Tag: Auto

Elon Musk has revealed that Tesla will not get any approvals for driverless cars in the U.S. (which means that the car wouldn’t need any input from the driver to operate). At the time in 2016 when Tesla had launched the AutoPilot stack, Musk had falsely predicted that permissions would be achieved by 2020 and till today he never had a morbid outlook towards the same.

Now for the last two years, Tesla has been running its full self-driving beta but now Musk admits that it will not be given permission to operate without a driver in 2022. In fact, the software is not ready even now and Musk also says another major beta update will be rolled out before the end of the year.

“The car will be able to take you from your home to your work, your friend’s house, the grocery store without you touching the wheel. It’s a separate matter as to will it have regulatory approval. It won’t have regulatory approval at that time,” he said.

Recently, a Tesla Model 3 was also involved in an accident that had a fatality. The car was reportedly on AutoPilot and rear-ended a bike. Many have been critical of Tesla’s approach to the technology and accused it of false advertising which will certainly make regulatory approval harder. Tesla’s cars also don’t use radars anymore and Musk has been resistant towards adding LiDAR, something every other self-driving tech player has admitted is necessary.

Tesla’s quarterly report on Wednesday will likely show whether the Elon Musk-led electric-vehicle maker is facing any weakness in demand that is starting to weigh on the wider auto industry.

Decades-high inflation, rising energy bills in Europe and signs of a weakening China market have raised doubts among some analysts about whether Tesla can buck an economic slowdown and continue to raise prices without hurting its sales.

Although Musk has said Tesla “does not have a demand problem”, the company’s latest report on deliveries showed that it made 22,000 more EVs than it delivered to customers in the third quarter. It blamed the rise in inventory on transportation-related problems.

Demand for Tesla vehicles in China, the world’s biggest market for autos, is emerging as a major worry among Wall Street analysts, given that the EV maker faces tough competition from domestic rivals BYD, Nio Inc and XPeng Inc.

“A top concern right now is demand in China as wait times seem to be shrinking,” RBC Capital Markets said. “Question is if this is a blip or signs of a bigger change among consumers.”

Globally, there are fears that auto sales may lose steam in the coming quarters as rising interest rates and a weaker economic backdrop discourage consumers from making big-ticket purchases.

Analysts say pricing is a key factor that could help Tesla make up for a possible demand drop and boost revenue.

The average U.S. selling price of Tesla’s Model 3 has risen about 24% since January last year, potentially helping the EV maker rake in record revenue in the third quarter.

Wells Fargo said Tesla is likely the biggest beneficiary of the Biden administration’s new consumer tax credits to incentivize North American battery and EV production.

Musk also raised hopes of a share buyback earlier this month when he said “Noted” on Twitter in response to a major individual investor’s call for a stock buyback.

Such a move could benefit Musk, whose 15% stake in Tesla makes him its biggest stakeholder, and help him raise cash to fund his $44 billion deal to take Twitter Inc private.

Some experts say Musk may need to sell up to an extra $3 billion in stock after the earnings announcement to help fund the deal.

“If there is a big sale of Tesla stock by Musk after earnings, that will be a strong sign that the Twitter deal is on the cusp of closing,” said Adam Badawi, a law professor at UC Berkeley.

Tesla sold 83,135 China-made vehicles wholesale in September 2022, smashing its record of monthly sales in China, the China Passenger Car Association reported. The number marks an 8 per cent increase from August 2022 and outpaced more than the 5 per cent month-over-month growth of all wholesale electric vehicle sales in China, according to CPCA data. It set a record for Tesla’s Shanghai factory since production began in December 2019, and topped the prior sales record of 78,906 in June, as the U.S. carmaker continues to invest in China production.

Globally, Tesla, last week said it delivered 343,830 electric vehicles in the third quarter, a record for the world’s most valuable automaker, but less than the 359,162 analysts on average had expected, according to Refinitiv. Tesla quickened its China deliveries after suspending most production at the Shanghai plant in July for an upgrade, which aimed to bring the factory’s weekly output to around 22,000 units compared with levels of around 17,000 in June, Reuters previously reported.

The plant, which manufactures Model 3s and Model Ys, reopened on April 19, 2022, after a COVID lockdown, but only resumed full production in mid-June. Production accelerated despite heatwaves and COVID curbs that hit its suppliers in the southwest region of the country.

China’s BYD continued to lead the domestic EV market with 200,973 wholesale sales in September, a nearly 15 per cent jump from August, as CPCA said higher oil prices and government subsidies continue to encourage more consumers to choose electric vehicles.

Tesla Inc on Sunday announced lower-than-expected  electric vehicle deliveries in the third quarter, as logistical challenges overshadowed its record deliveries.

The top electric car maker said “it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost,” but some analysts were also concerned about demand for high-ticket items due to the weakening global economy.

“The economy around the edges is still hurting Tesla that’s mostly logistical. But that I think there is some demand (issues) sprinkled in there,” Wedbush Securities analyst Dan Ives said after the delivery results.

“There is a dark cloud over the auto sector. And Tesla is not immune.”

Ford Motor said last month inflation-related costs would be $1 billion more than expected in the third quarter and that parts shortages had delayed deliveries.

Apple Inc. is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg reported last month, citing people familiar with the matter.

“I think that EVs are in for probably a little bit of a rough patch, just because people are probably going to be a little bit hesitant and less urgent to buy something new,” OANDA senior market analyst Ed Moya said.

Tesla delivered 343,830 electric vehicles, a record for the world’s most valuable automaker, but less than the 359,162 analysts on average had expected, according to Refinitiv. A year earlier Tesla delivered 241,300 units.

The latest deliveries fell short of Tesla’s production of 365,923 vehicles, which is rare for the automaker which has seen its deliveries higher or similar to production in many of recent quarters.

“As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks,” Tesla said in a statement on Sunday.

Tesla CEO Elon Musk said on Sunday “Smoothing out crazy end of quarter delivery wave to reduce expedite costs & relieve stress on Tesla team.”

Last year,  he said Tesla is having a “crazy wave” of deliveries at the end of each quarter, because its Shanghai factory makes cars for exports to Europe and other countries in the first half of a quarter and then cars to be sold in China.

Tesla again asked employees to help deliver “a very high volume of vehicles to eagerly waiting customers during the final days of Q3” in California, according to an email seen by Reuters.

Tesla on Sunday said it has “began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter.”

Tesla set an ambitious target to produce almost 495,000 Model Y and Model 3s in the fourth quarter of this year, internal plans reviewed by Reuters show.

The company’s production ambitions come against the backdrop of increasingly gloomy outlook for global growth, with Musk himself telling top managers in June he had a “super bad feeling” about the economy and planned to cut staff.

During a conference call in July, Musk said at first that macroeconomic uncertainty might have some impact on demand for its electric vehicles, but when pressed for details by an analyst, he said the company did not have a demand problem but a production problem.

The automaker expanded production capacity in Shanghai after a resurgence in COVID-19 cases forced a suspension at the plant and fueled the first dip in deliveries after a nearly two-year-long record run.

In September, Tesla’s vehicle order backlog fell, especially in China, Troy Teslike, a Tesla data tracker tweeted.

Tesla said it delivered 325,158 Model 3 compact cars and Model Y sport-utility vehicle, as well as 18,672 of its Model S and Model X premium vehicles to customers during the quarter.       Meanwhile, Musk on Friday showed off a prototype of its humanoid robot ‘Optimus,’ predicting the electric vehicle maker would be able to produce millions and sell them for under $20,000 – less than a third of the price of a Model Y.

Experts were impressed by the speed of development of Tesla’s humanoid robots, but they agreed with Musk, who said “there’s still a lot of work to be done to refine Optimus and prove it.”