Tesla isn’t involved in the United Auto Workers’ negotiations with General Motors, Ford and Stellantis, but it’s the elephant in the room regardless.
Why it matters: For the Detroit Three, the competitive threat from non-unionized Tesla heightens the importance of reaching a reasonable contract that allows them to build affordable electric vehicles.
Threat level: The UAW’s deals with GM, Ford and Stellantis expire at 11:59 p.m. Thursday — and analysts at Evercore ISI and Wedbush Securities predict a greater than 85% chance of a strike at all three, which has never happened before.
Zoom in: Behind the scenes, automakers say the cost gap between them and Tesla is a big reason why they’re struggling to compete with the EV titan.
Between the lines: Tesla’s profits per vehicle are higher than any of its global rivals, and CEO Elon Musk is using that advantage as a weapon in a price war that is squeezing industry rivals.
Those efficiencies have enabled Tesla to rapidly scale its operations, posing a growing threat to the established U.S. automakers.
What they’re saying: “We’re here to win. This is a very intense marketplace,” GM president Mark Reuss said at Tuesday’s Automotive News World Congress in Detroit.
The big question: After the contract dispute with the Detroit Three is over, will the UAW go after Tesla?
Keep in mind: The sprawling plant in Fremont, California, where Tesla makes many of its EVs was previously a GM-Toyota joint venture with unionized workers.
The bottom line: Tesla stands to gain if the automakers, the UAW or both emerge wounded from the contract talks.