyft from the other major scooter operators, but it believes that the predictability and tidiness of docks will appeal to both users (particularly those who already use Lyft ride-hailing) and city regulators.
The case for a new Philly subway line: The Philadelphia Inquirer bristles at suggestions from local leaders that there’s not enough money to build a proposed subway line which, according to projections, would carry 124,000 riders and divert 80,000 car trips. The paper points to the billions of dollars allocated for local transit projects in the bipartisan infrastructure law and urges the local transit agency to mount a campaign for its share of the pie. It also points to a $12 billion state surplus that could help.
…and for new fare enforcement in Minneapolis: The Minneapolis Star Tribune bemoans the lack of consequences for fare hoppers on regional light rail, urging for a change in the law that would allow officials besides police officers to issue tickets in an effort to shore up the agency’s funding.
Arrival axes half its workforce: The embattled EV maker is cutting half its workforce in its third restructuring since July. The move, which will reduce its global headcount to about 800, will cut costs by $30 million a quarter. In recent months the company has shifted its attention from producing electric buses aimed at the European market to smaller vans in the U.S.
…while Getaround gets rid of 10%: The car-sharing SPAC, which went public in early December and immediately saw its share value plunge from $10 to less than $1 in a matter of days, is laying off 10% of its 420 employees.
…and Rivian cuts 6%: The former stock market superstar laid off 6% of its 14,000 employees in July and now it announces that it will cut another 6%. CEO RJ Scaringe describes the cuts as aimed at “continuing to improve our operational efficiency.” Rivian is now trading at less than $20, down from about $60 a year ago and $129 in November 2021.
San Francisco v. Robots: Days after a self-driving car operated by Waymo stopped in the middle of a busy intersection, snarling traffic for two miles, the Alphabet-owned company and its competitor, GM-owned Cruise, are pushing to expand their driverless operations in San Francisco and elsewhere, despite stiff resistance from local officials. The New York Times talks to experts about the implications.
Why can’t America build things anymore? In the past half-century, the U.S. construction sector has become significantly less productive. Simply put, it takes much more time and money to build everything from housing to roads and bridges than it did a few decades ago. Ezra Klein examines the data and asks several experts why this is the case, and what it means for the American future.
Biden’s first round of mega-grants include some mega-wins and mega-fails: Kea Wilson at StreetsBlog walks us through the first nine recipients of grants from the new National Infrastructure Project Assistance program. Some of the money is going to much-needed improvements to transit and pedestrian and bike infrastructure, but much of it is going to fund yet more highway expansions based on the largely discredited notion that more car lanes will reduce congestion and reduce emissions. How can they keep saying this with a straight face?
Enjoy the Week in Review? Get it delivered directly to your inbox by signing up for the CoMotion>>NEWS newsletter.