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Tesla Vehicle Deliveries Hit Another Record in Q3 2021, Beats Analysts’ Estimates

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By Reuters | Updated: 4 October 2021

Tesla said on Saturday it had delivered a record electric cars in the third quarter, beating Wall Street estimates after Chief Executive Elon Musk asked staff to “go super hardcore” to make a quarter-end delivery push.

Tesla has weathered the chip crisis better than rivals, with its overall deliveries surging 20 percent in the July to September period from its previous record in the second quarter, marking the sixth consecutive quarter-on-quarter gains. .

In China, rising exports to Europe and the introduction of a cheaper Model Y helped boost Tesla’s production, analysts said.

Musk said Tesla suffered an extremely severe parts shortage earlier in the third quarter and had urged employees to make quarter-end delivery push, Reuters reported last month, citing an internal company email.

“The end of quarter delivery wave is unusually high this time,” he said in the email.

Tesla delivered 241,300 vehicles globally in the July to September quarter, up 73 percent from a year earlier. Analysts had expected the electric-car maker to deliver 229,242 vehicles, according to Refinitiv data.

General Motors, Honda, and some of its bigger rivals posted declines in US sales in the third quarter, hit by a prolonged chip shortage. GM’s third-quarter US sales fell nearly 33 percent to its lowest level in more than a decade.

Tesla said it delivered 232,025 of its Model 3 compact cars and Model Y sport-utility vehicles and 9,275 of its flagship Model S and Model X cars to customers in the quarter.

Total production in the third quarter rose over 15 percent to 237,823 vehicles from the prior quarter.

China

Gary Black, portfolio manager at the Future Fund and a Tesla bull, said that Tesla’s deliveries were driven by record deliveries in China, which was “putting to rest any notion China demand is slowing.”

Tesla faces scrutiny from both regulators and the public and growing competition from local rivals.

Tesla has not released its September China sales yet, and in August, its Shanghai factory exported more than two thirds of its vehicles to Europe and Asian countries.

© Thomson Reuters 2021

Technology

Tesla Says New Factories Will Need Time to Ramp Up, Posts Record Revenue Due to Record Deliveries

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By Reuters | Updated: 21 October 2021

Tesla said on Wednesday its upcoming factories and supply-chain headwinds would put pressure on its margins after it beat Wall Street expectations for third-quarter revenue on the back of record deliveries.

The world’s most valuable automaker has weathered the pandemic and the global supply-chain crisis better than rivals, posting record revenue for the fifth consecutive quarter in the July-to-September period, fueled by a production build-up at its Chinese factory.

But the company led by billionaire Elon Musk faces challenges growing earnings in coming quarters due to supply chain disruptions and the time required to ramp up production at new factories in Berlin and Texas.

“There’s quite an execution journey ahead of us,” Chief Financial Officer Zachary Kirkhorn said, referring to the new factories.

Price fluctuations of raw materials such as nickel and aluminium had created an “uncertain environment with respect to cost structure”, he added.

Even so, he said Tesla was “quite a bit ahead” of its plan to increase deliveries by 50 percent this year.

“Q4 production will depend heavily on availability of parts, but we are driving for continued growth,” he said.

Tesla shares, up about 23 percent this year, were down about 0.6 percent in extended trade late on Wednesday.

Musk himself was not present on the quarterly earnings call for the first time, a development that may have disappointed those investors keen to hear the celebrity CEO’s latest thoughts.

Third-quarter revenue rose to $13.76 billion (roughly Rs. 1,02,840 crores) from $8.77 billion (roughly Rs. 65,540 crores) a year earlier, slightly beating analyst expectations according to IBES data from Refinitiv.

Tesla’s automotive gross margin, excluding environmental credits, rose to 28.8 percent, from 25.8 percent the previous quarter.

Tesla’s overall average price fell as it sold more lower-priced Model 3 and Model Y cars, but it raised prices in the United States.

The company posted robust sales in China, where its low-cost Shanghai factory has surpassed the Tesla factory in Fremont, California, in terms of production.

Tesla also said it intended to use lithium iron phosphate (LFP) battery chemistry, which is cheaper than traditional batteries but offers lower range, in entry-level models sold outside China. Analysts said this would help keep costs down and address shortages.

It expected the first vehicles equipped with its own 4680, bigger battery cells to be delivered early next year, although it did not say which model would be fitted with them. Musk said in September last year that using its own cells would let Tesla offer a $25,000 (roughly Rs. 18.6 lakhs) car in three years.

In the third quarter, Tesla posted $279 million (roughly Rs. 2,085 crores) in revenue from sales of environmental credits, the lowest level in nearly two years. The company sells its excess environmental credits to other automakers that are trying to comply with regulations in California and elsewhere.

© Thomson Reuters 2021

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Social Networking

Facebook’s Name-Change Will Not Deter Lawmaker or Regulatory Scrutiny: Experts

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By Reuters | Updated: 21 October 2021

Renaming Facebook is unlikely to enable the tech giant to distance itself from regulatory and public scrutiny around the potential harms caused by its social media apps, marketing and branding experts told Reuters. Tech publication The Verge reported on Tuesday that the California-based firm is planning to change its corporate branding to reflect that as well as owning the social media platform that made it a global household name, it also now includes other thriving businesses like Instagram, WhatsApp and Oculus.

The company declined to comment regarding the report on the possible rebranding. It did not immediately respond to a request for comment for this story.

Facebook is battling intense scrutiny after a whistleblower leaked thousands of internal documents that showed it contributed to increased polarisation online when it made changes to its content algorithm, failed to take steps to reduce vaccine hesitancy, and was aware that popular social media app Instagram harmed the mental health of teenage girls.

The US Senate held a hearing earlier this month into the effect of Instagram on young users.

“Legislators and politicians are sufficiently smart to not be fooled by a rebranding,” said James Cordwell, an internet analyst at Atlantic Equities.

Renaming can be an effective strategy to allow subsidiary brands to maintain their own reputations, said Marisa Mulvihill, head of brand and activation at Prophet, a branding and marketing consultancy. But the media and regulators “are not going to stop investigating or creating reforms just because you rebranded,” she added.

The new parent company name could reflect Facebook’s focus on building the ‘metaverse,’ The Verge reported, referring to a proposed digital world where people can use different devices to move and communicate in a virtual environment.

It could also prevent a possible negative perception around the Facebook name from affecting WhatsApp, the messaging app used by nearly 2 billion people globally, and Oculus, its virtual reality brand, experts said.

According to Prophet’s annual ranking, Facebook’s brand relevance to US consumers has dropped “precipitously” over the past several years, Mulvihill said.

“What you don’t want is for that to proliferate and have a negative halo effect on other parts of your business,” said Deborah Stafford-Watson, head of strategy at brand consultancy firm Elmwood.

Other major companies have taken similar steps. Google reorganised under a holding company called Alphabet in 2015, as the company best known for internet searches increasingly pursued ambitions like autonomous driving technology.

In 2003, cigarette seller Philip Morris rebranded itself as Altria, at a time when the company owned Kraft Foods. It later spun off the food division.

While the move to rebrand as Altria didn’t remove the negative connotations of tobacco from the cigarette brands itself, it did help to limit the effects on Kraft, Mulvihill said.

Facebook will continue to confront the same pressures even after a rebrand, the experts said.

“I don’t think it’s going to help Facebook mitigate regulators’ scrutiny or the general public’s skepticism, if not distrust,” said Natasha Jen, a partner at Pentagram, a design studio that does advertising and communication work. “Trust is something you need to earn.”

© Thomson Reuters 2021

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Apps

TRUTH Social: Donald Trump Launches His Own Social Media App to ‘Stand Up to Big Tech’

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By Reuters | Updated: 21 October 2021

Former US President Donald Trump will launch his own social media app, TRUTH Social, that he said would “stand up to Big Tech” companies such as Twitter and Facebook that have barred him from their platforms.

TRUTH Social will be created through a new company formed by a merger of the Trump Media and Technology Group and a special acquisition company (SPAC), according to a press release distributed by both organisations.

“We live in a world where the Taliban has a huge presence on Twitter, yet your favourite American President has been silenced. This is unacceptable,” Trump said in a written statement included in the release.

“I am excited to send out my first TRUTH on TRUTH Social very soon. TMTG was founded with a mission to give a voice to all. I’m excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech,” he said.

The social network, set for a beta launch next month and full rollout in the first quarter of 2022, is the first of three stages in the company’s plans, followed by a subscription video-on-demand service called TMTG+ that will feature entertainment, news, and podcasts, according to the news release.

In a slide deck on its website, the company envisions eventually competing against Amazon’s AWS cloud service and Google Cloud.

A Trump representative who declined to be named confirmed the contents of the TMTG news release to Reuters. Trump spokesperson Liz Harrington also tweeted a copy.

“For so long, Big Tech has suppressed conservative voices,” the former president’s son, Donald Trump Jr., told Fox News in an interview. “Tonight my father signed a definitive merger agreement to form what will ultimately be the Trump Media and Technology Group and TRUTH Social – a platform for everyone to express their feelings.”

Twitter, Facebook, and other social media platforms banned Trump from their services after hundreds of his supporters rioted at the US Capitol on January 6.

That protest came after a speech by Trump in which he falsely claimed that his November election loss was due to widespread fraud, an assertion rejected by multiple courts and state election officials.

The deal will list Trump Media & Technology Group on Nasdaq through a merger with Digital World Acquisition, a blank-check acquisition firm led by former investment banker Patrick Orlando.

Trump Media & Technology Group will receive $293 million (roughly Rs. 2,190 crores) in cash that Digital World Acquisition had in trust, assuming no shareholder of the acquisition firm chooses to redeem their shares, according to the statement.

Orlando, who has worked at Deutsche Bank and BT Capital Markets, has launched at least four SPACs and has plans for two more, according to his firm’s website and regulatory filings.

But none of the SPACs have completed a deal yet. A China-based SPAC that Orlando led failed last month to complete a merger with Giga Energy that would have valued the transportation solutions provider at $7.3 billion (roughly Rs. 54,650 crores), because it could not deliver the cash required, according to regulatory filings.

Shareholder redemptions reduce the amount of cash that Digital World Acquisition will have available to give to Trump Media & Technology Group at the closing of the deal.

The companies said in the statement that the completion of the merger is subject to redemptions not exceeding an agreed minimum cash requirement. The statement did not disclose what the requirement is, though that detail is typically contained in a regulatory filing that should follow on Thursday.

The deal values Trump Media & Technology Group at $875 million (roughly Rs. 6,550 crores), including debt, according to the news release.

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Cryptocurrency

Bitcoin Edges Off All-Time High but Momentum for More Gains This Year Seen Intact

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By Reuters | Updated: 21 October 2021

Bitcoin fell slightly in Asian hours on Thursday, a day after marking an all-time high on optimism around the launch of the first US Bitcoin futures ETF.

The world’s largest cryptocurrency was last down 1.3 percent at $65,184 (roughly Rs. 48.8 lakhs) after hitting a record $67,016 (roughly Rs. 50 lakhs) on Wednesday, but still above a previous peak of $64,895 (roughly Rs. 48.6 lakhs) seen in April.

“We think its going to go higher and we can get to 80 or 90,000 by the end of this year easy, but that won’t be without volatility,” said Matt Dibb, COO of Singapore-based Stack Funds.

In the past few days, he said, traders were starting to pay high rates to borrow to buy Bitcoin futures, “and that’s a sign that we could be a bit overextended, and there could be a pullback to come.” Bitcoin price in India stood at 49.9 lakhs as of 9:30am IST on October 21.

He added he anticipated traders would rotate out of Bitcoin and into major ‘Altcoins’ – other cryptocurrencies.

Ether, the world’s second largest cryptocurrency, rose 1 percent to $4,203 (roughly Rs. 3.1 lakhs) and there were also sharper gains in smaller tokens. Ether price in India stood at Rs. 3.2 lakhs as of 10am IST on October 21.

Market players say the latest wave of buying has been supported by the launch of the first US Bitcoin futures-based exchange-traded fund (ETF) with investors betting this will open a path to greater investment from both retail and institutional investors.

Existing Bitcoin exchange-traded funds and products have seen sharp inflows since September.

Average weekly flows to bitcoin funds totalled $121.1 million (roughly Rs. 910 crores) in October, up from $31.2 million (roughly Rs. 230 crores) a month earlier, data from London-based CryptoCompare shows.

The three months prior to September had seen outflows following steep losses for bitcoin in May and June.

© Thomson Reuters 2021

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Cryptocurrency

Facebook Cannot Be Trusted to Manage Cryptocurrency, US Lawmakers Say

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By Reuters | Updated: 20 October 2021

A group of US lawmakers said Facebook cannot be trusted to manage cryptocurrency and urged the social media platform to discontinue immediately a small pilot of its cryptocurrency wallet named Novi, which was launched on Tuesday.

US Democratic senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith voiced their opposition to Facebook’s two-year-old effort to launch a cryptocurrency and digital wallet.

“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” the senators wrote in a letter to Facebook Chief Executive Mark Zuckerberg.

“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient,” the senators wrote.

The letter by the senators indicates that even Facebook’s small pilot of its cryptocurrency wallet will face scrutiny from lawmakers and regulators, who have previously raised antitrust and other concerns.

A Novi spokesperson said: “We look forward to responding to the committee’s letter.”

Facebook unveiled a cryptocurrency project in June 2019, as part of an effort to expand into e-commerce and global payments.

But the project immediately ran into fierce opposition from policymakers globally, who worried it could erode their control over the money system, enable crime, and harm users’ privacy.

In December, the project was rebranded in a renewed effort to gain regulatory approval, with its scope scaled back further to a single dollar-backed digital coin.

© Thomson Reuters 2021

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Apps

Login to God: Vatican Relaunches ‘Click to Pray’ App to Help the Faithful to Connect ‘Prayer With the World’

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By Agence France-Presse | Updated: 20 October 2021

It’s so secular, clicking to order food, clicking to buy shoes or clicking to reserve tickets. Pope Francis wants you to click to pray. The Click to Pray app is being relaunched, the Vatican said Tuesday, permitting more Catholic faithful to “connect your prayer with the world”.

Francis, 84, is no stranger to social media – he has a whopping 19 million Twitter followers and 8.3 million on Instagram and a high tolerance for selfies – and has acknowledged that social networks can be an “opportunity to promote encounter with others”.

Since it first appeared in 2016, the social media app has been downloaded by more than 2.5 million people, offering daily prayers and messages from the pope, while allowing users to send prayers to others.

Click to Pray 2.0 will be launched November 1 after a test period on beta users comprised of cloistered monks and nuns around the world, Vatican officials said.
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The new version – available in seven languages – offers more individualisation, allowing users to set an agenda to schedule prayers, provides more in-depth background about specific prayers and also links to Vatican-approved outside initiatives such as Tweeting with God.

“The idea is to be able to use it (the new app) and give an instrument to people to pray, to be in communion,” Monsignor Lucio Ruiz, secretary of the Dicastery for Communication, which oversees the Holy See’s entire communication network, told AFP.

Asked whether the app was launched to counteract declining church attendance in the West, he said it was “not a replacement for something”.

“It’s understanding culture, reading it and listening and seeing where we are, to be able to be there,” Ruiz said. “Because where people are, the Church must be.”

Log-in to God

On Tuesday, the app’s community page listed a host of prayers from around the world, with headlines such as “Please pray for my daughter”, “Prayer for my sick mother” and even one “for my career”.

After creating a profile, a user can organise a prayer agenda, choosing content and setting notifications and reminders to pray during the day.

“With Jesus in the morning – Start your day” reads the caption on the app for a morning prayer, while an evening prayer is under the title “Contemplate and rest”.

The new version was launched to coincide with the opening of the Synod, a global assembly of Catholic church leaders on the theme “Communion, Participation, and Mission”, expected to last until 2023.

Besides social media, the Vatican has multiple traditional media resources to spread the Church’s message to the 1.3 billion Catholics around the world, including the Holy See’s official website, a daily newspaper and a radio.

But outside Saint Peter’s Basilica Tuesday, no European visitors approached by AFP had heard of the app.

On the Google Play Store, most users gave the app five stars, although some cited glitches, especially of having to sign in repeatedly.

One user gave the app one star, saying: “God knows who I am, why should I need to identify to the Pope, too?”

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