Tesla FSD faces hurdles in EU expansion - Global Automotive Morning Paper, August 7, 2026
Today's Conclusion
Today's main theme was building the industrial foundation to realize electrification and autonomous driving.
Ford has announced an electric pickup truck starting at $28,000 in the U.S. Rather than simply releasing a cheap EV, they are changing the way the vehicle body is assembled, attempting to bring their cost structure closer to that of Chinese competitors.
Tesla and SpaceX are investing $16.8 billion into a massive hub to manufacture and package AI semiconductors in-house. Meanwhile, the U.S. government is stopping the export of black mass derived from waste batteries to keep battery materials within the country.
In Europe, the issue has arisen that safety verification data for Tesla's FSD approval is being kept private as a trade secret.
Connecting today's news, the focus of competition is shifting from "how many EVs to sell" to whether they can be built cheaply, whether semiconductors and battery materials can be secured, and how well safety can be explained.
1. Ford announces $28,000 electric pickup "Fathom"
Ford announced that it will sell the mid-size electric pickup "Fathom" starting at approximately $28,000. Reservations will begin in early 2027, with deliveries scheduled for the fall of that year. In the current U.S. market, new cars under $30,000 are rare, making this a very aggressive price point for an EV. (Reuters)
What is important is not the price itself, but the change in manufacturing methods.
Ford will introduce a new production method called "assembly-tree" at its Louisville plant. Instead of a single long production line, the front, rear, and structural battery/seat sections will be assembled in parallel and joined at the end. The goal is to shorten the process and reduce capital investment and labor costs. (Reuters)
At the end of 2025, Ford recorded a $19.5 billion impairment charge in its EV business and canceled several projects, including large electric pickups. The Fathom, released afterward, is a clear departure from the previous strategy of "making high-priced EVs with massive investment." (Reuters)
This is not just a new car announcement.
To compete with Chinese manufacturers, U.S. automakers have entered a stage of rethinking factory structure and product design from scratch, beyond just battery prices and parts procurement. Whether the Fathom succeeds depends more on whether Ford can truly replicate low-cost production than on range or performance.
2. Tesla and SpaceX invest $16.8 billion in AI semiconductor factory—Vertical integration of automakers deepens further
Tesla and SpaceX will invest $16.8 billion in the initial phase for "Terafab," an AI semiconductor hub to be built in Texas.
The facility will be approximately 100 million square feet in size, handling the manufacturing, packaging, and testing of advanced logic semiconductors and memory in one location. The plan is to produce semiconductors for Tesla's Cybercab and Optimus, as well as SpaceX's space data centers. (Reuters)
Including future additional investments, the entire project could become even larger. According to Reuters, previous filings indicated figures of $55 billion for initial investment and up to $119 billion including additional phases. (Reuters)
From the perspective of the automotive industry, this shows that Tesla is changing from a mere EV manufacturer into a company that integrates AI computing resources, semiconductors, robots, and autonomous vehicles.
Until now, vertical integration for automakers centered on engines, vehicle bodies, batteries, and software. Tesla is now adding semiconductor manufacturing to that list.
However, this is both a strength and a significant risk. Semiconductor factories require enormous capital, and low utilization rates will become a burden. Tesla and SpaceX are trying to avoid supply constraints by anticipating future AI demand, but if they miscalculate demand, they will be saddled with huge fixed costs.
3. U.S. Halts Exports of 'Black Mass' from Spent Batteries
The U.S. Department of Commerce has announced a one-year ban on the export of 'black mass'—the crushed remains of used lithium-ion batteries—and scrap containing tungsten. The regulation will take effect on August 27, 2026. (Reuters)
Black mass contains critical minerals that can be reused, such as lithium, nickel, and cobalt. The U.S. is attempting to change the structure where these waste materials are exported overseas and re-refined in countries like China, aiming instead to channel them into the domestic recycling industry. (Reuters)
This is a different type of industrial policy than EV purchase subsidies or battery plant support.
While subsidies have previously focused on mines, refining, and battery cell plants, policies will now increasingly focus on securing spent batteries themselves as strategic resources within the country.
However, recycling capacity within the U.S. is not yet sufficient. Some companies, such as Li-Cycle and Ascend Elements, have faced financial difficulties or bankruptcy, and if the waste cannot be processed domestically, stopping exports will only lead to a buildup of inventory. Industry insiders interviewed by Reuters also describe this measure as a 'stopgap to buy time.' (Reuters)
For automakers, while this could increase sources for recycled materials in the medium to long term, it may also increase battery recycling costs and waste disposal burdens in the short term.
4. European Tesla FSD Approval Keeps Safety Data Private
The Dutch vehicle certification authority, RDW, has recognized the safety of Tesla's FSD and is pushing for approval across the entire EU. However, it has become clear that they have not disclosed what tests were conducted or what metrics were used to determine safety. (Reuters)
RDW and Tesla state that the details of the safety tests are trade secrets. Meanwhile, traffic safety experts criticize the decision to keep the basis for approval private, arguing it is incompatible with public safety. (Reuters)
Tesla positions FSD as a key factor for recovering sales in Europe. Approval in the EU requires the support of countries representing at least 55% of member states and 65% of the population, with a vote possible as early as October 2026. (Reuters)
This issue is not unique to Tesla.
In autonomous driving and driver assistance systems, there is a growing possibility that companies will claim 'safety is intellectual property' and regulators will keep verification data private. However, for technology that carries accident risks, showing only the conclusion while hiding the verification process makes it difficult to gain social trust.
The competition in autonomous driving is moving beyond performance to a transparency competition regarding how much safety data is disclosed and can be verified by third parties.
Small changes today
Jetour, a subsidiary of China's Chery, is considering a plan to share idle factories of existing manufacturers in Brazil for local production. Since entering the market in March, Jetour has sold approximately 4,000 vehicles in Brazil and plans to invest 400 million reais by the end of 2027. (Reuters)
While overseas production by Chinese manufacturers is not new, the model of borrowing surplus capacity from existing manufacturers rather than building new factories is worth noting.
Regional production of EVs and hybrids may expand from large-scale standalone factory construction to asset-light models involving shared idle facilities, contract manufacturing, and joint ventures.
Additionally, Lyft reported that its gross bookings for the second quarter reached a record high of $5.5 billion, with partnerships accounting for approximately 30% of rides in North America. The platform-based revenue model, which bundles vehicle and service companies without developing autonomous vehicles in-house, continues to function. (Reuters)
Today's reading
The keyword for the August 7th edition is, "Rebuilding industrial systems, not just cars."
Ford is changing how it assembles factories to realize low-cost EVs.
Tesla is internalizing everything down to AI semiconductors, attempting to support autonomous driving, robotics, and space businesses with a single computing infrastructure.
The U.S. government is keeping waste batteries from leaving the country and circulating critical minerals domestically.
In Europe, the transparency of safety assessments is being questioned regarding the introduction of autonomous driving technology.
Today's materials may look like separate news stories. However, what they have in common is that EVs and autonomous driving are no longer just about competition between individual products.
Price competitiveness is determined by factory design, AI performance is determined by semiconductor supply, battery supply is determined by waste recovery policies, and the spread of autonomous driving is determined by trust in regulatory authorities.
The global automotive industry has entered a stage where looking only at finished vehicle manufacturers is not enough to grasp the big picture. What will determine future success or failure are companies and countries that can assemble manufacturing, semiconductors, resource circulation, and regulation into a single system.
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