Author: CNBC Online news

Elon Musk just sent his second email this month to employees explaining Tesla’s store closure plan

Patrick T. Fallon | Bloomberg | Getty Images
Elon Musk, co-founder and chief executive officer of Tesla Inc., speaks during an unveiling event for the Tesla Model Y crossover electric vehicle in Hawthorne, California, U.S., on Friday, March 15, 2019.

Tesla CEO Elon Musk sent his second email to employees in a month to clear up confusion around its store closures, according to a copy of the memo viewed by CNBC.

The email says Tesla stores with high foot traffic and sales will remain open. It also says Tesla will open more stores if it thinks it can increase sales. Musk's memo also said customers will still have to buy cars from their phone or a computer, even if they do so in a store.

Tesla originally caused a stir with its February announcement that it would shift to online only sales. At the time, Musk confirmed this move would involve reducing the headcount in Tesla's sales and retail force. On March 10, Musk addressed employees directly in an internal email to all employees, saying its plans had changed and Tesla would “retain more stores than previously announced.” The company also published a blog post to explain its shifted mindset to the public, saying that upon review, it had decided to close fewer stores.

As a tradeoff, the company said, “Tesla will need to raise vehicle prices by about 3% on average worldwide. In other words, we will only close about half as many stores, but the cost savings are therefore only about half.”

In the latest email to employees sent Wednesday, Musk said he hoped to clarify some confusion around the new plans around retail locations.

“Stores with a high visitation rate and that lead to significant sales will absolutely not be closed down,” Musk said in the email. “It would not make any sense to do so, except in rare cases where the rent is absurdly high. Moreover, Tesla will continue to open stores throughout the world that meet the above criteria.”

He also cleared up some misconceptions around Tesla's decision to sell online only.

“What is meant by 'all sales will be online' is just that the act of purchasing a Tesla will always be done via the potential new owner's phone or computer,” Musk wrote.

Tesla was not immediately available to comment.

Read the full memo below:

From: Elon Musk
To: Everyone
March 27, 2019
Subject: Tesla Stores & Sales
There [is] still some uncertainty around Tesla stores and the sales team. Hopefully, this note clears things up. Please let me know if there is anything I've forgotten to address.
– Stores with a high visitation rate and that lead to significant sales will absolutely not be closed down. It would not make any sense to do so, except in rare cases where the rent is absurdly high. Moreover, Tesla will continue to open stores throughout the world that meet the above criteria.
– Stores that are in a location with low visitation rates (ie empty most of their opening hours) and lead to low sales will gradually be closed down. This is analogous to seeds on barren ground. There is no reasonable way to justify keeping such stores open.
– Stores that are somewhere in the middle will be evaluated over time to see [if] there is some way to allow them to cover their costs. If there is, they will remain open, otherwise not. However, these stores will be given a fair opportunity to prove their case.
The above principles also apply to the sales team. No one who is a major contributor to demand generation will be let go. That would make no sense. However, sometimes, in a company with 45,000 people, things happen that make no sense. I will do my best to remedy issues when brought to my attention directly or through emdesk@tesla.com.
What is meant by “all sales will be online” is just that the act of purchasing a Tesla will always be done via the potential new owner's phone or computer. This is true whether they are at home or in a store. Unlike buying from other carmakers, ordering a Tesla doesn't require any *physical paperwork*.
This is very different from normal expectations for buying from other carmakers and is simply meant to emphasize that ordering a Tesla is super easy and can be done in 2 minutes from your phone or laptop at Tesla.com. Ordering a Tesla is not much harder than ordering an Uber, but hardly anyone knows this!
However, many potential Tesla owners will still want to talk to a Tesla representative in person or want a test drive from a Tesla representative. Stores also have a small number of Tesla vehicles available to drive away immediately for customers that want a car right then and there.
This is why stores and Tesla product specialists and owner advisors will always be of critical importance to our long-term success.
Thanks,
Elon

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Cars in Europe could soon be fitted with technology to stop drivers speeding

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Illuminated panels indicate a speed limit of 120 kilometers per hour above the A3 motorway near Frankfurt Airport, Germany.

A range of mandatory safety features for new vehicles, including technology that could limit speed, are set to be introduced in the European Union (EU).

In an announcement Tuesday, the European Commission — the EU's executive arm — said that EU institutions had come to a provisional political agreement on the new measures. That agreement is now subject to formal approval from the European Parliament and Council, with the new technologies set to be introduced in 2022.

The proposed safety features include the introduction of intelligent speed-assistance technology, or ISA. According to the European Transport Safety Council (ETSC), ISA uses technology such as GPS, digital mapping and cameras to give vehicles location and speed limit information.
ISA systems can “limit engine power” to stop drivers from going above the speed limit. The ETSC says it recommends ISA technologies that can be temporarily overridden. This would mean that drivers could, in scenarios such as overtakes on lower-speed sections of road, override the system by putting their foot down on the accelerator.

The mandatory ISA system proposed by the Commission would not automatically slow a car down, but warn a driver that they were travelling above a road's speed limit.

Several major car manufacturers already offer various iterations of ISA systems in their vehicles.

Other proposed safety features include advanced emergency braking, cameras that assist with reversing, and lane-keeping assistance. Vehicles will also provide warnings if they detect a driver is drowsy or distracted and will use data recorders to document accidents.

“Every year, 25,000 people lose their lives on our roads,” EU Commissioner Elzbieta Bienkowska said in a statement.
“The vast majority of these accidents are caused by human error,” she added. “We can and must act to change this. With the new advanced safety features that will become mandatory, we can have the same kind of impact as when the safety belts were first introduced.”
A number of major car firms are looking to introduce increasingly sophisticated and connected safety features to their vehicles.
Just last week, Volvo Cars announced it would install in-car cameras and sensors to monitor drivers for signs of intoxication and distraction.

The firm said the technology would be used to monitor drivers and, when needed, enable the car “to intervene if a clearly intoxicated or distracted driver does not respond to warning signals and is risking an accident involving serious injury or death.”

Actions the car could take include limiting speed to slowing down and then parking the car in a safe place. Installation of the technology will start in the early 2020s.

At the beginning of March, the company announced it would introduce a 180 kilometers per hour (112 miles per hour) speed limit on all its cars from 2020.

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Clarification: This story has been updated to reflect how the ISA system proposed by the European Commission would work.

Nissan reportedly paid to send Carlos Ghosn’s four children to Stanford University

Takaaki Iwabu | Bloomberg | Getty Images
Carlos Ghosn, former chairman of Nissan Motor Co., center, sits in a taxi as he leaves his lawyer's office in Tokyo, Japan, on Wednesday, March 6, 2018.

Nissan paid to send all four of former chairman Carlos Ghosn's children to Stanford University, according to a Bloomberg report.

His children attended Stanford between 2004 and 2015, when the total tuition would have been worth at least $601,000, according to Bloomberg.

The perk was part of Ghosn's original employment contract when he signed on as chief executive officer in 1999, Bloomberg said, citing anonymous people familiar with the matter.

A spokesman for Nissan did not immediately respond to a request for comment from CNBC. Nissan and Ghosn's lawyer, Jean-Yves Le Borgne, declined to comment to Bloomberg.

Ghosn was charged last fall in Japan for allegedly underreporting his compensation by millions of dollars and misusing company funds. His recent request for bond was approved after he spent 108 days in jail.

Ghosn has maintained his innocence throughout the process and denied any wrongdoing.

“I am not guilty of the charges against me and I look forward to defending my reputation in the courtroom; nothing is more important to me or to my family,” Ghosn said at his Jan. 20 bond hearing.

Read Bloomberg's report here.

Ford is boosting SUV production and adding 550 jobs at Kentucky truck plant

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A worker builds a Ford Expedition SUV as it goes through the assembly line at the Ford Kentucky Truck Plant in Louisville, Kentucky.

Ford said Tuesday it is boosting production of its Expedition and Lincoln Navigator sport utility vehicles and will be adding 550 new jobs at its Kentucky truck plant where it assembles the vehicles.

The automaker will also transfer roughly 500 workers from its nearby Louisville assembly plant to help handle the 20 percent increase in production, which is expected to begin in July.

The move indicates strong demand for the SUVs, which are based on the same platform and share many of the same features and parts.

Expedition sales rose 35 percent and gained 5.6 percentage points in market share in its segment last year. Customers paid an average of $62,700 for the SUV, about $11,700 more than the prior year. Sales of the Navigator, the more premium version of the two vehicles climbed 70 percent year over year to 17,839 units sold last year — it's best year since 2007.

The move also comes as Ford mulls cutbacks in its workforce elsewhere, particularly among salaried workers in the U.S. and different roles abroad, particularly in Europe. The automaker said last week it plans to cut about 5,000 jobs in Germany and an unspecified number in the United Kingdom. It also plans an unspecified number of cuts to its salaried U.S. workforce later this year. Ford said in 2018 it is undertaking an $11 billion plan to restructure its business and improve performance.

Shares of the second largest U.S. automaker have fallen 23 percent in the last 12 months, though they have risen more than 12 percent since the beginning of 2019, closing at $8.57 a share Monday. Its stock was up more than 2.5 percent in Tuesday's premarket.

In recent years, automakers have scrambled to keep pace with an ever intensifying shift away from more traditional passenger vehicles, such as sedans and compact cars, toward SUVs, pickup trucks and crossovers. Ford's cross-town rival General Motors has recently made headlines for its plans to idle sedan-heavy factories and cut jobs in the U.S.

UK’s first self-driving bus begins trials

Alexander Dennis Limited

Trials for a full-sized autonomous bus have started at a depot in Manchester, England.
The project makes use of a single-decker vehicle that can operate autonomously within the grounds of the Sharston depot, the Stagecoach Group said in an announcement earlier this week.
Using autonomous technology, the bus can undertake maneuvers including parking and moving into a washing area.

“This is an exciting project to trial autonomous technology on a full-sized bus for the first time in the U.K.,” Martin Griffiths, Stagecoach's chief executive, said in a statement.
Stagecoach has partnered with bus manufacturer Alexander Dennis Limited and technology firm Fusion Processing for the project.
The system used by the bus is Fusion Processing's CAVstar. It is made up of several sensors, including radar, ultrasound and optical cameras. Satellite navigation is also used in order to detect and avoid obstacles.
The system in the pilot vehicle will help to provide the basis for a forthcoming trial that will see five autonomous buses ferry passengers between Fife and Edinburgh, in Scotland.
Stagecoach said the buses will use a Level 4 standard of autonomy, meaning that a safety driver will need to be on board to comply with U.K. regulations.

Five “levels” of driving automation have been defined by SAE International, a global association of over 128,000 engineers. At Level 5, a vehicle's automated driving features can drive it under all conditions.
The Fusion Processing CEO, Jim Hutchinson, said that the company's CAVstar system had now been used on a range of vehicles, including two-seater electric cars and 12 meter, 43 seater buses.
The pilot in Manchester, Hutchinson added, offered a “glimpse of how future bus depots can be automated for improved safety and efficiency.”

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Tesla Gigafactory employees lined up for ‘Merch Madness,’ a chance to buy company swag on the cheap

Andrew Evers | CNBC
Tesla employees at the company's Nevada Gigafactory line up to buy discounted company merchandise in March 2019.

Tesla set up a pop-up shop just for employees at its Nevada Gigafactory this week, and sold them company swag on the cheap during a series of events it called “Merch Madness.”

The stunt helped boost employee morale during a stressful end-of-quarter push, which followed company-wide layoffs and store closures.

CNBC visited the sprawling battery plant during “Merch Madness” and observed lines to rival the opening day of a new “Star Wars” sequel.

Andrew Evers | CNBC
A screen in Tesla's Gigafactory advertising “Merch Madness,” a chance for employees to buy discounted company swag.

Among the items in the employee-only shop were:

A “Tesla Corporate Jacket,” which Tesla sells on its website for $175, but cost employees just $48 during the eventTesla caps that sell for around $30 at retail, but cost employees $6Items not currently available online, including a Semi Truck tee for $9, leather Corsicana tote bag for $102 and leather touchscreen gloves for $28.

Employees told CNBC they were stocking up on gear they wanted as well as gifts for family and friends. The company store took credit cards only. They get an employee discount year-round but the Merch Madness deals went beyond that, they said, so waiting on line was worth it.

In February 2019, Tesla set up a store to sell its branded apparel and accessories on Amazon.

Increased attention to branded merchandise at Tesla follows success in this arena for another Elon Musk business — The Boring Company sold $10 million worth of its “not-a-flamethrowers” in five days last year, and $1 million in baseball caps.

A spokesperson said that as of the week of March 4, Tesla employed more than 40,000 people. In its 2018 annual report, Tesla said it had 48,817 employees. Tesla has not disclosed exactly how many people it has laid off this year.

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Tesla brings back its referral program, sort of

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Tesla is bringing back its once popular referral program in a new form just months after killing it, the company said.

But the program will be different from its previous incarnation, which Tesla said was too costly to keep up.

For every customer a Tesla owner refers, the company will give both people 1,000 miles of free use of its Supercharger charging network and will enter the referrer into drawings for a special edition of the Model Y crossover monthly and second generation Tesla Roadster quarterly, each signed by Tesla CEO Elon Musk and Chief Designer Franz Von Holshauzen.

“While our previous Referral Program was very successful, it came with significant costs, and ending the program last year allowed us to pass those savings along to customers,” Tesla said in a blog post Thursday night. “We've since restructured the program to save the company money while also offering rewards that are super exclusive.”

The program is not quite as fat with incentives as its forebears. The previous version of the program gave owners six months of free Supercharging with the purchase of a Model X SUV, Model S sedan or Model 3 midsize sedan.

The previous program also gave referrers a chance to win a variety of awards, including having a photo launched into space, new wheels, priority access to software updates and vehicles.

An even earlier version of the program offered some buyers free unlimited Supercharging. The new program gives those participants in the program a two chances to win a new vehicles in each period.

Electric taxis in Oslo to be charged using wireless technology

K'Nub | Moment | Getty Images

Taxis in the Norwegian capital, Oslo, are set to use wireless fast-charging technology to keep them running.
In an announcement Thursday, Finnish energy firm Fortum said it would work with the City of Oslo and Momentum Dynamics, a U.S. company, to build the system.
The project will use induction technology, with charging plates installed in areas where taxis, which will carry a receiver for the charging, park.
“We will install the wireless chargers at taxi stands, such as the one at… Oslo Central Station,” Annika Hoffner, the head of Fortum Charge and Drive, said in a statement.
“Taxis will be able to drive up to the charger and a wireless charging session will automatically start,” Hoffner added, explaining that taxis could charge while waiting for new customers.
The rollout of a wireless charging system in Oslo is part of a wider transition to cleaner types of transport in the country.

In 2018, there were 46,143 new passenger car registrations for battery electric vehicles in Norway, according to the European Automobile Manufacturers Association.

Sture Portvik, electric mobility manager for the City of Oslo, said that all taxis in Oslo would be zero-emission from 2023.

Volvo to put cameras and sensors in its cars to tackle drunk driving

Volvo Car Group

Volvo Cars is set to install in-car cameras and sensors to monitor drivers for signs of intoxication and distraction.

The firm said the technology will be used to monitor drivers and, when needed, enable the car “to intervene if a clearly intoxicated or distracted driver does not respond to warning signals and is risking an accident involving serious injury or death.”

Actions the car could take include limiting speed to slowing down and then parking the car in a safe place. Installation of the technology will start in the early 2020s.
Wednesday's announcement represents the latest attempt by the company to boost the safety of its vehicles. At the beginning of March, it announced it would introduce a 180 kilometers per hour (112 miles per hour) speed limit on all its cars from 2020.

“When it comes to safety, our aim is to avoid accidents altogether rather than limit the impact when an accident is imminent and unavoidable,” Henrik Green, Volvo Cars' senior vice president, research and development, said in a statement Wednesday.
“In this case, cameras will monitor for behavior that may lead to serious injury or death,” Green added.
The system, Volvo Cars said, will be on the lookout for a range of potentially dangerous behaviors. These include drivers who display a “complete lack of steering input for extended periods of time” or have their eyes closed or off the road for long periods. Technology will also monitor “excessively slow reaction times” and “extreme weaving across lanes.”
According to the National Highway Traffic Safety Administration (NHTSA), nearly 30 people in the U.S. die each day because of drunk driving crashes. There were 10,874 deaths in the U.S. from drunk driving crashes in 2017, the NHTSA adds.
“There are many accidents that occur as a result of intoxicated drivers,” Trent Victor, professor of Driver Behaviour at Volvo Cars, said. “Some people still believe that they can drive after having had a drink, and that this will not affect their capabilities. We want to ensure that people are not put in danger as a result of intoxication.”

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