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Tesla shares suffer New Year’s hangover on demand worries, delivery issues

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  • Stock top S&P 500 loser on first trading day of 2023
  • Selloff knocks off $50 billion from market cap
  • Tesla misses Q4 vehicle deliveries estimate
  • EV company is still the world’s most valuable automaker

Jan 3 (Reuters) – Tesla Inc (TSLA.O) shares kicked off 2023 with a thud, plunging more than 12% on Tuesday on growing worries about weakening demand and logistical problems that have hampered deliveries for the world’s most valuable automaker.

Once worth more than $1 trillion, Tesla lost more than 65% in market value in a tumultuous 2022 that saw it increasingly challenged by other automakers and face production issues stemming from COVID lockdowns in China.

Tuesday’s slide knocked off nearly $50 billion in market value, roughly equal to the valuation of rival Ford Motor Co (F.N), which last year sold three times as many cars as Tesla.

The sell-off came after Tesla missed market expectations for fourth-quarter deliveries despite shipping a record number of vehicles.

Reuters Graphics

“Tesla, as it has grown is now entering a phase of still solid but slower growth,” Morningstar analyst Seth Goldstein said. Being a major auto producer, it “is likely to feel more of an impact from an economic slowdown”, he added.

Several Wall Street analysts said they expected more pressure on the stock in the coming months from increasing competition and weaker global demand.

Global automakers have in the past few months battled a demand downturn in China, the world’s top auto market where the spread of COVID-19 has hit economic growth and consumer spending. Tesla is offering hefty discounts there and a subsidy for insurance costs.

At least four brokerages cut their price targets and earnings estimates on Tuesday, pointing to the deliveries miss and Tesla’s decision to offer more incentives to boost demand in China and the United States, the two largest global auto markets.

The company’s stock was the worst performer on the benchmark S&P 500 index (.SPX) on Tuesday as it fell as low as $104.64 a share – the lowest since August 2020. More than 220 million shares exchanged hands during regular trading hours.

The electric-vehicle maker’s performance in 2022 was among the worst on the S&P 500 index.

Members of media and guests surround the Tesla Model Y and Model 3 during Thailand Tesla’s official launch event in Bangkok, Thailand, December 7, 2022. REUTERS/Athit Perawongmetha

“You have so many things working against the stock. One obviously is Musk’s involvement in Twitter,” said Dennis Dick, market structure analyst and trader at Triple D Trading.

Tesla’s market value has declined by about $370 billion since Chief Executive Elon Musk closed the deal to buy social media firm Twitter.

Some of that drop has come from his share sale to fund the $44 billion deal, while the stock also declined due to worries among investors that Musk has been distracted by the social media company.

At a value of about $341 billion, Tesla is still the world’s most valuable automaker, even though its production is a fraction of rivals such as Toyota Motor Corp (7203.T).

Tesla shares biggest loser among Big Tech Tesla shares biggest loser among Big Tech since April

Tesla delivered 405,278 vehicles in the fourth quarter, short of analysts’ estimates of 431,117. For all of 2022, its deliveries rose by 40%, missing Musk’s 50% annual target.

The result “came at the cost of higher incentives, suggesting lower pricing and margin,” brokerage J.P.Morgan said in a note, lowering its price target by $25 to $125.

The median price target of 41 analysts on the stock was $250, more than double the current price, according to Refinitiv data. The lowest price is $85, from Roth Capital Partners.

The shortfall highlighted the logistics hurdles facing the company which is known for its end-of-quarter delivery rush. The gap between production and deliveries has widened to 34,000 vehicles as more cars got stuck in transit.

The automaker plans to run a reduced production schedule in January at its Shanghai plant, extending the lowered output it began in December into 2023, Reuters reported.

Meanwhile, California-based electric vehicle maker Rivian Automotive Inc (RIVN.O) narrowly missed its 25,000-unit production target for 2022.

Reuters Graphics

Reporting by Aditya Soni, Eva Mathews and Akash Sriram in Bengaluru; Additional reporting by Amruta Khandekar; Editing by Tomasz Janowski, Shounak Dasgupta and Arun Koyyur

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Business

Tesla reports record quarterly deliveries but misses estimates

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  • Rare for Tesla to deliver less than it produces
  • Tesla stock in 2022 had its worst year since going public

Jan 2 (Reuters) – Tesla Inc (TSLA.O) on Monday reported record production and deliveries for fourth-quarter electric vehicles, but it missed Wall Street estimates, burdened by logistics problems, slowing demand, rising interest rates and fears of recession.

The world’s most valuable automaker delivered 405,278 vehicles in the last three months of the year, compared with Wall Street expectations of 431,117 vehicles, according to Refinitiv data.

The company had delivered 308,600 vehicles in the same period a year earlier.

Tesla delivered 388,131 Model 3 compact sedans and Model Y sports utility vehicles (SUVs) compared with 17,147 Model X and Model S luxury cars.

In total, Tesla made 439,701 cars in the fourth quarter.

Reuters Graphics

As logistical bottlenecks persisted – an issue CEO Elon Musk had said in October he was working to resolve – Tesla’s fourth quarter deliveries fell about 34,000 vehicles short of production.

In the third quarter, the company deliveries were about 22,000 units fewer than production.

Delivering fewer cars than it makes has been rare for the automaker, which in previous quarters delivered more or similar numbers to the vehicles produced.

Among other headwinds for Tesla, analysts have cited demand weakness in the world’s top auto market China, as well as stiff competition from legacy automakers such as Ford Motor Co (F.N), General Motors Co (GM.N) and startups such as Rivian Automotive (RIVN.O) and Lucid Group (LCID.O).

Tesla plans to run a reduced production schedule in January at its Shanghai plant, extending the lowered output it began this month into next year, according to a Reuters report, based on a review of an internal schedule.

Tesla’s stock, which did not trade on Monday due to a New Year holiday, fell 65% in 2022, its worst year since going public in 2010. Analysts and retail shareholders feared demand issues stemming from an uncertain economy would dent the company’s target to grow deliveries by 50% annually.

“This was a disappointing delivery number and the bulls will not be happy,” said Wedbush Securities analyst Daniel Ives.

Tesla said in a separate statement that it plans to host its Investor Day on March 1 and livestream the event from its Gigafactory in Texas when it will discuss longterm plans for expansion and capital allocation.

The automaker also hinted at a “generation 3” platform to show its investors on Investor Day. Musk said in October that Tesla was working on a “next-generation vehicle” which will be cheaper and smaller than the Model 3 and Model Y cars.

(This story has been refiled to remove New York dateline)

Reporting by Akash Sriram and Baranjot Kaur in Bengaluru; Additional reporting by Akanksha Khushi; Editing by Sriraj Kalluvila, Matthew Lewis, Howard Goller and Barbara Lewis

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Tesla sends Shanghai boss and aides to jumpstart U.S. output

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SHANGHAI/SAN FRANCISCO, Dec 21 (Reuters) – Tesla Inc’s (TSLA.O) China chief Tom Zhu and a team of his reports has been brought in to troubleshoot production issues in the United States, fueling talk among colleagues he is being groomed for a bigger role at a time when Chief Executive Elon Musk has been distracted by Twitter.

Zhu, who heads Tesla’s Asia operations, has been traveling with a team including Shanghai gigafactory manager, Song Gang, to Tesla’s plants in California and Texas, and was there as recently as last week, according to two people with knowledge of the matter. Both asked not to be named because they were not authorized to speak to the media.

Tesla did not respond to written requests for comment from Reuters sent to its Shanghai and global media relations accounts. Musk did not respond to a Reuters’ email seeking comments for the story. Zhu and Song could not be reached for comment.

Under Zhu, Tesla Shanghai rebounded strongly from lockdowns this year to bring Tesla close to its growth target for 2022 of 50% production growth. Analysts expect output to fall short at closer to 45%, based on forecasts for the just-concluding fourth quarter.

Zhu and others made their first trip to the United States for Tesla this year in August, one of the people said, at a time when the company has some key management roles there unfilled.

Among the projects the Shanghai team have worked on is Tesla’s long-delayed Cybertruck, its next new model, a third person said.

Tesla’s Austin plant is ramping up production of the Model Y and readying the Cybertruck. The Fremont plant is preparing to launch a new version of the Model 3, which will start production in Shanghai next year, Reuters has reported.

Some Tesla investors and analysts have voiced concerns about Musk’s distraction following his acquisition of Twitter in October and the depth of the executive bench at the electric-car company.

Bloomberg reported this month that Zhu was helping to run the Austin plant. However, Zhu’s colleagues in Shanghai believe he is in line for a more senior and wider-ranging role at Tesla, the two people said.

A close aide to Zhu in Shanghai circulated a farewell poem for the China boss in recent weeks on social media, anticipating his new assignment, according to the message reviewed by Reuters.

SHANGHAI TEAM ON THE ROAD

At the Austin factory, Chinese engineers were seen by people at the plant working in the area reserved for development of the Cybertruck and batteries, a third person with knowledge of operations there said. Tesla has targeted production of the Cybertruck next year.

At Fremont California, Chinese staff have been working on Model Y underbody assemblies, according to another person with knowledge of their work there.

When Tesla posted a picture on Twitter on Friday to celebrate Austin hitting a new production milestone of 3,000 Model Ys in a week — still less than a third of the weekly output of Shanghai last quarter — Zhu was shown smiling with hundreds of people on the factory floor.

Zhu, who was born in China but now holds a New Zealand passport, is a no-fuss manager who favors Tesla-branded fleece jackets and lives in a government-subsidized apartment a 10-minute drive from the Shanghai Gigafactory, according to people who work with him and his comments to Chinese media.

When Musk sent a memo in early June warning he had a “super bad feeling” about the economy, Shanghai was on track to end the quarter down 36% from the quarter before because of COVID lockdowns, data released later showed.

With help from Shanghai officials, Zhu restarted operations by asking thousands of workers and suppliers to stay at the factory for more than six weeks. Zhu himself opted to stay longer, sleeping at the factory as Musk had in 2018 when Fremont was struggling to ramp production, two people with knowledge of the events told Reuters.

Shanghai, a complex that employs some 20,000 workers, came roaring back in the third quarter, with output of the Model Y and Model 3 up over 70% on the quarter.

Through September, Shanghai accounted for more than half of Tesla’s output.

The plant has excelled in applying cost-saving, factory-floor innovations for Tesla, including the use of massive casting machines to simplify production.

“The manufacturing people who led that push are obvious choices to spread the production gospel into the other new plants,” said Sam Fiorani, who tracks production trends Auto Forecast Solutions.

Tesla board member James Murdoch said last month the company had recently identified a potential successor to Musk without naming the person. Murdoch did not immediately respond to a request for comment.

Reuters has no evidence that Zhu is the possible candidate.

“With Elon Musk’s attention currently being pulled in a number of directions, finding someone to help guide Tesla is important, especially someone with the manufacturing know-how that Tom Zhu has,” Fiorani said.

Some investors are skeptical that Zhu alone could turn things around: “In America, doing business is very, very different than running a factory in China,” Ross Gerber, a Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management said on Twitter Spaces on Tuesday. “So I think Elon needs to be at Tesla.”

Reporting by Zhang Yan in Shanghai and Hyunjoo Jin in San Francisco; editing by Kevin Krolicki and Daniel Flynn

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Business

GM recalls 140,000 Chevrolet Bolt EVs over fire risks

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WASHINGTON, Dec 20 (Reuters) – General Motors Co (GM.N) said Tuesday it is recalling 140,000 Chevrolet Bolt EVs in North America because the carpet could catch fire after a crash where a front seat belt pretensioner deploys.

The U.S. automaker said the recall covers various 2017 through 2023 model year Chevrolet Bolt EV vehicles due to rare instances of front seatbelt pretensioner exhaust gases coming in contact with floor carpeting fibers, after a vehicle crash, which could cause a fire.

About 120,000 U.S. vehicles and 20,000 Canadian vehicles are impacted by the recall.

Reporting by David Shepardson; Editing by Sandra Maler

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Business

Electric vehicles confront the leap to the mass market

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DETROIT, Dec 15 (Reuters) – The past year was sobering for investors who poured money into Tesla Inc (TSLA.O) and rival electric vehicle startups that hoped to emulate Tesla CEO Elon Musk’s success.

As interest rates rose and financial markets gyrated, shares in many EV startups deflated. Rivian Automotive Inc (RIVN.O), which had a higher market value than Ford Motor Co (F.N) shortly after it went public in 2021, lost more than 70% of its value over the past year.

Other EV startups fared worse. Electric van maker Arrival warned it could run out of cash in less than a year. Lucid Group Inc (LCID.O), backed by Saudi Arabia’s sovereign wealth fund, struggled to build its sleek Air luxury EVs. Chinese Tesla challenger Xpeng Inc’s (9868.HK) shares lost more than 80% of their value.

Now comes the hard part: Persauding more mainstream consumers to come along for the ride.

WHY IT MATTERS

The automobile industry is pouring more than $1 trillion into a revolutionary shift from combustion engines to electric vehicles guided by software. From Detroit to Shanghai, automakers and government policymakers have embraced the promise of electric vehicles to provide cleaner, safer transportation. European countries and California have set 2035 as the deadline for ending sales of new combustion passenger vehicles.

Tesla Inc’s (TSLA.O) surge to become the world’s most valuable automaker – achieving a $1 trillion valuation last year – humbled established automakers such as Toyota Motor Corp (7203.T) and Volkswagen AG (VOWG_p.DE) that once were reluctant to go electric.

Starting next year, a wave of new electric vehicles from pickup trucks to middle market SUVs and sedans will hit the world’s major markets.

Industry executives and forecasters do not agree on how rapidly electric vehicles could take over half the global vehicle market, let alone all of it.

In China, the world’s largest single automotive market, battery electric vehicles have captured about 21% of the market. In Europe, EVs account for about 12% of total passenger vehicle sales. But in the United States, EV market share is only about 6%.

Among the barriers to EV adoption, industry executives and analysts said, were a dearth of public fast-charging infrastructure, and the rising cost of EV batteries, driven by shortages of key materials and uncertainty over government subsidies that have buoyed EV purchases in major markets including the United States, China and Europe.

The all-electric Ford F-150 Lightning pickup truck is unveiled at the company’s world headquarters in Dearborn, Michigan, U.S., May 19, 2021. REUTERS/Rebecca Cook/File Photo

By 2029, electric vehicles could account for a third of the North American market, and about 26% of vehicles produced worldwide, according to AutoForecast Solutions, a consultancy.

Electric vehicle sales likely will not increase in a smooth, ever-ascending curve, said AFS President Joe McCabe. If there is a recession next year, as many economists forecast, that will slow EV adoption.

Wards Intelligence forecasts that combustion vehicles will make up just under 80% of North American sales in 2027. Based on automakers’ product plans, Wards analyst Haig Stoddard said at a recent conference that manufacturers “expect strong ICE (internal combustion engine) volume heading into the next decade.”

WHAT DOES IT MEAN FOR 2023?

Throughout 2022, established automakers such as Mercedes, Ford and General Motors Co (GM.N) unveiled dozens of new electric vehicles to challenge Tesla and the upstarts.

Mass production of most of these vehicles kicks into gear starting in 2023 and 2024.

By 2025, there could be 74 different electric vehicle models offered in North America, McCabe said. But he predicts fewer than 20% of those models are likely to sell at volumes above 50,000 vehicles a year. Automakers could be stuck with too many niche models and too much capacity.

Slowing economies threaten overall vehicle demand in Europe and China, too.

During the early years of the 20th Century, new auto companies sprang up, backed by investors eager to catch the wave of mass mobility that Henry Ford and other automotive pioneers started. By the 1950s, the global auto industry had consolidated and once-heralded brands such as Duesenberg had disappeared.

The next few years will determine whether the 21st Century’s crop of electric vehicle brands will follow a similar path.

Explore the Reuters round-up of news stories that dominated the year, and the outlook for 2023.

Reporting by Joe White
Editing by Bernadette Baum

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German car giants and Asian battery kings: a match made in Hungary

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  • German, Chinese and S.Koreans head to Hungary
  • They dominate auto investment and subsidies
  • Orban’s Hungary keen to court foreign business

BERLIN/BUDAPEST, Dec 13 (Reuters) – German automakers and Asian battery suppliers are getting together in Hungary in a multi-billion-dollar marriage of convenience to drive their electric ambitions.

The companies are flocking to central Europe, where Viktor Orban’s government is defying Western wariness of China and offering generous benefits to host foreign operations and stake Hungary’s claim as a global centre for electric vehicles (EVs).

Investment in the Hungarian auto industry is being dominated by three countries – Germany, a champion carmaker, plus China and South Korea, EV battery leaders way ahead of European rivals.

Companies from those three countries have accounted for 29 out of the 31 cash subsidies handed out by Hungary for major investments in its auto and battery sector over the past decade, according to a Reuters analysis of government data that shows the scale of German, Chinese and Korean convergence there.

“Cathodes, anodes, separators, assembly lines, the full battery supply chain is here,” said Dirk Woelfer of the German-Hungarian Chamber of Commerce in Budapest. “This is a foot in the door to Europe.”

Recipients of such subsidies included the likes of German automakers BMW (BMWG.DE) and Mercedes-Benz (MBGn.DE), and battery makers such as China’s BYD and Korean rival Samsung SDI (006400.KS). The median subsidy level has been 15% of investment.

In total, Hungary has received over 14 billion euros ($15 billion) in foreign direct investment into its battery sector alone in the past six years, according to government figures.

Major investments are broadly classed as those worth over 5-10 million euros, varying with factors such as jobs created.

State incentives and the opportunity for automakers and battery suppliers to work next door to each other is proving a strong pull, according to interviews with about 20 industry players and consultants in Germany, Hungary, China and South Korea.

China’s CATL (300750.SZ), the world’s No. 1 EV battery maker, and Korean battery giants SK Innovation (096770.KS) and Samsung SDI, all told Reuters that the planned proximity to German carmakers was a key factor in their decisions to invest in Hungary, as well as being able to source separators and other components there.

CATL is investing $7.6 billion to build Europe’s largest battery plant in Hungary. This plant and the $2.1 billion BMW factory will both be sited in the city of Debrecen, which is attracting an ecosystem of suppliers, ranging from makers of brakes and battery cathodes to industrial machinery.

Mercedes-Benz is converting its factory in Kecskemet to produce electric cars, while Volkswagen’s (VOWG_p.DE) Audi is making cars and electric motors in Gyor.

Such big business could present a boon for Prime Minister Orban’s government as the country faces its toughest economic environment in more than a decade, with inflation running above 20%, the economy slowing and EU funds in limbo.

Yet the Hungarian EVs project also faces stiff obstacles, according to many of the industry insiders.

One key concern is the huge demands that massive battery plants will place on the electricity grid, which needs to shift away from fossil fuels towards renewables to meet the net-zero emissions targets of much of the auto industry, the people said.

A lack of specialised workers in Hungary to work in battery cell manufacturing could also drag on capacity, they added.

HIPA, the Hungarian Foreign Ministry agency responsible for attracting investments in areas ranging from batteries and cars to logistics, did not respond to Reuters queries about the EV industry.

‘CHINA’S MADE GOOD STEPS’

Hungary’s welcome to Asian battery makers might jar with concerns expressed by Brussels and Berlin about the perils of Europe becoming too dependent on China and other foreign powers, particularly in technologies central to the green transition.

Still, for now, the need to ramp up EV output leaves the European auto industry little choice but to source from Asian players, said Csaba Kilian of Hungary’s automotive association.

“I absolutely agree that European manufacturers should have their own sources … but it’s a competition, and China has made good steps,” he added. “There is a learning curve.”

Europe should have a EV battery manufacturing capacity of 1,200 gigawatt hours (GWh) by 2031 if current plans come to fruition, outstripping expected demand of 875 GWh, Benchmark Mineral Intelligence (BMI) estimates. But of that 1,200 GWh, 44% will be provided by Asian companies with factories in Europe, ahead of homegrown firms on 43% and U.S. pioneer Tesla (TSLA.O) with 13%, according to a Reuters calculation based on BMI data.

The prospects for developing a battery sector in Germany have been set back by record energy there as a result of the loss of Russian gas, according to autos consultants at Boston Consulting Group and Berylls Strategy Advisors.

Hungary offers a comparatively stable energy system bolstered by nuclear energy, as well as high subsidies and Europe’s lowest corporate tax rate of 9%.

The entire battery supply chain has come to the country, said Ilka von Dalwigk, policy manager at the European Battery Alliance, launched by the European Union in 2017 to kick-start a homegrown industry.

“Everything is located there. When we look at the forecast for 2025 and 2030, it looks like it will have one of the largest production capacities in Europe,” she added.

“It might very well be that Hungary is in fact the next big battery production cluster in Europe.”

Asked about concerns about reliance on Asia for technology, an EU official said the bloc – which must approve member state subsidies to investors – had a system in place to cooperate and exchange information on investments from non-EU countries that may affect security.

The European Commission is currently in talks with Hungary over the size of the subsidy the country will offer to CATL for building the Debrecen plant, the official added.

‘SENDING THE WRONG SIGNAL’

For some Western companies, setting up shop in Hungary is a tough decision.

German autos supplier Schaeffler said it was on the verge of setting up its primary electric motor plant in Hungary rather than Germany in August because of the appeal of Hungary’s incentives, but decided on Germany for fear of sending “the wrong signal” to Germans who fear a loss of jobs to overseas.

Other industry players expressed a range of concerns over potential pitfalls for the burgeoning Hungarian auto industry as factories ramped up, including the power grid issue.

Batteries, in particular, are highly energy-intensive parts of EVs to produce, requiring high amounts of power for the drying the materials and machine operation.

Hungary’s sources of energy in 2021 comprised 80% fossil fuels, 14.5% nuclear and 3.6% solar, according to a Reuters calculation of data from the BP Statistical Review of World Energy.

The mix spells trouble for carmakers who will soon need to showcase carbon-free credentials across their supply chains under new German and European legislation.

Hungarian Foreign Minister Peter Szijjarto met senior executives from BMW and auto suppliers including Schaeffler and Knorr-Bremse in Munich last month, ahead of the German carmaker announcing it was beefing up its investment in the country.

Topics discussed included plans to improve logistics infrastructure in Hungary and increasing the amount of renewables energy used for the power grid, according to one of the companies that attended.

When BMW first announced its plan to build its Debrecen plant, in 2018, the government committed to spending around 135 billion forints on improving local infrastructure, according to calculations by the German-Hungarian Chamber of Commerce.

On the battery side, CATL told Reuters it was considering developing solar power with local partners in Hungary.

Despite the risks, Alexander Timmer, a partner at Munich-based consultants Berylls Strategy Advisors who has worked on several autos and battery projects in Hungary, said the country presented an appealing package.

“The combination of cost advantages, state subsidies, and closeness to automakers’ plants makes Hungary increasingly attractive to battery producers, he added.

($1 = 397.54 forints; $1 = 0.9483 euros)

Reporting by Victoria Waldersee in Berlin, Gergely Szakacs in Budapest; Additional reporting by Heekyong Yang, Zhang Yan; Editing by Pravin Char

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Business

Musk delivers first Tesla truck, but no update on output, pricing

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  • Tesla ships first Semi to PepsiCo five years after unveiling it
  • No details on orders or capacity for electric truck
  • Semi uses existing Tesla motors, to feature new Supercharger

Dec 1 (Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk delivered the company’s first heavy-duty Semi on Thursday to PepsiCo (PEP.O) without offering updated forecasts for the truck’s pricing, production plans or how much cargo it could haul.

Musk, who appeared onstage at an event at Tesla’s Nevada plant, said the battery-powered, long-haul truck would reduce highway emissions, outperform existing diesel models on power and safety and spin-off a fast-charging technology Tesla would use in its upcoming Cybertruck pickup.

“If you’re a trucker and you want the most badass rig on the road, this is it,” Musk said, noting that it was five years since Tesla had announced it was developing the all-electric truck. Still, industry experts remain skeptical that battery electric trucks can take the strain of hauling hefty loads for hundreds of miles economically.

At Musk’s first Tesla reveal since taking over Twitter – an acquisition some investors worry has become a distraction – the company did not announce pricing for the Semi, provide details on variants of the truck it had initially projected or supply a forecast for deliveries to PepsiCo or other customers. Tesla said it would begin using the Semi to ship parts to its plant in Fremont, California.

In 2017, Tesla had said the 300-mile range version of the Semi would cost $150,000, and the 500-mile version $180,000, but Tesla’s passenger electric vehicle prices have increased sharply since then.

Robyn Denholm, chair of Tesla, recently said the automaker might produce 100 Semis this year. Musk has said Tesla would aim to produce 50,000 of the trucks in 2024.

PepsiCo, which completed its first cargo run with the Tesla truck to deliver snacks for those attending the Nevada launch event, had ordered 100 trucks in 2017.

Brewer Anheuser-Busch (ABI.BR), United Parcel Service Inc (UPS.N) and Walmart Inc (WMT.N) were among other companies that had reserved the Semi. Tesla did not provide details on orders or deliveries to customers, nor an estimate on what the total cost of ownership for future buyers would be compared to diesel alternatives.

‘NOT IMPRESSIVE’

Musk said the Semi has been doing test runs between Tesla’s Sparks, Nevada factory and its plant in Fremont, California. Tesla said it had completed a 500-mile drive on a single charge, with the Semi and cargo weighing in at 81,000 pounds in total.

Tesla did not disclose the weight of an unloaded Semi, one key specification analysts had hoped to learn and an important consideration for the efficiency of electric trucks.

Musk has spoken in the past about the prospect of fully autonomous trucks. Tesla did not provide details on how Tesla’s driver assistance systems would function in the Semi it unveiled on Thursday or future versions.

[1/5] Tesla Chief Executive Elon Musk waves near Tesla Semi electric trucks during a live-streamed unveiling in Nevada, U.S. December 1, 2022, in this still image taken from video. Tesla/Handout via REUTERS

The Semi delivery presentation ended without Musk taking questions, as he often does at Tesla events.

“Not very impressive – moving a cargo of chips (average weight per pack 52 grams) cannot in any way be said to be definitive proof of concept,” said Oliver Dixon, senior analyst at consultancy Guidehouse.

Tesla had initially set a production target for 2019 for the Semi, which was first unveiled in 2017. In the years since, rivals have begun to sell battery-powered trucks of their own.

Daimler’s (MBGn.DE) Freightliner, Volvo (VOLVb.ST), startup Nikola (NKLA.O) and Renault (RENA.PA) are among Tesla’s competitors in developing alternatives to combustion-engine trucks.

Walmart (WMT.N), for instance, has said it has been testing Freightliner’s eCascadia and Nikola’s Tre BEV trucks in California.

‘LIKE A CHEETAH’

The Semi is capable of charging at 1 megawatt and has liquid-cooling technology in the charging cable in an updated version of Tesla’s Supercharger that will be made available to the Cybertruck, Musk said. The Cybertruck is scheduled to go into production in 2023.

Trucks in Semi’s category represent just 1% of U.S. vehicle sales but 20% of overall vehicle emissions, Tesla said.

Tesla said other, future vehicles would use powertrain technology developed for the Semi without providing details. The Semi uses three electric motors developed for Tesla’s performance version of its Model S, with only one of them engaged at highway speed and two in reserve for when the truck needs to accelerate, a feature that makes the truck more energy-efficient, Musk said.

“This thing has crazy power relative to a diesel truck,” Musk said. “Basically it’s like an elephant moving like a cheetah.”

In a slide displayed as part of Musk’s presentation, Tesla showed an image of a future “robotaxi” in development with a mock-up of the future car covered under a tarp.

The presentation took place after Tesla shares closed at $194.70. The stock has fallen about 45% so far this year, losing about $500 billion in market capitalisation, down to about $615 billion.

Among factors cited by investors have been Musk’s sales of Tesla shares to finance his takeover of Twitter, signs that a slowing global economy has started to cut into demand for Tesla’s premium-priced cars, and a warning by the company that it might not meet its target to grow deliveries by 50% this year.

Reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Kenneth Maxwell

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Business

Tesla EVs ranked among the worst in annual reliability survey by Consumer Reports

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Nov 15 (Reuters) – (This Nov. 15 story corrects headline to say Tesla EVs ranked ‘among the worst’, not ‘worst’. Story was previously corrected to remove reference to Mercedes in headline and paragraph 1, full-size pick-up trucks in paragraph 1)

Electric vehicles (EVs) from Tesla Inc (TSLA.O) and other brands were among the least reliable vehicles in the United States, Consumer Reports magazine’s annual reliability survey showed on Tuesday.

Although EVs and full-size pick up trucks enjoy the hottest demand in the market, they are the “most problematic”, the nonprofit organization that evaluates products and services said.

The report flagged a growing interest in hybrid vehicles, with 36% of prospective buyers considering one for their next car or truck purchase.

Tesla, the world’s most valuable automaker, climbed by four spots and was ranked 19th out of the 24 brands. The EV leader continues to have issues with body hardware, steering/suspension, paint and trim, and climate system on its models, the report said.

In October, the Elon Musk-helmed company said it expected to miss its vehicle delivery target this year and cited logistics challenges. read more

The top-ranked brands in the survey were Toyota and Lexus, and seven of the ten best-scoring brands were Japanese and Korean.

Among brands owned by Detroit automakers, Lincoln was the only one in the top ten, securing the tenth place.

The magazine’s annual survey of new vehicle reliability predicts which cars will give owners fewer or more problems than their competitors, based on data collected. Its scorecard is influential among consumers and industry executives.

Reporting by Aishwarya Nair in Bengaluru; Editing by Devika Syamnath

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Business

Buffett’s Berkshire discloses $4.1 bln TSMC stake

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Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion of stock in Taiwan Semiconductor Manufacturing (2330.TW), , a rare significant foray into the technology sector by billionaire Warren Buffett’s conglomerate.

The news sent shares in TSMC up more than 6% in Taiwan on Tuesday, as it boosted investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low last month due to a sharp slowdown in global chip demand.

In a Monday regulatory filing describing its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares of TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). It exited an investment in Store Capital Corp (STOR.N), a real estate company that agreed in September to be taken private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggy back on what Berkshire buys. Larger investments are normally Buffett’s.

While Berkshire does not normally make big technology bets, it often prefers companies it perceives to have competitive advantages, often through their size.

TSMC, which makes chips for the likes of Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% jump in quarterly profit last month, but struck a more cautious note than usual on upcoming demand.

“I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.

“Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

Its more than six-year wager during the last decade in IBM Corp (IBM.N) did not pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views more as a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion equity portfolio.

Berkshire disclosed the TSMC stake about 2-1/2 months after it began reducing a decade-old, multi-billion dollar stake in BYD Co (002594.SZ), China’s largest electric car company.

In the third quarter, Berkshire added to its stakes in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (CE.N), Paramount Global (PARA.O) and RH (RH.N).

It also sold shares of Activision Blizzard Inc (ATVI.O), Bank of New York Mellon Corp (BK.N), General Motors Co (GM.N), Kroger Co (KR.N) and US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as the BNSF railroad, the Geico auto insurer, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

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Twitter lays off staff as Musk blames activists for ‘massive’ ad revenue drop

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  • Musk looking to axe around half of Twitter’s workforce
  • Employees file class action against Twitter
  • Staff lose access to systems
  • Volkswagen pulls ads

Nov 4 (Reuters) – Twitter Inc started a major round of layoffs on Friday, alerting employees of their job status by email after barring the entrances to offices and cutting off workers’ access to internal systems overnight.

The move follows a week of chaos and uncertainty about the company’s future under new owner Elon Musk, the world’s richest person, who tweeted on Friday that the service was experiencing a “massive drop in revenue” as advertisers pulled spending.

Musk blamed the losses on a coalition of civil rights groups that has been pressing Twitter’s top advertisers to take action if he did not protect content moderation. The groups said on Friday they are escalating their pressure and demanding brands pull their Twitter ads globally.

“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” Twitter said in an email to staff on Thursday evening announcing the cuts that came on Friday, which was seen by Reuters.

The company was silent about the depth of the cuts, although internal plans reviewed by Reuters this week indicated Musk was looking to cut around 3,700 Twitter staff, or about half the workforce.

Staff who worked in engineering, communications, product, content curation and machine learning ethics were among those impacted by the layoffs, according to tweets from Twitter staff.

Shannon Raj Singh, an attorney who was Twitter’s acting head of human rights, tweeted on Friday that the entire human rights team at the company had been cut.

Musk has promised to restore free speech while preventing Twitter from descending into a “hellscape.” However, his reassurances have failed to calm major advertisers, which have expressed apprehension about his takeover for months.

Volkswagen AG (VOWG_p.DE) recommended its brands pause paid advertising on Twitter until further notice in the wake of Musk’s takeover, it said on Friday. Its comments echoed similar remarks from other companies, including General Motors Co (GM.N) and General Mills Inc (GIS.N).

Angelo Carusone, president of Media Matters for America, which is part of the civil rights coalition, said he knew of two more major advertisers that were preparing to announce that they would pause ads on the platform.

Musk tweeted that his team had made no changes to content moderation and done “everything we could” to appease the groups. “Extremely messed up! They’re (civil right groups) trying to destroy free speech in America.”

Speaking at an investors conference in New York on Friday, Musk called the activist pressure “an attack on the First Amendment.”

Twitter did not immediately respond to a request for comment.

ACCESS TO SYSTEMS CUT

Dozens of staffers tweeted they lost access to work email and Slack channels before receiving an official notice, which they took as a sign they had been laid off.

[1/9] Owner and CEO of Twitter, Inc. Elon Musk arrives at the 29th Annual Baron Investment Conference in Manhattan in New York City, New York, U.S., November 4, 2022. REUTERS/Andrew Kelly

They tweeted blue hearts and salute emojis expressing support for one another, using the hashtags #OneTeam and #LoveWhereYouWorked, a past-tense version of a slogan employees had used for years to celebrate the company’s work culture.

Twitter’s curation team, which is responsible for “highlighting and contextualizing the best events and stories that unfold on Twitter,” had been axed, employees said on the platform. The company’s communications team in India has also been laid off, according to a Twitter executive in Asia.

A team that focused on research into how Twitter employed algorithms, an issue that was a priority for Musk, was also eliminated, according to a tweet from a former senior manager at Twitter.

Senior executives including Vice President of Engineering Arnaud Weber also said their goodbyes on Twitter on Friday: “Twitter still has a lot of unlocked potential but I’m proud of what we accomplished,” he tweeted.

Employees of Twitter Blue, the premium subscription service that Musk is bolstering, were also let go. An employee with the handle “SillyRobin” who had indicated they were laid off, quote-tweeted Musk’s previous tweet saying Twitter Blue would include “paywall bypass” for certain publishers.

“Just to be clear, he fired the team working on this,” the employee said.

Twitter’s head of Safety & Integrity, Yoel Roth, appeared to have kept his job, as did Vice President of Product Keith Coleman, who launched a tool called Birdwatch for users to write notes on tweets they identify as misleading.

Last week, Musk endorsed Roth, citing his “high integrity” after Roth was called out over tweets critical of former U.S. President Donald Trump years earlier. Musk has also tweeted that he likes Birdwatch.

Roth and Coleman did not respond to requests for comment.

DOORS LOCKED

Twitter said in its email to staffers that offices would be temporarily closed and badge access suspended in order “to help ensure the safety of each employee as well as Twitter systems and customer data.”

Offices in London and Dublin appeared deserted on Friday, with no employees in sight. At the London office, any evidence Twitter had once occupied the building was erased.

A receptionist at Twitter’s San Francisco headquarters said a few people had trickled in and were working in the floors above despite the notice to stay away.

A class action was filed on Thursday against Twitter by its employees, who argued the company was conducting mass layoffs without providing the required 60-day advance notice, in violation of federal and California law.

The lawsuit also asked the San Francisco federal court to issue an order to restrict Twitter from soliciting employees being laid off to sign documents without informing them of the pendency of the case.

Reporting by Sheila Dang in Dallas, Katie Paul in Palo Alto, Calif., and Paresh Dave in Oakland, Calif.
Additional reporting by Fanny Potkin, Rusharti Mukherjee, Aditya Kalra, Martin Coulter, Hyunjoo Jin, Supantha Mukherjee and Arriana McLymore
Writing by Matt Scuffham
Editing by Kenneth Li, Jason Neely and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

San Francisco Bay Area-based tech reporter covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focused on the local tech industry.

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