Tesla’s lead in the United States electric vehicle space is already relatively noticeable due to its technology and the Supercharger Network. However, this lead may stretch and soon become untouchable if the United Auto Workers (UAW) strike goes through, as the major players in Detroit could see major setbacks.
The UAW’s current agreement with the Big Three is set to expire this Thursday if an agreement on new labor terms is not reached. It would see an end to production and manufacturing of vehicles, at least temporarily, but there would be other tremendous negatives that would affect these companies for years to come, potentially.
J.D. Power stated that the prices of new vehicles could rise by less than 2 percent if the strike lasts about two weeks. The firm’s vice president of data and analytics, Tyson Jominy, said (via Reuters):
“Everyone’s going to see higher prices regardless of the company you buy from if it (strike) continues for more than two weeks.”
While Jominy said Toyota, Honda, and Volkswagen, which are based in other countries, are set to benefit if domestic brands fall prey to the UAW strike, Tesla would be the big winner in the EV space.
Not only has the automaker cut prices significantly this year, but Tesla is still able to undercut many other companies in terms of the vehicles it sells. The Model 3 and Model Y are widely affordable, and while GM’s Chevrolet Bolt is cheaper, Tesla’s cars are more attractive to consumers because of the overall infrastructure, among other reasons.
An increase in prices would be a huge step back for companies like Ford and General Motors, who have fought hard to develop quality EVs that could rival Tesla.
It would also affect vehicle inventories, as Garrett Nelson, an analyst with CFRA said the strikes at Ford, GM, and Stellantis would cut production by 150,000 units every week. Prices will increase on cars as inventories dwindle.
It would basically compound the effects of inflation, which has already caused consumers to cut expenses.
Wedbush’s Dan Ives said that Jim Farley and Mary Barra, CEOs of Ford and GM, respectively, have “some tough decisions ahead and find themselves with the back against the wall.”
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