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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WASHINGTON, Jan 27 (Reuters) – Tesla (TSLA.O) Chief Executive Elon Musk met two top White House officials on Friday in Washington to discuss how the car maker and Democratic President Joe Biden could work together to advance electric vehicle production and speed electrification of U.S. vehicle networks.
Musk met John Podesta, a Democratic stalwart who serves as Biden’s senior advisor for clean energy innovation, and Mitch Landrieu, who oversees infrastructure spending, a White House spokesperson told Reuters.
“John Podesta and Mitch Landrieu met with Elon Musk to discuss shared goals around electrification and how the Bipartisan Infrastructure Law and Inflation Reduction Act can advance electric vehicle production and charging as well as the broader cause of electrification,” the White House spokesperson said.
Musk responded on Twitter to a link to an earlier version of this story with “True.”
A Reuters witness on Friday saw Podesta, Landrieu and Musk entering a downtown building that houses both Tesla’s Washington lobbying operation and the Center for American Progress, a think tank Podesta founded. Landrieu and Podesta left about half an hour later and did not answer questions.
Musk left about 45 minutes after Podesta and Landrieu. He too ignored questions from a Reuters reporter.
BIDEN, MUSK TENSIONS
Relations have often seemed antagonistic between Biden, who has pushed for companies to use union labor, and Musk, who has pushed to keep unions out of his factories.
Musk called Biden “a damp sock puppet in human form” last year after Biden highlighted EV production by GM and Ford in a tweet but left out Tesla.
Biden only publicly acknowledged the role of Tesla in U.S. electric vehicle manufacturing over a year after taking office, after Musk repeatedly complained about being ignored.
In June, Biden compared Tesla unfavorably to Ford and sarcastically wished Musk “lots of luck” on his “trip to the moon” after the billionaire expressed reservations about the economy.
Still, Musk has long-standing important relationships with the U.S. government, and those have continued under the Biden administration.
Tesla has benefited from tax subsidies given to buyers of its electric vehicles while SpaceX, Musk’s rocket company, has contracts worth billions of dollars to deliver astronauts and cargo to and from the International Space Station, and to build a moon lander.
U.S. consumers who bought Teslas became eligible again this month for up to $7,500 in consumer tax credits, under the $430 billion U.S. Inflation Reduction Act (IRA) passed last August. An earlier tax credit for Tesla buyers expired after the automaker sold its first 200,000 vehicles in the United States.
The law imposes requirements that EVs receiving the tax credits must be North American-made. There are also caps on vehicle prices and income for buyers who are eligible for the credits.
The law also sets new battery sourcing restrictions expected to take effect in March. It also includes new U.S. battery production credits that Musk said earlier this week could have significant benefits to the company.
Reporting by Nandita Bose, David Shepardson and Raphael Satter; Editing by Heather Timmons, David Gregorio and Rosalba O’Brien
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Jan 25 (Reuters) – Tesla Inc’s (TSLA.O) aggressive price cuts have ignited demand for its electric vehicles, Chief Executive Elon Musk said on Wednesday, playing down concerns that a weak economy would throttle buyers’ interest.
The company slightly beat Wall Street targets for fourth-quarter revenue and profit earlier on Wednesday despite a sharp decline in vehicle profit margins, and it sought to reassure investors that it can cut costs to cope with recession and as competition intensifies in the year ahead.
Deep price cuts this month have positioned Tesla as the initiator of a price war, but its forecast of a 37% rise in car volume for the year, to 1.8 million vehicles, was down from 2022’s pace.
However, Musk, who has missed his own ambitious sales targets for Tesla in recent years, said 2023 deliveries could hit 2 million vehicles, absent external disruption.
Tesla’s sales prospects, as it confronts a weaker economy, are a key focus for investors. The company said it maintains a long-term target of a compounded 50% annual rise in sales.
Musk addressed the issue at the start of a call with investors and analysts.
“These price changes really make a difference for the average consumer,” he said, adding that vehicle orders were roughly double production in January, leading the automaker to make small price increases for the Model Y SUV.
He said he expected a “pretty difficult recession this year,” but demand for Tesla vehicles “will be good despite probably a contraction in the automotive market as a whole.”
Shares rose 5.3% in extended trading.
CYBERTRUCK
The company is relying on older products and Musk said its Cybertruck, its next new electric pickup truck, would not begin volume production until next year. Reuters in November reported that the highly anticipated model would not be produced in volume until late this year.
Tesla will detail plans for a “next-generation vehicle platform” at its investor day in March.
Tesla’s vehicles “are all in desperate need of updates beyond software,” said Jessica Caldwell, Edmunds’ executive director of insights. She said Tesla will largely depend on the cheaper unit as well as Model 3 and Model Y to bring EVs to the masses.
“It’s unlikely that the Cybertruck will attempt to achieve mass-market volumes like the Detroit competitors.”
Reuters Graphics
[1/5] A Tesla supercharging station is seen in the early morning sun, in Kettleman City, California, U.S., January 25, 2023. REUTERS/Mike Blake
Reuters Graphics
Analysts said Tesla’s goal is bullish given the macroeconomic uncertainties.
“I think that you’re going to see some severe demand destruction across consumer spending and I think cars are going to take a big hit,” Edward Moya, senior market analyst at OANDA, said.
Tesla said it does not expect meaningful near-term volume growth from China, since its Shanghai factory was running near full capacity, rebounding from production challenges last year.
“Even a small cooling of demand will have significant implications for the bottom line,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.
Tesla said that its automotive gross margins, which dropped to a two-year low of 25.9% in the reported quarter, were pressured by the costs of ramping up battery production and new factories in Berlin and Texas, as well as higher raw material, commodity, logistics and warranty costs.
Tesla expected its automotive gross margin to remain above 20%.
Margins generally are expected to be under further pressure from its aggressive price cuts. Tesla, which had made a series of price increases since early 2021, reversed course and offered discounts in December in the United States, followed by price cuts of as much as 20% this month.
Analysts had said Tesla’s profitability gave it room to cut prices and pressure rivals. The company’s $9,000 in net profit per vehicle in the past quarter was more than seven times the comparable figure for Toyota Motor Corp (7203.T) in the third quarter. But it was down from almost $9,700 in the third quarter.
“In severe recessions, cash is king, big time,” Musk said, adding that Tesla is well positioned to cope with an economic downturn because of its $20 billion of cash.
The company’s stock posted its worst drop last year, hit by demand worries and Musk’s acquisition of Twitter, which fueled investor concerns he would be distracted from running Tesla.
Musk dismissed surveys that suggest his political comments on Twitter are damaging the Tesla brand. “I might not be popular” with some, he said, “but for the vast majority of people, my follow count speaks for itself.” He has 127 million followers.
Revenue was $24.32 billion for the three months ended Dec. 31, compared with analysts’ average estimate of $24.16 billion, according to IBES data from Refinitiv.
Tesla’s full-year earnings were bolstered by $1.78 billion in regulatory credits, up 21% from a year earlier.
Adjusted earnings per share of $1.19 topped the Wall Street analyst average of $1.13.
It ended the fourth quarter with 13 days’ worth of vehicles in inventory, more than four times higher than the start of 2022, and a record $12.8 billion in value.
Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru, Additinoal reporting by Joe White and Ben Klayman in Detroit and Kevin Krolicki in Singapore
Writing by Peter Henderson
Editing by Sriraj Kalluvila, Matthew Lewis, Sam Holmes and David Goodman
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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.
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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.”
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Reporting by Nick Carey, Additional reporting by Zoey Zhange in Shanghai and Norihiko Shirouzu in Beijing
Editing by Mark Potter
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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 7 (Reuters) – Hundreds of Tesla (TSLA.O) owners gathered at the automaker’s showrooms and distribution centres in China over the weekend, demanding rebates and credit after sudden price cuts they said meant they had overpaid for electric cars they bought earlier.
On Saturday, about 200 recent buyers of the Tesla Model Y and Model 3 gathered at a Tesla delivery centre in Shanghai to protest against the U.S. carmaker’s decision to slash prices for the second time in three months on Friday.
Many said they had believed that prices Tesla charged for its cars late last year would not be cut as abruptly or as deeply as the automaker just announced in a move to spur sales and support production at its Shanghai plant. The scheduled expiration of a government subsidy at the end of 2022 also drove many to finalize their purchases.
Videos posted on social media showed crowds at Tesla stores and delivery centres in other Chinese cities from Chengdu to Shenzhen, suggesting wider consumer backlash.
After Friday’s surprise discounts, Tesla’s EV prices in China are now between 13% and 24% below their September levels.
Analysts have said Tesla’s move was likely to boost its sales, which tumbled in December, and force other EV makers to cut prices too at a time of faltering demand in the world’s largest market for battery-powered cars.
While established automakers often discount to manage inventory and keep factories running when demand weakens, Tesla operates without dealerships and transparent pricing has been part of its brand image.
“It may be a normal business practice but this is not how a responsible enterprise should behave,” said one Tesla owner protesting at the company’s delivery centre in Shanghai’s Minhang suburb on Saturday who gave his surname as Zhang.
He and the other Tesla owners, who said they had taken delivery in the final months of 2022, said they were frustrated with the abruptness of Friday’s price cut and Tesla’s lack of an explanation to recent buyers.
Zhang said police facilitated a meeting between Tesla staff and the assembled owners at which the owners handed over a list of demands, including an apology and compensation or other credits. He added the Tesla staff had agreed to respond by Tuesday.
About a dozen police officers could be seen at the Shanghai protest and most of the videos of the other demonstrations also showed a large police presence at the Tesla sites.
Protests are not a rare occurrence in China, which has over the years seen people come out in large numbers over issues such as financial or property scams, but authorities have been on higher alert after widespread protests in Chinese cities and top universities at the end of November against COVID-19 restrictions.
‘RETURN THE MONEY’
Other videos appearing to be of Tesla owners protesting were also posted to Chinese social media platforms on Saturday.
One video, which Reuters verified was filmed at a Tesla store in the southwestern city of Chengdu, showed a crowd chanting, “Return the money, refund our cars.”
Another, which appeared to be filmed in Beijing, showed police cars arriving to disperse crowds outside a Tesla store.
Reuters was unable to verify the content of either video.
Tesla does not plan to compensate buyers who took delivery before the most recent price cut, a spokesman for Tesla China told Reuters on Saturday.
He did not respond when asked to comment on the protests.
China accounted for about a third of Tesla’s global sales in 2021 and its Shanghai factory, which employs about 20,000 workers, is its single most productive and profitable plant.
Analysts have been positive about the potential for Tesla’s price cuts to drive sales growth at a time when it is a year from announcing its next new vehicle, the Cybertruck.
“Nowhere else in the world is Tesla faced with the kind of competitors that they have here [in China],” said Bill Russo, head of consultancy Automobility Ltd in Shanghai.
“They are in a much bigger EV market with companies that can price more aggressively than they can, until now.”
In 2021, Tesla faced a public relations storm after an unhappy customer climbed on a car at the Shanghai auto show to protest against the company’s handling of her complaints about her car’s brakes.
Tesla responded by apologising to Chinese consumers for not addressing the complaints in a timely way.
Reporting by Brenda Goh, Zhang Yan and Casey Hall
Editing by Kevin Krolicki and Tomasz Janowski
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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)
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Reporting by Zhang Yan and Brenda Goh; Editing by Kim Coghill and Muralikumar Anantharaman
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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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