Thursday, September 28, 2023

President Biden amid the union fight and Tesla’s push into the electric vehicle (EV) market

President Joe Biden finds himself in a difficult situation as auto workers declare a strike against Detroit’s three major automakers: Ford, General Motors and Stellantis. This puts Biden in a dilemma as he positions himself as a pro-union president while supporting the production of environmentally friendly electric vehicles (EVs). Meanwhile, Tesla boss Elon Musk, who is not friends with the president, is ready to take advantage of Detroit’s difficulties and expand his market share.

Biden has largely overlooked Tesla’s dominance in the electric vehicle market due to its status as a non-union company and Musk’s opposition to unions. He has ignored Tesla and Musk at multiple meetings and events, leading to tense standoffs between the billionaire CEO and the White House. However, as Tesla’s market share continues to grow, Biden can no longer ignore its presence.

Recently, the president’s senior advisers hosted Musk at the White House to discuss electric vehicle initiatives. Tesla then announced that it would open its charging stations to non-Tesla vehicle owners with the support of federal funds. While other automakers have announced plans to build charging stations, the current network is often unreliable or poorly located. As a result, Ford, GM and other companies have signed a deal with Tesla to use its broader network of chargers, effectively giving themselves over to the company.

Analysts at Wedbush Securities believe Tesla is the clear winner in this situation. As a non-union company, it is not at risk of strikes, unlike its competitors in Detroit. Additionally, depending on the outcome of the strikes, Tesla will benefit from the rising costs and complexity facing Detroit’s Big Three. The UAW’s demands for a significant wage increase could make it even harder for Detroit’s Big Three to compete on price.

While Ford argues that these lawsuits would double its labor costs, UAW President Shawn Fain claims that labor costs are only 5% of the cost of a vehicle. He claims automakers can double wages without raising vehicle prices and still make significant profits.

Nation World News Desk
Nation World News Desk
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