Investing.com -- Here is your weekly Pro Recap of the past week's biggest headlines in the electric vehicle space: Tesla cuts more than prices as EPA updates standards and pay for workers in the U.S. goes up. In addition, VinFast enters India with a big investment.
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Tesla's Trials: Range, Pay, Prices, Pause
Tesla Inc (NASDAQ:TSLA) had a rough week. First, the EV giant faces challenges with revised driving-range estimations for its electric vehicles. Responding to a new U.S. government regulation, Tesla adjusted its range estimates for various models, reflecting real-world performance accurately. The move follows concerns about Tesla's range estimates surpassing actual capabilities, leading to discontent among customers.
Tesla's Model 3 also underwent a redesign in North America, maintaining its prices despite the refresh. The updated long-range variant boasts an extended range of 341 miles per charge, along with new enhancements and color options. The move aims to rejuvenate Tesla's vehicle lineup within its primary market, following price competition and discounts in 2023.
The electric vehicle giant saw shares sink Thursday after it was announced that the company will implement pay increases for workers at its California car plant, aligning with other nonunion automakers like Toyota (NYSE:TM), Volkswagen (ETR:VOWG_p), and Hyundai (OTC:HYMTF). The pay raise comes as the United Autoworkers Union (UAW) seeks to increase membership in the U.S., leveraging its successful negotiations with the major Detroit automakers in 2023.
However, Tesla's decision to increase pay may complicate CEO Elon Musk's emphasis on cost-cutting measures. Musk, a vocal critic of unions, has consistently highlighted the challenge of making electric vehicles more affordable, especially amidst rising interest rates.
Further complicating Musk’s cost-cutting goals, Tesla also officially lowered the prices of its Model 3 and Model Y in China, reducing them by amounts ranging from Rmb6.5k to Rmb15.5k.
According to analyst checks, the price reduction was not as significant as the market had expected. The new MSRP for the base Model 3 is now Rmb245.9k, and for the base Model Y, it is Rmb258.9k.
Lastly, Tesla has also announced a temporary halt in production at its plant near Berlin, scheduled from January 29 to February 11. The pause has been attributed to adjusted transport routes due to recent attacks on vessels in the Red Sea.
Shares of TSLA ended trading on Friday down 7.4% for the week.
VinFast Enters India
In a strategic move to tap into the burgeoning electric vehicle (EV) market in India, Vietnam's VinFast Auto (NASDAQ:VFS) has announced its plans to build its first EV facilities in the southern state of Tamil Nadu. The electric vehicle manufacturer aims to invest a total of $2 billion, with an initial commitment of $500 million over the first five years of the project.
VinFast's entry into the Indian market comes as the company eyes the opportunity to establish itself in the world's third-largest vehicle market. The facilities, set to begin construction later this year, include EV and manufacturing plants, with a projected annual capacity of up to 150,000 vehicles. The facilities are expected to generate 3,000 to 3,500 job opportunities.
The Tamil Nadu government has expressed its support for the venture by providing cleared land for manufacturing facilities and ensuring an uninterrupted power supply, among other essential infrastructure support.
VinFast has also unveiled its latest electric models at CES 2024, showcasing the VF (NYSE:VFC) Wild, a mid-size pickup truck, and the VF 3, a mini-sized eSUV. The VF 3 is designed for smart, sustainable, and accessible urban mobility, with a target driving range of 125 miles per full charge. The company plans to launch the VF 3 globally, with reservations set to begin later this year.
Shares of VFS ended trading on Friday down 6.65% for the week.
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