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Business

Dell looks to phase out China-made chips by 2024 – Nikkei

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Jan 5 (Reuters) – Dell Technologies Inc (DELL.N) plans to stop using China-made chips by 2024 and has told suppliers to reduce the amount of other made-in-China components in its products amid concerns over U.S.-Beijing tensions, the Nikkei reported on Thursday.

The news comes after the United States added Chinese memory chipmaker YMTC and 21 “major” companies in the country’s artificial intelligence chip sector to a trade blacklist in December.

PC maker HP Inc (HPQ.N), one of Dell’s rivals, has also started surveying its suppliers to gauge the feasibility of moving production and assembly away from China, the report said, citing sources with knowledge of the matter.

Dell has also asked product assemblers and suppliers of other components such as electronic modules and print circuit boards to help prepare capacity in countries beyond China, such as Vietnam, the report said.

“We continuously explore supply-chain diversification across the globe that makes sense for our customers and our business,” Dell said in a statement.

HP did not immediately respond to a Reuters request for comment.

In October last year, the Biden administration published a set of export controls that included a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. tools.

Reporting by Kanjyik Ghosh in Bengaluru, additional reporting by Tiyashi Datta; Editing by Janane Venkatraman and Devika Syamnath

Our Standards: The Thomson Reuters Trust Principles.

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Technology

Sony, Honda roll out prototype of ‘Afeela’ EV that uses Qualcomm tech

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Jan 4 (Reuters) – Japan’s Sony (6758.T) on Wednesday unveiled a prototype of the new “Afeela” electric vehicles it will build together with Honda (7267.T), saying it would harness its vast entertainment content as it looks to become a player in next-generation cars.

Sony gave a glimpse of the Afeela, which sports rounded corners and a sleek black roof, at the CES 2023 technology trade show in Las Vegas. The car will use technology from hardware maker Qualcomm Inc (QCOM.O), including its “Snapdragon” digital chassis.

Sony’s long-awaited push into electric vehicles – it announced the venture with Honda in March – shows how manufacturers are increasingly focused on the cockpit experience in cars, which offers the potential to sell content via subscription services cars, especially as autonomous driving capabilities improve.

“In order to realise intelligent mobility, continuous software updates and high-performance computing are required,” Yashuhide Mizuno, the chief executive of Sony Honda Mobility, told the trade show. “To that end, we will work closely with Qualcomm.”

Qualcomm on Wednesday launched a new processor, the Snapdragon Ride Flex SoC, that handles both assisted driving and cockpit functions, including entertainment. Previously those functions were handled on different chips, and bringing them together can help bring down costs, a Qualcomm executive told Reuters.

Sony is also looking to harness its traditional strengths in sensors. The Afeela will be equipped with more than 40 sensors, Mizuno said. The car will use the “Unreal Engine” 3-D creation tool from Epic Games, the maker of the “Fortnite” series of games.

For Honda, the venture with Sony may allow it to speed up what has so far been a slow shift to electric. It has also struggled over the years to make gains in the luxury vehicle market with its Acura brand. The new EV will be priced at a premium, the venture has said.

The venture between Sony Group Corp and Honda Motor Co Ltd aims to deliver its first electric vehicles by early 2026 in North America.

Shares of Sony were up 1.6% in Tokyo trade, while Honda shares were flat. The benchmark Nikkei 225 (.N225) was little changed.

Reporting by Kiyoshi Takenaka; Additional reporting by Jane Lanhee Lee in San Francisco; Writing by David Dolan; Editing by Chang-Ran Kim and Muralikumar Anantharaman

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Business

Elon Musk says he will not sell more Tesla stock for about two years

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Dec 22 (Reuters) – Tesla (TSLA.O) Chief Executive Officer Elon Musk said on Thursday he will not sell any more Tesla stock for about two years.

While speaking in a Twitter Spaces audio chat, Musk said he foresees the economy will be in a “serious recession” in 2023 and demand for big-ticket items will be lower.

His comments came after a Tesla stock sell-off deepened on Thursday over worries about softening demand for electric cars and Musk’s distraction with Twitter and his stock sales.

“I won’t sell stock until I don’t know probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” Musk said.

Shares of Tesla rose 3% to $129.23 in after-hours trading on Thursday following an 8.9% drop in regular trading hours.

Musk has previously made promises about not selling Tesla stock before subsequently selling it. Last week, Musk disclosed another $3.6 billion in stock sales, taking his total near $40 billion since late last year and frustrating investors as the company’s shares wallow at over two-year lows.

“I needed to sell some stock to make sure, like, there’s powder dry…to account for a worst case scenario,” the billionaire said.

He said Tesla’s board is open to share buyback, but that will depend on the scale of a recession.

On Thursday, Tesla stocks plunged 9%, after Tesla started to offer deep, $7,500 discounts to U.S. consumers, fueling investor concerns about softening demand as the economy slows.

“I think there is going to be some macro drama that’s higher than people currently think,” he said, adding that homes and cars will get “disproportionately impacted” by economic conditions.

Musk said that Tesla is close to picking the location of its new “Gigafactory.” Tesla could announce the construction of a “Gigafactory” in the northern Mexican state of Nuevo Leon as soon as Friday, with an initial investment of between $800 million and $1 billion, local newspaper Reforma reported on Monday.

Asked whether he would bring in someone such as venture capitalist David Sacks to run Twitter to allow him to focus on Tesla, Musk dodged the question and said Twitter was a relatively simple business.

“(Twitter) is maybe 10% of the complexity of Tesla,” Musk said.

Musk said earlier this week that he will step down as chief executive of Twitter once he finds “someone foolish enough to take the job.”

In response to concerns that his political views and controversial comments are alienating some people, he said, “I am not going to like sort of suppress my views just to boost the stock price.”

Musk has increasingly used Twitter’s live audio platform to weigh in on his product and strategic decisions at the social media company he took private in October in a $44 billion deal.

Reporting by Hyunjoo Jin and Greg Bensinger in San Francisco, Sheila Dang and Kenneth Li; Editing by Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

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Business

Tesla doubles discounts on mainstay vehicles to $7,500 in U.S.

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Dec 21 (Reuters) – Tesla Inc (TSLA.O) is offering $7,500 discounts on Model 3 and Model Y electric vehicles (EV) delivered in the United States this month, its website showed on Wednesday, amid concerns the automaker is facing softening demand as economies slow and EV tax incentives loom.

That is up from the $3,750 credit it has offered on Model 3 and Model Y vehicles delivered before the end of the year. It has also recently started offering free supercharging for 10,000 miles (16,093 kms) for the December vehicles.

The latest discount came just days after the U.S. Treasury Department delayed restrictions on EV incentives until March, meaning Teslas and other U.S-made electric vehicles are likely to qualify for the full $7,500 credits temporarily.

Customers have canceled their orders and held off their purchases until the new credits take effect in January, weighing on Tesla demand.

Analysts also worry that rising interest rates and CEO Elon Musk’s controversial Twitter management could hurt the Tesla brand and sales.

“The fact they seem to be cutting price to increase deliveries volumes doesn’t raise confidence, particularly at a time where we see increasing competition,” Craig Irwin, a senior analyst at ROTH Capital Partners, said.

The rare discounts follow a series of price hikes over the past couple of years by the automaker, which blamed supply chain disruption and inflation.

Tesla is also offering $5,000 credit in Canada on Model 3 and Model Y vehicles delivered before the end of the year. The U.S. automaker has also given a discount of 6,000 yuan ($860) on some models in China to the end of 2022.

Tesla in October said it would miss its vehicle delivery target this year, but downplayed concerns about demand after its revenue missed Wall Street estimates.

($1 = 6.9761 yuan)

Reporting by Hyunjoo Jin in San Francisco, Jaiveer Singh Shekhawat and Maria Ponnezhath in Bengaluru; Editing by Tom Hogue and Emelia Sithole-Matarise

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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

Exclusive: PepsiCo to roll out 100 Tesla Semis in 2023, exec says

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NEW YORK/SAN FRANCISCO, Dec 16 (Reuters) – PepsiCo plans to roll out 100 heavy-duty Tesla Semis in 2023, when it will start using the electric trucks to make deliveries to customers like Walmart and Kroger, the soda maker’s top fleet official told Reuters on Friday.

PepsiCo Inc (PEP.O), which ordered the big trucks in 2017, is purchasing them “outright” and is also upgrading its plants, including installing four 750-kilowatt Tesla Inc (TSLA.O) charging stalls at both its Modesto and Sacramento locations in California, PepsiCo Vice President Mike O’Connell said in an interview. A $15.4 million state grant and $40,000 federal subsidy per vehicle helps offset part of the costs.

“It’s a great starting point to electrify,” said O’Connell, who oversees the company’s fleet of vehicles.

“Like any early technology, the incentives help us build out the program,” he said, adding that there were “lots” of development and infrastructure costs.

PepsiCo is the first company to experiment with the battery-powered Tesla Semis as a way of cutting its environmental impact. read more

United Parcel Service Inc (UPS.N) and food delivery company Sysco Corp (SYY.N) have also reserved the trucks, while retailer Walmart Inc (WMT.N) is testing alternatives.

PepsiCo’s plans to use the Semis have been reported, but O’Connell provided new details on how the company is using them and its timeline for deploying them. Tesla Chief Executive Elon Musk initially said the trucks would be in production by 2019, but that was delayed due to battery constraints.

PepsiCo said it plans to deploy 15 trucks from Modesto and 21 from Sacramento. It is unclear where the others will be based but O’Connell said the firm is targeting rolling out the Semis in the central United States next, and then the East Coast.

The company’s Frito-Lay division sells lightweight food products, making it a good candidate for electric trucks, which have heavy batteries that could limit cargo capacity.

The Semis will haul Frito-Lay food products for around 425 miles (684 km), but for heavier loads of sodas, the trucks will initially do shorter trips of around 100 miles (160 km), O’Connell said. PepsiCo then will also use the Semis to haul beverages in the “400 to 500 mile range as well,” O’Connell said.

“Dragging a trailer full of chips around is not the most intense, tough ask,” said Oliver Dixon, senior analyst at consultancy Guidehouse.

“I still believe that Tesla has an awful lot to prove to the broader commercial vehicle marketplace,” Dixon said, citing Tesla’s unwillingness to offer information on payload and pricing.

PepsiCo has earmarked some of the trucks planned for the Sacramento location to make deliveries to Walmart and grocers such as Kroger Co (KR.N) and Albertsons Cos Inc (ACI.N). The trucks at the Modesto Frito-Lay plant have just gone to PepsiCo distribution centers, O’Connell said.

All of the Semis going to PepsiCo will have a 500-mile (805-km) range. O’Connell added that he is not aware of when Tesla will start deploying 300-mile (480-km) trucks. When Tesla starts building them, PepsiCo “will rotate those up” into its fleet, he said.

PepsiCo declined to share details on the price of the trucks, a figure that Tesla has kept quiet. Competing vehicles sell for $230,000 to $240,000, said Mark Barrott of consulting firm Plante Moran. He added that the 500-mile range Tesla Semi could be priced higher because its 1,000-kilowatt-hour (kWh) battery pack is about twice the size of many of its rivals.

“We keep the trucks for a million miles, seven years,” O’Connell said. “The operating costs over time will pay back.”

The Gatorade maker declined to share specifics on the weight of the trucks, another closely guarded secret by Tesla.

He said Tesla did not help pay for the trucks’ megachargers but provided design and engineering services for the facilities, which come with solar and battery storage systems.

O’Connell said that a 425-mile (684-km) trip carrying Frito-Lay products brings the Semi’s battery down to roughly 20%, and recharging it takes around 35 to 45 minutes.

Reporting by Jessica DiNapoli in New York and Hyun Joo Jin in San Francisco; additional reporting by Joe White and Siddharth Cavale; Editing by Jonathan Oatis and Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

Jessica DiNapoli

Thomson Reuters

New York-based reporter covering U.S. consumer products spanning from paper towels to packaged food, the companies that make them and how they’re responding to the economy. Previously reported on corporate boards and distressed companies.

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Business

Exclusive: Air India nears historic order for up to 500 jets

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PARIS/NEW DELHI, Dec 11 (Reuters) – Air India is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate, industry sources said on Sunday.

The orders include as many as 400 narrow-body jets and 100 or more wide-bodies, including dozens of Airbus A350s and Boeing 787s and 777s, they said, speaking on condition of anonymity as finishing touches are placed on the mammoth deal in coming days.

Such a deal could top $100 billion dollars at list prices, including any options, and rank among the biggest by a single airline in volume terms, overshadowing a combined order for 460 Airbus and Boeing jets from American Airlines over a decade ago.

Even after significant expected discounts, the deal would be worth tens of billions of dollars and cap a volatile year for an industry whose jets are back in demand after the pandemic but which is facing mounting industrial and environmental pressures.

Airbus (AIR.PA) and Boeing declined to comment. Tata Group-owned Air India did not immediately respond to a request for comment.

The potential order comes days after Tata announced the merger of Air India with Vistara, a joint-venture with Singapore Airlines, to create a bigger full-service carrier and strengthen its presence in domestic and international skies.

That deal gives Tata a fleet of 218 aircraft, cementing Air India as the country’s largest international carrier and second largest in the domestic market after leader IndiGo (INGL.NS)

Air India, with its maharajah mascot, was once known for its lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.

Founded by JRD Tata in 1932, Air India was nationalised in 1953. Tata regained control in January and has since been working to revive its reputation as a world-class airline.

The planned order reflects a deliberate strategy to win back a solid share of traffic flows to and from India, which are currently dominated by foreign carriers such as Emirates.

Air India also wants to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.

Delivered over at least a decade, the 500 jets would both replace and expand fleets in the world’s fastest-growing airline market, while contributing to Prime Minister Narendra Modi’s goal of expanding the economy to $5 trillion.

But experts warn many hurdles stand in the way of Air India’s ambition to recover a strong global position, including frail domestic infrastructure, pilot shortages and the threat of tough competition with established Gulf and other carriers.

Reporting by Tim Hepher, Aditi Shah; Editing by Jane Merriman

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Business

Twitter to relaunch Twitter Blue at higher price for Apple users

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Dec 10 (Reuters) – Twitter Inc will relaunch a revamped version of its subscription service Twitter Blue on Monday at a higher price for Apple users, the company said in a tweet on Saturday.

The company said users could subscribe to the revamped service that will allow subscribers to edit tweets, upload 1080p videos and get a blue checkmark post account verification, for $8 per month through the web but for $11 per month through Apple iOS.

Twitter did not explain why Apple users were being charged more than others on the web but there have been media reports that the company was looking for ways to offset fees charged in the App Store.

Twitter had initially launched the Twitter Blue early in November before pausing it as fake accounts mushroomed. It was then scheduled to launch again on Nov. 29 but was pushed back.

Elon Musk, who took Twitter private for $44 billion in November had in a series of tweets last month listed various grievances with Apple, including the 30% fee the iPhone maker charges software developers for in-app purchases.

He had then accused Apple of threatening to block Twitter from its app store and also said that the iPhone maker had stopped advertising on the social media platform.

However, after a subsequent meeting with Apple chief executive Tim Cook, he tweeted that the misunderstanding about Twitter being removed from Apple’s app store was resolved.

Both Twitter and Apple did not respond to Reuters request for comments.

Reporting by Gokul Pisharody and Kanjyik Ghosh in Bengaluru; Editing by David Gregorio and Aurora Ellis

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Business

Pentagon splits $9 billion cloud contract among Google, Amazon, Oracle and Microsoft

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Dec 7 (Reuters) – The Pentagon awarded $9 billion worth of cloud computing contracts to Alphabet Inc’s Google (GOOGL.O), Amazon Web Services Inc (AMZN.O), Microsoft Corp (MSFT.O) and Oracle Corp on Wednesday.

The Joint Warfighting Cloud Capability (JWCC) is the multi-cloud successor to the Joint Enterprise Defense Infrastructure (JEDI), which was an IT modernization project to build a large, common commercial cloud for the Department of Defense.

The separate contracts, which carry a notional top line of $9 billion, run until 2028 and will provide the Department of Defense with enterprise-wide, globally available cloud services across all security domains and classification levels, the contract announcement said.

U.S. flag hangs during a ceremony to honor victims of the September 11, 2001, attacks at the Pentagon in Washington, U.S., September 11, 2022. REUTERS/Cheriss May

U.S. Navy Commander Jessica McNulty, a Department of Defense spokesperson, said in a statement the JWCC was a multiple-award procurement composed of four contracts with a shared ceiling of $9 billion.

The move comes months after the Pentagon had delayed its decision to award an enterprise-wide JWCC contract.

The Pentagon attempted to move to the cloud several years ago using the JEDI concept, but the proposal died after litigation stopped the procurement process.

This deal could put the military more in line with private-sector companies, many of whom split up their cloud computing work among multiple vendors.

Reporting by Nathan Gomes in Bengaluru and Mike Stone in Washington D.C.; Editing by Stephen Coates and Gerry Doyle

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Business

U.S. Army awards Black Hawk replacement contract to Textron’s Bell

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WASHINGTON, Dec 5 (Reuters) – The U.S. Army on Monday awarded the contract for its next-generation helicopter to Textron Inc’s (TXT.N) Bell unit, ending a years-long competition for the technology that will replace the Black Hawk utility helicopter.

The Army’s “Future Vertical Lift” competition aimed at finding a replacement as the Army looks to retire more than 2,000 medium-class UH-60 Black Hawk utility helicopters built by Sikorsky since the 1970s.

The Army was looking for an aircraft capable of moving about a dozen troops 400 nautical miles. “We are ready to equip soldiers with the speed and range they need to compete and win using the most mature, reliable, and affordable high-performance long-range assault weapon system,” Mitch Snyder, CEO of Bell said in a statement.

The Army said the initial award was for $232 million, but the first batch of helicopters in low rate production will be worth $7.1 billion. Ultimately, the contract is potentially worth around $70 billion – over decades – depending on how many the Army and U.S. allies order, the Army told reporters on Monday evening.

“The thoughtful and disciplined execution of the FLRAA (Future Long Range Assault Aircraft) program strategy will deliver the transformational capabilities we need to support the Joint force, strengthen deterrence and win in multi-domain operations,” said Doug Bush, assistant secretary of the army for acquisition, logistics, and technology.

In the FLARAA competition was Bell’s V-280 “Valor,” a tiltrotor aircraft that has reached speeds in excess of 340 mph (547 km) according to the Army. It beat out the entrant from Lockheed Martin’s (LMT.N) Sikorsky and Boeing Co’s (BA.N) SB-1 “Defiant” which has two coaxial rotors and a single pusher propeller and has reached speeds of 265 mph, according to the Army.

Often defense procurement awards of this magnitude are protested. Bush said “we planned for that contingency, but that is completely up to the vendor.” It is likely that if a protest were to be filed it would be in several weeks once administrative meetings occurred.

Textron’s shares rose about 8.5% in trading after the bell on the news.

Reporting by Mike Stone and Idrees Ali; Editing by Marguerita Choy and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

Idrees Ali

Thomson Reuters

National security correspondent focusing on the Pentagon in Washington D.C. Reports on U.S. military activity and operations throughout the world and the impact that they have. Has reported from over two dozen countries to include Iraq, Afghanistan, and much of the Middle East, Asia and Europe. From Karachi, Pakistan.

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