EV Sales Are Slowing. Now The Auto Industry Is Banking On A Self-Driving Boom

The American automotive sector was supposed to be well on its way to phasing out internal combustion by now. Most carmakers operating in the United States bet on an electric boom that would take off by the end of the decade, leading to an industry powered by batteries in the 2030s.

Clearly, that’s not the case—not with the Trump administration yanking the policy-support rug out from underneath them. Now, car companies need to find another equally lucrative obsession to hyper-focus on, and more and more, it’s autonomous vehicles.

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Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Musk pitches a flying car (again) and Tesla’s door handle fiasco expands even further. Let’s jump in.

30%: As EV Sales Retreat For Now, Automakers Refocus on AVs

Photo by: Ford

The industry’s 2010s-era foray into self-driving didn’t really pay off for many automakers. General Motors-backed Cruise lit money on fire while others, like Ford’s Argo AI, died in infancy. And while Tesla has steadily improved its Autopilot and Full Self-Driving features over the past decade and even launched a Robotaxi service, it too hasn’t achieved its biggest promises.

But things seem to be changing thanks to the boom in AI and computing power. Sterling Anderson, former co-founder of self-driving startup Aurora and former head of Autopilot at Tesla, joined GM earlier this year to boost its entire tech game—including autonomy.

His focus was on how autonomy can make roads safer. In fact, he even called the tech the “cornerstone of GM’s modern portfolio.” Meaning that it’s probably fair to bet that GM is going head-first into spending on autonomy efforts. Here’s more from the Financial Times:

Car giants from General Motors and Stellantis to Volkswagen are racing to develop autonomous vehicles as they seek to compete with Tesla and other new rivals on “the next frontier” of growth.

[…] But analysts say the pivot towards autonomous technology will pose an inherent dilemma for traditional carmakers.

Margins in the ride-hailing market are notoriously thin, and scaling a robotaxi service will require heavy capital investment at a time when the automotive industry is already struggling with the higher costs of developing electric vehicles and the loss of profits in China.

“The carmakers need to produce profit and cash whereas the big tech giants need to produce growth. The market is not holding them to the same agenda, which gives the tech giants a much greater advantage to pursue things like robotaxis,” HSBC analyst Mike Tyndall said.

Individual ownership of vehicles is also a limitation to ride hailing. For the industry’s economics to work, “we’ll have to give up personal ownership”, he added.

This is perhaps why GM decided to focus on what it calls “personal autonomy”: i.e., making its Super Cruise hands-free highway driving assistant better and better over time. Eventually, its plan is to add LIDAR to make Super Cruise “eyes-off” as well. That may make a lot more sense than running a robotaxi service, which was a $10 billion money pit for its now-shuttered Cruise division. 

GM isn’t the only automaker that’s investing in autonomy. Just last week, Stellantis pledged its allegiance to a partnership with Nvidia, Foxconn and Uber. Under this deal, the automaker would start joint production of its autonomous platform in 2028—the U.S. being the first global market with 5,000 vehicles. Volkswagen also has its own partnership with Uber in the works, via the ID. Buzz and its Moia autonomy division. We’ve also seen similar announcements from Hyundai, Toyota and more recently, Lucid Motors.

60%: Feds Pull Harder On Tesla’s Door Handle Problem

Photo by: Tesla

Tesla’s futuristic door handles are back in the headlines. The National Highway Traffic Safety Administration (NHTSA) has expanded its investigation into Tesla’s door handle failures after a wave of new complaints were made just days after the regulatory body opened its investigation into the automaker’s tech.

To recap, Tesla’s door handles are fully electronic, with no mechanical components. They can become inoperative after a crash or a failure of the 12-volt battery, leading to people being trapped in the cars, in certain cases. Some owners who filed complaints said those occupants were sometimes small children who, in some cases, were stuck in the car during hot days, strapped into car seats.

Bloomberg reports on the additional complaints:

The National Highway Traffic Safety Administration cited the additional complaints in an Oct. 27 letter to Tesla about the investigation the agency initiated in mid-September. Owners of the manufacturer’s best-selling Model Y described exterior door handles becoming inoperative due to issues with their vehicle’s low-voltage battery. In several cases, this locked children inside the vehicle.

The letter provides a glimpse into how NHTSA is proceeding with an investigation launched days after Bloomberg News uncovered a series of incidents in which people were injured or died after they were unable to open the doors of Teslas following battery-power losses or crashes. Tesla’s longtime design chief later told Bloomberg that the company was working on changes to its door handles.

Originally, the scope of the NHTSA investigation opened in September was just the 2021 Tesla Model Y. However, within 10 days of opening the investigation, regulators received seven additional complaints, which, pushed the agency to begin looking into what the agency calls “peer vehicles”—that means 2017-2022 Tesla Model 3 and 2020-2022 Tesla Model Y EVs. It’s unclear if that will expand to other vehicles that use similar locking or software mechanisms at this time.

The agency also probed Tesla to clarify the number of consumer complaints that it has received related to the defect. It also asks for safety data regarding crashes, fires, injuries, fatalities, lawsuits and arbitration proceedings related to its door handles. Tesla has until Dec. 10 to provide regulators with the requested data.

The automaker now also faces a lawsuit over a November 2024 crash that killed five occupants of a Tesla Model S. According to Bloomberg, the complaint alleges that two occupants who survived the impact were burned to death after the car’s doors wouldn’t open. The lawyer of the family said that Tesla’s “design choices” for its door handles (some of which were reportedly insisted upon by Musk), “Created a highly foreseeable risk” that resulted in the occupants being trapped.

Tesla has already said that it would look to rework its door handles to be easier to operate in “a panic situation.”

90%: Toyota Takes Another Tariff Hit

2026 Toyota RAV4 Woodland Exterior 4

Photo by: Toyota

In some ways, Toyota’s sitting pretty right now, thanks to its hybrid push fueling a sales boom as EVs contract. But no automaker—even one with a gigantic U.S. manufacturing presence like Toyota—can escape the tariff pain. Here’s Reuters with the latest:

The world’s best-selling automaker is forecast to report a 25% year-on-year profit drop to 863.1 billion yen ($5.72 billion) for the July-September quarter, according to the average estimate of eight analysts surveyed by LSEG.

Such a result would mark Toyota’s weakest performance since the fourth quarter of fiscal 2022, highlighting the impact of macroeconomic factors after strong hybrid sales and a favourable exchange rate fuelled a record earnings streak.

At its previous earnings announcement in August, Toyota estimated a hefty 1.4 trillion yen hit from the levies and slashed its full-year operating profit forecast by 16% to 3.2 trillion yen. Investors will be watching closely for any further revision.

Hybrid cars accounted for 42% of Toyota and Lexus sales over the six-month period ending in September, while battery electric vehicles made up less than 2%.

Painful indeed.

100%: Is The Joy Of Driving On Its Way Out?

Photo by: BYD

There’s something to love about a car that connects its driver to the road. Manual steering, roll-up windows and as few screens as possible. You know—as close to the Slate approach as possible. Then again, more and more people seem willing to pay subscription fees for Super Cruise and Ford’s BlueCruise.

How are you feeling about the whole push for autonomy? Are driver-focused cars doomed in the future, or is this just a great feature for long highway trips and taxi-like short trips ? Let me know in the comments.