America's EV Revolution Enters 'Wait And See' Mode On Election Day

Plus, China formally beefs with Europe over EV tariffs and we look at the Tesla Cybertruck's latest sales.

It's Election Day in the U.S., which means millions of people will make their way to the polls in order to make their voices heard. And with electric vehicles being so political this election cycle, it's clear that the next U.S. President will influence the adoption of battery-powered cars over the next four (or more) years. So have you voted yet?

Welcome back to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about how today's election could affect the EV industry, China's ongoing beef with the European Union over EV tariffs, and where Tesla may be at with Cybertruck sales. Let's jump in.

30%: 'Wait And See': What Could Happen After The Election

Both top-ticket candidates on today's ballot have very different viewpoints about EVs, which have somehow become politicized more than ever during this election cycle. This has thrown the entire industry into a wait-and-see mode ahead of the results because there's nothing left to do but stand by while the votes are tallied.

Manufacturers, suppliers, and industry giants have all been plugged into what's happening. Some have thrown piles of cash at their candidate of choice, and one has even had their CEO go rogue to (rather publicly) support another. It's a mess, and I'm sure there are plenty of people excited for the season to be over—but it's still important to know what's at stake for a win on either side.

Let's talk about policy. Vice President Kamala Harris has been a supporter of the current administration's climate and EV policies, albeit certainly not a vocal one. A presidency under Harris could continue the status quo of the Inflation Reduction Act's influence on the U.S. charging network and the federal EV tax credit.

Former President Donald Trump has been very vocal about the opposite, pledging to end the (non-existent) EV mandate and possibly repeal the EV tax credit. Trump's running mate, Senator J.D. Vance, has attempted to introduce legislation that swapped the EV tax credit from battery-powered cars to U.S.-built gas and diesel-powered vehicles. Tesla CEO Elon Musk, who has propped up the Trump campaign on behalf of the America PAC with millions of dollars, has also called for ending subsidies industry-wide.

Both candidates have shown support for creating and retaining EV-related jobs in the U.S. Harris' support is primarily back-channeled through the existing IRA policies which are already meant to onshore EV manufacturing through component, critical material, and assembly location requirements. Trump has also talked about saving the auto industry by revitalizing Detroit with his plans for the so-called "Michigan miracle" centered around the rebirth of domestic auto production in the Motor City.

Then there's the issue of the environment. Trump has repeatedly called climate change a "hoax" and claimed that it was invented by China to create a global trading advantage. The former presidents even asked "Who the hell cares [about rising sea levels]?" at a recent rally in Wisconsin last week. Harris, on the other hand, has called it an "existential threat" and called for the U.S. to address it through the IRA and other means like cutting greenhouse gas emissions by 2030.

An EV future will press on regardless of which candidate ends up sitting in the Oval Office next year. The bigger question is: will progress slow, or continue marching forward? The fact is that more Americans are driving EVs than ever. Last quarter, automakers sold nearly 350,000 battery-powered cars—a record number industry-wide. In fact, recent data shows that in Q2 2024, 9.96% of all new light-duty vehicle sales in the U.S. were EVs. Record Q3 sales could point to even higher BEV market share.

Regardless of who you support, it's important to get out and vote today. You can find your local polling place here and even get a discounted Uber ride to cast your vote if you need it.

60%: China's Beef With The European Union's EV Tariffs Is Escalating

The Western world has been firm on its stance towards Chinese-built EVs: welcome them, but add huge, protectionist tariffs to combat the "unfair subsidization" allowing China's automakers to launch hit after cheap hit like the $10,000 BYD Seagull.

It turns out that China doesn't like this very much. And after repeatedly threatening to do something about it, the country finally has. On Monday, the country lodged a formal complaint with the World Trade Organization over the European Union's final tariffs, which can be as high as 45% for some Chinese automakers.

Specifically, China says that the EU's final tariffs—which are the product of a long investigation by officials and are levied based on how cooperative automakers were during the inquiry—lack "factual and legal foundation." The country also claims that the tariffs violate the WTO's rules and are "an abuse of trade remedy measures"

From Bloomberg:

Beijing brought the case to the WTO’s dispute settlement mechanism on Monday to “safeguard the development interests” of the EV industry, according to a statement from the Ministry of Commerce. The ministry reiterated its strong opposition to the EU’s tariffs, criticizing the levies as “trade protectionism.”

China’s formal complaint raises the risk of greater tit-for-tat confrontation in a relationship valued at €739 billion ($806 billion) in bilateral merchandise trade in 2023. The bloc has defended the tariffs, saying it’s a byproduct of an investigation of Chinese government subsidies that unfairly benefit the sector.

Despite the tariffs, the EU is still trying to negotiate an end-game solution. Maros Sefcovic, the incoming trade chief of the EU, said that a team of EU officials is currently in China attempting to find a solution to the tariffs, noting that the European Union is "not interested in trade wars."

The two countries couldn't have more different strategies in approaching the EV revolution. China is all about scale—pump out vehicles at a high capacity with heavy government incentives and throw them at markets to see what sticks. European automakers are playing it a bit safer. Instead of fast-tempo production, manufacturers based in the EU are focused on navigating the high costs of the EV transition by adjusting production speed based on consumer interest.

Let's face it, China's offerings are pretty darn tempting. Some of those cars are sleek, sexy, and packed full of futuristic tech that younger buyers are increasingly more interested in. There's a reason that so many Gen Z buyers would consider buying one, and it's not just price.

Meanwhile, the WTO could take a bit to mediate this particular issue. Tariffs aren't exactly a cut-and-dry subject, and the European bloc might push back using the length and thoroughness of its investigation. Meanwhile, the EU's tariffs officially go into effect tomorrow and the powerplay for worldwide EV supremacy has another wrench thrown in its gears.

90%: Tesla Looks To Canada To Revive Cybertruck's Dried-Up Backlog

Tesla has a Cybertruck problem. After delivering somewhere between 40,000 and 50,000 electric trucks, the U.S. market seems to have hit a stall. And the timing couldn't be worse considering Tesla just announced that the truck has become profitable to produce. So, Tesla is looking to the Great White North to continue propping up sales of its trapezoidal truck.

It's no secret that Tesla is having a difficult time converting an estimated 2 million worldwide reservations into actual sales. In fact, delivery numbers reveal that Tesla has only been able to turn about 2.5% of reservation holders into buyers. This has led to the automakers all but churning through the Cybertruck's U.S. reservation list in record time, as folks can now reserve and take delivery of a new truck in just days.

That being said, it's not like the Cybertruck is a poor-selling vehicle. It was the third-best-selling EV in Q3 2024. However, it's important to remember that buyers have been waiting nearly five years to take delivery of a Cybertruck—meaning that this year's sales might have been pent-up demand as the trucks finally ended up in driveways. But as the truck became less supply-constrained, Tesla's has been able to deliver units quicker than it can sell them. Now, the truck's price has fallen $20,000 overnight and buyers still don't seem to be biting like Tesla expected.

So what's to blame here?

The easy speculation here is Tesla's missed promises. Not only did the automaker fail to deliver the truck at the promised $40,000 price point—at least, for now—it fell short on key range and specs that made it appeal to some more traditional truck buyers. In 2019, Tesla announced that it anticipated a huge 500-mile range out of its tri-motor truck. However, Tesla fell short of that number and has only delivered 301 miles of range in its tri-motor truck and 325 miles in its dual-motor. Tesla has since begun taking pre-orders of an in-bed range extender. However, the $16,000 add-on will only extend the range to 470 miles.

Enter: Canada. Today, Canadian buyers can now take delivery of a Cybertruck. Much like the U.S., Tesla is first launching the truck with the $20,000 "Foundation Series" markup, which runs buyers a total of $138,000 CAD, or right around $99,275. Deliveries for a newly ordered truck are less than a month out according to Electrek. More on this from us later today too.

Tesla's brand has also taken a reputation hit thanks to its CEO's recent love for political activism. EVs are, unfortunately, a casualty in America's ongoing partisan culture war. This has historically aligned with left-leaning buyers, some of whom are now ditching their Teslas as quickly as they bought them. It has become almost a stain to tell people you drive an Elon-mobile, just ask the folks who peddle the "I bought this before we knew Elon was crazy" bumper stickers.

All of that isn't going to keep the world away from the stainless steel wedge, though. Some folks can separate the art from the artist and will continue to buy the truck, which is good news for Tesla. But without more buyers lined up after the reservation list dries up, Tesla could find itself with another Faberge egg in its stable.

100%: GM's CEO Says The EV Market Is Oversaturated. Is She Right?

Have you noticed that you can get some killer deals on EVs right now? Prices have been dropping across the industry, driven primarily by competition and cost of material reductions. However, what the U.S. doesn't see is just how competitive China's EV market has become, and just how many automakers exist in the Far East. Spoiler: there are more than 100.

GM CEO Mary Barra recently spoke at TechCrunch Disrupt where she expressed concerns that the state of the EV industry in China, and the price war it has created, simply isn't sustainable long-term.

"You have to look at what the sustainable business is because the situation that is there right now is not sustainable," said Barra. "Of the hundred or so companies, only less than a handful are profitable."

The U.S. doesn't have a large number of EV players like China, however, it's clear that more companies want a piece of the U.S. market. And with EV-to-gas cost-parity looking like more of a reality in the short term. Meanwhile, the federal government has safeguarded its automakers from Chinese imports by implementing heavy protectionist tariffs and only allowing the EV tax credit to be applied to cars with strict sourcing requirements.

So where does the industry go from here? Is more competition a good thing, or could an over-saturation spill-over result in a disruption of the U.S. EV market? Let me know in the comments.

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