Elon Musk’s electric car maker Tesla is the biggest beneficiary of labor unrest that has resulted in a strike impacting Detroit’s “Big Three” automakers, according to analysts.
The United Auto Workers, which represents some 146,000 employees based in Ohio, Michigan and Indiana, announced a targeted strike for Friday.
Some 13,000 employees of Ford, General Motors and Jeep-Chrysler’s parent company, Stellantis, walked off the job at the stroke of midnight Thursday into Friday after management balked at their demands for a four-day workweek and a 46% pay raise.
Daniel Ives, a senior analyst for Wedbush, said a prolonged strike will hamper Detroit’s uphill effort to top Musk’s Tesla in the ultra-competitive electric vehicle market.
“This is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success,” Ives said, referencing Detroit’s “313” area code.
Anderson Economic Group estimates that a 10-day work stoppage could cost the Big Three more than $5 billion.
“In this crucial period of EV execution, model rollouts, distribution, marketing, with EV competition rising across the board, the timing could not be worse,” according to Ives.
Ives said the labor headache gives Tesla an advantage since Musk’s automaker doesn’t have a unionized workforce.
“The clear winner in this ‘Game of Thrones’ battle … is Musk and Tesla with champagne now on ice,” Ives said.
A lengthy work stoppage affecting the production lines in Detroit will allow Tesla to add to its market share in the EV race, according to analysts.
“Tesla would be the big winner at the poker table if there is a long-term UAW strike,” Ted Jenkin, head of the Atlanta-based financial services firm Exit Stage Left, told The Post.
“They already dominate the US EV market and this would just add to their current lead.”
Jenkin said even if the Big Three reach a deal with their workers in the short term, it will have a lasting impact on their balance sheets.
Ives agreed, saying that significant concessions from management to the union would simply drive up prices, resulting in higher costs being passed on to the consumer — thus helping Tesla.
“I think Tesla wins in this situation either way,” according to Jenkin.
“If the automakers cave, they are already struggling with margins in their EV market and it will only get worse if they come to a deal with the UAW.”
“If the strike lasts for an extended period of time, Tesla doesn’t have union workers and they would continue to expand their leadership in EV market share,” Jenkin said.
Musk, who derives most of his wealth from the majority stake that he owns in Tesla, weighed in on the UAW strike in a post on X, the social media company once known as Twitter which he acquired last year for $44 billion.
While Tesla doesn’t permit unions, Musk wrote on Thursday that his company boasts “a great vibe.”
“We encourage playing music and having some fun” at Tesla and SpaceX factories, according to Musk, referencing his rocket-launching company.
“Very important for people to look forward to coming to work!”
Musk then wrote: “We pay more than UAW btw, but performance expectations are also higher.”
“Quite a few of our factory techs who work on the line have become millionaires over the years from company stock grants,” according to Musk, who stripped the UAW of its official X verification status after it launched the strike, the Intercept reported.
Tesla pays between $45 and $50 per hour for labor whereas the Detroit Big Three pay between $64 and $67 per hour — factoring in wages, benefits and profit sharing, according to Axios.
Musk’s car maker is also famous for not relying on suppliers for the parts to make EVs — keeping the entire manufacturing and assembly process in-house at the company’s Fremont, Calif., and Texas factories.
This has allowed Tesla to close the gap with its Detroit-based competitors and rapidly scale up its mass production of its Model 3, Model S and Model Y series of sedans.
In 2017, GM was producing 85 times more automobiles than Tesla.
Last year, however, the Detroit auto giant was producing five times more cars than the number that was rolling off the assembly lines at Tesla.
Many investors on Wall Street long considered Tesla the most overvalued stock, but Musk managed to ramp up production and expand factory space, cementing Tesla as the world’s most valuable car maker.
As of Friday, Tesla had a market capitalization of $866 billion.
By comparison, GM’s market capitalization stood at around $47 billion while Ford’s valuation was around $51 billion. Stellantis had a market cap of $56 billion as of Friday.