The recent UAW (United Auto Workers) strikes present major challenges for legacy automakers…

The union is asking for 40% wage increases across the board as well as cost of living protections.

This puts the likes of Ford and GM in a tough financial spot as they look to invest billions of dollars to transition the industry toward EVs. 

Both sides will likely have to make concessions to resolve the issue, but one party remains the clear winner here…

Tesla!

Musk’s company already has a pricing advantage over anything legacy automakers can bring to the EV space…

This means that any deal made with UAW will either result in an increase in car prices, a drop in margins, or both!

Tesla has already made it clear that they are willing to sacrifice their margins in the short run in order to get as many cars on the road as possible.

Why?

Because the company is looking to advance its autonomous driving capabilities quickly…

More cars on the road means more opportunities for machine learning to take place!

While this is great for Tesla, it’s terrible for competitors…

We are in an environment where the consumer is having to make tough choices on how to spend their money in order to be able to pay their monthly credit card bills.

Price is not the only way Tesla could benefit though…

If companies like Ford don’t have the necessary capital to invest in EV factories, then they risk limiting the supply.

This could put the consumer in a situation where they are forced to buy a Tesla over a Ford because there is a long waitlist for legacy automaker EVs. 

That’s all for now…

Until Next Time,

-Damian