Week after week, the Trump administration has been throwing wrenches at automakers while they play a game of tariff dodgeball. Now, just days before a key deadline in the cabinet's push for certain new tariffs to go into effect, Trump is handing out Band-Aids to stop the bleeding as if it wasn't his administration causing the mayhem.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Today, Trump will announce a break for automakers sweating the impact of tariffs. Slate's approach to manufacturing is the anti-Gigafactory. And Tesla is going on a hiring spree ahead of the Semi launch. Let's jump in.
30%: Automakers To Get Semblance Of Tariff Relief Just Ahead Of May 3rd Deadline
The Trump administration will provide some relief to automakers who are faced with huge tariff bills as a result of the new (and constantly changing) presidential policies on foreign trade.
According to a report from the Wall Street Journal, Trump is expected to reveal the specifics on Tuesday ahead of a rally being held in Detroit, coincidentally marking his 100th day in office. People familiar with the matter have revealed what to expect from the policy changes, and while it doesn't eliminate the gut punch that many automakers are experiencing, it at least softens the blow.
Here are the specifics from WSJ:
President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter.
The decision will mean that automakers paying Trump’s automotive tariffs won’t also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy. The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.
The administration will also modify its tariffs on foreign auto parts—slated to be 25% and effective May 3—allowing automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would fall to 2.5% of the car’s value in a second year, and then be phased out altogether.
It's unclear what "value" means in this context (whether that be sticker price or the cost to manufacture the vehicle in part or as a whole), but let's just use $30,000 as a reference point. This means that automakers could be reimbursed up to $1,125 in tariffs over the first year, which would nullify the cost when importing approximately $4,500 in foreign parts. However, the following year would only reimburse up to $750, or the cost to import $3,000 in foreign parts.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” said Commerce Secretary Howard Lutnick in a statement. “This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”
The goal here is obvious: the administration wants to reduce the reliance on foreign parts and supply chains. Automakers have been begging for some give, or at least for the government to provide the industry with the opportunity to have a gradual phase-out, since, you know, it's impossible to uproot decades of manufacturing complacency in a matter of weeks without any financial impact.
Ford CEO Jim Farley said in a statement that the automaker "welcomes and appreciates" the changes to the tariff policy. Farley, a big fan of the Chinese-made Xiaomi SU7, previously said that the flip-flopping tariff policies were causing "a lot of cost [...] and chaos" in the industry, but recognizes that promoting domestic growth is "essential."
At the end of the day, if it's still more expensive to manufacture a part domestically, the price of a vehicle will increase relative to the new cost of that part. It's unlikely that any automaker will completely eat the price of a part increase forever, especially when the average margin for an automaker is already slim at 6.2%.
60%: Slate's New Plant Will Be The Anti-Gigafactory
Before Slate officially announced its vehicle, one of my biggest questions around the IEV water cooler was "How the heck do these guys expect to make a low-volume, low-price truck profitable?" Through the weeks that followed, Slate began peeling back the wrapper on its plans and answered that very question.
It all comes down to slimming down manufacturing. Rather than invest in huge, expensive machinery that makes premium parts faster for higher volume and lower labor costs, Slate decided to put its money into building a factory that focuses on achieving cost savings through simplicity. Or, as our friends at the Autopian coin it: the Anti-Gigafactory.
It feels oddly like revisiting Saturn. You remember Saturn, right? GM's for-the-people brand where all owners got invited to a huge backyard gathering-style party and cars were literally skinned with plastic instead of metal. Saturn had a niche of being a smart, economical choice, but somehow didn't earn the same bargain basement reputation that Hyundais of the era were slapped with.
Plastic paneling is one way that Slate is managing to pull forward a smart idea from the past to ensure that its plans will be successful. Rather than rely on huge machines to cut, stamp, and shape metal, Slate will use slightly smaller machines to injection mold plastic in a single color.
That's not to say that Slate won't use any sort of stamping. Its underpinnings are largely built from stamped metal fastened together to form its unibody. This would (hopefully) make the truck a bit easier to repair and less likely to be immediately totaled in a small accident due to repair costs. Though it might make it a bit more labor-intensive to build.
The biggest win here is the lack of a paint shop. It can cost hundreds of millions of dollars for a car company to set up a paint shop—literally. Between tooling, automation, and materials, brands dump huge amounts of money into painting cars various shades of monochrome.
Next up is reducing complexity. Some automakers do this by stuffing tons of options into components and then only enabling things that a customer has paid for. Think optional heated seats or steering wheels that can be turned on with a subscription (the parts are still installed, just not enabled), or Tesla where lower-cost models have speakers which are installed but not enabled because they don't have a model with premium sound. Or, automakers that software-limit the battery capacity in a larger pack.
Slate did it just by installing...well, nothing. Bigger battery? Optional. Speakers? Also optional. Turning it into a freaking SUV? You better believe that's optional too. The point is to make one vehicle in one configuration, in just one color.
We already know that Americans want cheaper EVs. If Slate just unlocked the secret to building those stateside, it could usher in a whole new era of Saturn-like brands.
90%: Tesla Is Gearing Up For a Huge Semi Push With Hiring Spree
Tesla's Semi program has been nearly a decade in the making. First unveiled in 2017 alongside the next-gen Tesla Roadster, the automaker has been promising to bring its all-electric Class 8 tractor-trailer to market since 2019. Clearly that hasn't happened, but it looks like the brand may finally be gearing up to actually launch the product in volume over the coming months.
First spotted by Teslarati, Tesla posted a whopping 83 new job openings this week for workers assigned to the Tesla Semi project. The majority of these positions (55) are at its facility in Sparks, Nevada and appear to be directly related to moving along the production of the trucks. We're talking about roles like maintenance technicians, technical trainers, and production control process engineers.
A number of these jobs are also for engineering positions at Tesla's global engineering headquarters in Palo Alto, California. Now, I'm no expert in vehicle R&D, but it seems late in the game to hire a bunch of high-level engineers for Tesla-specific semi-truck components and testing, especially since Tesla plans to launch the Semi at scale this year.
Lars Moravy, VP of Vehicle Engineering at Tesla, said that the automaker planned to begin volume production in late 2025 and ramp for external customers starting in early 2026.
"First units are set to be on the line by the end of this year, and we'll be ramping the factory throughout 2026," said Dan Priestley, head of engineering for the Tesla Semi project, in an update on Monday. He noted that the automaker is planning for an annual capacity of around 50,000 units and will soon begin to plan for high-volume production.
Tesla "launched" the Semi way back in 2022 by releasing a few trucks to PepsiCo. Around this time last year, Tesla had delivered just 36 of the 100 that the brand had ordered. Since then it's been radio silence with a handful of Semi spottings and promises that the commercial truck would be coming soon.
The automaker reaffirmed that 2025 would be the year of product launches, including Tesla's yet-to-be-revealed low-cost model (that might very well be a stripped-down Model 3 or Model Y). That means Tesla could still be planning to launch the Semi later this year—which could be huge for its commercial side of the business considering that the retail side tanked 71% year-over-year.
100%: Let's Be Real, Who's Buying The Slate Truck?
Don't come for me—I mean this lovingly, because I love the idea of a tiny, two-door pickup. Big, big fan of anything even remotely Jimny-shaped, so Slate's offering has me wide-eyed and wondering whether or not I should open up my wallet in the near future.
That being said, it's hard to ignore that you're really not getting a flashy vehicle with a million bells and whistles for $20,000. What you do get is a do-whatever workmobile for a decent price. Does it seem to be a great battery-powered work truck or toy for the homeowner who would otherwise buy a used Tacoma on the off-chance they need a big vehicle for a Home Depot run? Sure. But the fact that even the speakers are optional makes me scratch my head.
I want to know who the heck is planning to buy these trucks. Who is the ideal buyer picking one of these up, and why are they choosing it over, say, a similarly priced Ford Maverick Hybrid? Then again, I did just consider spending close to $10,000 to import a Honda Acty two years ago. So maybe I'm the target audience. Is it me?
Anyway, enough rambling. Tell me your thoughts in the comments.
