To grind out profits from E.V.s, carmakers have pursued some familiar strategies. If the union’s demands for a 40 percent pay increase are met, that figure could grow to $136 per hour, The Wall Street Journal reported over the weekend, Bloomberg reported that UAW negotiators would accept a slightly lower increase, though still one greater than the 9 to 15 percent offers automakers have made public thus far. Big Three automakers currently pay an estimated average of $66 per employee per hour, including wages and benefits. While the proudly anti-union company’s market share has begun to decline, Teslas still account for about 60 percent of all E.V.s sold in the United States and stand poised to dominate the country’s E.V. Their hottest competition, after all, is Tesla. A far easier place for them to cut costs en route to electrification is in the workforce. Many of those costs, though-including those for the minerals required to make batteries such as cobalt and lithium-are outside the direct control of carmakers. Bearish Wells Fargo analyst Colin Langan found that E.V.s now cost roughly $7,000 more to make than an equivalent internal combustion engine vehicle, which is down from the $10,000 premium he enumerated last year. costs for manufacturers are declining and could tumble further still thanks to federal incentives. business won’t be profitable until 2025.Į.V. sold through Ford Pro, the company’s otherwise profitable arm dealing with commercial customers. On a quarterly earnings call, one investor analyst calculated that Ford was losing $32,000 on each E.V. unit to lose $4.5 billion this year, revised upward from a previous estimate of $3 billion. In July, Ford announced that it expects its E.V. But thin margins on E.V.s are making them sweat. Altogether, their CEOs took home $74 million last year. The Big Three are enjoying a record boom, having raked in a combined $21 billion in total profits during the first half of this year alone. The stakes are high for automakers still figuring out how to make money off electrification. Amid tense negotiations over the contract that covers its 146,000 members employed by the Big Three (Ford, GM, and Stellantis-the owner of Chrysler and Jeep), the UAW is sounding the alarm that the government-subsidized push for electrification is being used to undermine the kinds of wages and working conditions for which its members have long fought. The new leadership of the muscular union has taken a more combative tone with both automakers and Democrats than its predecessors, withholding its traditional early-days endorsement of the party’s White House incumbent. That push, however, has invited the ire of an unusual foe: the United Auto Workers, whose members are now on the brink of what could be the second-largest work stoppage in 25 years. The Department of Energy now tallies $140 billion worth of announced investments in E.V.s since President Joe Biden took office, including over 100 new or expanded E.V. joyrides, White House officials tout a surge of manufacturing spending since that bill’s passage last summer. If the Inflation Reduction Act can be said to have a mascot, it’s the electric vehicle.
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