VIDEO1:4501:45VW CFO: China is tremendously important for usChina is helping to drive technological change in the automotive sector, the chief financial officer of Volkswagen told CNBC Thursday.
When asked about new innovations such as self-driving cars and 5G mobile networks, VW's Frank Witter said he was impressed by the rate of technological advancements coming from the world's second-largest economy.
“I think for the longest time we have been used to looking to the west coast of the United States when we were talking about innovation and new technologies,” Witter told CNBC's “Squawk Box Europe.”
“This is still valid but at the same time you are absolutely right to point to China,” he added.
Witter said that, looking at motor shows in China year-over-year, it was “just amazing how quickly the industry is progressing,” highlighting development at China's OEMs (original equipment manufacturers).
“The driver of technology is China, and we are very pleased with the progress we are making, together with our partners but also in Mobility Asia,” he added.
The Volkswagen Group's relationship with China dates back to 1978. In 2017, it launched a joint-venture with the state-owned Anhui Jianghuai Automobile Co., looking at e-mobility.
In May 2018, it set up Mobility Asia, which focuses on connectivity, smart mobility ecosystems, infrastructure ecosystems, service and data monetization, and autonomous cars.
Looking at the bigger picture, when it comes to autonomous driving a range of technologies are being developed and tested.
At the end of April 2019, South Korean telecoms giant SK Telecom signed an agreement with the Incheon Free Economic Zone (IFEZ) to develop 5G-based self-driving infrastructure.
In a statement at the time, SK Telecom said it would produce a high definition map covering the whole IFEZ area. It added that the map would have “centimeter-level accuracy” and provide information relating to road conditions, lanes, road slopes and speed limits.
5G refers to the fifth generation of mobile networks. While it promises cell phone users incredibly fast browsing experiences, it will also benefit the autonomous vehicle sector through its ability to process reams of information and data simultaneously and quickly.
Author: CNBC Online news
VW says it’s ‘optimistic but also realistic’ after US tariff threat on cars
VIDEO2:3302:33VW CFO: Special items related to diesel close to 30 billion eurosVolkswagen said Thursday it would continue to hope for the best possible outcome amid heightened fears that the U.S. could soon impose tariffs on EU cars.
But, the German automaker emphasized it plans to monitor the prospect of additional charges with a sense of realism too.
It comes after President Donald Trump said in February that he would impose tariffs on cars imported from the EU if U.S. talks with the bloc couldn't produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.
Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.
“We certainly hope that the trade disputes can be resolved but it is no secret that 100% of the Porsche cars are being exported from Europe to the United States,” Frank Witter, chief financial officer of Volkswagen, told CNBC's “Squawk Box Europe” on Thursday.
He explained that approximately 70% of all Audi products were sold in the U.S., while for Volkswagen passenger cars it was a very small percentage being exported from Europe to the U.S. since most of their cars were built in North America.
“So, we still hope for the best, we do whatever we can but we are not party to the negotiations … We continue to be optimistic but also realistic,” Witter said.
Earlier this year, Volkswagen CEO Herbet Diess said the carmaker would need to redouble its efforts in 2019 in order to meet its ambitious annual targets.
Diess told the Financial Times in February that the biggest risk to Volkswagen's 2019 profit would be potential tariffs from Trump's administration.
At the time, he estimated the worst-case scenario regarding potential U.S. tariffs could cost around 2.5 billion euros a year — roughly 13% of expected earnings.
VIDEO1:4501:45VW CFO: China is tremendously important for usEarnings in line with expectationsOn Thursday, Volkswagen reported first-quarter earnings in line with expectations, as the company attempts to increase the pace of its transformation.
The German firm posted operating profit of 3.9 billion euros ($4.4 billion) for the first three months of the year. That compared with operating profit of 4.2 billion euros a year earlier. Analysts polled by Reuters had expected first-quarter operating profit to come in at 3.9 billion euros.
Shares rose over 2.3% during early morning deals.
Volkswagen, which is still battling to recover from a 2015 scandal over emissions test cheating, also said it had decided to take a 1 billion euro charge in the first quarter, as a result of legal risks.
“It is certainly very unfortunate that we had to book more provisions but we assess every single risk and exposure we have continuously and it was the point in time to make those provisions,” Witter said.
The company confirmed its full-year guidance and said it expected sales to increase as much as 5%. It projected an operating return on sales between 6.5% and 7%.
Revenue advanced 3.1% to 60 billion euros for the first three months of 2019, despite a drop in deliveries.
The company did not provide a net profit figure.
Elon Musk and SEC again ask for more time to reach deal over Twitter dispute
Elon Musk, chief executive officer of Tesla Inc., smiles while speaking to members of the media outside federal court in New York, U.S., on Thursday, April 4, 2019.Natan Dvir | Bloomberg | Getty ImagesTesla Chief Executive Elon Musk and the U.S. Securities and Exchange Commission on Thursday sought a second delay and requested to provide the court another joint submission on or before April 30, indicating whether they have reached an agreement to settle a dispute over Musk's use of Twitter, both parties said in a court filing.
The SEC in February sought to have Musk found in contempt of a fraud settlement last year after the CEO tweeted details about Tesla production numbers that were not vetted by the electric vehicle company's attorneys.
Instead, U.S. District Court Judge Alison Nathan in Manhattan ordered Musk and the SEC to try to resolve the dispute on their own. The parties have already requested one extension.
The SEC sued Musk last year for making fraudulent statements after he tweeted on Aug. 7 that he had “funding secured” to take Tesla private at $420 per share. The parties later settled and Musk agreed to step down as chairman and have the company's lawyers pre-approve written communications, including tweets with material information about the company. Musk's lawyers have argued that the February tweet did not contain new information that was material to investors.
South Korea’s SK Telecom to develop a 5G-based map for self-driving cars
Sungjin Kim | Moment | Getty ImagesSouth Korean telecoms giant SK Telecom has signed an agreement with the Incheon Free Economic Zone (IFEZ) to develop 5G-based self-driving infrastructure.
The memorandum of understanding (MOU) will also focus on the development of information and communications technology start-ups in the IFEZ, a specially-designated economic zone located in the city of Incheon in the northwest of the country. The IFEZ was set up in 2003 and is made up of the areas of Songdo, Yeongjong and Cheongna.
5G refers to the fifth generation of mobile networks. While it promises cell phone users incredibly fast browsing experiences, it will also benefit the autonomous vehicle sector through its ability to process reams of information and data simultaneously and quickly.
In a statement Monday, SK Telecom said it would produce a high definition map covering the whole IFEZ area. It added that the map would have “centimeter-level accuracy” and provide information relating to road conditions, lanes, road slopes and speed limits.
The hope is that the map will help the IFEZ area become ready for Level 4 autonomous vehicles, as defined by SAE International. A global association of over 127,000 engineers, SAE International has defined five “levels” of driving automation. An example of Level 4 automation could be a driverless taxi, while at Level 5 a vehicle's automated features can drive it under all conditions.
The map will be built using a 5G-based platform that will automatically update when it gets road observation data from advanced driver assistance systems over the 5G network.
Advanced driver assistance systems, or ADAS, are becoming increasingly important tools in modern vehicles. They use a range of technologies, including sensors and cameras, to detect potential hazards, and can undertake action – be it automatically or by warning a driver – to prevent accidents from happening.
VIDEO3:0803:085G will change your phone and your world
In order to detect any changes on the road, SK Telecom said it planned to install both ADAS and 5G communication technologies to public transport vehicles and government cars in the IFEZ.
“The core of 5G lies in its power to transform all industries to deliver unprecedented value to people's daily lives,” Park Jin-hyo, SK Telecom's chief technology officer, said Monday.
“We will work closely with the IFEZ Authority to accelerate IFEZ's transition to a smart city powered by SK Telecom's 5G network and mobility technologies,” he added.
While there is a great deal of excitement in relation to self-driving cars, the CEO of Arm Holdings told CNBC earlier this year that it would be “a while” before they become mainstream.
“It is a phenomenally hard problem to anticipate what a car could do under absolutely any set of circumstances,” Simon Segars, who was speaking to CNBC's Karen Tso, said.
“I think you're going to start to see early services, in quite a constrained way, quite soon over the next couple of years,” he added, explaining that there was “some way to come” before the technology was “completely mainstream.”
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Elon Musk emailed employees about how great Tesla’s autonomy day was, but the plan has lots of holes
Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019.Frederic J. Brown | AFP | Getty ImagesTesla CEO Elon Musk did what he does best on Monday when he presented bold, visionary promises that only his most loyal followers would take at face value.
Specifically, Musk gave guidance that Tesla will have a million “robotaxis” on the road next year, meaning a million truly driverless cars that can operate commercially in a ride-hailing network, generating passive income for their owners.
Musk celebrated the day in an email to all employees on Monday afternoon.
Subj. Great day for Tesla!
The Autonomy Day was extremely well-received. Feedback has been incredible. [Smiling emoji here.]
Awesome result of extremely intense effort by the Autopilot Team!
[two clapping emoji]
Elon
Promising safe, driverless cars within a year is already exceedingly optimistic. But Musk went further to say that each Tesla — equipped with some future version of its Autopilot and Full Self-Driving software — could generate $30,000 in gross income for owners each year if operated as a robotaxi.
VIDEO1:2601:26Elon Musk says Tesla will have 'robotaxis' on the road by 2020That's not realistic, considering Tesla's production numbers to date and the average salary of a ride-hailing driver in the US today.
The event served as a distraction from Tesla's recent operational, regulatory and financial troubles, which will be in full focus during the company's first-quarter earnings report on Wednesday.
Among some of its recent challenges, Tesla slowed production of its Model S and X vehicles in recent quarters and recently closed stores and laid off thousands of employees. Plus, Musk remains locked in a battle with the SEC over his use of social media to disseminate material business information. Tesla had around $180 million in debt coming due this month. And sales of its Model 3 slowed down in the first quarter.
A history of self-driving promisesIn 2018, ride-hailing trade publication Ridester found that human drivers working 40 hours a week for the likes of Uber or Lyft make annual salaries of about $31,000 before vehicle expenses, and about $20,000 after expenses but before taxes in the US.
Those people are driving cars already deemed street legal, and picking up fares in major cities and at airports where local laws have been, for the most part, hashed out authorizing them to drive there.
Meanwhile, the company has produced only about 600,000 cars to date. Not all of them are still on the road.
Tesla said in its fourth-quarter earnings release that it was aiming to deliver 360,000 to 400,000 vehicles in 2019, about 45 percent to 65 percent more than its deliveries last year.
VIDEO8:0508:05Tesla loses $2.90/share, revenue light, as wellTo reach a million robotaxis in 2020, Tesla would have to continue producing cars near the high-end of its previous guidance. Then, the majority of those cars would have to get the necessary software updates to reach Full Self-Driving status, which currently costs $5,000 when customers order the car or $7,000 as an upgrade if added after delivery, although these prices could change over time. Finally, owners would have to agree to let their cars participate in a Tesla robotaxi network.
Meanwhile, truly driverless vehicles do not yet exist. Tesla doesn't sell one. Neither does any other company.
Deutsche Bank analyst Emmanual Rosner, who took a test drive of the vehicles Tesla showed on Tuesday, was skeptical, writing, “Throughout the ride, the car performed relatively well but experienced a few rough maneuvers and had one disengagement where it failed to recognize cones blocking off some parked vehicles on the side of the road.”
He continued, “Given our own test ride still faced issues despite being on a pre-planned course and under relatively simple road conditions, we believe the company's targeted timeline for both full self-driving and its robotaxi service is at the very least aggressive. Ultimately, we still wonder whether Tesla can even solve the large challenges of fully autonomous driving with its vision-based approach alone.”
Musk has made grandiose promises about self-driving before.
In October 2016, Musk touted Tesla's second-generation autonomous driving hardware, saying that system could power full level 5 autonomy in his company's cars — that means the car could drive in all conditions with zero human attention. Musk said the company expected that a Tesla would be able to complete a hands-free trip across the US by late 2017. As of April 2019, Tesla has not demonstrated any of its vehicles completing such a trip, although self-driving pioneer Anthony Levandowski says a car from his new start-up accomplished the task last December.
Analysts were generally skeptical. Cowen analysts wrote, “The Tesla Network robotaxi plans seemed half baked, with the company appearing toeither not have answers to or not even considered pretty basic question on the pricing,insurance liability, or regulatory and legal requirements.”
Even some historical Tesla bulls were not swayed by the presentation.
Dan Ives, Managing Director of Wedbush Securities said, “The presentation was more visionary and lacked the details the Street wants to know which is key to credibility. It was more geared to the autonomy world as Musk is telling technologists 'don't forget about Tesla,' with Waymo and Uber getting a ton of credit.”
Tesla stock traded down about 4% on Monday, and ticked up by less than a point in mid-day trading on Tuesday. The stock is down about 30% from its most recent peak in December, and down about 9% from a year ago.
VIDEO2:3902:39Tesla's Elon Musk promises 'robotaxis' by 2020
Elon Musk makes deal with SEC not to discuss Tesla’s finances without a lawyer’s approval
Elon Musk, chief executive officer of Tesla Inc., arrives at federal court in New York, on Thursday, April 4, 2019.Natan Dvir | Bloomberg | Getty ImagesTesla CEO Elon Musk has reached an agreement with the Securities and Exchange Commission over his use of Twitter, according to an amended filing in U.S. District Court of the Southern District of New York.
The late Friday agreement, which still needs to be approved by a judge, lays out exactly what kind of information requires formal legal review before being shared. This oversight process is now required for the company's blog, statements made on investor calls, as well as social media posts for material information.
The filing laid out the following items in that list:
the Company's financial condition, statements, or results, including earnings or guidance;potential or proposed mergers, acquisitions, dispositions, tender offers,or joint ventures;production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company ( “Official Company Guidance”) or deviate from previously published Official Company Guidance;new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);projection, forecast, or estimate numbers regarding the Company's business that have not been previously published in Official Company Guidance or deviate from previously published Official Company Guidance;events regarding the Company's securities (including Musk's acquisition or disposition of the Company's securities), credit facilities, or financing or lending arrangements;nonpublic legal or regulatory findings or decisions;any event requiring the filing of a Form 8-K by the Company with the Securities and Exchange Commission, including:
– a change in control; or
– a change in the Company's directors; any principal executive officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer; orsuch other topics as the Company or the majority of the independent members of its Board of Directors may request, if it or they believe pre-approval of communications regarding such additional topics would protect the interests of the Company's shareholders;Tesla did not immediately reply to a request for comment.
Shares of Tesla gained about 0.9% in postmarket trading. The stock had shed 5% during the normal session and has fallen 29% so far in 2019.
Friday's agreement “removes an overhang” for Tesla shareholders, said Dan Ives, managing director for equity research at Wedbush Securities.
VIDEO5:5405:54Shares of Tesla have plunged back below a key level, here's what's next for the stock “Some feared the SEC situation was not going to be resolved favorably so this resolution is a sigh of relief for the bulls. Tesla has enough bad news on its plate so this removes one headache for the Street with the focus now core demand and profitability,” he said.
This superseding agreement settles a dispute between the SEC and Musk about whether the Tesla chief violated the terms of their original deal in which he had agreed to clear his tweets containing material information about the company before posting. The SEC had asserted that Musk never sought clearance for any tweet.
The U.S. regulatory agency had claimed that Musk broke the terms of that agreement in February when he tweeted about Tesla production numbers for 2019.
The SEC first charged Musk last year, alleging he made fraudulent statements on Twitter. On Aug. 7, Musk tweeted that he had “funding secured” to take Tesla private at $420 per share.
In the first deal, Musk had also agreed to pay a civil penalty of $20 million and forfeit his role as chairman of the board for at least three years. The company also paid a $20 million fine.
— CNBC's Lora Kolodny contributed to this report.
Trump’s tariff threats on autos are stoking fears of a German recession
Trump: Will impose more auto tariffs if no deal reached with EU
2:47 PM ET Wed, 20 Feb 2019 | 02:25
A trade war between the United States and Europe is coming and the fallout could tip Germany into recession, according to analysts at German lender Commerzbank.
EU leaders have now agreed to negotiate fresh trade arrangements with Washington but have restricted the talks to industrial goods only. That scope of debate is likely to irk President Donald Trump who is under pressure from Congress to win access to EU agriculture markets.
In February, Trump said he would impose tariffs on cars imported from the European Union if U.S. talks with the bloc can't produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.
Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.
In a research report Friday, analysts at Commerzbank said the chances of a trade deal that satisfied both European leaders and U.S. lawmakers looked slim. It noted that France, holding a powerful voice in the corridors of Brussels, had already erected a serious barrier.
“President (Emmanuel) Macron has already voted against opening negotiations with the U.S. because the U.S. is no longer participating in the 2015 Paris Climate Agreement,” noted Commerzbank.
The bank said on the other side of the ledger, U.S. Congress has made it clear that it will not rubberstamp any agreement that excludes agriculture — a tricky proposition given many EU nations fiercely protect prices paid to their farmers.
“It is therefore likely that Donald Trump will announce the imposition of duties — probably at rates of 25% — on imports of autos and auto parts from the EU,” said Commerzbank.
Official German statistics supplemented by the bank's own research show that in 2018, the United States was the top export destination for German cars, accounting for about 12% of the total with a value of 27 billion euros of parts or finished vehicles.
The bank estimated that a Trump-ordered tariff increase of 25 percentage points on EU auto imports would slash that figure for Germany down to around 14 billion euros per annum.
When factoring in how much of that export figure is actual German “added value,” the bank estimated that total economic output for the country could fall by around 0.25 percentage points.
“All the more dangerous in a situation where the German economy is only just managing to avoid a recession,” it read.
The German economy stagnated in the fourth quarter of 2018 after contracting 0.2% in the July-September period, which was the first time GDP (gross domestic product) had shrank since 2015.
A separate note Friday from French bank Credit Agricole noted that Germany accounts for almost three out of every four European cars shipped to the United States.
Ford says Justice Department opened a criminal probe tied to its emissions certification process
Aly Song | Reuters
People walk by a Ford Escape SUV displayed during the media day for the Shanghai auto show in Shanghai, China, April 16, 2019.
The Justice Department has launched a criminal investigation in a matter relating to Ford Motor's U.S. emissions certification process.
Ford disclosed in an SEC filing Friday that the company has also notified a number of other state and federal agencies and are cooperating fully with all government investigations. The matter stems back to issues related to road load estimations, including analytical modeling and coastdown testing. It does not involve the use of defeat devices to cheat on emissions tests.
The company also said in the filing that it cannot predict the outcome of the investigation and “cannot provide assurance that it will not have a material adverse effect on us.”
The automaker's stock is up 6% in premarket trading after it reporting quarterly earnings that topped expectations.
This is breaking news. Please check back for updates.
‘The ship is starting to turn’ for Ford, says CFO
Original Article
Tesla cars are now ‘quite old’ and the exclusive brand is at risk, analyst says
Tesla will find it difficult to find scale in European and Chinese markets, autos expert says
14 Hours Ago | 03:35
Tesla's Model S and X cars are reaching the end of their product life cycle and will need a serious upgrade if the company wants to retain a luxury price tag, one auto analyst told CNBC.
Tesla shares were largely unchanged in after-hours trade Wednesday, after the electric car maker posted a wider-than-expected first-quarter loss on an adjusted basis.
The company blamed the dip on struggles to deliver its key Model 3 car to Europe and China, while demand slipped following the end of a tax credit for buyers in January. Tesla warned it will not return to profitability before the second half of this year.
Evercore ISI Group recently downgraded Tesla to an underperform rating and Head of Global Automotive Research, Arndt Ellinghorst, told CNBC's “Street Signs” that the firm's latest update confirmed his view about the risk of cash burn and liquidity at Tesla.
“If you claim that demand is huge and unlimited then the key question is, why do you lower your mix? Why do you lower your pricing?” Ellinghorst added.
The analyst said that in his call to investors, Tesla CEO Elon Musk had not been very clear about a pricing strategy to maintain demand. He added that the Model S, first introduced in 2012, and the SUV model X which debuted in 2015, were now starting to look “quite old.”
“I mean the S and the X are quite advanced in any normal life cycle of a product so they would really need significant refresh in order to restore the pricing.”
Tesla introduced the Model 3 sedan in 2017 and unveiled a compact SUV, known as the Model Y in March this year.
The Model Y is an attempt to tap into the hugely popular SUV market that dominates the U.S. car market in particular.
“We'll probably do more Y than S, X, and 3 (sales) combined,” Musk claimed in March. By the time the Model Y comes to market in 2020 that would equate to more than 1 million vehicles.
Ellinghorst said both the Model 3 and Model Y would attract buyers but Musk's promise of a million of sales looked unrealistic. He said pressure from rival German automakers would make it difficult to enter the car markets of Europe and China with any real scale.
“The brand will be less exclusive than it has been in the past,” he said.
Tesla explains loss during quarter
6:08 PM ET Wed, 24 April 2019 | 04:56
Tesla said it lost $702 million on an adjusted basis, or $4.10 a share, in the first quarter while revenue reached $4.5 billion. The company also ended the quarter holding $1.5 billion less than at the end of 2018.
The stock price is down more than 22% year-to-date but Ellinghorst said at around $257 per share it is still too pricey.
“It is priced for growth and we don't see how that growth is going to be financed.”
The analyst added that Musk had “opened the door” to fresh equity but investors might now be less interested given the recent reduction in both demand and pricing.
Disclaimer: Ellinghorst, his colleagues, and the Evercore company as a whole do not own a stake in Tesla.