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Welcome to Wednesday as we talk about the US Senator encouraging US automakers to sue the government… and win. We also talk about the higher-than-ice repair costs of EVs as well as Tesla’s move to curb them with a former Geico exec. 

Show Notes with links:

• U.S. Sen. Joe Manchin has urged manufacturers to sue the Treasury Department over its implementation of local content rules for clean energy tax credits under the Inflation Reduction Act (IRA).
  • Manchin, now an independent, has criticized both major parties for "partisan extremism" and claims the Treasury's final rules halve the original content requirements in the legislation arguing that the rules harm U.S. manufacturers and allow continued reliance on Chinese materials.
  • He highlighted that the rules permit automakers to use Chinese critical minerals for another year, which he says "breaks the law."
  • Treasury Secretary Janet Yellen acknowledged the concerns and offered technical discussions to address them.
  • Manchin stated​​, "I'm encouraging every manufacturer to sue you, and I will do the amicus brief on (their) behalf .... and you'll lose every suit." 

• Repairing an EV is on average 30% more expensive than repairing an internal combustion engine vehicle, according to Q1 2024 insurance data. Here’s why.
  • Average EV repair claim in Q1 2024 was $6,066, compared to $4,703 for ICE vehicles.
  • EVs declared total losses at nearly the same rate as ICE vehicles (9.93% vs. 9.51%).
  • The biggest cost driver is mechanical labor hours: 3.04 hours for EVs vs. 1.66 hours for ICE vehicles.
  • Extra labor often involves managing high-voltage batteries, including de-energizing and removal.
  • EVs rely more on new OEM parts (89.29%) than ICE vehicles (65.14%), leading to higher costs.
  • Tesla Model 3 and Model Y are the top vehicles for repairable claims, followed by the Ford Mustang Mach-E.

• Tesla is taking a strategic step to reduce the high insurance costs for its vehicles by hiring a long-time GEICO executive.
  • Allen Laben, a 20-year veteran of GEICO, joins Tesla as 'Head of Insurance Partnerships'.
  • Tesla aims to make its vehicles easier and more economical to insure by partnering with insurance companies and collision shops.
  • Laben's goal is to lower the total cost of Tesla ownership and support the transition to sustainable energy.
  • Tesla's own insurance product, launched in California in 2019 and later expanded, uses real-time driving data to determine insurance rates.
  • The insurance product, while innovative, has been controversial due to its reliance on real-time driving data and safety scores.
  • "My goal is to make Tesla vehicles easy and economical to insure," stated Allen Laben, emphasizing partnerships with insurance companies and

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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