Tesla isn't involved in the United Auto Workers' negotiations with General Motors, Ford and Stellantis, but it's the elephant in the room regardless.

Why it matters: For the Detroit Three, the competitive threat from non-unionized Tesla heightens the importance of reaching a reasonable contract that allows them to build affordable electric vehicles.

• Meanwhile, the UAW has a vested interest in obtaining lucrative deals if it ever wants to resuscitate its efforts to organize Tesla workers — or those at any other automaker, for that matter.

Threat level: The UAW's deals with GM, Ford and Stellantis expire at 11:59 p.m. Thursday — and analysts at Evercore ISI and Wedbush Securities predict a greater than 85% chance of a strike at all three, which has never happened before.

• The UAW this week reportedly lowered its wage increase demand from 40% to 36%, signaling some progress at the bargaining table, but the parties remain far apart on benefits.
• Anderson Economic Group reports that a 10-day strike at all three would lead to direct losses of $5.6 billion and a possible one-quarter recession in Michigan, Indiana and Ohio.

Zoom in: Behind the scenes, automakers say the cost gap between them and Tesla is a big reason why they're struggling to compete with the EV titan.

• Tesla currently makes vehicles at an estimated labor cost of $45 to $50 per hour, whereas the Detroit Three make vehicles for about $64 to $67 per hour. Both figures include wages, benefits and profit-sharing.

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