Musk and Tesla are the 'clear winners' of the Detroit auto strike. Analysts say Elon 'put champagne on ice' as he sees the ultimate EV victory

President Joe Biden is caught between a rock and a hard place as autoworkers strike against Detroit’s Big Three U.S. carmakers: Ford, General Motors, and Stellantis (formerly Fiat Chrysler). 

Biden, who has touted himself as the most pro-union and greenest president ever, is struggling to balance his commitments to organized labor and to the production of eco-friendly electric vehicles (EVs) in the key election battleground state of Michigan. Meanwhile, Tesla CEO Elon Musk—who is poised to profit from Detroit’s struggles and seize even more market share—is probably sitting back and laughing because he and the president are far from friends. 

Biden long refused to acknowledge Tesla’s dominance in the EV market given its status as a non-unionized company and Musk’s outspoken stance against organized labor. (Last year, Musk even dared the UAW to try to organize at Tesla, but implied that they’d fail because his workers are compensated and treated “well.”) In 2021, the White House hosted an EV summit, inviting executives from the Big Three and snubbing Tesla, and thereby Musk. In January 2022, Biden met with GM CEO Mary Barra and Ford CEO Jim Farley to discuss spending legislation, once again overlooking Musk. 

The billionaire lashed out on then-Twitter, the social media platform now known as X since Musk purchased it in October 2022, saying “Biden is a damp [sock] puppet in human form.” The next month, CNBC reported that the White House had no plans to invite Musk to future meetings, fearing that he would do or say something embarrassing.

“Biden has pointedly ignored Tesla at every turn and falsely stated to the public that GM leads the electric car industry,” Musk told CNBC in response. 

But that has changed in the past year as Tesla’s dominance has become increasingly difficult to ignore. 

‘Champagne on ice’

John Podesta and Mitch Landrieu, both senior advisors to the president, hosted Musk at the White House in January to discuss the implementation of EV initiatives. Weeks later, Tesla announced that it would open its charging stations to owners of non-Tesla cars in exchange for federal funding—a move by the White House to speed the adoption of EVs.

GM and Stellantis, as well as BMW, Honda, Hyundai, Kia, and Mercedes, announced in July that they would build “high power” charging stations. But the current hodgepodge network of EV chargers is often unreliable or in bad locations, which has prompted Ford, GM, and other car makers to sign a deal with Tesla’s much larger network of chargers. In this way, the industry has already de facto surrendered to Tesla.

The “clear winner” in all of this is Musk and Tesla, “with champagne now on ice,” analysts from Wedbush Securities wrote in a note. Tesla “sits in a non-union position” and therefore isn’t at risk of a strike. The leading EV company also stands to benefit, they said, from the fact that its Detroit “competitors now face mounting costs/complexities in the years ahead depending on how this ultimately plays out.” 

“If a strike is lengthy (4 weeks+) then ultimately production and the EV roadmap could be pushed out into 2024 and delays would be on the horizon at this crucial period for GM, Ford, and Stellantis,” the analysts added.

And agreeing to the UAW’s “audacious” demands for a roughly 40% pay increase to make up for years of inflation could make it even harder for the Big Three to compete with Tesla on prices. Ford said in a statement on Thursday that these demands would more than double the company’s UAW-related labor costs, “which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor.” 

UAW president Shawn Fain fired back, claiming on CBS that labor costs makeup only 5% of a vehicle’s cost, so automakers “could double our wages and not raise the price of the vehicles and still make billions in profits.”

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