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Tesla Expects to Miss Vehicle Delivery Targets for 2022, Q3 Revenues Miss Analyst Estimates

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By Reuters | Updated: 20 October 2022

Tesla Chief Executive Elon Musk on Wednesday said he expected the company would miss its vehicle delivery targets this year, but downplayed concerns about softening demand after the company’s revenue missed Wall Street estimates.

The billionaire told analysts on a conference call there was excellent demand for the fourth quarter, addressing investor concern that buyers could be discouraged by the weak global economy and high prices for Tesla vehicles.

But he said some logistics challenges would persist, with fourth-quarter deliveries tracking under 50 percent growth while production hit 50 percent growth.

“I wouldn’t say we’re recession proof, but it’s certainly recession resilient,” he said.

Shares fell 4.3 percent in after-market trading.

Tesla is expanding fast despite global economic jitters, and investors are closely watching for signs that the cooling economy would hurt demand.

The company’s third-quarter automotive gross margin was 27.9 percent, missing analysts’ estimates and down from 30.5 percent a year earlier.

Tesla’s revenue for the third quarter was $21.45 billion (roughly Rs. 1.78 lakh crore), a record but short of analysts’ estimates of $21.96 billion (roughly Rs. 1.83 lakh crore), according to IBES data from Refinitiv.

The company said it had a negative foreign exchange impact of $250 million (roughly Rs. 2,080 crore) on its earnings as the US dollar strengthened against major currencies.

“Raw material cost inflation impacted our profitability along with ramp inefficiencies” from its new factories in Berlin and Texas, and the production of its new 4,680 batteries, according to Tesla’s statement. Musk added that production of the 4,680 battery was gaining rapid traction, although executive Andrew Baglino said, “There are challenges still ahead that we have not yet surpassed. No doubt.”

Musk also said the company has the ability to do a stock buyback in the range of $5 billion (roughly Rs. 42,000 crore) to $10 billion (roughly Rs. 83,000 crore), pending board review and approval.

Path to pass Apple market share

Early this month, Tesla said it delivered 35 percent more vehicles in the July-September period than in the previous quarter, but the record number was shy of vehicle production and analysts’ estimates.

The electric vehicle pioneer has seen its shares tumble about 50 percent from record highs last November as investors were spooked by a cooling global economy and Musk’s bid to buy social media company Twitter.

Musk told the conference call he saw a path for Tesla to be worth more than two mammoth companies, Apple and Saudi Aramco, combined. Tesla’s market cap is now under $700 billion (roughly Rs. 60 lakh crore), while Apple is worth $2.3 trillion (roughly Rs. 200 lakh crore) and oil producer Saudi Aramco is worth $2.1 trillion (roughly Rs. 180 lakh crore).

Analysts had expected Musk to voice optimism about Tesla in the conference call. Musk has been trying to raise cash to fund his $44 billion (roughly Rs. 3.6 lakh crore) deal to take Twitter private. Some experts say Musk may need to sell about $3 billion (roughly Rs. 25,000 crore) more in stock after the earnings announcement to help fund the deal.

Musk on Wednesday said he was excited about his pending acquisition of Twitter, although he and other investors were overpaying for the social media company.

Musk also said Tesla’s Cybertruck pick-up truck was on track to enter production in the middle of next year and its heavy-duty semi-truck, which will begin deliveries later this year, could see 50,000 units in North America in 2024.

© Thomson Reuters 2022

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Apple’s App Store Missing From List Mobile Storefronts Submitting Filings to China’s CAC Under New Rules

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A total of 26 app stores operated by companies including Tencent, Huawei, Baidu, Xiaomi and Samsung have submitted filings to the authority.
By Reuters | Updated: 27 September 2023

China’s cyberspace regulator released on Wednesday names of the first batch of mobile app stores that have completed filing business details to regulators, signalling it has begun to enforce new rules that expand its oversight of mobile apps.

A total of 26 app stores operated by companies including Tencent, Huawei, Ant Group, Baidu, Xiaomi and Samsung have submitted filings to the authority, according to the Cyberspace Administration of China (CAC).

Apple’s App Store is not among the app stores on the list. Apple did not immediately respond to Reuters’ request for comment.

China’s cyberspace regulator released on Wednesday names of the first batch of mobile app stores that have completed filing business details to regulators, signalling it has begun to enforce new rules that expand its oversight of mobile apps.

A total of 26 app stores operated by companies including Tencent, Huawei, Ant Group, Baidu, Xiaomi and Samsung have submitted filings to the authority, according to the Cyberspace Administration of China (CAC).

Apple’s App Store is not among the app stores on the list. Apple did not immediately respond to Reuters’ request for comment.

In August this year, the Ministry of Industry and Information Technology published another notice requiring mobile apps to complete filing by the end of March.

Earlier this month, Reuters reported that app stores operated by companies including Tencent and Huawei have started demanding apps on their app stores comply with the new rules.

Apple has not disclosed how its app store in China will comply with Beijing’s new rules. Experts said Apple’s compliance could lead to tens of thousands of apps being removed from Apple’s App Store in China.


© Thomson Reuters 2023

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JPMorgan’s UK Bank Chase to Ban Crypto Transactions After Increase in Scams

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JPMorgan has attracted more than 1.6 million customers to its Chase retail bank since launching the mobile app-based service in Britain two years ago.
By Reuters | Updated: 27 September 2023

JPMorgan’s British retail bank Chase will ban crypto transactions made by customers from October 16 due to an increase in fraud and scams, the company said on Tuesday.

“We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account,” a spokesperson for the bank said.

Chase has become the latest lender in the UK to restrict customers’ access to crypto amid long-running concerns over its use in online scams run by criminals.

JPMorgan has attracted more than 1.6 million customers to its Chase retail bank since launching the mobile app-based service in Britain two years ago, and plans to roll out the consumer bank in other international markets over time.

Chase informed customers of its planned policy change by email on Tuesday morning, the bank confirmed. Crypto media outlet Coindesk reported the move earlier on Tuesday.

In March, NatWest (NWG.L) imposed new limits on the daily and monthly amount customers can send to crypto exchanges, seeking to protect consumers from “crypto-criminals.”

Spain’s Santander said last year it would block UK customers from sending real-time payments to crypto exchanges as part of measures to protect customers from scams.

Last month, payments giant PayPal announced that it would stop allowing UK customers to buy cryptocurrencies through its platform from October as it worked to comply with new rules on crypto promotions.

Britain’s financial regulator is due to bring in tougher rules to limit how crypto is advertised to British consumers, including requiring crypto firms to carry warnings about the risk and scrapping “refer a friend” bonuses.

© Thomson Reuters 2023

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Chipmaker ASML to set up base in Japan’s Hokkaido to support new Rapidus plant

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Chipmaker ASML to set up base in Japan's Hokkaido to support new Rapidus plant
By Reuters | Updated: 26 September 2023

TOKYO, Sept 26 (Reuters) – Dutch semiconductor equipment maker ASML (ASML.AS) plans to set up a base in Japan’s northern island of Hokkaido to support production at a chip plant for Japanese startup Rapidus, the company said on Tuesday.

An ASML spokesperson said the company will have a customer support team for Rapidus, but could not immediately confirm staff numbers. Nikkei, which first reported the news, said that 50 ASML engineers will install an ASML “EUV” machine on a prototype line in Chitose City, Hokkaido.

“We always have engineers that support our systems in our customers’ fabs,” the ASML spokesperson said, referring to customers’ factories.

Rapidus, which broke ground on its plant in Chitose City on Sept. 1, is receiving billions of yen in funding from the Japanese government as it seeks to break into the market for manufacturing custom-made, leading-edge microchips.

Rapidus is aiming to manufacture chips at the 2 nanometre process node, which will require using ASML’s most advanced EUV, or extreme ultraviolet, lithography tools to help create the circuitry of chips.

TSMC, Samsung, Intel and memory chip specialists SK Hynix and Micron currently manufacture using ASML’s EUV tools.

The Nikkei report said ASML is also expanding its existing support base for TSMC, which is building a major plant in Kumamoto in Japan.

© Thomson Reuters 2023

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Internet

Israeli tech firms raised $1.7 bln in Q3 in sign of stabilisation -report

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Israeli tech firms raised $1.7 bln in Q3 in sign of stabilisation -report
By Reuters | Updated: 26 September 2023

JERUSALEM, Sept 26 (Reuters) – Israeli high-tech firms raised $1.7 billion in the third quarter, preliminary data showed on Tuesday, in a sign that investment in startups is stabilising.

The amount raised in the third quarter was down 38% over the same period in 2022 but only 14% lower from the second quarter, the IVC Research Center and LeumiTech said in a report.

It noted that full quarterly data will be issued in October.

Israeli tech companies have raised $5.3 billion so far this year, with $1.9 billion coming in the second quarter. In all of 2022, tech firms raised nearly $16 billion, mainly in the first half before the global economic slowdown, higher interest rates and weak stock markets hit.

The Israeli government’s plan to overhaul the country’s judiciary has also harmed fundraising, with many investors wary and vocal about the country’s democratic health.

“We continue to see in the third quarter data the first signs of stabilisation in the amount and scope of fundraising, data that bring us back to the levels of 2018-19,” said LeumiTech CEO Maya Eisen Zafrir.

“In addition, we recognise a stabilisation in the rate of follow-on investments, an indication that the companies are beginning to adjust their value to the new interest rate environment.”

© Thomson Reuters 2023

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Mexico eyes US energy exports from solar farm, chip supply chain role

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By Reuters | Updated: 26 September 2023

TAIPEI, Sept 26 (Reuters) – Mexico’s northern state of Sonora wants to export clean energy to California and Arizona from a massive new solar farm project and play a role in the chip supply chain given TSMC’s (2330.TW) $40 billion investment in Arizona, Sonora’s governor said.

The first phase of the Puerto Penasco solar plant in the sprawling border state, which boasts some of the highest temperatures in the country, was inaugurated in February as part of Mexican President Andres Manuel Lopez Obrador’s flagship solar push, which officials have said could boast four additional plants.

During a visit to Taiwan, Sonora Governor Alfonso Durazo said the “Plan Sonora” solar energy project would not only help improve domestic connectivity to the national grid, but also to export to the United States.

“Not only Arizona, but also California. It’s part of its objective,” he told Reuters on Monday. “We want to convert our state into an exporter of clean energy, particularly for semiconductor and electric vehicle industries.”

Durazo said he would be meeting major Apple (AAPL.O) supplier Foxconn (2317.TW) while he was in Taipei to discuss possible investment in his state, though was not planning to meet TSMC.

Foxconn, which has made electric vehicles a major part of its future development strategy, has large operations in Mexico but no plants in Sonora.

“Our interest in Foxconn is in establishing semiconductor plants, and also, eventually, factories of some or all the stages of e-mobility,” added Durazo, who is only visiting Taiwan on this overseas trip.

Durazo said he would like a TSMC chip plant in his state, and that he would be visiting the Hsinchu Science Park, where the chipmaker does much of its manufacturing in Taiwan.

“Assuming as a natural complement of all these processes of relocation of investment in Arizona, we also see TSMC as an obvious option for Sonora state,” he said.

Foxconn and TSMC both declined to comment.

Sonora also boasts major lithium deposits, which Lopez Obrador formally nationalised in Mexico earlier this year.

Mexico has yet to begin production of the metal, which is a key component for EV batteries.

To facilitate production, Durazo underlined that private investors would be able to partner up with the incipient national lithium company LitioMx on the condition they established supply chains in Sonora.

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OpenAI’s ChatGPT will ‘see, hear and speak’ in major update

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OpenAI's ChatGPT will 'see, hear and speak' in major update
By Reuters | Updated: 26 September 2023

Sept 25 (Reuters) – OpenAI’s ChatGPT is getting a major update that will enable the viral chatbot to have voice conversations with users and interact using images, moving it closer to popular artificial intelligence (AI) assistants like Apple’s (AAPL.O) Siri.

The voice feature “opens doors to many creative and accessibility-focused applications”, OpenAI said in a blog post on Monday.

Similar AI services like Siri, Google (GOOGL.O) voice assistant and Amazon.com’s (AMZN.O) Alexa are integrated with the devices they run on and are often used to set alarms and reminders, and deliver information off the internet.

Since its debut last year, ChatGPT has been adopted by companies for a wide range of tasks from summarizing documents to writing computer code, setting off a race amongst Big Tech companies to launch their own offerings based on generative AI.

ChatGPT’s new voice feature can also narrate bedtime stories, settle debates at the dinner table, and speak out loud text input from users.

The technology behind it is being used by Spotify (SPOT.N) for the platform’s podcasters to translate their content in different languages, OpenAI said.

With images support, users can take pictures of things around them and ask the chatbot to “troubleshoot why your grill won’t start, explore the contents of your fridge to plan a meal, or analyze a complex graph for work-related data”.

Alphabet’s Google Lens is currently the popular choice to gain information on images.

The new ChatGPT features will be released for subscribers of its Plus and Enterprise plans over the next two weeks.

© Thomson Reuters 2023

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