Tesla is becoming a political pawn: UK considers removing it from EV incentives
The UK government is considering removing Tesla from its incentive program for electric vehicles after the Trump administration imposed tariffs on all cars and trucks not assembled in the US.
Tesla is becoming a political pawn in Trump’s trade war.
Earlier this month, Tesla contacted the Trump administration to warn them that the automaker could be the target of retaliatory tariffs amid the president’s trade war.
The company was correct.
The Canadian government announced yesterday that Tesla would be banned from upcoming EV rebates – following the lead of several provinces.
Now, the UK is considering doing the same after Trump announced that all imported cars, including every British car sold in the US, will be subject to a 25% tariff starting next week.
UK finance minister Rachel Reeves said today:
We are looking at the zero emission vehicle mandate which is why some of… that money goes to Tesla, and looking at how we can better support the car manufacturing industry in the UK.
Reeves is clearly hinting at banning US automakers from the program or even Tesla in particular.
She is bringing this up as she is still negotiating with the US to try to get the British automobiles exempt from the new tariffs.
The UK is now Tesla’s biggest market in Europe and the only significant market where Tesla is still growing.
Tesla’s sales have crashed more than 40% so far this year in Europe.
Electrek’s Take
Elon Musk’s political meddling and the use of his sales of Tesla shares to finance Trump’s election has turned the automaker into a political pawn amid the trade war.
I guess that’s exactly what Tesla’s policy team was warning earlier this month.
Trump has not only turned many foreigners against American products in general by breaking previously agreed free trade agreements, including some he negotiated during his prior term, but the issue is compounded for Tesla due to its connection with Musk.
The UK government is now basically threatening Tesla to put pressure on Trump’s administration to back off with its tariffs.
It’s not a bad strategy considering they are negotiating with Howard W. Lutnick, the Secretary of Commerce, who is openly conflicted when it comes to Tesla.
Tesla’s situation is already dire in Europe, but the UK is currently its saving grace. With Tesla’s sales crashing in France and Germany, Tesla is now selling more vehicles in the UK than both those countries combined.
In the UK, electric vehicles are exempt from paying both the first-year and standard-rate annual vehicle tax. They also cover up to 75% of the cost of a charging station.
If Tesla buyers don’t have get access to those incentives, it would lose demand in the country.
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Elon wants the US military to start buying Tesla Cybertrucks – and now they are! The Air Force has ordered two Cybertruck testers for target practice to determine how easy they are to blow up, while Jo makes up a whole new conspiracy theory on today’s explosive episode of Quick Charge!
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An it doesn’t stop there. We’ve also got exciting new home battery backup and V2X options for Tesla owners, and one Texas EV driver that decided to conquer the Texas floodwaters by harnessing the awesome combined powers of electrons and stupidity (it’s pretty awesome).
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Tesla’s Dojo supercomputer project is reportedly over. Bloomberg reports that CEO Elon Musk is killing the project after a mass exodus of talent from the Dojo team to a competing startup.
Dojo was the name of Tesla’s in-house AI chip development to create supercomputers to train its AI models for self-driving.
Tesla hired a bunch of top chip architects and tried to develop better AI accelerator chips to rely less on companies like NVIDIA, AMD, and others.
It has been running into delays for years.
We previously reported on significant setbacks. In 2018, Jim Keller, the famed chip architect who was first hired to lead Tesla’s chip-making effort, left the company.
Ganesh Venkataramanan succeeded him, but he left Tesla in 2023.
For the last few years, Peter Bannon, who worked with Keller for years, has been leading Tesla’s chip-making programs, but he is now reportedly also leaving the automaker.
Bloomberg reports that Musk has “ordered the effort to be shut down.”:
Peter Bannon, who was heading up Dojo, is leaving and Chief Executive Officer Elon Musk has ordered the effort to be shut down, according to the people, who asked not to be identified discussing internal matters. The team has lost about 20 workers recently to newly formed DensityAI, and remaining Dojo workers are being reassigned to other data center and compute projects within Tesla, the people said.
DensityAI is a new startup currently in stealth mode, founded by several former Tesla employees, including Venkataramanan.
It reportedly plans to build chips for AI data centers and robots, much like the Dojo program.
The company recently hired 20 former Tesla employees who worked on Dojo.
While the program appeared to be lagging behind for years as Tesla increasingly bought more compute power from NVIDIA, Musk has been claiming progress.
The CEO said in June:
Tesla Dojo AI training computer making progress. We start bringing Dojo 2 online later this year. It takes three major iterations for a new technology to be great. Dojo 2 is good, but Dojo 3 will be great.
During Tesla’s quarterly conference call in late July, the CEO claimed that Dojo 2 will be “operating at scale sometime next year.”
Electrek’s Take
It’s unclear whether the report is accurate or if it’s an extrapolation from the talent exodus to Elon killing Dojo, or if Elon was lying just a few weeks ago.
Alternatively, this development may be so recent that Elon went from being confident in Dojo a few weeks ago to disbanding the team working on it now.
Either way, I think it’s clear that the project has been lagging, and Tesla has been extremely dependent on chip suppliers rather than making its own.
I think Dojo being likely dead is not a big loss for Tesla.
When it comes to chip making, developing its own inference compute for onboard “AI computers” was always the more important project.
TSMC is set to produce Tesla’s new AI5 chip, which is coming soon, and we have recently learned that Samsung will be manufacturing its AI6 chip.
I think the bigger concern from this report is that it’s the latest example of an ongoing exodus of talent at Tesla.
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Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., listens during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
Block shares jumped in extended trading on Thursday after the fintech company increased its forecast for the year.
Here is how the company did, compared to analysts’ consensus estimates from LSEG.
- Earnings per share: 62 cents adjusted vs. 69 cents expected
Block doesn’t report a revenue figure, but said gross profit rose 14% from a year earlier to $2.54 billion, beating analysts’ estimates of $2.46 billion for the quarter. Gross payment volume increased 10% to $64.25 billion.
Block raised its guidance for full-year gross profit to $10.17 billion, representing 14% growth from a year earlier. In its prior earnings report, Block said gross profit for the year would come in at $9.96 billion.
The company expects full-year adjusted operating income of $2.03 billion, or a 20% margin. For the third quarter, the company expects gross profit to grow 16% from a year ago to $2.6 billion, with an operating margin of 18%.
Square payment volume in the quarter grew 10% from a year earlier.
Block faces growing competition from rivals such as Toast and Fiserv‘s Clover, though its Square business still gained share during the quarter in areas such as retail and food and beverage.
Block shares were down 10% this year as of Thursday’s close, while the Nasdaq is up 10%. Last month, Block was added to the S&P 500.
— CNBC’s Robert Hum contributed to this report.
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