Good morning! It’s Friday, August 9, 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.
1st Gear: Tesla Orders Canceled Over Musk’s Support For Trump
For months, Tesla boss Elon Musk has been throwing his support behind convicted felon Donald Trump and his campaign for reelection. This culminated in July when Musk officially endorsed the Trump campaign and reportedly threw millions at the reelection effort. Now, it sounds like the efforts may be coming to bite Musk’s company Tesla, with orders being canceled as a result of his close ties to the campaign.
For the first time, a canceled order for Tesla cars has been blamed on Musk’s ties to Trump, reports Fortune. The sale was a corporate order from a drugs company, which has now canned the order due to “Musk’s vocal support of Trump.”:
“Elon Musk makes no secret of his support for Donald Trump. Trump has repeatedly described climate change as a hoax—this attitude is in stark contrast to Tesla’s mission to contribute to environmental protection through the production of electric cars,” Raoul Rossmann, Rossmann’s spokesman for the management, said in a statement.
Thirty-four of Rossmann’s 800 vehicles are Teslas, the company’s spokesperson told Fortune. The company plans to continue using those vehicles for “sustainability and resource conservation.”
Rossmann is the first major business to cite Musk’s political stance as a reason to halt future Tesla purchases. Other European companies have dropped orders from Tesla for different reasons. For instance, software giant SAP said it would stop offering Teslas as company cars for employees as Musk’s numerous price cuts add uncertainties, unlike other car makers.
Musk’s support for Trump has already hit Tesla’s reputation among buyers here in America. Democrats are reportedly looking to distance themselves from anything related to Trump and Republicans aren’t really that bothered about buying EVs. This isn’t a good move for a company that’s struggling with dwindling profits as a result of price cuts and slowing sales.
On top of that, Musk’s support for Trump isn’t the only reason buyers are offloading their Teslas. Earlier this year, rental giant Hertz announced a massive effort to sell off its fleet of electric vehicles as it tackled increased repair bills and a cut to its sale profits as a result of the never ending EV price war that Tesla started.
2nd Gear: BMW Recalls 100,000 Cars Due To Starter Fault
August is proving to be a big month for recalls after another deadly airbag issue was found to be impacting millions of cars across America, Hyundai recalled 50,000 Santa Fe SUVs and Tesla patched a bug impacting more than 1.6 million cars. Now, BMW is getting in on the action with a recall affecting more than 100,000 crossovers.
The German automaker has recalled 105,588 X5, X6, X7, 7 Series, 8 Series and 3 Series models as a result of issues with the cars’ starters, reports Automotive News. A software fault in the engine starter on impacted models could cause damage to the cars and prevent them from starting up. As Automotive News reports:
If drivers repeatedly attempt to start the engine for extended periods, it may cause the motor to overheat from an electrical overload. An overheated starter motor could ignite nearby flammable material in the engine compartment, increasing the risk of a fire, according to the NHTSA filing.
The recall covers the 2019-20 BMW X5; the 2019-20 X7 xDrive40i; the 2020-21 7 Series Sedan; and the 2020 X6, 8 Series Convertible, 8 Series Coupe, 8 Series Gran Coupe and 3 Series sedan.
BMW first became aware of the issue in March 2023 after receiving reports of engines not starting and thermal damage in the engine compartment, according to the NHTSA filing. By August 2023, potential fault patterns were identified. Further reviews this year linked specific engine starter configurations that could be associated with the reported cases of the fault. On July 25, BMW decided to initiate a voluntary safety recall.
Only 12 instances of the issue have been reported in the field, but so far no injuries have been reported as a result of the software glitch. Thankfully, no hardware is impacted by the problem and BMW’s fix will simply involve a quick software update on every car listed in the recall.
If you are worried that your car might be affected by a recall, there are a few easy ways to check if it’s the case. First up, the NHTSA has a super handy app that you can use to see if your vehicle is impacted by a recall, or you can head to the regulator’s website and plug your VIN into its recall search tool.
3rd Gear: Delta Lost $380 Million In Sales Over System Failings
Delta has been reeling since a computer outage sparked by antivirus software CrowdStrike took out its systems. Now, it transpires that the ongoing software issues Delta has suffered could cost it more than $380 million.
Delta is expecting lost sales as a result of the CrowdStrike outage to surpass $380 million, reports Bloomberg. The outage, which hit at the end of July, forced the carrier to cancel thousands of flights. Now, the airline is hoping to recoup some of those losses in a legal fight with CrowdStrike:
Delta, which canceled about 7,000 flights over several days following the July 19 outage, previously said it expected about a $500 million impact and had hired the law firm of prominent attorney David Boies to represent it. The airline on Thursday confirmed that it was pursuing legal claims against CrowdStrike and Microsoft Corp. to recover damages.
CrowdStrike’s outage caused a “catastrophic shutdown” of more than 8 million computers around the world, including 37,000 at Delta, Boies said in a letter Thursday to the technology company’s attorney. The disruption affected more than 1.3 million customers of the airline, and about 60% of its “mission critical” applications, including backup systems, depend on the Microsoft Windows operating system and CrowdStrike, he said.
Delta, CrowdStrike and Microsoft are scrapping over who’s to blame for the lost sales and refunds issued by the carrier. This follows allegations from the two computer companies that Delta turned down their assistance in the fallout of the outage, which was the result of a software issue pushed out to Microsoft systems around the world.
When the CrowdStrike outage hit, it impacted hundreds of airports and carriers around the world, resulting in the cancellation of almost 50,000 flights that left countless passengers stranded.
4th Gear: Toyota Cuts Output Targets After Factory Shutdowns
While Delta cuts profit forecasts, Toyota is also setting things on the chopping block. The automaker has cut its output goals for the year after investigations in Japan forced it to pause production at some factories.
Toyota was forced to temporarily cease production while an investigation into vehicle certification was ongoing. The slowdown will reportedly hit its output for the year, with Reuters reporting that the company has slashed its 2024 targets by five percent:
Toyota Motor has downgraded its global vehicle production plan for the calendar year 2024 by about 5% due to output suspension at domestic factories, Chubu Keizai newspaper reported on Thursday.
The Japanese automaker has told major suppliers its worldwide vehicle production is expected to be 9.8 million units, versus 10.3 million expected previously, the newspaper reported without citing sources.
Toyota, which is the world’s largest automaker by volume, assembled more than 10 million cars in 2023. That figure was almost a million cars clear of second-place Volkswagen Group. The downgrade in projections for 2024 marks the first time in four years that Toyota is targeting a production number that’s lower than the previous year’s targets, reports Reuters.
In fact, if Toyota hits its 9.8 millions cars goal, it will be the firm’s lowest annual output since 2022 when the automaker was working to rebound from slowing sales during the Covid-19 pandemic.
