TOKYO, Feb 2 (Reuters) – Japan’s Honda Motor Co (7267.T) said it will start producing a new hydrogen fuel cell system jointly developed with General Motors Co (GM.N) this year and gradually step up sales this decade, in a bid to expand its hydrogen business.
Honda will target annual sales of around 2,000 units of the new system in the middle of this decade, the company said on Thursday, aiming to boost that to 60,000 units per year in 2030.
The Japanese carmaker is seeking to expand the use of its new system not only for its own fuel cell electric vehicles (FCEVs), but also commercial vehicles such as heavy trucks, as stationary power stations and in construction machinery.
Honda will start production of the hydrogen fuel cell system through its joint venture with GM this year, Honda senior managing executive director Shinji Aoyama told reporters during a company event in Tokyo.
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With the “next-generation” system, the company aims to more than double durability compared with its older fuel cell system and to bring costs down by two-thirds.
“While commercial vehicles are in use all over the world, they’ll likely see electrification just as with passenger cars,” said Tetsuya Hasebe, general manager of Honda’s hydrogen business development division.
That would likely lead to a divergence in trucks using batteries and those running on fuel cells, he added.
Reporting by Daniel Leussink; Editing by Chang-Ran Kim and Jamie Freed
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WASHINGTON, Jan 31 (Reuters) – Tesla Inc (TSLA.O) disclosed on Tuesday the U.S. Justice Department has sought documents related to its Full Self-Driving (FSD) and Autopilot driver-assistance systems as regulatory scrutiny intensifies.
The automaker said in a filing it “has received requests from the DOJ for documents related to Tesla’s Autopilot and FSD features.”
Reuters reported in October Tesla is under criminal investigation over claims that the company’s electric vehicles could drive themselves. Reuters said the U.S. Justice Department launched the probe in 2021 following more than a dozen crashes, some of them fatal, involving Autopilot.
Tesla did not respond to a request for comment.
Chief Executive Officer Elon Musk has championed the systems as innovations that will both improve road safety and position the company as a technology leader.
Regulators are examining if Autopilot’s design and claims about its capabilities provide users a false sense of security, leading to complacency behind the wheel with possibly fatal results.
Acting National Highway Traffic Safety Administration (NHTSA) chief Ann Carlson said this month the agency is “working really fast” on the Tesla Autopilot investigation it opened in August 2021 that she termed “very extensive.” In June, NHTSA upgraded to an engineering analysis its defect probe into 830,000 Tesla vehicles with Autopilot, a step that was necessary before the agency could demand a recall.
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Autopilot is designed to assist with steering, braking, speed and lane changes. The function currently requires active driver supervision and does not make the vehicle autonomous. Tesla separately sells the $15,000 full self-driving (FSD) software as an add-on that enables its vehicles to change lanes and park autonomously.
The automaker’s shares rose 2% in early trading.
The Wall Street Journal reported in October that the Securities and Exchange Commission is conducting a civil investigation into Tesla’s Autopilot statements, citing sources.
Tesla also forecast Tuesday capital expenditure between $7 billion and $9 billion in 2024 and 2025. The midpoint of that expectation is $1 billion higher than the $6.00 billion to $8.00 billion range provided for this year.
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Some of the spending will go toward a $3.6 billion expansion of its Nevada Gigafactory complex, where Tesla will mass produce its long-delayed Semi truck and build a plant for the 4680 cell that would be able to make enough batteries for 2 million light-duty vehicles annually.
Tesla said it recorded an impairment loss of $204 million on the bitcoin it holds, while booking a gain of $64 million from converting the token into fiat currency.
Cryptocurrencies such as bitcoin were hammered last year as rising interest rates and the collapse of major industry players such as crypto exchange FTX shook investor confidence.
Reporting by Akash Sriram in Bengaluru and David Shepardson; Editing by Sriraj Kalluvila and Bernadette Baum
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WOKING, England, Jan 23 (Reuters) – The global auto industry has committed $1.2 trillion to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to grab contracts providing everything from battery packs to motors and inverters.
Startups specialising in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts. Carmakers design platforms to last a decade, so high-volume models can generate large revenues for years.
The next generation of EVs is due to hit around 2025 and many carmakers have sought help plugging gaps in their expertise, providing a window of opportunity for new suppliers.
“We’ve gone back to the days of Henry Ford where everyone is asking ‘how do you make these things work properly?’,” says Nick Fry, CEO of F1 engineering and technology firm McLaren Applied.
“That’s a huge opportunity for companies like us.”
Bought from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for EVs. An inverter helps control the flow of electricity to and from the battery pack.
The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lb) and can extend an EV’s range by over 7%. Fry says McLaren Applied is working with around 20 carmakers and suppliers, and the inverter will appear in high-volume luxury EV models starting January 2025.
Mass-market carmakers often prefer to develop EV components in-house and own the technology themselves. After years of pandemic-related parts shortages, they are wary of over-reliance on suppliers.
“We just can’t afford to be reliant on third parties making those investments for us,” said Tim Slatter, head of Ford (F.N) in Britain.
Traditional suppliers, such as German heavyweights Bosch and Continental (CONG.DE), are also investing heavily in EVs and other technologies to stay ahead in a fast-changing industry.
But smaller companies say there are still opportunities, particularly with low-volume manufacturers that cannot afford huge EV investments, or luxury and high-performance carmakers seeking an edge.
Croatia’s Rimac, an electric hypercar maker part-owned by Germany’s Porsche AG (P911_p.DE) that also supplies battery systems and powertrain components to other automakers, says an undisclosed German carmaker will use a Rimac battery system in a high-performance model – with annual production of around 40,000 units – starting this year, with more signed up.
“We need to be 20%, 30% better than what they can do and then they work with us,” CEO Mate Rimac says. “If they can make a 100-kilowatt hour battery pack, we must make a 130-kilowatt pack in the same dimensions for the same cost.”
NO TIME TO LOSE
Some suppliers like Cambridge, Massachusetts-based Actnano have had long relationships with EV pioneer Tesla (TSLA.O). Actnano has developed a coating that protects EV parts from condensation and its business has spread to advanced driver-assistance systems (ADAS), as well as other carmakers including Volvo (VOLCARb.ST), Ford, BMW (BMWG.DE) and Porsche.
California-based startup CelLink has developed an entirely automated, flat and easy-to-install “flex harness”, instead of a wire harness to group and guide cables in a vehicle. CEO Kevin Coakley would not identify customers but said CelLink’s harnesses had been installed in around a million EVs. Only Tesla has that scale.
Coakley said CelLink was working with U.S. and European carmakers, and with a European battery maker on battery wiring.
Others are focused on low-volume manufacturers, like UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make themselves.
“Currently it costs just too much to electrify, which is why you see some manufacturers delaying their electrification launch,” CEO James Eaton said.
Since 1971, Swindon Powertrain has developed powerful motorsports engines. But it has now also developed battery packs, electric powertrains, e-axles and is working with around 20 customers, including carmakers and an electric vertical take-off and landing (eVTOL) aircraft maker.
“I realized if we don’t embrace this, we’re going to end up working for museums,” said managing director Raphael Caille.
But time may be running out.
Mate Rimac says major carmakers scrambled in the last three years to roll out EVs and now have strategies largely in place.
“For those who haven’t signed projects, I’m not sure how long the window of opportunity will remain open,” he said.
($1 = 0.8226 pounds)
Reporting by Nick Carey
Editing by Mark Potter
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COVENTRY, England, Jan 23 (Reuters) – China’s Geely (0175.HK) is planning a big investment to turn the maker of London’s iconic black taxis into a high-volume, all-electric brand with a range of commercial and passenger vehicles, executives at the unit told Reuters.
London Electric Vehicle Company (LEVC) also aims to expand its suite of services, which include cars arranging their own maintenance and recognising their owner’s interests to help them book activities.
“We need a developed product portfolio. We need to make big investments in terms of the technology and infrastructure,” LEVC Chief Executive Alex Nan said at the taxi maker’s headquarters in Coventry, central England. “Geely will make consistent investments into LEVC because this is a very unique project.”
LEVC builds a hybrid taxi model that starts at around 66,000 pounds ($81,500), which has a battery providing 64 miles (103 km) of range and a petrol range-extender giving it a total range of over 300 miles. The company’s business was hit hard by the pandemic and it laid off 140 staff in October.
Nan said LEVC and Geely would seek to attract other investors to its zero-emission portfolio and would look to partner with other carmakers to develop new technology.
Executives said the size of Geely’s investment would be disclosed later. So far the Chinese group, which took full control of LEVC in 2013, has invested 500 million pounds in it.
“Geely fully supports the new transition strategy laid out by LEVC’s board and executive team,” Geely said in a statement.
In 2021, Geely launched a 2 billion pound investment in another unit, niche British luxury sports carmaker Lotus, to massively expand production of its sports cars and build high-end SUVs and sedans in Britain and China. Geely is following a similar path in its plans to grow LEVC, executives said.
Britain’s EV ambitions were dealt a blow last week when startup Britishvolt, which had planned to build a major battery factory in northeast England, filed for administration.
“We need to make sure the UK environment as a whole is competitive and has its position on the world stage,” said LEVC managing director Chris Allen.
READY TO ACCELERATE
Geely owns multiple brands including Volvo (VOLCARb.ST) and – via a joint venture with Volvo – Polestar . Zeekr, another brand in the group, filed for a U.S. initial public offering last month.
As such, Geely faces a complexity that larger EV makers BYD (002594.SZ) and Tesla (TSLA.O) have avoided.
Allen said LEVC was exploring a range of commercial and passenger car models on a common electric platform. It can lean on other group brands that already have EVs to “move forward in a fast, agile way”.
The company already uses an infotainment system and software developed by Volvo and a steering wheel from the Swedish carmaker, allowing it to cut costs, Allen said.
“There’s nothing we couldn’t deliver in a very short time period if we needed to, but it’s just a question of timing,” he said, adding LEVC could easily have a full range of EVs on the road within five years.
“But in two years time, is the industry going to be ready, is the charging infrastructure going to be there, is consumer confidence going to be there?”
LEVC currently has the capacity to build 3,000 taxis a year running on a single shift at its Coventry factory. Allen said that could easily be increased to 20,000 and the plant had room to expand. It could also lean on production in China as Lotus has, Allen said. A major car plant produces on average around 300,000 vehicles per year.
“There’s a huge amount of value in our product that hasn’t ever really been maximised,” Allen said. “This is about growing LEVC into a much more recognizable brand on a global scale and expanding our product offering into as many spaces as we can.”
($1 = 0.8095 pounds)
Reporting by Nick Carey, Additional reporting by Zoey Zhange in Shanghai and Norihiko Shirouzu in Beijing
Editing by Mark Potter
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Jan 17 (Reuters) – Apple Inc (AAPL.O) has postponed the launch of its lightweight augmented-reality glasses indefinitely due to technical challenges, but is still planning to unveil its first mixed-reality headset this year, Bloomberg News reported on Tuesday.
The iPhone maker’s mixed-reality headset – which combines both augmented and virtual reality – is set to launch in this year’s spring event, Bloomberg said, adding that the device will cost around $3,000.
Apple’s mixed-reality device would compete with the likes of Meta Platforms’ (META.O) Quest Pro virtual and mixed-reality headset, which it launched late last year for $1,500, half of the Apple device’s reported price.
The Cupertino, California-based company now plans to focus on lowering the price of the follow-up version of its mixed-reality device, expected as soon as 2024 or early 2025, instead of working on the AR glasses, according to the report.
Apple will aim to do so by using chips on par with those in the iPhone rather than components found in higher-end Mac computers.
Apple did not immediately respond to a Reuters request for comment.
The Information website first reported Apple’s plans to unveil a cheaper mixed-reality headset on Tuesday.
earlier in the day, the iPhone maker unveiled MacBooks powered by its new and faster M2 Pro and M2 Max chips in a surprise launch weeks ahead of its usual schedule.
Reporting by Kanjyik Ghosh and Shubham Kalia in Bengaluru; Editing by Janane Venkatraman
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Jan 16 (Reuters) – Microsoft Corp (MSFT.O) on Monday said it is widening access to hugely popular software from OpenAI, a startup it is backing whose futuristic ChatGPT chatbot has captivated Silicon Valley.
Microsoft said the startup’s tech, which it so far has previewed to its cloud-computing customers in a program it called the Azure OpenAI Service, was now generally available, a distinction that’s expected to bring a flood of new usage.
The news comes as Microsoft has looked at adding to the $1 billion stake in OpenAI it announced in 2019, two people familiar with the matter previously told Reuters. The news site Semafor reported earlier this month that Microsoft might invest $10 billion; Microsoft declined to comment on any potential deal.
Public interest in OpenAI surged following its November release of ChatGPT, a text-based chatbot that can draft prose, poetry or even computer code on command. ChatGPT is powered by generative artificial intelligence, which conjures new content after training on vast amounts of data — tech that Microsoft is letting more customers apply to use.
ChatGPT itself, not just its underlying tech, will soon be available via Microsoft’s cloud, it said in a blog post.
Microsoft said it is vetting customers’ applications to mitigate potential abuse of the software, and its filters can screen for harmful content users might input or the tech might produce.
The business potential of such software has garnered massive venture-capital investment in startups producing it, at a time funding has otherwise dried up. Already, some companies have used the tech to create marketing content or demonstrate how it could negotiate a cable bill.
Microsoft said CarMax, KPMG and others were using its Azure OpenAI service. Its press release quoted an Al Jazeera vice president as saying the service could help the news organization summarize and translate content.
Reporting By Jeffrey Dastin; Editing by Leslie Adler
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Model 3 price in Germany in line with Volkswagen’s ID.3
Jan 13 (Reuters) – Tesla (TSLA.O) has slashed prices on its electric vehicles in the United States and Europe by as much as 20%, extending a strategy of aggressive discounting after missing Wall Street estimates for 2022 deliveries.
The move, which prompted a 3.8% fall in Tesla’s shares in Frankfurt, came after CEO Elon Musk warned that the prospect of recession and higher interest rates meant it could lower vehicle pricing to sustain volume growth at the expense of profit.
The lower pricing across Tesla’s major markets marks a reversal from the strategy the automaker had pursued through much of 2021 and 2022 when orders for new vehicles exceeded supply. Musk acknowledged last year that prices had become “embarrassingly high” and could hurt demand.
The U.S. price cuts, announced late Thursday in U.S. time on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% compared with prices before the discount, according to Reuters calculations.
That is before an up to $7,500 federal tax credit that took effect for many electric vehicle models at the start of January.
Following is a table of the price cuts by model in Germany and the United States:
Reuters Graphics
Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.
In Germany, it cut prices on the Model 3 and the Model Y – its global top-sellers – by between about 1% and almost 17% depending on the configuration. It also cut prices in Austria, Switzerland and France.
For a U.S. buyer of the long-range Model Y, the new Tesla price combined with the U.S. subsidy that took effect this month amounts to a discount of 31%. In addition, the Tesla move broadened the vehicles in its line-up eligible for the Biden administration tax credit.
Before the price cut, the five-seat version of the Model Y had been ineligible for that credit, a designation Musk had called “messed up”. After the price cut, the long-range version of the Model Y will qualify for the $7,500 federal credit.
“This should really boost 2023 (Tesla) volumes,” Gary Black, a Tesla investor who has remained bullish on the company and its prospects through the recent, sharp share price decline, said in a tweet. “It’s the right move.”
Still, some users on Tesla fan forums online complained the price cuts disadvantaged customers who had recently bought their vehicle, leaving them with a lower-valued item on the second-hand car market.
“I’m not very pleased with these huge price sways. Just reducing 10,000 euros like that – definitely makes you feel that you just paid far too much,” one user wrote on a ‘Tesla Drivers and Friends’ forum on Friday.
In China, where Tesla cut prices last week by 6-13.5%, owners protested at delivery centres across the country, pressing Tesla for compensation.
Before the price cut, Tesla inventory in the United States, as tracked by the models its website shows as immediately available, had been trending higher. Prices on used Tesla models had also been declining, increasing the pressure on it to adjust new-car sticker prices.
For 2021, the United States and China combined had accounted for about 75% of Tesla sales, although the automaker has been growing sales in Europe, where its Berlin factory has been ramping up production.
Reuters Graphics
NEW SALES LEADERSHIP
The shift is the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee U.S. output and sales.
Tesla cut prices in China and other Asian markets last week. Along with previous price cuts announced in October and recent incentives, the Chinese price for a Model 3 or Model Y was down 13% to 24% from September after the recent move, Reuters calculations showed.
Tesla has also cut prices in South Korea, Japan, Australia and Singapore.
Analysts had said the Chinese price cuts would boost demand and increase pressure on its rivals there, including BYD (002594.SZ), to follow suit in what could become a price war in the largest single market for electric vehicles.
That pressure could be building in Europe as well.
Tesla’s Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating Volkswagen’s (VOWG_p.DE) all-electric ID.4. Volkswagen recently raised the price of its entry-level ID.3, putting it at parity with the now-discounted Model 3.
Tesla missed Wall Street estimates for fourth quarter deliveries. Full year growth in deliveries was 40% – also short of Musk’s own forecast of 50%.
Tesla shares under pressure
Reporting by Zhang Yan in Shanghai, Hyunjoo Jin in Seoul, Victoria Waldersee in Berlin; Writing by Kevin Krolicki in Singapore; Editing by Lincoln Feast, Kenneth Maxwell, Mark Potter and Alexander Smith
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SHANGHAI, Jan 9 (Reuters) – Prospective Tesla Inc (TSLA.O) buyers in China are waiting longer for certain versions of its Model Y car, suggesting the electric-vehicle maker’s decision to cut prices is stoking demand in its second-largest market.
The waiting time for orders of the rear-wheel-drive and long-range versions of Model Y was a week longer on Monday than it had been on Friday, Tesla’s website showed.
The company’s shares rose about 8% to $122.20 on Monday after losing 68% in the past 12 months.
The wait as of Monday was two to five weeks on those models. The wait time for all versions of the Model 3 and the performance version of the Model Y remained at one to four weeks as of Monday.
Tesla cut prices by 6% to 13.5% on Friday in discounts that brought some of its cars to near BYD’s (1211.HK) best-selling models in a step analysts read as a sign that a price war could be building at a time when demand in China has faltered.
As of Monday, Tesla had not made any adjustment to its January production plan for its Shanghai plant, with suspension of the assembly lines to start from Jan. 20 through the end of the month, a person with knowledge of the matter said.
“It (the wait time) is an early indication that the price cuts are having their intended impact, which is to boost demand,” said CFRA Research analyst Garrett Nelson.
Nelson added that Tesla’s vehicle production has exceeded sales for three straight quarters and the company has chosen to lower prices and take some additional downtime at the Shanghai factory to bring supply and demand back in balance.
People check a Tesla Model Y electric vehicle (EV) displayed at its booth during the 2021 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2021. REUTERS/Florence Lo
Reuters Graphics
Angry Chinese owners who bought Tesla cars in late 2022 and missed out on the additional discount said they were waiting for a response from the company for their demand for some kind of compensation after a flurry of impromptu protests.
A Tesla representative told Reuters on Saturday that the company has no plan to compensate those buyers for price cuts they had missed. The company did not respond to a request for comment on Monday.
Some of the buyers in China said they had been led to believe that the further discounts would not be coming. Many were also looking to take advantage of a nation-wide EV subsidy that expired at year end.
Chinese state media have largely opted not to cover the protests, which online videos showed happened in cities including Beijing, Shenzhen, Chengdu and Xi’an. Reuters witnessed a protest at a Tesla facility in Shanghai.
Comments on Chinese social media were largely negative toward the Tesla buyers who have protested, with many saying online they should have understood the terms of the contract.
“I feel ashamed for them protesting after Tesla cut the prices,” a popular law blogger named “Wind Blows” commented on his Weibo social media.
Separately, Tesla began offering discounts to buyers in Singapore as of Monday who agreed to purchase existing inventory, adding that market to China, South Korea, Japan and Australia to those where it has offered new incentives.
Reporting by Zhang Yan, Brenda Goh; Additional reporting by Akash Sriram in Bengaluru; Editing by Muralikumar Anantharaman and Shounak Dasgupta
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Jan 7 (Reuters) – The U.S. Food and Drug Administration on Friday approved the Alzheimer’s drug lecanemab developed by Eisai Co Ltd (4523.T) and Biogen Inc (BIIB.O) for patients in the earliest stages of the mind-wasting disease.
Eisai and Biogen said on Saturday the Japanese drugmaker had applied for full FDA approval of the drug.
The drug, to be sold under the brand Leqembi, belongs to a class of treatments that aims to slow the advance of the neurodegenerative disease by removing sticky clumps of the toxic protein beta amyloid from the brain.
Nearly all previous experimental drugs using the same approach had failed.
“Today’s news is incredibly important,” said Dr. Howard Fillit, chief science officer of the Alzheimer’s Drug Discovery Foundation. “Our years of research into what is arguably the most complex disease humans face is paying off and it gives us hope that we can make Alzheimer’s not just treatable, but preventable.”
Eisai said the drug would launch at an annual price of $26,500. Biogen shares, which had been halted, were up 3% at $279.40.
The Japanese company said it also plans to apply for marketing authorization for Leqembi in Japan and the European Union by the end of its business year on March 31.
Eisai estimated the number of U.S. patients eligible for the drug would reach around 100,000 within three years, increasing gradually from there over the medium to long term.
Dr. Erik Musiek, A Washington University neurologist at Barnes-Jewish Hospital, said he was “pleasantly surprised” by the drug’s price.
“Considering the marketplace and the fact that we have no other good disease-modifying treatments, I think it’s in the ballpark of what I would expect,” he said.
Initial patient access will be limited by a number of factors including reimbursement restrictions by Medicare, the U.S. government insurance program for Americans aged 65 and older who represent some 90% of individuals likely to be eligible for Leqembi.
“Without Centers for Medicare & Medicaid Services (CMS) and insurance coverage … access for those who could benefit from the newly-approved treatment will only be available to those who can pay out-of-pocket,” the Alzheimer’s Association said in a statement.
Leqembi was approved under the FDA’s accelerated review process, an expedited pathway that speeds access to a drug based on its impact on underlying disease-related biomarkers believed to predict a clinical benefit.
“This treatment option is the latest therapy to target and affect the underlying disease process of Alzheimer’s instead of only treating the symptoms of the disease,” FDA neuroscience official Billy Dunn said in a statement.
CMS said on Friday that current coverage restrictions for drugs approved under the accelerated pathway could be reconsidered based on its ongoing review of available information.
If the drug receives traditional FDA approval, CMS said it would provide broader coverage. Eisai officials have said the company plans to submit data from a recent successful clinical trial in 1,800 patients as the basis for a full standard review of Leqembi.
The CMS decision was largely in response to a previous Alzheimer’s treatment from Eisai and Biogen. Aducanumab, sold under the brand name Aduhelm, won accelerated approval in 2021 with little evidence that the drug slowed cognitive decline and despite objections by the FDA’s outside experts.
Biogen initially priced Aduhelm at $56,000 per year before cutting the price in half. With limited acceptance and insurance coverage, sales were only $4.5 million in the first nine months of 2022.
Lecanemab is intended for patients with mild cognitive impairment or early Alzheimer’s dementia, a population that doctors believe represents a small segment of the estimated 6 million Americans currently living with the memory-robbing illness.
To receive the treatment, patients will need to undergo testing to show they have amyloid deposits in their brain – either through brain imaging or a spinal tap. They will also need to undergo periodic MRI scans to monitor for brain swelling, a potentially serious side effect associated with this type of drug.
The medicine’s label says doctors should exercise caution if lecanemab patients are given blood clot preventers. This could be a safety risk, according to an autopsy analysis published this week of a lecanemab patient who had a stroke and later died.
In the large trial of lecanemab, which is given by infusion, the drug slowed the rate of cognitive decline in patients with early Alzheimer’s by 27% compared to a placebo. Nearly 13% of patients treated with Leqembi in the trial had brain swelling.
Dr. Babak Tousi, a neuro-geriatrician at the Cleveland Clinic, said the approval will make a “big difference” in the field because it is based on biomarkers rather than just symptoms.
“It’s going to change how we make a diagnosis for Alzheimer’s disease, with more accuracy,” he said.
Tousi acknowledged that the benefit of the drug will likely be modest. “Still, it is a benefit that we were not able to achieve” before this approval.
Reporting by Deena Beasley in Los Angeles and Bhanvi Satija in Bengaluru, additional reporting Jaiveer Shekhawat; Editing by Bill Berkrot, David Gregorio and William Mallard
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SHANGHAI, Jan 6 (Reuters) – Tesla (TSLA.O) cut car prices in China for the second time in less than three months on Friday, fuelling a price war amid a darkening demand outlook in the world’s largest auto market.
The latest cut, along with a reduction in October as well as various incentives that amount to as much as 10,000 yuan extended to Chinese buyers over the past three months, mean a 13% to 24% reduction in Tesla’s prices from September, according to Reuters calculations.
On Friday, the U.S. electric vehicles (EV) maker slashed prices for all versions of its Model 3 and Model Y cars in China by between 6% to 13.5%, according to Reuters calculations based on the prices shown on its website. The starting price for Model 3, for instance, was cut to 229,900 yuan ($33,427) from 265,900 yuan. It cut prices in Japan on the same day.
“Tesla’s price adjustments are backed by innumerous engineering innovations,” Grace Tao, Tesla’s vice president in charge of external communications in China, posted on her Weibo social media account on Friday. “(They) answer the government’s call to promote economic development and encourage consumption.”
The price cuts come after December deliveries of Tesla’s China-made cars hit their lowest in five months, and also just days after Beijing ended a subsidy programme that helped build the world’s largest EV market. Softening demand has forced Tesla and its rivals to absorb the brunt of that decision.
China Merchants Bank International (CMBI), which warned in July that China’s EV sector was headed for a price war, said Tesla’s price reduction affirmed the prediction, adding that the U.S. firm may have to do more, especially as competition with its Chinese rivals intensifies.
The Model 3 and Y have been the only models Tesla delivers in China, though on Friday it announced prices for the Model S and Model X in China.
“Tesla needs to further cut prices and expand its sales network in China’s lower-tier cities amid ageing models,” said CMBI analyst Shi Ji.
“We expect new EV production capacity in China to outpace new demand in 2023 and Tesla Shanghai’s capacity utilisation could drop to about or even below 80% this year if its Berlin plant ramps up.”
BYD (002594.SZ), which has a much larger variety of offerings that comprise both plug-in and pure electric vehicles, saw its retail sales in China double in December while Tesla’s fell 42%, according to data from CMBI.
Tesla did not offer any additional comment when contacted by Reuters. A spokesperson referred to Tao’s Weibo post.
The car maker’s discounts have brought the starting price of Model 3 to the same level of BYD’s best-selling Han EV sedan, which is sold from 219,800 yuan. The Chinese EV maker recently raised the prices for its best-selling models after losing the central government subsidies.
Sales of BYD’s Han series, including the plug-in hybrid versions, were more than double that of Model 3’s in China in the first 11 months, according to the China Passenger Car Association.
The China prices of the Model 3 and Model Y cars are now 24% to 32% lower than those in the United States, Tesla’s largest market, Reuters calculations showed, due to reasons including different material and labour costs.
Tesla also cut the prices of Model 3 and Model Y cars by about 10% each in Japan, the first time it had done so since 2021. The price for the Model 3 rear wheel drive version is now 5.369 million yen ($40,091), down from 5.964 million yen.
($1 = 6.8775 Chinese yuan)
($1 = 133.9200 yen)
Reporting by Zhang Yan and Brenda Goh; Editing by Kim Coghill and Muralikumar Anantharaman
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