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Tesla Hunts for Design Chief to Create Electric Cars for China

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By Reuters | Updated: 11 January 2021

Tesla is searching for a design director in China, part of efforts to open a “full-function” studio in Shanghai or Beijing and design electric cars tailored to Chinese consumer tastes, according to three people with knowledge of the matter.

The US carmaker’s human resources managers, as well as several headhunters, have been trawling the industry over the past four months, the sources said.

They are looking for “bi-cultural” candidates with 20 or more years of experience who are familiar with Chinese tastes and can bridge the gaps between China and the United States, they added.

Some candidates have been interviewed by Tesla’s global design chief Franz von Holzhausen, according to the people, though it was not clear how many potential candidates had been approached by the company and recruiters.

All three sources spoke to Reuters on condition of anonymity due to the sensitivity and confidential nature of the matter.

Tesla and von Holzhausen did not respond to emailed requests for comment.

China is the world’s biggest auto market, plus the largest for all-electric vehicles with sales volumes expected to reach roughly 1.5 million vehicles there this year, according to consultancy LMC Automotive. It is also Tesla’s No.2 market after the United States.

The carmaker’s plans for the design studio are not fully developed, and the sources believe Tesla will likely wait for more clarity on strained US-China relations under a new US president before making a final decision on the move and all its details.

The talent search, which the sources said was mainly focused within China, fits with comments from Tesla boss Elon Musk early last year.

“I think something that would be super cool would be … to create a China design and engineering centre to actually design an original car in China for worldwide consumption. I think this would be very exciting,” he said at a media event in Shanghai.

Flurry of activity

Musk’s interest in developing cars in China is part of a broader push by Tesla to boost the company’s global sales volume well past the 5,00,000-vehicle-a-year mark, which it came just 450 short of hitting in 2020.

All three sources said Tesla’s search for a China studio director began around September, and that there was a flurry of activity as recently as December when a number of headhunters used LinkedIn and other means to approach candidates.

One of the sources, who has knowledge of Tesla’s headhunting activities in China, said that once a design director was hired, Tesla would recruit the director’s team which would likely be around 20-strong and include designers plus modellers who help turn design renderings into clay models.

All the sources said the planned centre aimed to be a comprehensive design outfit, with one describing it as a “full-function studio”, which would not only help conceptualise the design of a car but also come up with the final shape – digital three-dimensional data – of a model.

The data could then be handed over to Tesla’s vehicle engineers, who are mostly based in northern California.

Two of the sources said Tesla’s China studio would likely also carry out research on Chinese consumer tastes, as well as work for cars expected to be produced at Tesla’s vehicle assembly plant in Shanghai, where designs are tweaked to make sure specific components fit within engineers’ specifications.

“They want to give vehicle design a lot more bias toward China; they have already done a lot here, setting up a major manufacturing site and having sold a ton of EVs, but it seems Tesla’s ready to put roots down,” said one of the sources.

This push might lead to a more independent Tesla China, added the person, who has spent more than a decade in the country working at design centres run by global automakers, among other places.

Chinese consumers bought around 1,45,000 Tesla vehicles last year, accounting for roughly a third of the company’s overall global volumes, LMC said.

$25,000 electric car

Two of the sources said one likely “China-specific” model was a lower-cost volume generator such as a $25,000 (roughly Rs. 18.3 lakhs) electric car that Musk referred to at a Battery Day event in September, which he said Tesla might aim to bring to market in about three years.

Musk said Tesla was confident it would be able to hit the market with “a very compelling $25,000 (roughly Rs. 18.3 lakhs) electric vehicle that’s also fully autonomous”.

At that price, according to two of the sources as well as industry experts, it was likely to be a compact car, smaller than Tesla’s Model 3, which would be as affordable as some mainstream gasoline-fueled vehicles.

Compact cars are not big sellers in the United States where bigger, taller vehicles such as Ford’s F-150 pickup truck and SUVs, as well as midsize sedans, rule the road.

They account for about 10 percent of America’s overall vehicle market. By contrast, compacts make up 25 percent of sales in China, or around 5-6 million cars a year, according to consultancy LMC Automotive.

That’s why the planned $25,000 (roughly Rs. 18.3 lakhs) car Musk has discussed would be better suited to the China marketplace, according to the two sources and industry experts.

“A compact Tesla car would do well in China, as well as the rest of Asia and Europe,” said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. “It could potentially put a serious dent in sales of cars like Toyota’s Corolla and the Volkswagen Golf.”

© Thomson Reuters 2020

Apps

Tencent Says ‘Loophole’ Allowed WeChat Searches on Google, Bing

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By Reuters | Updated: 22 October 2021

Tencent’s WeChat has fixed a glitch that allowed some of its content to be searchable by external search engines, the owner of China’s most popular messaging app said on Friday, raising questions over regulators’ latest attempt to crackdown on the internet sector.

Some of WeChat’s content, including articles on its public accounts page, was briefly searchable in the last few days on Alphabet-owned Google and Microsoft’s Bing, but not on China’s dominant search engine Baidu, Reuters checks showed.

The change had prompted speculation that Tencent was heeding a call by Chinese authorities for its tech giants to tear down “walled gardens” in the country’s cyberspace which has come amid a wide ranging crackdown on the sector.

“Due to recent technological upgrades, the official accounts’ robots protocol had loopholes, which caused the external crawlers to scrape part of the official accounts’ content,” Tencent said in a statement in Chinese.

“The loopholes have since been fixed.”

Google, Microsoft, and Baidu did not immediately respond to a request for comment. Google is not available in China.

The ability to find WeChat content on Google and Bing was initially raised by users on developer forums. China’s internet sector has been long dominated by a handful of technology giants who have historically blocked rivals’ links as well as their search crawlers, a practice is often referred to as ‘walled gardens’.

In recent months, this practice has been targeted by Chinese authorities as part of a sweeping regulatory crackdown.

Last month, China’s Ministry of Industry and Information Technology (MIIT) ordered companies to stop blocking links, which they said has affected users’ experience and damaged consumer rights.

The MIIT has also been studying plans and conducting research to make WeChat content available on external search engines, according to a person with direct knowledge.

MIIT did not immediately respond to requests for comment.

Some users on China’s Twitter-like Weibo platform expressed dismay over Tencent’s comments.

“This should be an important attempt of creating an open internet space, how can you call it a bug,” said one user.

© Thomson Reuters 2021

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Snap Shares Plunge 25 percent as Apple Privacy Changes Hit Advertising Business

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By Reuters | Updated: 22 October 2021

Shares of Snap plummeted 25 percent on Thursday after the owner of photo messaging app Snapchat said privacy changes implemented by Apple Inc on iOS devices hurt the company’s ability to target and measure its digital advertising.

The Santa Monica, California-based company, which earns the vast majority of its revenue from selling digital advertising on the app, said the issue was compounded by global supply chain disruptions and labor shortages and caused brands to pull back on their advertising spending.

The results for Snap, which is the first of the major social media companies to report earnings, cast a shadow over Facebook and Twitter, which release third quarter results next week..

Snap’s results also knocked Facebook shares down 6 percent, Twitter down 7 percent and Alphabet fell 3 percent on Thursday.

The Apple privacy updates were rolled out broadly in June and prevent digital advertisers from tracking iPhone users without their consent.

A new ad measurement tool provided by Apple hampered the ability for companies to measure the performance of their ads, upending many of the ways advertisers have been accustomed to doing business for decades, said Snap Chief Executive Evan Spiegel during a conference call with analysts.

“This has definitely been a frustrating setback for us,” he said.

Snap added it expects the Apple privacy changes and global supply chain disruptions to linger through the fourth quarter, which is typically the highest-earning period for social media companies when brands ramp up marketing for the holiday season.

Many of the advertisers who place ads on Snapchat are in the beauty, fashion and consumer goods industries.

Snap said the supply chain disruptions affected a wide variety of advertisers across industries and regions.

Revenue for the third quarter ended September 30 was $1.07 billion, missing consensus estimates of $1.1 billion (roughly Rs. 8,000 crore), according to IBES data from Refinitiv.

Daily active users, a metric watched closely by advertisers and investors, rose 23 percent year-over-year to 306 million, beating analyst estimates of 301.9 million.

Snapchat has worked to attract and retain users by building new features like the ability to discover restaurants and stores through a map feature, or play virtual games with friends.

The net loss during the quarter was $72 million (roughly Rs. 540 crore), or 5 cents (roughly Rs. 4) per share, narrowing from $199.9 million (roughly Rs. 1,495 crore), or 14 cents (roughly Rs. 10) per share, in the year-ago quarter.

Snap forecast fourth quarter revenue between $1.16 billion (roughly Rs. 8,670 crore) to $1.2 billion (roughly Rs. 8,970 crore), and daily active users between 316 million to 318 million.

© Thomson Reuters 2021

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PayPal Said to Be in $45-Billion Bid for Pinterest

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By Reuters | Updated: 22 October 2021

PayPal has offered to buy Pinterest for $45 billion (roughly Rs. 3,36,770 crore), people familiar with the matter said, a combination that could herald more financial technology and social media tie-ups in e-ecommerce.

It would be the biggest acquisition of a social media company, surpassing Microsoft’s $26.2 billion (roughly Rs. 1,95,990 crore) purchase of LinkedIn in 2016.

The deal talks come as internet shoppers increasingly buy items they see on social media, often following “influencers” on platforms such as Instagram and TikTok. Acquiring Pinterest would allow PayPal to capture more of that e-commerce growth and diversify its income though advertising revenue.

PayPal has offered $70 (roughly Rs. 5,200) per share, mostly in stock, for Pinterest, one of the sources said. The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on November 8, the source added.

The sources cautioned that no deal was certain and terms could change. They asked not to be identified because the matter is confidential.

PayPal and Pinterest did not respond to requests for comment. Bloomberg News first reported on the companies’ talks on Wednesday.

PayPal shares fell 4.9 percent to close at $258.36 (roughly Rs. 19,330), while Pinterest shares jumped 12.8 percent to $62.68 (roughly Rs. 4,690).

“(The) combination would be a significant positive for PayPal’s ongoing monetisation initiatives on both sides of its merchant and consumer platforms, especially if Pinterest’s social commerce platform gets integrated with Honey’s AI into PayPal’s destination app,” Wedbush analysts wrote in a note.

The payments behemoth was among the big winners of the COVID-19 pandemic, as more people used its services to shop online and pay bills to avoid stepping out. Its shares have risen about 36 percent in the last 12 months, giving it a market capitalisation of nearly $320 billion (roughly Rs. 23,94,100 crore).

Pinterest was valued at about $13 billion (roughly Rs. 97,275 crore) when it went public in 2019. It also saw a huge spike in users looking for crafts and DIY project ideas, as lockdown curbs kept people at home.

As lockdowns eased, Pinterest has warned about slowing user growth, especially in the United States, its largest market. It has said it expects revenue growth mainly through deeper engagement with existing users rather than signing up new ones.

The market has valued Pinterest shares more cheaply than those of some younger social media platforms such as Snap but higher than more mature companies such as Twitter, according to Refinitiv Eikon valuation metrics.

PayPal’s offer represents a 26 percent premium to Pinterest’s closing price of $55.58 (roughly Rs. 4,160) on Tuesday and it is equivalent to 62 times the social media company’s earnings before interest, taxes, depreciation and amortisation over the last 12 months, according to Eikon.

By that metric, Microsoft paid 79 times LinkedIn’s earnings when it acquired it in all-cash deal. Pinterest, however, would be giving its shareholders some of PayPal’s stock, in a bet that this currency would appreciate over time over time as the combined company reaps revenue and cost synergies.

Pinterest is at a crossroads after co-founder Evan Sharp announced last week he would step down as chief creative officer to join LoveFrom, a firm led by Jony Ive, the designer of many Apple products.

Sharp founded the online scrapbook and photo-sharing platform in 2010 with Ben Silbermann, who is the San Francisco, California-based company’s chief executive officer, and Paul Sciarra, who left in 2012.

PayPal had been looking to boost its e-commerce offerings in recent years through acquisitions. It bought online coupon finder Honey Science in 2019 for $4 billion (roughly Rs. 29,920 crore) and Japanese buy-now-pay-later (BNPL) firm Paidy for $2.7 billion (20,195 crore) earlier this year. It acquired return-service provider Happy Returns in May.

Social media-driven commerce

Social media platforms that have not pursued mergers with fintech firms have been working on ways to allow consumers to buy directly from their platforms.

TikTok, for example, is testing a way for users to buy products directly on its short video app. It has partnered with ecommerce giant Shopify and in August began allowing retail brands to link their product catalogs to the app.

Analysts said the PayPal-Pinterest deal talks highlight the potential for other social media and fintech companies to join forces to capture swaths of the e-commerce market.

“Social/interactive commerce is growing in the United States and no one has won it yet. So rather than going against Amazon, PayPal is making a bet on a different kind of shopping model,” said Marketplace Pulse e-commerce analyst Joe Kaziukėnas.

© Thomson Reuters 2021

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Games

Among Us Coming to PlayStation, Xbox in December; Will Also Be Featured on Xbox Game Pass Alongside

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By ANI | Updated: 22 October 2021

The popular social deduction game, Among Us’, is arriving on Xbox and PlayStation on December 14. It will also launch on Xbox Game Pass on the same day and be available on Xbox One, Xbox Series S / X, PS4, and PS5 consoles.

According to The Verge, this announcement comes months after Sony confirmed Among Us was coming to its PlayStation consoles this year. Just like on other platforms, the game will support crossplay and online multiplayer across mobile, PC, and now consoles.

The only difference between the two console versions is PlayStation players will get access to exclusive Ratchet and Clank-themed cosmetics. There”s a skin and hat to make your character look like Ratchet and a pet that looks like Clank.

Among Us was a huge hit during the early stages of the pandemic, becoming 2020’s most downloaded mobile game. Innersloth has been gradually improving the game over the past year, revealing plans to add a hide and seek mode, visor cosmetics, and a fifth map earlier this year.

As per The Verge, physical editions of the game will also be arriving in Europe on December 14, with a US release due in January.

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WeChat Makes Content Searchable on Google and Bing

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By Reuters | Updated: 22 October 2021

Tencent’s WeChat has made its content searchable on some foreign search engines such as Alphabet-owned Google and Microsoft’s Bing, Reuters checks showed, in the latest tearing down of “walled gardens” in China’s internet sector.

Content from China’s most popular messaging app WeChat, including articles and videos on its popular public accounts page, a function similar to a news portal, has opened to external search engines, other than Tencent’s own Sogou search engine, in recent days.

Tencent, Google, and Microsoft did not immediately respond to a request for comment. Google is not available in China.

China’s Internet sector has been long dominated by a handful of technology giants who have historically blocked each others rivals’ links as well as their search crawlers. The practice is often referred to as ‘walled gardens’.

In recent months, this practice has been targeted by Chinese authorities as part of a sweeping regulatory crackdown.

Last month, China’s Ministry of Industry and Information Technology (MIIT) ordered companies to stop blocking links, which they said has affected users’ experience and damaged consumer rights.

The MIIT has been studying plans and conducting research to make WeChat content available on external search engines, according to a person with direct knowledge.

MIIT and Tencent did not immediately respond to requests for comment.

WeChat content however, is not yet searchable on Baidu, China’s dominant search engine, according to Reuters checks. Baidu didn’t immediately respond to a request for comment.

Citi analysts said in a Tuesday note that the potential “opening up of the social ecosystem to search engine” was a positive development for Baidu, as its “leading search gateway position has been weakened and diluted by the growth and dominance of super apps.”

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Facebook’s Oversight Board Says Company Not ‘Fully Forthcoming’ on How It Deals With High-Profile Users

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By Reuters | Updated: 22 October 2021

Facebook’s independent oversight board demanded more transparency from the social media giant on Thursday, saying the company was not “fully forthcoming” on how it deals with certain high-profile user accounts.

The comments follow a Wall Street Journal report last month that said millions of Facebook accounts belonging to celebrities, politicians, and other high-profile users were exempted from some internal checks.

The board said that Facebook has not been transparent with the company’s ‘cross-check’ system, an internal program the social media network says is used to double-check enforcement actions against certain users.

“Facebook needs to commit to greater transparency and to treat users fairly,” the board said in a tweet.

In relation to its May decision to uphold the indefinite suspension of former US President Donald Trump’s account after the January 6 riot, the board said when Facebook referred the case, it did not mention the cross-check system until it was asked.

“Given that the referral included a specific policy question about account-level enforcement for political leaders, many of whom the Board believes were covered by cross-check, this omission is not acceptable,” it said.

Facebook, in the form of a policy advisory opinion, has asked the board to review its cross-check system and make recommendations on how it can be changed.

A company spokesperson said the board’s work had been “impactful,” which is why it asked for input into the cross-check system.

Facebook created the board mainly to address criticism over how it handles problematic content and is responsible for independent verdicts on a number of thorny decisions related content moderation.

Going forward, the board will publish quarterly and annual transparency reports to provide assessment on whether its recommendations were implemented.

In its first quarterly report, the board said over half a million Facebook and Instagram users submitted appeals between October 2020 and the end of June 2021, of which more than a third were related to content concerning Facebook’s rules on hate speech.

© Thomson Reuters 2021

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