Electric Porsche Boxster And Cayman Could Be Dead Before They Ever Got The Chance To Live

Good morning! It's Tuesday, February 3, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, Porsche may give up on the electric Cayman and Boxster because of development issues, Elon Musk's SpaceX acquires Elon Musk's xAI in record-setting deal that definitely isn't shady at all, California's $200 million EV incentive program needs automakers to get with the program and Ford's aluminum supplier is still reeling from a devastating September fire.

In a win for "purists" but a loss for people who like cool cars, Porsche is apparently considering throwing in the towel on the electric Boxster and Cayman in an effort to cut costs that have ballooned during a lengthy and troubled development process. It's a damn shame, because, if the Taycan and Macan EVs were anything to go off, the electric version of the little sports cars were certainly going to be a thrill.

Porsche is reportedly facing budget constraints because of slumping sales in China as well as the high cost of reversing some of its EV strategy. Discussions as whether or not to add a plug-in hybrid variant to the lineup have only made the issue more complicated, unnamed sources say. A drivetrain like that would require different underpinnings, and it would delay the project by several years — putting Porsche at risk of introducing already-outdated technology when it finally arrives. What a mess. From Bloomberg:

While scrapping the line is one option Leiters is considering, he hasn't made a final decision, the people said. The CEO, in the job since Jan. 1 after taking over from Oliver Blume, is under pressure to balance the spending constraints with concerns over underused factories due to lower-than-expected demand for Porsche's EVs.

[...]

The issues with the 718 line are part of a broader set of problems Leiters inherited following Porsche's ailing EV push. The company is pivoting back to combustion-engine and hybrid models after cutting its guidance four times last year, a slump that also hit parent Volkswagen AG. Porsche has warned that the EV course correction would slash operating profit by as much as €1.8 billion in 2025. In addition, the automaker is grappling with import tariffs in the US, its biggest single market.

Gas-powered 718 sales ended in most markets in 2024, mostly because of emsision. However, because we live in the land of the free, Porsche sold the Boxster and Cayman in the U.S. through the end of 2025, but that's over now, and so is the car. It's a shame too, because in 2024 — the cars' last full year of production — sales rose 15% to 23,670.

I'm sure whatever car Porsche brings to replace the 718 will be excellent, but I can't say I won't be disappointed if the long-awaited electric variant isn't at least part of the equation.

Elon Musk says his company, SpaceX, has acquired his other company, xAI, in a record-setting deal that is meant to unify his artificial intelligence and space ambitions by combining the rocket-and-satellite company with Grok, alleged maker of illegal sexual images. Really, this is more of a bailout of xAI than anything, since it's hemorrhaging money, but that's neither here nor there. 

The transaction values SpaceX at $1 trillion and xAI at $250 billion. From Reuters:

The deal [...] represents one of the most ambitious tie-ups in the technology sector yet, combining a space-and-defense contractor with a fast-growing AI developer whose costs are largely driven by chips, data centers and energy. It could also bolster SpaceX's data-center ambitions as Musk competes with rivals like Alphabet's Google, Meta, Amazon-backed Anthropic and OpenAI in the AI sector.

[...]

Investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI as part of the acquisition, this person said. Some xAI executives may also opt for cash instead of SpaceX stock at $75.46 per share, the person said.

"This marks not just the next chapter, but the next book in SpaceX and xAI's mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!" Musk said.

The purchase of xAI sets a new record for the world's largest M&A deal, a distinction held for more than 25 years when Vodafone bought Germany's Mannesmann in a hostile takeover valued at $203 billion in 2000, according to data compiled by LSEG.

The combined company of SpaceX and xAI is expected to price shares at about $527 each, another person familiar with the matter said. SpaceX was already the world's most valuable privately held company, last valued at $800 billion in a recent insider share sale. XAI was last valued at $230 billion in November, according to the Wall Street Journal.

The merger comes as the space company plans a blockbuster public offering this year that could value it at over $1.5 trillion, two people familiar with the matter said.

[...]

The world's richest man has a history of merging his ventures together. Musk folded social media platform X into xAI through a share swap last year, giving the AI startup access to the platform's data and distribution. In 2016, he used Tesla's stock to buy his solar-energy company SolarCity.

The agreement could draw scrutiny from regulators and investors over governance, valuation and conflicts of interest given Musk's overlapping leadership roles across multiple firms, as well as the potential movement of engineers, proprietary technology and contracts between entities.

It remains to be seen exactly what this deal will mean for Tesla, which did just invest $2 billion in xAI last month as a lifeline to the fledgling online porn-maker and chat bot. It is clear though that Tesla is a bit more separated from the rest of Musk's empire, thanks to the fact it's publicly owned.

California's proposed $200 million electric vehicle incentive program is going to have some still limits in place if it comes to fruition. It'll be restricted to first-time buyers only, and it's going to require participating manufacturers to contribute matching incentives. The proposal would allow incentives to cut down on the up front cost of a new or used EV purchase, but, as of right now, no incentive amount has been announced. Vehicle eligibility will be similar to what was adopted by Congress in 2022. 

This move by California Governor Gavin Newsom comes after President Trump killed the $7,500 electric vehicle tax credit for new EVs and $4,000 credit for used EVs at the end of last September. The move caused EV sales to fall sharply in the final three months of the year. From Reuters:

In late 2024, Newsom said if President Donald Trump eliminated a federal EV tax credit, he would propose creating a new version of the state's Clean Vehicle Rebate Program that ended in 2023 and spent $1.49 billion to subsidize 586,000 vehicles over a decade.

Newsom, a vocal Trump foe who is seen as a leading Democratic presidential candidate in 2028, in September harshly criticized GM, saying GM CEO Mary Barra "sold us out" in a bid to eliminate the progress made by the California Air Resources Board.

CARB met last week in Detroit with the Detroit Three automakers to talk about the plans.

Automakers are grappling with the fallout of fewer EV sales. Chrysler-parent Stellantis said this week it would stop selling its plug-in hybrid electric Jeep Wrangler and Grand Cherokee in North America, while GM said it would take a $6 billion charge to unwind some electric vehicle investments.

Trump loves going after EVs. He signed legislation last summer that barred California's electric vehicle sales mandates. The following month, the administration told automakers a new law signed by Trump won't require them to pay any fines for not meeting fuel efficiency rules that date back to 2022.

Ford aluminum supplier Novelis is still not back up to full production over four months after a massive fire ripped through its factory in New York in September. Ripple effects could be felt on Ford's pickup truck line — and bottom line.

Following the fire, Ford cut its 2025 profit guidance and sait it would lose the output of up to 100,000 F-Series pickups through the end of 2025. The automaker says the costs could end up at $2 billion, and it planned to mitigate about half of that. Initially, Novelis said it expected full production to resume by the end of December, but that clearly didn't happen. From Reuters:

An additional fire in late November upset that timeline. Ford at the time said the November fire did not change its projections for its 2025 core profit. It is now unclear how the prolonged shutdown at the facility's hot mill might affect Ford's results for the fourth quarter or the first quarter.

A Ford spokesperson said the company would provide an update when it reports fourth-quarter earnings on February 10. A Novelis spokesperson pointed to the company's November statement, in which it said it "will continue to leverage alternate sources, including its global network of plants and industry peers, to mitigate impact."

The automaker is purchasing aluminum from other Novelis facilities, Ford executives have said.

Ford's F-Series line, which includes the F-150 and larger Super Duty truck, is by far the company's top seller and generates the bulk of its global profit, analysts estimate. While Novelis also supplies other automakers, Ford is a major customer because its trucks use a largely aluminum body.

The automaker said last year it would increase production of its F-150 and Super Duty trucks by more than 50,000 vehicles at plants in Michigan and Kentucky in 2026 to recoup some of the lost production from the Novelis fire. It has axed production of the F-150 Lightning electric truck, which also used aluminum from the supplier, as part of a $19.5 billion writedown on its EV programs.

It's definately not going to be a small project or undertaking to rebuild the damaged areas and equipment at the New York Novelis factory. The company projected rebuilding and repair costs would exceed a quarter billion dollars.

History.com

As a Jets fan, the New England Patriots have done terrible, horrible, unspeakable things to me for my entire life. I need the Seahawks, and my GEQBUS Sam Darnold, to humble them this Sunday. I've always believed in you, Sam. Please do this for me.

If you had told me after watching F1 that it would be nominated for three Grammys and actually win one, well, I probably wouldn't believe you. Strange times, we're living in. Still, it's a really fun movie to watch on an airplane, so I guess that should cont for something.