2.5 Million New Cars Are Just Sitting On Dealer Lots

Good morning! It’s Monday, December 11, 2023, 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.

1st Gear: Dealer Can’t Move Cars Right Now

Dealer inventories for new vehicles in the U.S. rose by another 100,000 units in November. That means there are around 2.5 million vehicles just sitting on dealer lots right now, according to data from Cox Automotive.

That works out to about a 70-day supply of vehicles and represents a gain of about 890,000 vehicles over just a year ago. It’s the dealers’ fullest new vehicle stock since early spring 2021. From Automotive News:

Cox calculates days’ supply using the last 30 days’ sales rate, which it said was running about 15 percent above the same period a year ago.

Before the COVID-19 pandemic, the U.S. auto industry had historically maintained inventory levels between roughly 3 million and 4 million. Inventory declined sharply in spring 2021 to less than 1 million vehicles as sales outpaced production that was still stymied by component supply disruptions and shortages from the pandemic. It stayed at that level for more than a year before beginning a steady recovery in summer 2022.

The pace of the production recovery has picked up in 2023, however.

All seven automakers that report monthly U.S. sales saw their days’ supply increase in the previous month, according to the Automotive News Research & Data Center. Among them, Ford Motor Co. had the highest days’ supply, while Subaru of America had the lowest.

You can color me absolutely shocked that new cars, as unaffordable as ever, aren’t selling quickly right now. I just cannot believe that in a time where everything costs a lot more than it used to, new car sales are being hurt.

2nd Gear: Telsa Says CA Is Cool With “Autopilot”

Tesla is defending its use of “Autopilot and “self-driving” for its driver assistance programs by arguing California has already investigated the naming schemes of the two systems in 2014 and 2017 and didn’t do anything about them then. It’s a bold strategy.

“The DMV chose not to take any action against Tesla or otherwise communicate to Tesla that its advertising or use of these brand names was or might be problematic,” Tesla said. From Reuters:

The electric car company run by billionaire Elon Musk was accused last year by California’s Department of Motor Vehicles of falsely advertising its Autopilot and Full Self-Driving features as providing autonomous vehicle control.

The DMV is seeking remedies that could include suspending Tesla’s license to sell vehicles in California, Tesla’s largest U.S. market, and requiring the company to make restitution to drivers.

[…]

The DMV also in 2016 decided not to prohibit the use of “self-driving” and similar language, when drawing up regulation about statements on autonomous technology, Tesla said. Legislation on the topic also removed a prohibition on the terms that was in an earlier DMV draft, Tesla said.

“Tesla relied upon Claimant’s (the DMV’s) implicit approval of these brand names,” the company said.

In the 2022 complaints, the DMV said Tesla was misleading prospective customers with advertising that was exaggerating how much its ADAS system could really do.

According to Tesla’s website, the technologies “require active driver supervision,” with a “fully attentive” driver whose hands are on the wheel, “and do not make the vehicle autonomous.”

The DMV has said Tesla’s disclaimer “contradicts the original untrue or misleading labels and claims, which is misleading, and does not cure the violation.”

Based solely on how badly every Tesla I’ve ever been in has held up, I do not have much faith that its ADAS systems would pass muster, either. If you can’t get a rear suspension to not be a bouncy mess, then what hope does your super advanced driver assist software have?

3rd Gear: Russian Airline With Stuck Plane Sues Canada

Remember that Russian cargo plane stuck in Canada? Well, it’s still there, and now a court battle could determine exactly what’ll happen to it. From The Wall Street Journal:

Russian airline Volga-Dnepr has sued the Canadian government, asking a federal court to declare that Canada’s sanctions against it are invalid. The court could determine what happens to the airline’s massive Antonov An-124 cargo plane, one of only 26 in the world, which has been stuck in Toronto since Canada closed its airspace to Russian planes in February 2022.

The Canadian government sanctioned Volga-Dnepr in April and ordered the plane to be seized in June. Canada said taking the aircraft would “put additional pressure on Russia to stop its illegal war against Ukraine by straining its economic system and limiting resources that fuel the war.”

In its lawsuit, filed last month, Volga argued that it was wrongly put on the sanctions list because, contrary to Canada’s assertions, it isn’t involved in Russia’s invasion and didn’t provide any aviation service to Wagner Group, the Russian paramilitary organization.

[…]

The plane, which is large enough to carry satellites, train engines and wind turbines, landed in Toronto the day before Canada closed its airspace to Russian aircraft in response to the invasion of Ukraine. The plane had arrived from China to deliver personal protective equipment, but it couldn’t take off again.

Since the plane landed, it has been parked on the tarmac on the east side of the airport. According to the lawsuit, the plane is “suffering from exposure to the elements and receiving no maintenance whatsoever.” Awe, poor little guy. Will someone please think of the airplane?

Well, as it turns out, someone is thinking of the airplane, and that someone is Ukraine’s prime minister, Denys Shmyhal. In April he apparently said the plane would be transferred to Ukraine.

Western bans on Russian aircraft have limited the use of An-124 planes. There are now only six of the aircraft flying in the West. Five of the planes are owned by Ukraine’s Antonov Airlines, and another is owned by the United Arab Emirates-based Maximus Air.

Right now, it’s unclear who exactly is paying the parking fees on the plane, which accumulate at a rate of $0.57 per minute. That works out to about $530,000 since the plane was grounded. It’s not me, I’ll tell ya that much.

4th Gear: Nordic Pension Funds Want Telsa To Respect Collective Bargaining

Telsa’s union and collective bargaining saga in Sweden is far from over as a group of Nordic pension funds sent a joint letter to the automaker asking it to respect collective bargaining for its employees in the region. From Reuters:

Tesla is facing a backlash from unions and some pension funds in the region over its refusal to accept a demand from Swedish mechanics for collective bargaining rights covering wages and other conditions.

“Tesla’s attitude against the right to collective bargaining is of deep concern,” said a draft of the letter to the carmaker’s management provided by Norway’s largest pension fund KLP.

The Nordic region’s labour market model combines high job mobility with income security for the unemployed through a long tradition of dialogue between employer associations and labour unions.

“(This model) has enabled the Nordics to thrive as one of the most prosperous and harmonious regions worldwide,” the draft letter said.

Sweden isn’t the only place Tesla isn’t unionized. CEO Elon Musk, a famous union hater, has been trying to convince his nearly 127,000 workers to not unionize all over the world. Other Swedish industries aren’t taking this lightly.

A labour dispute between Tesla and a Swedish trade union has sparked sympathy strikes across the region and prompted some pension funds to sell their shares in the company.

Tesla, which has revolutionised the electric car market, says its Swedish employees have as good or better terms than those the union is demanding.

“As investors in Tesla, we recognise the company’s great contribution to the electrification of the transport sector, but at the same time call on the management to seek a resolution to the conflict,” Rasmus Bessing, head of responsible investments at PFA, Denmark’s largest non-state pension fund, told Reuters.

“PFA has chosen to be a co-signatory of a letter to the management of Tesla, where we draw attention to the fact that in Sweden and the other Nordic countries, there is a long tradition of collective agreements being entered into in a large part of the labour market,” Bessing said.

The deadline to co-sign the letter was extended to this week due to high interest from investors, according to Kiran Aziz, head of responsible investments at KLP.

Sweden’s Folksam and Denmark’s PensionDanmark said they will also sign the letter.

Norway’s sovereign wealth fund, Tesla’s 7th biggest shareholder with a $6.8 billion stake, last week said it would continue to push the company to respect labour rights such as collective bargaining.

Tesla is going to have its work cut out for it if it wants to keep unions at bay. Would it be easier to just give the workers what they deserve? Sure, but where’s the fun in that?

Reverse: Alexa, Play “Flight Of The Valkyries”