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Why VW and Rivian are teaming up to launch a $21,500 EV

Volkswagen new EV
Volkswagen unveiled its ID.EVERY1 concept car on Wednesday.

Volkswagen

  • VW unveiled a $21,500 EV on Wednesday, but don't expect it to come to the US anytime soon.
  • The compact ID.EVERY1 will be the first car to incorporate software from EV startup Rivian.
  • The two companies struck a $5 billion partnership last year, and both face their own looming challenges.

Volkswagen and Rivian are teaming up on an ultra-cheap EV, and once again, Americans can only stare across the Atlantic in envy.

After several months of teasing, Volkswagen unveiled the ID.EVERY1 on Wednesday, with a version of the compact electric car set to go on sale for 20,000 euros ($21,500) in Europe by 2027.

The 13-foot long, four-seater EV packs a lot into a small package, including 155 miles of range and a customizable dashboard β€” but the most interesting thing about it is what's going on behind the scenes.

The production version of the ID.EVERY1 will be the first vehicle to include software developed with EV startup Rivian, a Volkswagen spokesperson confirmed to Business Insider.

The two companies announced a deal last year that would see the German car giant invest over $5 billion in Rivian and form a joint venture to develop next-generation software and EV technology.

Volkswagen new EV
The production version of the ID.EVERY1 will go on sale for 20,000 euros ($21,500) in Europe by 2027.

Volkswagen

That deal has quickly become a vital part of Volkswagen's strategy to turn its crisis-stricken car business around.

The nearly century-old automaker has seen sales collapse in Europe and China, its two most important markets, thanks to weaker-than-expected demand for EVs in the former and brutal competition from local rivals in the latter.

VW also weathered a bruising fight with worker's unions over restructuring plans last year and has vowed to cut 35,000 jobs by 2030.

The company now faces the prospect of its Chinese competitors selling their affordable EVs in its backyard, with the likes of BYD and Xpeng eyeing ambitious expansion plans in Europe.

Just as VW faces many of the same problems as other legacy automakers, Rivian's challenges have the same flavor as those of other fledgling EV firms.

The startup, known for its sporty electric trucks and SUVs, plans to release cheaper EVs in the coming years but is still losing nearly $40,000 on every vehicle it sells.

Rivian also faces the looming disruption of Trump ending federal support for EVs, and is battling a slowdown in electric vehicle sales growth which has seen several electric vehicle startups that went public around the same time file for bankruptcy in recent months.

The deal with VW gives Rivian a crucial financial lifeline as it scales up production.

Volkswagen EV
The EV will be the first VW vehicle to feature software developed with Rivian.

Volkswagen

For VW, it allows the German automaker to incorporate Rivian's electric vehicle and software know-how into its lineup of affordable EVs, starting with the ID.EVERY1, which will compete against the coming wave of affordable Chinese EVs packed with advanced technology in Europe.

Other European automakers such as Renault and Stellantis are also rolling out their own affordable electric vehicles β€” but there is no sign of the wave of cheap EVs reaching the US just yet.

While a production version of the ID.EVERY1 is set to launch in Europe in 2027, VW did not provide any details about a US launch.

That means the ID.EVERY1 is likely to join the growing number of affordable EVs that are available in Europe but not the US. With the prospect of tariffs on European cars and the end of government subsidies for EVs being floated by the Trump administration, that is unlikely to change anytime soon.

Read the original article on Business Insider

Why Trump tariffs could wipe out Ford and GM's profits

Ford Mustang Mach-E electric vehicles on a dealer lot
Ford Mustang Mach-E electric vehicles β€” which are built in Mexico β€” on a dealer lot.

Scott Olson/Getty Images

  • Trump's tariffs on Mexico and Canada are now live, and it's bad news for the Detroit "Big Three."
  • Barclays analysts said the levies could wipe out "effectively all" of Ford, GM, and Stellantis' profits.
  • All three have factories in Mexico, which is a major hub for the US auto industry.

Trump's tariffs are now a reality, and that is bad news for the Detroit automakers.

The 25% levies on all goods imported from Canada and Mexico, which went into effect yesterday, could have a devastating impact on the Detroit "Big Three" of Ford, GM, and Stellantis, analysts at Barclays have warned.

"In short, without any adjustment from automakers (i.e. no price increase, no adjustment in production plans), we estimate it could wipe out effectively all profits for the Detroit Three," Barclays analysts Dan Levy and Josh Cho wrote in a note on Tuesday.

The US auto industry is heavily entangled with its neighbors to the north and south, with car components often crossing the border multiple times during production.

As such, the tariffs enacted by President Donald Trump β€” which are now finally live after being paused for a month in February β€” will impact all automakers.

The Alliance for Automotive Innovation, which represents nearly every major US automaker, warned on Tuesday that the import taxes could see car prices rise by as much as 25%, while data forecaster S&P Global estimated that a third of vehicle production in North America could be cut by next week.

Shares in Ford, GM, and Stellantis all fell on Tuesday amid broader market turmoil on the tariff news.

Barclays analysts said that while no automaker will emerge unscathed from the tariffs, Ford, GM, and Stellantis β€” which includes brands such as Jeep and Chrysler β€” were the most exposed.

All three have factories in Mexico, which has become a hub for automakers thanks to its low labor costs, and produce key models for the US market in the country.

The analysts estimated the tariffs would add around $3,000 to the cost of a vehicle with half its parts produced in Mexico or Canada. They warned that moving production to the US would be difficult due to high labor costs and long lead times on capacity adjustment.

Ford, GM, and Stellantis did not immediately respond to requests for comment from Business Insider.

Read the original article on Business Insider

Tesla is offering free charging to people who buy the most expensive Cybertrucks

Elon Musk standing by a Cybertruck.
Tesla CEO Elon Musk unveiling the Cybertruck at an event in 2019.

FREDERIC J. BROWN/AFP via Getty Images

  • Tesla is offering some Cybertruck buyers free Supercharging as it grapples with stagnant demand.
  • The offer applies to new Foundation Series Cybertrucks and covers the entire period of ownership.
  • It's the latest incentive Tesla has given amid underwhelming sales of the electric truck.

Tesla is offering some Cybertruck buyers free Supercharging as it grapples with sluggish demand for Elon Musk's electric pickup.

The offer applies to Foundation Series Cybertrucks β€” which start at about $95,000 β€” ordered on or after February 28 and is valid for the entire period of ownership, per a notice on Tesla's website.

The incentive cannot be transferred to other vehicles or owners and applies only to Tesla-branded Superchargers. The EV maker also says it reserves the right to revoke free Supercharging in the event of "excessive charging."

Tesla's website didn't elaborate on what would be excessive, though it separately said the offer excluded vehicles used for commercial purposes such as ride-hailing. Tesla did not respond to a request for comment, sent outside normal working hours.

There's no standardized cost for charging a Cybertruck, as prices vary between chargers across the US. Regardless, free lifetime charging would represent a significant cost saving for any Tesla user.

The incentive is the latest Tesla has introduced as it tries to drive demand for the Cybertruck.

The company began offering up to $1,600 off new Cybertrucks and a $2,600 discount on used vehicles in January and slashed leasing prices to $750 a month in recent weeks.

Tesla moved some workers off its Cybertruck production lines at its Austin factory at the start of the year, employees told Business Insider.

Sales of the electric truck, which had a torturous production ramp and launched at a higher price tag than expected, have been broadly underwhelming.

Tesla sold 38,965 Cybertrucks last year, according to data from Cox Automotive.

That was enough to make the stainless steel-clad EV the best-selling electric pickup truck in the US, but it was well below analyst expectations in late 2023 that Tesla would ship 48,500 units in 2024.

Demand also slowed toward the end of the year, with Tesla delivering 12,991 Cybertrucks in the fourth quarter of 2024 compared with 16,692 in the previous quarter.

The offer of free Supercharging for some Cybertruck owners has come as Tesla faces challenges on numerous fronts.

The automaker has seen sales collapse in Europe and is dealing with a high-profile backlash against Musk, its CEO, who has taken a prominent role in cutting the federal workforce via the White House DOGE office.

That backlash has made the Cybertruck, which is hardly inconspicuous at the best of times, a target, with some owners complaining that their vehicles have been vandalized and defaced with slogans criticizing Musk.

Read the original article on Business Insider

BYD's latest challenge to Tesla is a drone on the roof

BYD drone
BYD's drones are housed in a compartment on the vehicle's roof.

Auto Media/YouTube

  • BYD unveiled a new vehicle-mounted drone for its EVs on Sunday.
  • The Lingyuan drone takes off from a retractable hanger and travels up to 33 miles an hour.
  • Chinese EV makers are locked in a tech arms race as they try to win customers with futuristic features.

BYD's latest trick for taking on Tesla in China's brutally competitive auto market is built-in drones.

The Chinese EV giant unveiled a vehicle-mounted drone system on Sunday, allowing drivers to take sweeping panoramic videos.

The Lingyuan drone system, which BYD developed with Chinese drone maker DJI, will be offered on models as a 16,000 yuan ($2,200) optional extra.

The drones are housed in a roof compartment, can take off and land from a moving car and follow the vehicle at speeds of up to 33 miles an hour.

BYD's premium Yangwang U8 SUV, which costs about $150,000, already includes an onboard drone, but Lingyuan will add the feature to more affordable vehicles.

The first models to get the system include BYD's $27,000 Sealion 07 DM-i hybrid and $40,000 Tang L electric SUV.

The BYD Sealion 7 was unveiled at the Paris Auto show
The BYD Sealion 7 will be one of the first models to include the optional drone.

Business Insider

Drones are the latest high-tech extra offered by a Chinese automaker to make their cars stand out in the country's intensely competitive auto industry.

While its rivals have offered features such as AI-assisted parking and the ability to voice-control household appliances, BYD has led the way when it comes to smart features.

The company recently showed off a supercar that can "jump" over potholes, and last month announced that it would install advanced "God's Eye" self-driving technology in all its EVs, including the $9,500 Seagull, at no extra cost.

Weeks later, Tesla rolled out its own self-driving tech to some drivers in China. Elon Musk's automaker, which is battling BYD for global EV dominance, offers Chinese drivers self-driving features for $8,800 extra β€” only slightly less than the cost of BYD's Seagull.

BYD sales are booming following strong demand for its affordable EVs and hybrids. It sold 318,000 vehicles in February, up 161% on the same month last year, with a record 67,000 sales outside China.

Read the original article on Business Insider

DOGE job cuts will slow down robotaxi rollout, says fired federal worker

Tesla Cybercab press image
Elon Musk unveiled Tesla's "Cybercab" robotaxi last year.

Tesla

  • Nearly half the team regulating self-driving cars was fired in the layoff of federal workers last month.
  • One terminated NHTSA employee said the firings would slow down companies trying to deploy robotaxis, including Tesla.
  • Tesla CEO Elon Musk is leading efforts to slash the federal workforce with DOGE.

Job cuts imposed by Elon Musk's DOGE will slow down the deployment of self-driving vehicles on US roads, a terminated federal worker told Business Insider.

The Office of Automation Safety, which develops regulations for autonomous vehicles, lost three of its seven employees during a Valentine's Day cull of government workers, a person with knowledge of the cuts said.

The office is part of the National Highway Traffic Safety Administration (NHTSA), which regulates vehicle safety and lost about 4% of its workers in the February 14 layoffs.

"There was a massive push in the government over the past year to hire people from the actual autonomous vehicle industry to assist in regulating and understanding it. Since the government fired all recently hired employees, almost all of that private sector knowledge is now gone," the terminated worker said.

They said the cuts had left the office "extremely understaffed" with less specialized knowledge about the autonomous vehicle sector.

BI has viewed the person's termination letter. They did not want to be named for fear of affecting their future employment prospects.

The Washington Post previously reported on the firings. They were part of a wider push that saw thousands of probationary federal workers lose their jobs. They had typically been in their roles for less than two years.

It comes as DOGE moves forward with its efforts to cut the size of the government, despite legal opposition and concern that Musk's efficiency efforts are targeting agencies that regulate Tesla, SpaceX, and his other companies.

Robotaxi roadblock

Companies building autonomous vehicles face a daunting patchwork of state and federal regulations.

Those wanting to deploy fully driverless vehicles that lack traditional controls such as steering wheels or pedals, such as Tesla's Cybercab or the now-scrapped Cruise Origin vehicle, need to apply for an exemption to federal regulations.

The exemption process, which is handled by the Office of Automation Safety, can be lengthy. Cruise waited two years for permission to deploy the Origin before ultimately scrapping it.

Musk has called for an overhaul of federal autonomous vehicle regulations, telling investors last October he would "try to help make that happen" through his role at DOGE.

In November, Bloomberg reported that easing rules around self-driving cars was a major priority for the incoming Trump administration.

Tesla is gearing up to deploy fully driverless vehicles for the first time in June with a robotaxi service in Austin.

Musk's automaker is also facing NHTSA investigations into its Full Self-Driving and Autopilot assisted driving tech, although those investigations are handled by a separate department to the Office of Automation Safety.

The job losses risk ceding the initiative on robotaxis to China, which is also heavily invested in developing autonomous vehicles, the terminated NHTSA employee said.

"When they do stuff like this, where they claim that it's a regulatory goal to further the deployment of autonomous vehicles, but then they fire the team that's responsible for that β€” that's just going to let China get further ahead," the individual said.

An NHTSA spokesperson said despite the layoffs, the agency's workforce remained "considerably" larger than it was at the start of the Biden administration.

"We have retained positions critical to the mission of saving lives, preventing injuries, and reducing economic costs due to road traffic crashes. We will continue to enforce the law on all manufacturers of motor vehicles and equipment, in accordance with the Vehicle Safety Act and our data-driven, risk-based investigative process," they told BI.

Have a tip? Contact this reporter via email at [email protected] or Signal at tcarter.41. Use a personal email address and a nonwork device; here's our guide to sharing information securely.

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Tesla sales almost halved in Europe last month and were surpassed by a Chinese rival

Tesla Berlin factory
Tesla's German factory is on the outskirts of Berlin.

Sean Gallup/Getty Images

  • Tesla's European sales plunged in January, falling 45% compared with the same month in 2024.
  • The decline came despite a rise in EV sales in Europe, with Tesla falling behind China's SAIC Motor.
  • Elon Musk has waded into European politics in recent months, backing far right-wing German party AfD.

Tesla sales in Europe plunged in January, falling 45% compared with the same month last year, while overall sales of electric vehicles increased.

Elon Musk's automaker sold 9,945 vehicles last month in the European Union and UK, Iceland, Liechtenstein, Norway, and Switzerland, figures from the European Automotive Manufacturers' Association showed. There were 18,161 sales in January 2024.

In December, Tesla sold 44,697 vehicles across the same markets.

Tesla had a 1% market share in January, down from 1.8% in the same month last year.

That decline put it behind China's SAIC Motor, whose sales grew 37% to nearly 17,000 vehicles in January under brands including MG. The company had a 2.3% market share, up from 1.7%. It sells petrol and hybrid cars as well as EVs.

Chinese EV giant BYD also outsold Tesla in the UK for the first time in January, according to separate industry data, as China's EV makers continue to put Musk's company under pressure.

Tesla's shares were down as much as 8% on Tuesday, taking its market capitalization below the $1 trillion mark.

The EV giant, which recorded its first annual fall in sales last year, is changing over assembly lines at its factory near Berlin as it prepares to start building the revamped Model Y this year.

Overall sales of battery electric vehicles jumped 34% to 124,341 in Europe last month, giving the category a 15% market share, up from 10.9% in January 2024.

Tesla's declines follow Musk's decision to wade into European politics in recent months, and he endorsed Germany's far-right AfD party ahead of last Sunday's elections.

The AfD won the second-highest share in the election, but seems unlikely to form part of the next government.

The billionaire spoke virtually at campaign events for the anti-immigrant and anti-European Union party. AfD leader Alice Weidel said Musk called to congratulate her after the party's historic election performance.

Musk's involvement in European politics has sparked public backlash, protests, and isolated acts of vandalism.

Last month, activists projected an image of a controversial gesture the Tesla CEO made at an event marking President Donald Trump's inauguration, which some interpreted as a fascist salute, onto the company's Berlin factory. A Tesla showroom in the Netherlands was also vandalized with spray-painted swastikas, Politico reported.

Tesla did not immediately respond to a request for comment.

Read the original article on Business Insider

The agency that regulates vehicle safety — and Elon Musk's Tesla — is another target of DOGE layoffs

Elon Musk chainsaw
Elon Musk brandishes a chainsaw at the Conservative Political Action Conference.

SAUL LOEB/AFP via Getty Images

  • The agency responsible for regulating vehicle safety has cut 4% of its workforce.
  • The NHTSA has multiple investigations into Tesla including two about its self-driving tech.
  • The firings come as Elon Musk's DOGE makes sweeping cuts across the federal government.

The agency responsible for regulating vehicle safety and is investigating Tesla has cut staff as Elon Musk's DOGE continues to make sweeping changes to the federal workforce.

The National Highway Traffic Safety Administration fired 4% of its workers on February 14, an individual with knowledge of the cuts told Business Insider.

The agency, which is responsible for ensuring vehicle safety in the US, has three active investigations into Tesla.

These include an investigation into Tesla's Actually Smart Summon (ASS) feature, which allows drivers to fetch their cars remotely using their smartphone, and investigations into the Full-Self Driving and Autopilot technology.

Cuts to the NHTSA, which is part of the Department of Transportation, come as the Trump administration continues efforts to slash the federal workforce, with Elon Musk's Department of Government Efficiency leading the charge.

The new administration fired thousands of probationary federal employees, who have typically been in their roles for less than two years, across multiple agencies on February 13.

Musk's DOGE, meanwhile, has made broad cuts across multiple departments as it seeks to eliminate what it says is government waste.

On Saturday, Musk sent out an email to federal employees asking them to list what work they accomplished in the past week, with the Tesla CEO posting on X that failure to respond would be taken as a resignation.

It is not clear whether the NHTSA layoffs affected teams specifically involved in regulating Tesla. A review of LinkedIn profiles by BI suggests that some of the federal workers let go by the NHTSA had been in their roles for less than a year.

An NHTSA spokesperson told BI that despite the job cuts, the agency remained larger than it was at the start of Joe Biden's presidency and had grown 30% during his administration.

"We have retained positions critical to the mission of saving lives, preventing injuries, and reducing economic costs due to road traffic crashes. We will continue to enforce the law on all manufacturers of motor vehicles and equipment," the spokesperson said.

NHTSA is responsible for overseeing vehicle recalls for automakers.

It issued 932 safety recalls, affecting almost 31 million vehicles in 2022 per the agency's website. Over the past year, Tesla has issued multiple recalls for itsΒ Cybertruck,Β Model Y, and Model 3Β vehicles.

The NHTSA, which has between 500 and 1,000 employees according to its LinkedIn page, also sets rules on autonomous vehicles and robotaxis.

The Washington Post reported that the small team overseeing self-driving vehicles within NHTSA has been cut in half as a result of the layoffs. The agency declined to comment to the outlet about that point.

Tesla is set to enter the robotaxi market this year. Musk told investors that the EV maker plans to launch an autonomous ride-hailing vehicle service in Austin in June.

Tesla did not immediately respond to a request for comment.

Do you work at the National Highway Traffic Safety Administration and have information to share? Contact this reporter at [email protected] or tcarter.41 on Signal.

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Elon Musk likely won't be the savior Nissan is looking for

Elon Musk
Elon Musk has pivoted Tesla toward autonomous vehicles and robotaxis in recent years.

FREDERIC J. BROWN/AFP via Getty Images

  • Nissan's shares jumped after a report said Tesla was being courted as an investor.
  • The Financial Times said a consortium of high-profile figures in Japan were involved.
  • Musk quickly rejected the idea, and Tesla's focus on robotaxis means it's an unlikely Nissan savior.

Nissan is looking for a savior, but despite what some investors hope, it won't be Elon Musk, he indicated.

Shares in the beleaguered Japanese carmaker surged 9.5% on Friday amid reports that Tesla was being courted as an investor, even though Musk quickly poured cold water on the idea.

The Financial Times said a consortium of Japanese investors and former politicians planned to approach Tesla to discuss an investment, based on the belief that the US automaker was interested in buying Nissan's factories in the US.

While Tesla has its own extensive manufacturing operations in the US, acquiring Nissan's factories in Tennessee and Mississippi would allow it to boost domestic production as the Trump administration proposes a new round of tariffs on imported cars.

But the suggestion that Tesla might be interested in Nissan's factories was quickly shot down by Musk.

"The Tesla factory IS the product," he wrote on X in response to the Financial Times report.

"The Cybercab production line is like nothing else in the automotive industry," Musk added, referencing Tesla's coming steering-wheel-less robotaxi.

In a post on X, Hiro Mizuno, a former Tesla board member and one of the figures named in the FT's article, denied being involved. Mizuno said he doubted Tesla would be interested in Nissan's factories as Tesla's factory design is so "unique."

The report on an attempt to get Tesla to invest is a sign of how desperate things have become for Nissan.

The ratings agency Moody's downgraded the Japanese auto giant's credit rating to junk status on Friday, a week after a proposed $50 billion merger with Nissan's rival Honda fell through.

Nissan's sales have plunged in China and the US thanks to fierce competition from Chinese EV companies and a lackluster hybrid lineup, and the automaker is in dire financial straits.

The company's profits have crash, and it projected an annual loss of 80 billion yen, or about $519 million, in its earnings report last week.

Its disastrous financials have left it looking for investment, with the iPhone manufacturer Foxconn a prospective suitor.

Nissan CEO Makoto Uchida, who has pledged to turn things around by cutting 9,000 jobs globally and slashing global vehicle production, said Nissan would explore all options "without taboos" to ensure the company's future.

As it stands, Tesla seems like an unlikely savior.

Tesla's production lines heavily use advanced manufacturing techniques, such as gigacasting, in which giant presses create large sections of vehicles. So converting Nissan's factories would likely be difficult and expensive.

Musk has also pivoted the company away from mass-produced electric vehicles and toward autonomous vehicles and robotics, such as the self-driving Cybercab and Tesla's Optimus robots.

In May, Tesla quietly dropped its goal of building 20 million cars annually. And Reuters reported in April that the company scrapped plans to build a $25,000 EV, though Musk has said more affordable models are still coming this year.

The automaker has its own headwinds, with Tesla recording its first-ever annual sales decline last year and facing an uncertain EV landscape in the US thanks to Trump's rollback of federal support for electric vehicles.

Nissan declined to comment. Tesla did not immediately respond to a request for comment.

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BYD and its rivals are crushing Tesla in China — and they're going global

BYD Sealion 7
A BYD Sealion 7 on display at Warsaw airport.

Aleksander Kalka/NurPhoto/Getty Images

  • Affordable Chinese electric vehicles are flooding into global markets β€” but not the US.
  • Tesla rivals BYD and Xpeng are bringing their ultra-smart EVs to a host of new countries.
  • High tariffs have locked them out of the US, meaning American drivers may be cut off from cheap EVs.

Tesla's China headache might be about to become a global one.

Elon Musk's automaker has come under increasing pressure in the world's largest car market from local EV giant BYD and its rivals, who are now competitive with the Model Y manufacturer on both price and technology.

In January, BYD sold nearly double the number of EVs as Tesla, with the US carmaker's sales slumping by 11% from the previous year.

BYD increased the heat last week with its announcement that "God's Eye" self-driving tech would be offered in nearly all its vehicles, including the $9,500 Seagull. Tesla is still waiting for regulatory approval for its rival FSD system in China.

The most concerning thing about BYD's sales for Tesla β€” and other Western automakers β€” is where they're coming from.

BYD sold 66,000 vehicles outside China in January, a record figure that suggests the company's efforts to become a global powerhouse are bearing fruit.

BYD Seagull
BYD has found success through more affordable offerings such as the $9,500 Seagull.

WuYuan/Getty Images

The EV maker, which once received backing from Warren Buffett, beat Toyota to become Singapore's top-selling car brand last month, and overtook Tesla's sales in the UK for the first time.

With BYD's affordable electric and hybrid offerings gaining traction overseas, other Chinese EV players are beginning to follow their lead β€” a move that analysts and industry execs fear could export the so-called "hypercompetition" of China's home market globally.

European offensive

The debut of Chinese EV startup Xpeng in the UK was no ordinary car launch.

Tech executives and delegates from the Chinese embassy swanned through a grand hall within sight of Tower Bridge that was once a historic fish market, munching canapes and mingling around Xpeng's X2 flying car on display alongside its electric sedans and SUVs.

It's a sign of the tech company ethos that Xpeng's executives were keen to highlight as they announced the company's first UK launch: the G6 SUV, priced about Β£6,000 ($7,500) less than Tesla's Model Y.

The UK is Xpeng's newest market. It has also launched in France, Germany, and Italy in recent months. President Brian Gu said the company plans to expand its presence to more than 60 countries and regions in 2025.

"Our ambition is to be the No. 1 Chinese premium electric vehicle brand overseas," said Gu, adding that he defined "premium" EVs as costing more than $41,000.

For brands like Xpeng, which still records big losses and lags well behind BYD in China's highly competitive EV market, international expansion may be a necessity rather than a luxury.

"The China market is ultra-competitive, so it's going to be really difficult for them to carve out huge market share gains in the short-term because of the price war," Tu Le, managing director of Sino Auto Insights, told Business Insider.

Xpeng X2
Xpeng showed off the company's X2 flying car concept at its UK launch.

Business Insider

While the UK has not imposed tariffs on Chinese electric vehicles, making it a tempting target for expansion, the European Union followed the US last year in imposing import taxes of up to 35% on EVs made in China.

That has not stopped brands like Nio and Leapmotor, which has a partnership with Jeep-owner Stellantis, from joining BYD and Xpeng in moving into the continent.

Their expansion has put local automakers on notice. Volvo Cars CEO Jim Rowan told BI that he doesn't believe EU tariffs will stop Chinese EV companies from becoming major players in Europe.

The boss of the Swedish carmaker said the influx of Chinese vehicles into Europe, alongside brutal competition in China, will force local automakers to up their game.

"As the non-Chinese brands lose market share in China, they're going to have to find market share somewhere else. That means they're going to become more competitive in their home markets and global markets around the world," Rowan said.

US risks being left behind

One market that China's EV champions are unlikely to target anytime soon is the US, thanks to 100% tariffs on imported Chinese vehicles introduced by the Biden administration.

These import levies mean the US has had to watch as other regions like Europe get access to affordable electric models like the $32,000 BYD Dolphin, and local brands like Renault launch their own mass-market EVs to compete.

The absence of this trend has helped keep US electric vehicle prices high, with customers paying around $8,000 more on average for an EV compared to Europe. This raises fears that US consumers could be cut off from accessing affordable electric models.

"On the current trajectory, the US is going to get cut off. There are 95 countries outside China where you can buy BYD cars, and we can't," said Tu Le.

Legacy US automakers have been slow to shift to electric vehicles, with companies like Ford and General Motors rolling back ambitious EV strategies over the past year.

President Donald Trump has also vowed to remove emissions targets and scrap federal support for electric vehicles, a move that will likely slow the transition to electric vehicles.

Tu Le warned that a lackluster EV industry in the US risked making the American auto industry less globally competitive, hurting the ability of the likes of Ford and General Motors to compete with their Chinese rivals overseas.

"I'm hopeful we can change the culture and bring products to market that are competitive globally, not just in the United States. As things are, it feels like the Detroit two are effectively on their way to becoming single-market companies," he said.

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Why an electric-truck maker once worth more than Ford just went bust

Nikola truck
Nikola rode a wave of enthusiasm for EV startups to a bumper valuation in 2020.

Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images

  • Nikola, an electric-truck startup, was once worth more than Ford but recently filed for bankruptcy.
  • The truck maker faced a high-profile fraud scandal and eventually ran out of money.
  • Nikola is the latest formerly buzzy EV startup to collapse.

Another would-be Tesla rival has filed for bankruptcy, in the latest sign of how difficult it is to make money off electric vehicles.

Nikola, which makes electric and hydrogen trucks, on Wednesday said it had filed for Chapter 11 bankruptcy protection and would sell its assets amid a cash crunch.

Nikola rode a wave of enthusiasm for electric transportation when it went public in 2020 and at one point was worth in excess of $30 billion β€” more than Ford at that time.

Nikola struck a major deal with General Motors but was engulfed in crisis after its founder, Trevor Milton, was accused of misleading investors about Nikola's business and technology.

In 2020, the short-seller Hindenburg Research revealed a substantial short position in Nikola and published a scathing 15,000-word report saying it believed the EV maker was "an intricate fraud built on dozens of lies."

"We have never seen this level of deception at a public company, especially of this size," the report said.

It detailed a litany of allegations, including that a publicity video purporting to show a prototype of Nikola's electric truck driving along a road was actually shot by rolling the truck down a hill.

Milton resigned and was later sentenced to four years in prison. The Securities and Exchange Commission fined Nikola $125 million in 2021.

Nikola recovered somewhat, striking a deal last year to sell 100 trucks to a California logistics company and announcing in January that its updated battery-electric trucks had driven 1 million miles.

But the startup, which recalled its entire fleet of big rigs in 2023 after several battery fires, ultimately failed to commercialize its technology.

Nikola lost more than $200 million in the third quarter of 2024. In October, the company said it had only enough cash to last until the first quarter of this year.

"The transition EVs has been slower than all manufacturers anticipated, and when it comes to commercial vehicles, that's a really tough segment to break into," Sam Fiorani, an industry analyst at AutoForecast Solutions, told Business Insider.

Fiorani said heavy-duty trucks and semis of the kind Nikola was building have specific needs, including quick refueling and long ranges, making them a difficult product to bring to market.

EV startups run out of charge

Nikola is the latest once promising EV startup to run out of money as EV sales growth has slowed over the past year.

Fisker, once worth as much as $8 billion,Β filed for bankruptcy last JuneΒ after its Ocean SUV was plagued by production delays and software problems.

Canoo, an electric-van company that went public in 2020 through a special-purpose acquisition company, went the same way last month despite high-profile deals with NASA, Walmart, and the US Postal Service.

"Every investor 10 years ago was looking for the next Tesla," Fiorani said. "Venture capitalists were jumping into any EV startup and expecting them to pay off in five or 10 years."

Fiorani added that the arrival of higher interest rates shut off that supply of easy money.

"Keeping these companies financed takes more than just wishful thinking that someday they'll make money," Fiorani said.

Their failures show just how difficult β€” and expensive β€” it is to build a viable EV business from scratch, with companies spending enormous sums to build up production.

Only Tesla β€” which nearly went bankrupt several times over a period that its CEO, Elon Musk, has described as "production hell" β€” has been able to become profitable through selling EVs.

Musk's company now has the advantage of scale; Tesla was responsible for nearly half of EV sales in the US last year.

'Valley of death'

Even legacy automakers have struggled to make money on EVs. Ford lost $5 billion on its EV business last year, and the Detroit carmaker told investors it's likely to lose another $5 billion this year.

Other startups remain mired in what has been termed the EV "valley of death."

Rivian went public in 2021 at a valuation of $86 billion, but it lost about $39,000 on each vehicle it sold last quarter. As it burns through cash, it has sought funding fromΒ VolkswagenΒ and theΒ federal government.

A green Rivian R1S SUV driving through an urban city area.
A Rivian R1S SUV.

Rivian

Losses at Lucid Motors widened to nearly $1 billion in the third quarter. It has relied on funding injections from its largest shareholder, Saudi Arabia's Public Investment Fund.

"It's a measure of how hard it is to make money and turn a successful business out of an automotive company, EV or otherwise," Fiorani said.

"In North America, we've seen one successful vehicle startup since World War II. Tesla is the only one that has turned a profit."

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Elon Musk's Boring Company is planning to build a tunnel system in Dubai more than 10 miles long

Las Vegas loop.
Teslas navigate through the Boring Company's Las Vegas loop.

AaronP/Bauer-Griffin/GC Images

  • Elon Musk's tunneling firm has announced plans to build a 10.5-mile tunnel network in Dubai.
  • The Boring Company has already built a "loop" in Las Vegas, which ferries people through tunnels in Teslas.
  • Boring's loops are still a long way from the futuristic "hyperloop" proposed by Musk in 2013.

Elon Musk's Boring Company wants to set up its Tesla-carrying tunnel network in Dubai.

The tunneling company announced on Thursday it had signed a memorandum of understanding with Dubai's roads and transport authority to build a 10.5-mile tunnel system in the Gulf city-state.

The initial pilot project will have 11 stations and transport around 20,000 passengers an hour, the Boring Company said, with plans to eventually expand the transit system to carry 100,000 passengers an hour.

The company called it "a landmark collaboration poised to set the standard for urban mobility."

The company didn't give a timeline for the Dubai project, which would be the Boring Company's second location.

Musk's tunneling firm's only operational loop is under the Las Vegas Convention Center, where passengers are transported through around 1.8 miles of tunnels in Tesla vehicles at speeds of around 40 miles per hour.

The Boring Company's Las Vegas loop β€” and its planned loop in Dubai β€” are a long way from the science-fiction "hyperloop" concept Elon Musk sketched out in a 2013 white paper.

The billionaire proposed a system of low-pressure tubes that would transport commuters in pods at speeds as high as 760 miles per hour.

The Boring Company was founded in 2017; partly to bring the "hyperloop" concept to life. Musk said he founded the company after being driven "nuts" by LA traffic.

The company is expanding its Vegas Loop into a 68-mile tunnel network though this has run into obstacles. The city's monorail was temporarily shut down last year after Boring Company employees reportedly dug close to pillars holding it up.

The Boring Company is led by Steve Davis, one of Musk's closest associates.

He is involved with DOGE, the new department Musk is leading to drive spending cuts in the US federal government, per a list of staff working there, that Business Insider obtained.

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NASA is expecting a visit from Elon Musk's DOGE crew, its acting chief says

Elon Musk walks Donald Trump and congressional lawmakers through a SpaceX launch
Elon Musk walks Donald Trump and congressional lawmakers through a SpaceX launch.

Getty Images

  • NASA's acting administrator said the space agency is expecting a visit from DOGE.
  • Janet Petro said Elon Musk's cost-cutting unit would be coming to examine its payments.
  • SpaceX, the rocket company founded by Musk, has NASA contracts worth billions of dollars.

DOGE is tearing through government agencies β€” and NASA may be next in line.

Speaking on the sidelines of the Commerce Space Conference in Washington DC on Wednesday, the space agency's acting administrator confirmed that NASA was expecting a visit from Elon Musk's cost-cutting unit.

"So we are a federal agency. We are going to have DOGE come. They are going to look β€” similarly to what they've done at other agencies β€” at our payments," said Janet Petro, in comments reported by Bloomberg.

Since it was established by President Donald Trump last month, DOGE has cast its net over a wide variety of government agencies, shutting down USAID and targeting the Treasury, the FAA, and FEMA.

As the unit turns its attention to NASA, it will be scrutinizing an agency that does extensive business with Musk's SpaceX.

NASA has struck around $14.5 billion in contracts with the billionaire's rocket company. SpaceX is set to carry astronauts to the moon as part of NASA's Artemis missions, and was awarded an $843 million contract to deorbit the International Space Station last year.

Despite SpaceX's involvement in Artemis, Musk has criticized the program as "extremely inefficient" and called missions to the Moon "a distraction," suggesting that space efforts should be focused on Mars instead.

SpaceX is set to launch multiple Starship missions to the red planet over the coming decade, and Musk has been an outspoken proponent of colonizing Mars for years.

Musk has been highly critical of some of NASA's other contractors. Last year, he suggested that Boeing should face fines over its troubled Starliner program, which said in a post on X had "put astronauts at risk."

The Tesla CEO's effort to audit government spending has also relied on individuals connected to his many companies. A DOGE staff list seen by Business Insider included several employees with connections to SpaceX, including a former intern and an investor whose firm took a stake in a SpaceX supplier last year.

Despite this, Petro said NASA's strong conflict-of-interest policies would apply to any DOGE representatives working at the agency.

"Any employee or any person that's coming in, we will check out their conflict of interest, make sure they don't have any conflicts of interest with any of the companies that we work with," she told reporters.

Petro is set to be replaced by incoming NASA administrator Jared Isaacman, a billionaire astronaut who has flown multiple private missions for SpaceX. His appointment is yet to be confirmed by the Senate.

SpaceX and NASA did not immediately respond to requests for comment.

Do you work at NASA or have information to share? Contact this reporter at [email protected] or tcarter.41 on Signal.

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Nissan faces a fight for survival after abandoning its $50 billion Honda merger

Logos of Nissan and Honda are seen at the front of cars.
Nissan and Honda have ended their $50 billion merger deal.

Anna Barclay/Getty Images

  • Nissan and Honda said they canceled their $50 billion merger
  • The merger would have created the world's third-largest automaker.
  • Both Japanese companies face declining sales and a slow transition to EVs.

Nissan and Honda called off a $50 billion merger that would have formed one of the world's largest car companies.

The Japanese automakers said on Thursday they scrapped the deal, announced in December, "to prioritize speed of decision-making and execution of management measures" in an "increasingly volatile" market.

The companies said they would continue to work within a "strategic partnership."

Nissan CEO Makoto Uchida said Honda's desire to make his company a subsidiary rather than a partner played a key role in the deal's collapse.

"While both companies have a long history, we were not sure whether this would reflect our autonomy or allow us to demonstrate our potential or strength," he told a press conference.

Both companies released earnings on Thursday shortly after the deal's collapse.

Honda reported a 25% rise in pre-tax profit in the latest quarter, buoyed by strong US sales and its high-performing motorcycle business.

It still faces a major headache in China, where sales collapsed almost 40% in the nine months to December, but its financial position looks decidedly more rosy than its rival.

Nissan's profits crashed to 5.1 billion yen ($33 million) for the nine months to December, down from 325 billion yen ($2.1 billion) in the same period for 2023. It projected an annual loss of 80 billion yen ($519 million).

FILE PHOTO:Nissan Motor Co. senior executive Makoto Uchida speaks to media at Shanghai International Automobile Industry Exhibition in Shanghai, China April 16, 2019, in this photo taken by Kyodo.  Mandatory credit Kyodo/via REUTERS
Nissan CEO Makoto Uchida is racing to execute a turnaround plan for the troubled automaker.

Reuters

A scarcity of electric models has seen Nissan lose market share in China to local rivals, while its US sales have also suffered due to a lack of hybrid options and its EV's failure to qualify for $7,500 government tax credits.

Nissan stock has fallen about 25% over the past year. After being about the same size as Honda a decade ago, its market capitalization is now about a fifth of its rival. Honda stock is down about 15% in the same period.

Uchida is now racing to execute a turnaround plan that will involve cutting 9,000 jobs globally. He warned that all options were on the table to ensure the storied automaker's survival.

"Given the latest performance of the company and the changing environment, it is essential to explore all the options without taboo and carry out a deeper structural reform," Uchida said.

Nissan gave more details about its restructuring plans on Thursday, unveiling plans to cut 6,500 jobs at the company's factories in Tennessee, Mississippi, and Thailand.

It also plans to cut global vehicle production by 1 million to 4 million in the 2026 financial year.

Tariffs headache

Both Nissan and Honda also face a looming headache in the form of potential US tariffs on vehicles imported from Mexico and Canada, where the two companies have factories.

Uchida said Nissan would consider moving production from Mexico to other regions if the tariffs go ahead after the temporary suspension expires in March.

Honda vice president Shinji Aoyama said the automaker was racing to export vehicles made in Canada and Mexico into the US before the waiver expired.

The breakdown of the Honda deal leaves Nissan looking for investment elsewhere. The chairman of Apple supplier Foxconn said the Taiwanese firm was considering buying the 36% stake in Nissan owned held by France's Renault.

Private equity firm KKR is also considering an investment in Nissan, Bloomberg reported.

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DeepSeek's AI is the hot new feature for Chinese cars. Here are all the automakers adding it to their EVs.

The BYD Seal on display in a showroom.
BYD has become the latest automaker to incorporate Deepseek's R1 into its vehicles.

Getty Images

  • DeepSeek has shaken the global tech industry and sparked an outpouring of national AI pride in China.
  • Now, the country's EV giants are jumping on the DeepSeek bandwagon.
  • EV firms BYD, Geely, and Great Wall have all announced plans to put DeepSeek's AI models into cars.

DeepSeek has sparked an outpouring of national AI pride in China, and now the country's EV giants are racing to add it to their vehicles.

Tesla rivals BYD, Geely, and Great Wall have all said they will integrate DeepSeek's AI model into their in-car software in recent weeks as they look for an edge in China's tech-obsessed electric vehicle market.

DeepSeek caused upheaval in the global financial markets and shaved nearly $600 billion off the value of chipmaker Nvidia when it released its R1 reasoning model last month.

The Chinese hedge fund-turned-AI lab's model matches the performance of equivalent AI systems released by US tech firms like OpenAI, despite claims it was trained at a fraction of the cost.

Its success has seen China's EV companies β€” which also have a track record of upsetting their Western rivals with low-cost offerings β€” pile in on the buzzy AI model.

At an event announcing a new advanced autonomous driving system on Monday, Tesla nemesis BYD said it would incorporate DeepSeek's AI into its Xuanji vehicle software and assisted driving tech to improve its vehicles' AI capabilities.

BYD rival Geely, which owns the EV brands Zeekr and Polestar, is integrating R1 into its Xinrui AI model, according to local media reports.

Automaker Great Wall confirmed to Reuters last week that it had incorporated DeepSeek's AI model into its "Coffee Intelligence" connected vehicle system. Legacy brand Dongfeng has also said vehicles made by its joint venture with Nissan would feature DeepSeek's models.

DeepSeek's rapid ascent has turned the company into a poster child for China's AI efforts, with local media hailing CEO Liang Wenfeng as the "AI hero of Guangdong."

Adding the latest AI models is motivated by more than national pride for these automakers, however. Chinese customers are increasingly demanding so-called "EIVs" packed with AI technology, self-driving tech, and advanced in-car software.

Geely, Great Wall, and Dongfeng did not respond to requests for comment from Business Insider, sent outside normal working hours.

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China's BYD goes all-in on self-driving, with even its $9,500 EV getting 'high-level' autonomous features

BYD Seagull
BYD has found success through more affordable offerings such as the $9,500 Seagull.

WuYuan/Getty Images

  • BYD is going all-in on autonomous driving as it looks to take Tesla's EV crown.
  • The Chinese automaker shared a major expansion of its "God's Eye" intelligent driving system on Monday.
  • The $9,500 Seagull EV will also get "high-level" intelligent driving features, a BYD exec said.

BYD is battling Tesla for the title of the world's largest EV company β€” and now the Chinese upstart is coming for Elon Musk's self-driving crown.

The electric vehicle giant unveiled a massive expansion of its intelligent driving system on Monday as it seeks to fight off brutal competition in the world's most competitive car market with a new lineup of high-tech vehicles.

BYD said it would include its "God's Eye" self-driving tech, which enables features such as remote parking and autonomous overtaking, on its entire model lineup.

The company's shares on the Hong Kong Stock Exchange hit an all-time high after the announcement, rising 4% on Tuesday morning.

Prior to the event, BYD executive Zhang Zhuo said the company would release 11 models with BYD's "God's Eye" self-driving tech across its Ocean brand.

The ultra-cheap BYD Seagull, which currently starts at 69,800 yuan (around $9,550) in China, will also get "high-level" intelligent driving features, Zhuo wrote in a post on the Chinese social media site Weibo.

BYD general manager Lu Tian, meanwhile, said that the company's six main brands β€” named after Chinese imperial dynasties β€” would be fully upgraded with the new technology.

The automaker also said it would integrate home-grown AI models built by Deepseek into its vehicles, joining several of its local rivals in partnering with the Chinese AI phenomenon.

BYD's move into autonomous driving comes as Chinese carmakers increasingly shift toward "EIVs," or electric intelligent vehicles, outfitting their cars with increasingly advanced technology as they fight for a slice of China's hypercompetitive EV market.

Smartphone maker Xiaomi's SU7, which starts at around $30,000 and comes with intelligent driving assist and voice control technology, has smashed sales targets since it launched last year.

Other manufacturers, such asΒ startup Xpeng, have rolled out "AI-defined" vehicles, while Zeekr, Great Wall, and Dongfeng have already incorporated Deepseek's AI into their cars.

Not to be outdone, BYD has pledged to spend at least $14 billion on building "intelligent" vehicles.

Its "God's Eye" driving assistance tech will face competition from Xpeng and fellow EV startup Nio, which have their own autonomous driving systems.

BYD will also face off against Tesla, with the US automaker saying it is working to begin selling its Full Self-Driving tech in China this year.

The EV giant's sales have been booming even before it unveiled its self-driving push. BYD sold 296,446 EV and hybrid vehicles in January, up 47% from the same period in 2024.

BYD's impressive performance comes as warning signs appear that China's crowded EV market may be about to face a period of consolidation.

Chinese state-owned carmakers Dongfeng and Changan both announced restructuring moves on Sunday, with the two companies seeing their share prices soar as investors speculated they may be about to merge.

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Robotaxis are a brutally expensive business. This CEO aims to make them much cheaper.

May Mobility robotaxi
May Mobility operates its autonomous vehicles across 10 cities in North America and Japan.

May Mobility

  • Robotaxis have hit the mainstream, with Waymo and Tesla planning major expansions in 2025.
  • Concerns about the huge cost of self-driving vehicles have prompted Ford and GM to exit the race.
  • May Mobility CEO Edwin Olson told Business Insider that robotaxis are a "brutal" business.

The robotaxi wars have begun β€” but questions over cost are already forcing some contenders to wave the white flag.

The likes of Ford and General Motors are giving up on robotaxis because they're a "brutal business," Edwin Olson, the CEO of autonomous driving company May Mobility, told Business Insider in January.

Olson, who founded May in 2017, said the sheer cost of scaling up autonomous ride-hailing services was leading companies to back away from robotaxis, with firms such as Waymo only able to expand thanks to the massive checkbooks of their Big Tech-backers.

"Robotaxis are a brutal business. The revenue per hour that you can earn is maybe $30 or so, and that drops off outside peak hours," he said.

"The revenue potential is quite low. You have to go to the very largest markets where you can drive your asset utilization as high as possible so that you can get as close as possible to $30 an hour, 24 hours a day, seven days a week. Then you have a chance of being able to make some money."

Ed Olson
May Mobility CEO Edwin Olson says robotaxis are a "brutal" business.

May Mobility

The robotaxi industry has seen a dramatic expansion over the past year, with Google-backed Waymo hitting 150,000 paid rides a week and Elon Musk unveiling Tesla's dedicated "cybercab" robotaxi.

At the same time, the long-awaited arrival of self-driving cars has proven highly expensive.

Despite its rapid growth, Waymo is not yet profitable, with Alphabet's "other bets" division (which includes Waymo, as well as other subsidiaries) losing $1.17 billion in the fourth quarter of 2024.

A recent McKinsey study found robotaxis could cost about $8.20 per mile to run, and Bernstein analysts estimated that the cars themselves can cost roughly $150,000 each.

The hefty price tags have already forced some players out of the game.

Legacy automakers Ford and General Motors have both scrapped plans to build dedicated robotaxis, with GM pulling funding for embattled self-driving firm Cruise despite spending billions on the company. Cruise said in early February it would lay off around 50% of its staff.

"I think GM, Ford, they were all looking at price tags well north of $10 billion. And they just decided, let's call it a day," said Olson, who previously worked at Ford's autonomous vehicle unit.

"Even if the technology was perfect … they're still years, maybe a decade, from reaching the breakeven point. In the meantime, they're going to continue to burn billions of dollars a year," he said.

Waymo's cash advantage

One company that is less cash-constrained than its legacy auto-backed rivals is Waymo. The robotaxi startup is owned by Google parent Alphabet, which led a $5.6 billion funding round in October.

"That's why Waymo is still here β€” they've basically got Alphabet's checkbook," said Olson.

"I think people have a lot of confidence that they're going to be able to continue to cough up the cash, to just push through to profitability however long it takes," he added.

May runs autonomous vehicle services in 10 cities across North America and Japan and has adopted a different strategy as it seeks to compete with Waymo.

A Waymo autonomous self-driving Jaguar electric vehicle sits parked at an EVgo charging station
A Waymo autonomous self-driving Jaguar electric vehicle sits parked at an EVgo charging station.

PATRICK T. FALLON/AFP via Getty Images

The company has mainly focused on long-term public transport contracts with businesses and governments. Olson said that strategy offers much higher revenue potential than ride-hailing and has enabled May to make money on nearly all of its US sites.

"We have probably at scale the autonomous vehicles that would have the lowest price point," Olson said. "We've brutally optimized this vehicle to operate in the places where buses go, and that's allowed us to bring the cost down." May's total compute footprint was around a third of its competitors, he added.

Olson said this has put May in a good position to finally enter the robotaxi market this year, with the company set to deploy robotaxis on the Lyft app in Atlanta in the coming months.

Saber Fallah, a professor of Safe AI and Autonomy at the University of Surrey, told BI that May's approach of prioritizing public transport contracts may signal a more sustainable strategy for self-driving startups.

"Unlike robotaxis, which operate in highly dynamic and unpredictable urban environments, autonomous public transport systems benefit from predefined routes and structured operating conditions," Fallah said.

"This level of predictability significantly reduces the complexity of autonomous driving, making deployment more feasible in the near term," he added.

Running robobuses has other advantages over the cut-throat world of ride-hailing. Michael Lenox, a professor of business administration at the University of Virginia, told BI that robotaxi firms like Waymo might find that their margins are squeezed as competition heats up.

"The advantage of public transit contracts is the ability to be the sole provider in a given market, basically becoming a monopoly provider," Lenox said.

Tesla enters the race

Although Olson is confident that May can take on Waymo, the company is also set to contend with Tesla's looming entry into the robotaxi business.

Elon Musk unveiled the steering-wheel-less CybercabΒ at a glitzy Hollywood event in October and has said Tesla plans to launch a robotaxi service in Austin in June.

Olson said he was skeptical about the approach taken by Tesla, with Elon Musk's company relying on cameras and AI to run its Full Self-Driving technology.

"It's clear that eventually you'll be able to do this purely optically using cameras … but that's not where the camera technology is today," said Olson. "The computer vision networks are just not good enough to achieve the level of reliability."

Elon Musk showed of Tesla's new Cybercab on a closed lot at Warner Bros Studios.
Elon Musk showed off Tesla's new Cybercab on a closed lot at Warner Bros Studios.

Tesla

Musk's robotaxi ambitions could be boosted by his influence with President Donald Trump, with reports suggesting federal rules for self-driving cars may be one of the new administration's transport priorities.

Despite fears in some quarters that Musk could use his position to boost his own prospects at the expense of his rivals, Olson said that his presence could help shake up the "patchwork" rules around robotaxis in the US.

"I think in general, given who's at the helm, if they are able to push through new federal-level regulatory standards, they're likely to be favorable to the AV industry," said Olson.

Do you work in the robotaxi industry or have thoughts to share? Get in touch with this reporter at [email protected]

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Trump is trying to stop a major EV charger rollout that counts Tesla as one of its biggest recipients

Donald Trump and Elon Musk stand
Tesla boss Elon Musk has taken on a prominent role in the Trump administration.

Getty Images

  • Transport officials are halting approval for new EV chargers funded by the $5 billion NEVI program.
  • It's the latest sign Trump is going after federal EV initiatives, including those benefiting Tesla.
  • Elon Musk's automaker has received $31 million in funding from the NEVI program.

Donald Trump's administration is halting a funding program for EV chargers that has awarded Tesla millions in federal grants.

Officials are "immediately suspending" approval for all state plans funded by the National Electric Vehicle Infrastructure (NEVI) program, a $5 billion initiative to build a network of EV chargers across the US, according to a memo to state transport directors released on Thursday.

The memo said leaders at the Transportation Department had "decided to review the policies underlying" the implementation of the NEVI program, with updated draft guidance due to be published this spring.

Until then, "no new obligations may occur" under the NEVI program, a move which puts plans to build EV chargers across multiple states announced late last year into limbo.

With the scarcity of EV chargers still one of the main concerns putting people off buying electric vehicles, the dismantling of the program will likely be a major blow for EV adoption in the US β€” and for Tesla, which has been one of NEVI's biggest beneficiaries.

The Elon Musk-run automaker has received $31 million in funding through the NEVI program, according to a dashboard run by transportation officials, making it the third largest recipient of funds.

Introduced as part of the $1.2 trillion Infrastructure Investment and Jobs Act in 2021, the NEVI program was a key pillar of the Biden administration's plan to build a national network of EV chargers.

Trump, by contrast, has vowed to roll back the "EV mandate" and scrap federal support for electric vehicles.

The new president signed an executive order on the first day of his second term ordering an immediate pause of the distribution of funds under the NEVI program.

Further measures could also have a major impact on Tesla, which is the largest seller of EVs in the US, with Trump's team reportedly considering scrapping the $7,500 tax incentive for new electric vehicles.

Tesla benefits directly from the tax credit and recently began advertising the Cybertruck with the discount.

That hasn't stopped Elon Musk, who has taken a prominent role in the Trump administration and is one of the president's most outspoken supporters, from saying he supports the move.

The billionaire has argued that ditching the tax credit would be a "long-term" positive for Tesla but would "devastate" the company's rivals, which make up the rest of the EV industry.

Tesla did not respond to a request for comment, sent outside normal working hours.

Are you a federal worker or do you work on EV charging? If you have anything to share, get in touch with this reporter at [email protected] or tcarter.41 on Signal. Do not use a work device.

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EV buyers shouldn't get government incentives, Volvo CEO says

Volvo boss Jim Rowan
Jim Rowan, the CEO of Volvo Cars, has said the auto industry faces a "challenging" year.

ANDERS WIKLUND/TT News Agency/AFP via Getty Images

  • Volvo's Jim Rowan told BI he didn't think governments should give incentives to people buying EVs.
  • President Donald Trump has vowed to roll back electric vehicle subsidies in the US.
  • Rowan joins the Tesla boss Elon Musk in arguing that subsidies for EVs are a bad idea.

Elon Musk isn't the only auto boss who thinks subsidies for electric vehicles are a bad idea.

Jim Rowan, the CEO of the Swedish auto giant Volvo Cars, told Business Insider that he disagreed with the idea that governments should subsidize the EV industry, as President Donald Trump unravels federal support for electric vehicles in the US.

"I don't subscribe to the fact that government should give incentives for people to buy EVs," Rowan said in an interview after Volvo released its 2024 results on Thursday.

"I think governments have got enough to spend money on, in terms of healthcare and education, that they shouldn't need to subsidize industries."

Rowan added, "I would like to see them do more about infrastructure to encourage people to buy EVs, or tax incentives, but I'm not a proponent of actual subsidies themselves."

Trump has signed a series of executive orders signaling his intent to scrap EV subsidy programs and emissions targets, with reports suggesting the new administration is planning to ditch the $7,500 tax credit for new EVs in the US.

Auto industry experts have warned that cutting the tax credit could make electric vehicles unaffordable for many Americans, but that hasn't stopped Musk, a Trump ally, from expressing support for its demise.

"End all government subsidies, including those for EVs, oil and gas," he wrote in a post on X last year.

Musk has argued that ending the incentive would devastate Tesla's competitors but help the company in the long run, even though many buyers of Tesla's vehicles benefit from the $7,500 credit. Tesla began advertising the Cybertruck with the tax credit this week.

The withdrawal of US government support for EVs adds to the storm clouds facing automakers this year; the trade war sparked by Trump in the past month also threatens to severely disrupt the auto industry.

In an earnings call after Volvo Cars released its fourth-quarter results, Rowan predicted the industry would be "severely tested" in a "challenging" 2025.

The Swedish automaker, which last year abandoned plans to sell only EVs by 2030, said operating income and margins declined in the latest quarter. Its shares fell by as much as 10% on Thursday.

Rowan told BI that Volvo may have to reconsider the economics of producing future vehicles in Europe if Trump follows through on his threat of imposing tariffs on the European Union. He added that trade levies on the EU could raise car prices in the US.

"Ultimately it might make it more expensive for the end customer," Rowan said, adding that depending on the severity of tariffs automakers may choose to pass the cost onto consumers rather than shift production.

"If you're going to move production that's expensive," Rowan said, adding that if the tariffs are "below a certain amount, it doesn't make sense β€” you've just got to eat those tariffs or try and pass them on to the customer."

Volvo, which is owned by the Chinese conglomerate Geely, has already faced tariff headaches over its EX30 electric SUV.

With a starting price of about 38,000 euros, or about $39,600, the EX30 has proved popular in Europe, but its debut in the US was delayed as a result of the 100% tariffs on Chinese-built EVs introduced by the Biden administration last year.

Some EX30 trims are available in the US, at a starting price of $44,900, and Volvo is set to start producing the EV at its Belgium factory in the first half of this year. But Rowan said the uncertainty around tariffs was making an already difficult outlook for the auto industry more complicated.

"When you have a changing landscape of tariffs, it just makes it more complex and costly to navigate through," he said.

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Toyota is following Elon Musk's lead as it tries to turn things around in China

Tesla giga Shanghai
Tesla electric vehicles outside the company's Shanghai gigafactory.

Zhang Hengwei/China News Service via Getty Images

  • Toyota's sales in China are slumping as it faces brutal competition from local EV giants like BYD.
  • The Japanese automaker plans to fight back by taking a page from Elon Musk's playbook.
  • It said Wednesday it would build a fully owned EV factory in Shanghai, after Tesla did the same in 2019.

Toyota is taking a page out of Elon Musk's playbook as it plots a comeback in China.

The Japanese automaker announced on Wednesday that it would build a new EV and battery factory in Shanghai, as it seeks to turn around stuttering sales in the world's most competitive car market.

Toyota will fully own the new factory, which it says will have the capacity to produce 100,000 electric vehicles a year for the Lexus brand from 2027.

The facility will see it join Tesla as part of a select group of foreign automakers who run their own Chinese operation, along with Tesla's Shanghai gigafactory and a VW plant in eastern China.

Foreign carmakers were previously required to enter into partnerships with local companies to build cars in China, though those rules were relaxed in 2018.

The new factory marks a change in strategy for Toyota, which currently sells cars in China through joint ventures with local firms FAW and GAC.

The world's largest automaker has struggled in China, with sales dropping nearly 7% in 2024 amid brutal competition from homegrown EV giants like BYD.

Toyota's decision to prioritize hybrids over battery electric vehicles has seen the company avoid the slumping sales and financial difficulties that have hit some of its rivals.

But it has also meant Toyota has struggled to compete with the wide range of low-cost electric vehicles on offer in China, with BYD selling EVs for as little as $10,000.

The Japanese giant is trying to change that, in part by following Tesla's lead.

Tesla opened its Shanghai gigafactory in 2019, after Elon Musk pushed for a relaxation in China's foreign ownership rules.

Production at the factory scaled up rapidly, and by 2021, around half the company's global deliveries came from the Shanghai site.

China has since become one of Tesla's most important markets, with Tesla selling around 657,000 electric cars in the country last year as it competed with local rivals in a brutal price war.

Toyota's strategy shift in China comes as the company reported a 27% drop in quarterly profit in its latest earnings.

Toyota's vehicle sales also dropped slightly to 10.8 million vehicles, enough to retain the title of world's largest automaker but raising concerns that the hybrid boom that has fuelled Toyota's recent growth may be slowing down.

Despite this, Toyota raised its full-year profit forecast by 400 billion yen ($2.6 billion) to 4.7 trillion yen ($30.7 billion) as it also announced its new $14 billion battery factory in North Carolina was ready to begin production.

Toyota did not respond to a request for comment, sent outside normal working hours.

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Elon Musk's interventions are making Starlink's global expansion more complicated

Elon Musk side view, dressed formally
Elon Musk wants to launch Starlink services in South Africa.

Chip Somodevilla/Getty Images

  • Elon Musk's political interventions are beginning to be a problem for SpaceX.
  • The rocket firm is attempting to launch Starlink in South Africa even as Musk criticizes the country's laws as "openly racist."
  • Ontario ripped up a Starlink contract in response to the threat of US tariffs from Musk ally Donald Trump.

Elon Musk has thrown himself head-first into politics β€” and that is causing problems for one of SpaceX's most prized assets.

Starlink, the satellite internet service operated by Musk's rocket company, has grown rapidly in recent years, launching in 27 new markets and tripling its internet traffic last year.

Musk's political interventions across the globe and presence in the Trump administration are now complicating the service's expansion drive.

The world's richest person attacked a Black empowerment law introduced by South Africa's coalition government, which requires foreign telecom companies to provide 30% equity to Black-owned businesses to be granted operating licenses, asΒ "openly racist."

Musk, who grew up in South Africa, has also railed against the country's land appropriation law, which allows the government to seize unused land in certain circumstances.

On Monday, President Donald Trump said the US would cut funding for South Africa over the law, which was intended to address the damage caused by colonial and Apartheid-era policies that restricted the ability of South Africa's Black majority population to own land.

South Africa hit back against Trump's move, with President Cyril Ramaphosa writing on X that the government has not "confiscated any land."

Musk's interventions in South African politics come as SpaceX waits to receive permission to launch Starlink there.

The rocket firm has launched its satellite internet service in other southern African nations, but is waiting for regulatory approval as politicians in South Africa debate whether to grant SpaceX an exemption to Black empowerment rules.

South Africa isn't the only place Musk's outspoken political interventions are causing a headache for SpaceX.

After donating more than $200 million to Donald Trump's campaign, the SpaceX founder has taken on a key role in the Republican president's administration, spearheading efforts to overhaul government spending with his so-called Department of Government Efficiency and even becoming a "special government employee."

Musk's status as one of the new administration's biggest personalities has made him a target as Trump has ramped up an aggressive trade war against Canada, China, and Mexico.

On Monday, Ontario Premier Doug Ford said the Canadian province would be "ripping up" its $68 million contract with Starlink because of a mooted 25% tariff on Canadian goods, which Trump later paused.

The backlash could spread to Musk's other companies, with Canadian prime ministerial candidate Chrystia Freeland suggesting the country could respond to the tariffs by imposing a 100% levy on Tesla vehicles.

Musk doesn't seem particularly concerned. "Oh well," heΒ posted on XΒ in response to the news thatΒ Ontario was tearing up the multimillion dollar contract.

SpaceX did not immediately respond to a request for comment from Business Insider.

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