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Elon Musk’s Bitcoin Turnaround Pleases Some Tesla Investors

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By Reuters | Updated: 15 May 2021

Elon Musk’s decision to stop accepting bitcoin as payment over environmental concerns has been well-received by some of Tesla Inc’s investors, offering a warning to corporate peers mulling a dabble with the cryptocurrency.

The Tesla boss’ tweets, which had helped drive some of the gains in Bitcoin (price in India) in recent months, this week triggered a 17 percent slide in the value of the cryptocurrency when he said his company’s customers would no longer be able to use bitcoin to buy its cars.

Driving the decision, Musk said, was concern over the amount of energy it takes to “mine” Bitcoin, with much of it done in China using cheap, climate-destroying thermal coal. Tesla could revisit the decision if the situation changes, he added.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process.

More than half a dozen investors in the electric vehicle maker contacted by Reuters said they were happy with Musk’s decision on Bitcoin.

“The energy waste should be avoided regardless of its color. And Tesla should focus on its core business. Drop the bitcoin position and move on,” said APG Asset Management Chief Investment Officer Peter Branner, a Tesla investor.

Bitcoin mining uses about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency showed, generating between 22 million and 22.9 million metric tons of carbon dioxide emissions a year, according to a 2019 study in scientific journal Joule.

Guillaume Mascotto, head of ESG and Investment Stewardship at American Century Investments, a top-40 Tesla investor according to Refinitiv, said any move into bitcoin by a company would impact the way they were viewed.

“It would affect our ESG risk views on payment companies and other firms taking large positions in crypto especially if it contributes to ‘engineering’ their bottom-lines like we saw with Tesla,” he said.

Warning shot
A UK-based investor, who declined to be named, said Musk’s reversal showed the ability of consumer and investor discontent to push through change, raising broader recognition of the carbon footprint embedded in cryptocurrencies.

“Tesla decided to make a big statement about bitcoin in February and it did not pan out that well, so this is a warning shot to those who might be considering integrating some cryptocurrency into their strategy,” the investor said.

Several investors pointed to the need for ESG ratings agencies to do more to highlight the risks associated with cryptocurrencies.

The UK-based investor said leading agency MSCI had given Tesla a strong 9.3 score out of a maximum 10 for environmental risk and referred to the Bitcoin foray as only a minor controversy in a February report. MSCI declined to comment when contacted by Reuters.

Jennifer Bishop, senior portfolio manager at UK-based Coal Pension Trustee Services, said she would also like more insight from the ratings agencies.

“What would be most helpful is ensuring use of digital currency gets picked up by the likes of MSCI and Sustainalytics in emissions intensity,” she said, referring to a measure of emissions produced per unit of revenue.

David Sneyd, vice president in the Responsible Investment team at BMO Global Asset Management, said that overall, the firm viewed bitcoin and other currencies as “net negative from an ESG standpoint”.

“As it currently stands, the positive potential of bitcoin remains unproven, but the negatives are very real and present,” he said, citing the environmental concerns as well as those over the use of the currency in financing crime.

Criminals increasingly demand payment via untraceable electronic means to avoid detection. On Friday, for instance, Bloomberg News reported Colonial Pipeline paid hackers a ransom of nearly $5 million in cryptocurrency.

For Miranda Beacham, head of ESG – Equity and Multi-Asset Group at Aegon Asset Management, which recently sold out of Tesla, accepting bitcoin raises governance risks given its speculative, volatile nature and lack of regulation.

“I think a lot of investors have picked up on the environmental side … but I personally don’t think that’s the biggest problem. I think that the governance and the risk surrounding cryptocurrency is far higher.”

“There’s a lot of shareholders that have really focused in on ‘how dare Tesla, the darling of the ESG world suddenly start dabbling in something as dirty as cryptocurrency.’ I think that’s a red herring.”

© Thomson Reuters 2021

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Baidu Bags License to Operate China’s First Fully Driverless Robotaxi Service

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By Reuters | Updated: 8 August 2022

China search engine giant Baidu said on Monday it has obtained permits to operate fully driverless robotaxi services on open roads from two Chinese cities, the first of their kind in the country.

The permits, awarded by the southwestern municipality of Chongqing and the central city of Wuhan, allow commercial robotaxis to offer rides to the public without human safety drivers in the car. They come into effect on Monday.

Baidu said they marked a “turning point” in China’s policy-making towards autonomous driving.

“These permits have deep significance for the industry,” Wei Dong, chief safety operation officer of Baidu’s Intelligent Driving Group, told Reuters in an interview. “If we think of the exploration of space, this moment is equal to landing on the moon.”

At first, Baidu will deploy a batch of five fee-charging robotaxis in each city, where they will be allowed to operate in designated areas from 9am to 5pm in Wuhan and 9:30am to 4:30pm in Chongqing, the company said in a statement.

The service areas span 30 square km in Chongqing’s Yongchuan District and 13 square km in the Wuhan Economic & Technological Development Zone.

In April, Baidu’s Apollo and Toyota-backed Pony.ai said that they received permits in Beijing to deploy robotaxis without safety drivers in the driver’s seat on open roads within a 60 square km area. But the Beijing permits still require them to have a safety driver in the passenger seat. These services have started.

Baidu is also in talks with local governments in Beijing, Shanghai and Shenzhen, to secure licenses within a year to test fully-driverless and unpaid robotaxis in those cities, according to Wei.

China’s efforts to fast-track autonomous vehicle trials and permits come as US regulators are also pushing ahead with milestone-setting autonomous driving policies.

In January, self-driving company Cruise received a permit from the California Public Utilities Commission that allows it to offer paid and fully driverless rides from 10 pm to 6 am in select streets in San Francisco.

Apollo Go, Baidu’s robotaxi service, has operated over 1 million rides across 10 Chinese cities since its launch in 2020.

Baidu has not reported any problems with the service and has not given a breakdown for how much it has invested in the project.

© Thomson Reuters 2022

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Tesla to Face US Agency Probe Into Two Crashes That Killed Motorcyclists

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By Associated Press | Updated: 6 August 2022

Two crashes involving Teslas apparently running on Autopilot are drawing scrutiny from federal regulators and point to a potential new hazard on U.S. freeways: The partially automated vehicles may not stop for motorcycles. The National Highway Traffic Safety Administration sent investigation teams to two crashes last month in which Teslas collided with motorcycles on freeways in the darkness. Both were fatal.

The agency suspects that Tesla’s partially automated driver-assist system was in use in each. The agency says that once it gathers more information, it may include the crashes in an broader probe of Teslas striking emergency vehicles parked along freeways. NHTSA also is investigating over 750 complaints that Teslas can brake for no reason.

The first crash involving a motorcyclist happened at 4:47 a.m. July 7 on State Route 91, a freeway in Riverside, California. A white Tesla Model Y SUV was traveling east in the high occupancy vehicle lane. Ahead of it was a rider on a green Yamaha V-Star motorcycle, the California Highway Patrol said in a statement.

At some point, the vehicles collided, and the unidentified motorcyclist was ejected from the Yamaha. He was pronounced dead at the scene by the Fire Department.

Whether or not the Tesla was operating on Autopilot remains under investigation, a CHP spokesman said.

The second crash happened about 1:09 a.m. July 24 on Interstate 15 near Draper, Utah. A Tesla Model 3 sedan was behind a Harley-Davidson motorcycle, also in an HOV lane. “The driver of the Tesla did not see the motorcyclist and collided with the back of the motorcycle, which threw the rider from the bike,” the Utah Department of Public Safety said in a prepared statement.

The rider, identified as Landon Embry, 34, of Orem, Utah, died at the scene. The Tesla driver told authorities that he had the vehicle’s Autopilot setting on, the statement said.

Michael Brooks, acting executive director of the nonprofit Center for Auto Safety, called on NHTSA to recall Tesla’s Autopilot because it is not recognizing motorcyclists, emergency vehicles or pedestrians.

“It’s pretty clear to me, and it should be to a lot of Tesla owners by now, this stuff isn’t working properly and it’s not going to live up to the expectations, and it is putting innocent peole in danger on the roads,” Brooks said.

Since 2016, NHTSA has sent teams to 39 crashes in which automated driving systems are suspected of being in use, according to agency documents. Of those, 30 involved Teslas, including crashes that caused 19 deaths.

Brooks criticized the agency for continuing to investigate but not taking action. “What the Hell are they doing while these crashes continue to occur?” he asked. “Drivers are being lured into thinking this protects them and others on the roads, and it’s just not working.”

Musk has eliminated use of radar from his systems and relies solely on cameras and computer memory. Brooks and other safety advocates say the lack of radar hurts vision in the darkness.

Since 2016, NHTSA has sent teams to 39 crashes in which automated driving systems are suspected of being in use, according to agency documents. Of those, 30 involved Teslas, including crashes that caused 19 deaths.

Brooks criticized the agency for continuing to investigate but not taking action. “What the Hell are they doing while these crashes continue to occur?” he asked. “Drivers are being lured into thinking this protects them and others on the roads, and it’s just not working.”

Musk has eliminated use of radar from his systems and relies solely on cameras and computer memory. Brooks and other safety advocates say the lack of radar hurts vision in the darkness.

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Omega Seiki Partners With Agri Junction to Deploy 10,000 Electric Vehicles to Cater to Rural Market Demand

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By Press Trust of India | Updated: 5 August 2022

Omega Seiki Mobility (OSM) on Friday announced a strategic partnership with Agri Junction to deploy over 10,000 electric two and three-wheelers in rural markets by current fiscal year.

In the first phase, these vehicles will be introduced in tier II and III markets of Uttar Pradesh and Maharashtra, the two firms said in a joint release.

Faridabad-headquartered Omega Seiki product range comprises electric three-wheeler Rage+, passenger electric three-wheeler Stream and light commercial vehicle M1KA.

The company said it will be deploying Rage+ range and Stream along with specialised new product line-up such as e-two-wheeler Mopedo, Stream City, drones and tractors to cater to rural market demand.

Agri Junction, a digital marketplace for agriculture products, will support in vehicle deployment, listing of OSM vehicles on its website, providing access to credit through PM Mudra Yojana, setting up of EV infrastructure, among others, the release said.

On the other hand, OSM will be providing EVs, set up charging infrastructure and an R&D team for developing new products specific for rural markets of India.

“OSM is testing its electric tractors at its Korea and Thailand R&D centres and will be bringing new concepts of tractor as a service and leasing for the tier II and III markets by 2023,” Uday Narang, Founder and Chairman of OSM, said.

Agri Junction is a supplier of agricultural seeds, pesticides, fertilisers, machinery and equipment, with a presence in 10 rural cities of Uttar Pradesh and Maharashtra.

On Thursday, it was reported that the government is gearing up to launch a mobile app dedicated to electric vehicle users. The Super App is said to provide details about the location of electric vehicle charging stations and their availability in real-time. The government is working with state-run Convergence Energy Services Limited (CESL) to develop the app.

The app will show tariff information of the charging stations and allow users to make and change reservations at nearby stations. The CESL will also set up 810 electric vehicle charging stations across 16 highways and expressways, according to CESL.

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Tesla to Seek Investor Approval on Second Stock Split at Annual General Meeting: Details

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By Reuters | Updated: 5 August 2022

Tesla will host its annual general meeting on Thursday, with the world’s most valuable automaker’s proposal for a second stock split in as many years set to take center stage for investors gathered in Austin, Texas. Also on the agenda are shareholder proposals for corporate governance-related items, including endorsing the right of employees to form a union and asking the company to report its efforts in preventing racial discrimination and sexual harassment annually.

The meeting comes as Tesla chief Elon Musk and Twitter are slugging it out in a legal battle after the world’s richest person said last month that he was abandoning a $44 billion (roughly Rs. 3,48,300 crore) takeover offer for the company.

Musk owns 15.6 percent of Tesla, according to data from Refinitiv, after selling millions of shares over much of the last year.

Tesla first announced its plan to seek investor approval to increase its number of shares in March, two years after a five-for-one split helped bring down the price of the high-flying stock within the reach of ordinary investors. Tesla is now proposing a three-for-one split.

Tesla shares, which debuted at $17 (roughly Rs. 1,300) apiece in 2010, rose to more than $1,200 (roughly Rs. 95,000) late last year after the 2020 stock split, taking the company’s market capitalization above $1 trillion (roughly Rs. 79,16,233 crore).

While a split does not affect a company’s fundamentals, it could buoy the share price by making it easier for a wider range of investors to own the stock.

Tech heavyweights Alphabet, Amazon, and Apple have also announced stock splits in the recent past.

Tesla shareholders will also vote on the board’s proposals to reduce the term of its directors to two years from three as well as re-elect Ira Ehrenpreis and Kathleen Wilson-Thompson.

Proxy advisory firm Institutional Shareholder Services (ISS) last month recommended Tesla investors to vote against the two nominees.

A shareholder proposal, asking the board to enable large and long-term stockholders or groups with at least 3 percent of the company’s shares to put competing director candidates on the company ballot will be put to vote at the meeting.

Tesla in its proxy filing said this may create an opportunity for special interests that seek only short-term returns rather than having the company’s long-term interests in mind.

In a board proposal, the company asked shareholders to approve removing some supermajority voting requirements, saying that it would give its “stockholders a greater voice”.

Proxy advisory firms Glass Lewis and ISS recommended stockholders to vote for both proposals.

The annual meeting is due to start at 5.30 pm ET (3am IST on Friday).

© Thomson Reuters 2022

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Zypp Electric, Alt Mobility Partner to Lease 15,000 Electric Two-Wheelers Over Next 12 Months

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By ANI | Updated: 4 August 2022

Alt Mobility has partnered with India’s leading e-logistics provider Zypp Electric to lease 15,000 electric two-wheelers in order to facilitate last mile deliveries.

The partnership will increase the Zypps fleet size by three times in the current financial year and help facilitate a national roll out of e-bike deliveries and offset approx. 18mn kgs of carbon emission annually.

The lower total cost of ownership coupled with push from the centre and state governments has seen an uptake of electric vehicles sales. The Delhi government’s recent draft of the Delhi Motor Vehicle Aggregator Scheme mandates transition of commercial fleets providing passenger transport services and last mile deliveries to 10 percent in the first six months, 25 percent in the first year, 50 percent within two years and 100 percent by 2030.

Electric vehicle leasing has emerged as the most viable solution for commercial fleet electrification for Zypp and other B2B logistic companies and aggregators, owing to the extensive capital requirement for fleet replacement.

The sector is yet to see participation from banks and financial institutions, due to apprehensions around underlying technology risk, uncertainty of asset performance and residual value during the term of the loan. It is estimated 5 lakh crore would need to be mobilized to finance the transition of India’s commercial fleets.

Raashi Agarwal, Co-founder & CBO of Zypp said, “We are on a mission to build efficient and sustainable transportation for intra-city deliveries in India. Our partnership with Alt is a big step in our commitment and enables us to remain asset light while blitz scaling our nationwide expansion.”

Dev Arora, Cofounder & CEO, Alt Mobility said, “Alt’s exclusive EV leasing platform helps unlock scale for commercial fleet electrification by partnering with domestic banks and international financing institutions to mobilize low-cost debt. Alt provides credit enhancement, redeployment, and resale assurance, first loss protection, asset underwriting and asset management to remove barriers for financing institutions to participate in India’s EV transition. With this approach, we are able to take higher exposures and place bigger bets on our partners.”

Alt is expected to expand its fleet size to 50,000 electric two and three wheelers, mobilizing USD 100mn in capital over next 12 months.

IIT Delhi based Alt Mobility is backed by a team of second time renewable energy founders from NIT, IIT, MIT, who have previously deployed and cumulatively managed renewable energy assets over USD 100mn+ in previous ventures.

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Toyota Profit Down Amid Chip Shortage, EV Business Has Been the Worst Hit

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By Associated Press | Updated: 4 August 2022

Toyota’s profit fell nearly 18 percent in the April-June quarter from the year before, as a semiconductor shortage that has slammed the auto industry dented production at Japan’s top automaker.

Toyota Motor reported Thursday a quarterly profit of 736.8 billion yen ($5.5 billion or roughly Rs. 4,40,000 crore), down from 897.8 billion yen the previous year. Quarterly sales rose 7 percent to 8.49 trillion yen ($63 billion or roughly Rs. 50,23, 500 crore).

Toyota officials apologized to customers who have been waiting for their cars after putting in orders. Some have waited so long the vehicle went through a model change in the meantime.

Various problems apart from the chips shortage have hurt production, such as flooding in South Africa and pandemic lockdowns in Shanghai, according to the manufacturer based in Toyota City, central Japan.

Electric vehicles, which need many chips, have been the worst hit by the global chips crunch. Rising material costs also hurt Toyota’s bottom line.

The negatives offset the perks of a weaker Japanese yen. A cheap yen benefits Japanese exporters like Toyota by boosting the value of their overseas earnings when they are converted into yen.

The favorable foreign exchange rate increased Toyota’s operating income for the quarter by 195 billion yen ($1.5 billion or roughly Rs. 1,19,500 crore), the company said.

Toyota sold about 2 million vehicles during the quarter, down from 2.1 million vehicles in the same period last year.

But it kept unchanged its full fiscal year forecast to produce 9.7 million vehicles, saying output will pick up in the months ahead.

Toyota posted record earnings in the last fiscal year through March, racking up a 2.85 trillion yen ($21 billion or roughly Rs. 16,75,000 crore) profit, up nearly 27 percent on year.

For the fiscal year through March 2023, it’s forecasting a profit of 2.36 trillion yen ($17.6 billion or roughly Rs. 130 crore) ). The projection was revised upward from an earlier estimate of 2.26 trillion yen ($16.9 billion or roughly Rs. 130 crore).

Toyota said it did not include numbers from its group truck maker Hino Motors because Hino hadn’t released a forecast. Earlier this week, Hino acknowledged it had been falsifying emission and mileage data for 20 years and apologized for betraying its customers’ trust. It has promised to prevent a recurrence.

Toyota, which makes the Prius hybrid, Lexus luxury models and Camry sedan, has been boosting electric vehicle sales as the world’s interest in sustainability grows. At times it has been accused of lagging in electric vehicles, partly because it’s done well with hybrid vehicles, like the Prius, which includes a gasoline engine and an electric motor.

The company expects to sell 10.7 million vehicles worldwide in the fiscal year through March 2023, up from nearly 10.4 million vehicles in the previous fiscal year.

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