Tesla names Larry Ellison and Kathleen Wilson-Thompson to board after SEC settlement

Tesla names two new independent directors after SEC settlement
2 Hours Ago | 01:30

Tesla named Larry Ellison and Kathleen Wilson-Thompson to its board on Friday, in compliance with an SEC settlement. The appointments add needed business and human resources expertise to the board — though add to questions about CEO Elon Musk's influence over the board.

Wilson-Thompson is the global head of human resources at Walgreens Boots Alliance and a former executive at Kellogg. Ellison is co-founder and executive chairman of Oracle, and recently disclosed a massive personal stake in Tesla.

“I am very close friends to Elon Musk and I am a very big investor in Tesla,” Ellison said at a financial analyst meeting at the Oracle OpenWorld conference in October.

Ellison owns 3 million shares of Tesla stock, according to a company spokesperson. That stake would be worth close to $1 billion at Friday's opening price. In October, Ellison said Tesla was his second-largest holding and staunchly defended Musk against ongoing criticism of his behavior.

“You are telling me he is an idiot. I just want to know who you are so I know why I should believe you as opposed to my friend Elon,” Ellison said at the time.

Tesla and Musk agreed in September to appoint a new chairman and two independent board members after an SEC lawsuit alleging that Musk misled investors with a tweet about taking the company private at $420 a share.

Shares of Tesla rose as much as 3 percent Friday morning.

Source: Walgreens Boots Alliance
Kathleen Wilson-Thompson

“In conducting a widespread search over the last few months, we sought to add independent directors with skills that would complement the current board's experience. In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy,” Tesla's existing directors said in a statement.

Tesla's board has historically been tightly linked to its CEO and includes, among others, his brother Kimbal Musk. The stipulation in the SEC settlement was intended to introduce more oversight of the CEO, who has dragged the company's stock lower with his unchecked use of social media and other antics.

Existing board member Robyn Denholm was named chair in November. Denholm was seen as an experienced though predictable pick at the time, but investors and analysts had been hoping for a truly independent, outside chairperson to fully check Musk.

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The two new board members are supposed to be independents, as well, though Ellison's personal ties to Musk leave some room for concern.

A Tesla spokesperson downplayed Ellison and Musk's personal relationship, saying the two had only socialized a handful of times and always in a group setting. The spokesperson said Musk and Ellison had not spoken for about a year leading up to Ellison's appointment to the board.

Meanwhile, longstanding Tesla board member and venture capitalist Steve Jurvetson has been “on leave” from the board for over a year, after reports of his alleged sexual misconduct. Those reports led to his being ousted from the eponymous venture firm he founded, DFJ, which backed both Tesla and Musk's other company, SpaceX. Jurvetson has disputed the allegations.

Besides appointing new board members, Tesla is supposed to form a committee to oversee other terms of the SEC settlement, and institute controls over both the company's and Musk's statements about Tesla on Twitter and elsewhere.

Ellison and Wilson-Thompson began serving on the board effective Thursday, Tesla said.

Correction: Larry Ellison and Kathleen Wilson-Thompson began serving on Tesla's board effective Dec. 27, 2018. A previous version of this story misstated when the appointments would be finalized.

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No car keys? No problem. Hyundai rolls out fingerprint technology that makes keys obsolete

Source: Hyundai
Hyundai Smart Fingerprint technology

If you're prone to losing car keys, the latest-generation Hyundai Santa Fe just going on sale in China is for you.

It offers buyers the option of using a fingerprint detector that can open the vehicle and turn on its engine, rendering car keys as necessary as a landline. Touch one of the SUV's biometric sensors and it will even adjust such things as seat position and sideview mirrors to the settings preferred by individual drivers in its database.

The oldest known locks were found in the ruins of the ancient Syrian capital of Nineveh and date back thousands and thousands of years. Today, keys are an accessory to just about everything we do, giving us access to our homes, offices, gym lockers and, of course, our cars. For motorists, however, keys could soon go the way of the crank starter, rumble seat and running board.

It's already rare to find a car that still uses a conventional metal key. They've largely been replaced by wireless key fobs on all but a handful of base models. But manufacturers are looking at a variety of alternative technologies, much like those replacing traditional keys in homes and workplaces — and, of course, to unlock smartphones, where biometric sensors let users forget those complicated and often forgettable passcodes.

Volvo's key app

“Mobility needs are evolving and so are our customers' expectation to access cars in an uncomplicated way,” said Henrik Green, vice president of product strategy and vehicle line management at Volvo Car Group.

Volvo's S90 makes even a key fob an option, the big sedan otherwise relying on the owner's smartphone to serve as a key, at least as long as the motorist has downloaded the necessary app. Approach the car and it links up to the phone by Bluetooth, unlocking its doors when the motorist touches one of the handles.

BMW, meanwhile, uses a similar approach with the newly redesigned 2019 3 Series. In this case, however, it uses near-field communications, or NFC, technology, similar to what underlies smartphone-based financial transaction services like Apple Pay. The system can be shared with as many as five different drivers.

BMW isn't ready to abandon keys, or at least key fobs, entirely. The latest version of its flagship 7 Series sedan features an oversized key fob that incorporates a reconfigurable display that allows an owner to control a wide range of vehicle functions that couldn't be incorporated into a traditional fob with hard buttons.

The push to move away from conventional car keys comes at the same time automakers are loading up vehicles with all sorts of digitally controlled technologies. Wireless fobs, smartphone apps and biometric sensors can all tell the vehicle precisely which motorist is going to be driving, adjusting such things as seats, mirrors, climate control and even which radio station to tune to.

Defective switches

Smartphone apps are particularly useful for new battery-powered vehicles, allowing a driver to check how much range is left and, if it's plugged in, to control when the vehicle begins charging. Vehicles like the Nissan Leaf and Jaguar I-Pace also allow a motorist to remotely turn on the climate control while the vehicle is plugged in so that the cabin is comfy when it's time to drive off. That also has the advantage of requiring less range-sapping energy when the vehicle is unplugged.

There are other reasons why automakers want to abandon conventional keys, as General Motors learned earlier in the decade. A poor ignition switch design made it possible to inadvertently shut off the engine on a number of models. It didn't help, of course, that GM delayed fixing the problem for close to a decade. Ultimately, 2.4 million vehicles equipped with the defective switches were recalled. And, with more than 120 deaths connected to the problem, GM paid out more than $1 billion in fines and settlements to victims and their families.

Switching to digital keys offers a number of new opportunities for carmakers, car owners and even retailers. Last April, Amazon partnered up with General Motors and Volvo on a service that can allow it to place packages in the trunk of a vehicle, rather than leaving goods on a porch where they might get stolen. The service is available to Amazon Prime customers who have GM vehicles newer than 2015 and equipped with the GM OnStar or Volvo on Call telematics services.

Cloning signals

GM's car-sharing service, Maven, also makes use of the OnStar service to allow customers to open a vehicle they are renting without having to first get the key — which the owner stores inside in a locked box.

That's not to say that digital alternatives don't have their own problems. Several recent news reports have alleged that thieves have been able to make off with Tesla vehicles by cloning signals from their key fobs — something captured on video during one robbery in the U.K. Tesla has told media outlets that it isn't the only automaker that is vulnerable to these types of hacks into passive entry systems, and says it has rolled out a number of security enhancements to assist customers in decreasing the likelihood of such security breaches.

Some cybersecurity experts warn that even when they're not in use, digital key fob codes can be cloned, and some have suggested storing the devices in metal coffee cans, much like chipped credit cards can be stored inside special sleeves designed to prevent their code from being read and cloned by hackers.

“We think it is becoming the new way of stealing cars,” Roger Morris, a vice president at the National Insurance Crime Bureau, told The Wall Street Journal, after several vehicles were stolen in Houston two years ago, with video of one theft appearing to show how the thieves used cloned keys. “The public, law enforcement and the manufacturers need to be aware.”

There's also a cost issue. A motorist who needs a spare metal key can get one for a dollar or two at most hardware stores — unless it's a more secure key with a digital chip built in. But the price for a replacement wireless key fob can run anywhere from $200 up to more than $500 for one of the smart fobs used on the BMW 7 Series.

Alternative 'keys'

Despite such concerns, expect to see the industry to continue the shift to alternative “keys,” if for no other reason than convenience. Several Jaguar models, such as the E-Pace SUV, feature “activity keys,” little more than waterproof wristbands with built-in NFC chips. Someone who is going swimming or hiking, Jaguar says, doesn't have to carry and risk losing a conventional key or fob. Instead, they lock the regular fob in the car and wear the band. When it's time to open the vehicle up again they simply touch the activity key to a reader on the back logo.

Digital alternatives actually aren't entirely new. Various Ford designs for decades have allowed motorists to access the vehicle using a keypad on the car's center pillar. The motorist still has to keep a conventional key or fob hidden inside the vehicle, however, to start the engine. And similar keypads may be needed on future vehicles to make it possible for a motorist to get into a vehicle should their smartphone run out of battery life or other new systems fail.

Biometric sensors could make the process even easier, since there's no need to carry or wear anything. There are, however, other challenges. Hyundai had to make sure its fingerprint sensor could work under all weather conditions and not be foiled if the car was dirty – something that can be expected of an SUV. The automaker claims the system can distinguish one person's fingerprint from another with an error rate of about 1 in 50,000, which is along the lines of what Apple claims for its own touch-based system.

For the moment, Hyundai will be offering the fingerprint system only in China versions of the Santa Fe. But if it works as expected and generates strong consumer demand it can be expected to start offering the technology in other markets, as well.

Source: Hyundai
Hyundai Smart Fingerprint technology

Demand for Tesla Model 3 ‘looks very strong into 2019 and beyond’: Analyst

Salwan Georges | The Washington Post | Getty Images
Tesla's Model 3 at the Tesla store in Washington, D.C.

Demand for Tesla's Model 3 midsize electric sedan “looks very strong into 2019 and beyond,” said one analyst Wednesday.

Wedbush Securities analyst Dan Ives said in a note that underlying drivers for the electric vehicle market are likely to push consumers toward Tesla's cheapest passenger car, at a time when many automakers are abandoning sedans in favor of SUVs.

This is a pivotal inflection point in the Tesla story, says Wedbush's Dan Ives
3:05 PM ET Fri, 14 Dec 2018 | 03:46

Demand for the car is likely to reduce the risk Tesla will have to raise capital again in the near future, Ives said. Tesla's capital needs have been an ongoing issue for the company, and Tesla has had to return to the markets several times since it went public in 2010. Ives said he expects Tesla to spend $2.2 billion to $2.3 billion in 2019.

Deliveries to European customers appear to be on schedule, and Ives sees pent-up demand in that market. China also looks like a “major growth catalyst” on the heels of Tesla's recent price cuts in China, he said.

Tesla shares were up nearly 2 percent in premarket trading on Wednesday, pushing its market value to more than $50 billion. In the past 52 weeks, Tesla shares have traded as high as $387.46 and as low as $244.59. The stock is down 5 percent this year, having closed at $295.39 on Monday.

Hertz launches biometric lanes to make car renting faster by up to 75 percent

Getty Images
A sign is posted in front of a Hertz car sales and rental car office on August 8, 2017 in South San Francisco, California.

Car rental company Hertz has launched an airport gate that uses biometric scanners to speed up the process.

The “Hertz Fast Lane powered by CLEAR” opened at Hartsfield-Jackson Atlanta International Airport on Tuesday, allowing travellers to use fingerprint scanners and facial recognition technology instead of showing a physical ID.

According to Hertz, the system will cut down on the time taken to collect a rental car by at least 75 percent, with the potential to get drivers through the exit gate and on the road in 30 seconds or less.

The Fast Lanes – the first use of biometrics by a major car rental firm – will be rolled out across more than 40 U.S. locations in 2019. New locations will include Los Angeles International Airport and John F. Kennedy International Airport.

Hertz

CLEAR, the company behind the technology, also developed Delta Biometrics – the system used by the airline to streamline its airport lounge access.

“By teaming with CLEAR, Hertz gets a partner with an expanding footprint and proven track record to help us innovate the car rental process, improve the customer experience and bring meaningful benefits to busy travellers,” Hertz CEO Kathryn V. Marinello said in a press release Tuesday.

CLEAR's CEO Caryn Seidman-Becker added: “You are you, and we're creating a future in which your fingerprints, eyes and face are your best and most secure ID.”

The fast lanes are available for use by Hertz Gold Plus Rewards program members, as well as CLEAR members who opt to upgrade.

Tesla shares could surge nearly 27% as it becomes ‘sustainably profitable,’ Baird says

Beck Diefenbach | Reuters
Elon Musk, CEO of Tesla

Shares of electric car maker Tesla could jump sharply in the next year as the company starts making money more consistently, according to an analyst at Baird.

Analyst Ben Kallo reiterated his outperform rating on the stock and hiked his price target to $465 from $411. Kallo's new 12-month price target implies a 26.8 percent upside from Wednesday's close of $366.60.

Tesla shares rose 2.8 percent Thursday, to $376.79.

“We believe the narrative will continue to change from 'TSLA will never make money' to 'TSLA can be sustainably profitable,'” Kallo said in an investor note Thursday. “The narrative on TSLA, particularly in the middle of 2018, was as negative as we have experienced in our coverage, but we believe sentiment will continue to improve as the company proves it can be self-supportive, which should drive sustained share appreciation.”

Tesla reported a surprise third-quarter profit on Oct. 24. Since then, the stock is up more than 27 percent. That quarter was its third profitable one.

“We do not believe the strong Q3 results were a 'flash in the pan' and think TSLA could maintain profitability,” Kallo said. “Further execution will reinforce investor belief the company can be self-supportive, which should be a positive catalyst.”

Tesla shares have had a wild year. At one point, they were down more than 20 percent for 2018. They were also up as much as 22 percent year to date.

Tesla reached its 2018 high after CEO Elon Musk tweeted in August he had “funding secured” to take the company private. He would later walk back what he wrote in the tweet, agreeing to keep the company public. The Securities and Exchange Commission settled with Musk over charges stemming from his tweet. As part of the settlement, Musk agreed to step down as chairman for three years.

Moving forward, “we continue to believe there are several catalysts upcoming which could drive shares higher, and first-half 2019 results could benefit from easy comps given the Model 3 delay,” Kallo wrote. “TSLA could be entering a positive estimate revision cycle, which should coincide with several other catalysts, in our view, including start of European deliveries, initial production in China, introduction/production of new products, and inclusion in the S&P 500.”

—CNBC's
Michael Bloom
contributed to this report.

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BMW tries to revive lagging 3 Series sales with new 2019 design that’s more, well, BMW-like

BMW refreshes its Series 3 sedan
4:45 PM ET Fri, 14 Dec 2018 | 01:05

BMW likes to boast that it builds “the ultimate driving machine,” and if any individual model has deserved that reputation, it's the 3 Series sedan.

While BMW produces a broad range of vehicles — traditional sedans, sports cars, wagons and a growing list of sport utility vehicles — no vehicle is more closely identified with the carmaker than its 3 Series.

The Bavarian automaker has sold about 4.5 million of the sedans since the 3 Series' introduction in 1975, making it the best-selling luxury nameplate in automotive history. But it has lost momentum in recent years, something BMW hopes to remedy with the launch next year of its next generation 3 Series — its seventh iteration.

The outgoing model, introduced in 2011, took a number of hits for losing its traditionally unique mix of performance, handling and luxury.

Initial reviews of the 2019 model have been overwhelmingly positive, with a headline in the influential Automobile magazine declaring the 2019 sedan “a Proper 3 Series Again.”

Source: Paul Eisenstein
2019 BMW 330i

Perhaps, but the seventh-generation sedan faces a level of uncertainty not seen since the original model, internally code-named the E21, debuted in 1975. That includes not only a wave of new competitors, but other offerings found right within the BMW showroom that reflect the dramatic market shift from sedans to sport utility vehicles.

“The 3 Series is truly the heart and soul of BMW,” said Thomas Baumer, project head for the 2019 3 Series, adding that “it is truly critical” that the new 2019 model regain momentum lost by the sixth-generation sedan.

As recently as 2013, BMW set a U.S. sales record. American buyers drove off in 93,544 3 Series models. But volumes have steadily declined, dipping to just 53,470 in 2017. And the downward trend has continued this year — 3 Series sales for the first 11 months of 2018 were off by 23 percent.

There are a number of reasons why BMW may have lost momentum. The Automobile review noted that the traditionally crisp characteristics of the 3 Series became “muddled” with the outgoing model, adding, “More than a few pundits and purists have found the traditional joys of the 3 Series less present in recent years.”

Source: BMW
The current model, a 2018 BMW Series 3, is being redesigned.

If that alone was the problem, the new model might be able to stage a rapid recovery. CNBC was also able to test the new 3 Series during a media drive in Portugal's Algarve region this month and found its handling precise, steering crisp and, with as much as 62 more horsepower, depending upon the model, capable of giving a motorist neck-snappingly quick acceleration.

But that's by no means the only challenge for the gen-7 sedan.

“The BMW 3 Series has been the icon in its class, and when you're the icon, everyone is gunning for you,” said John McElroy, a veteran automotive analyst and host of the industry broadcast AutoLine.tv.

In years past, most competitors aimed to carve out their own niche. With its own compact sedan, the Audi A4 was focused on design, Mercedes-Benz aiming for Teutonic plushness with the C-Class. But the lines have been blurring, and those German rivals have sharply upped their own performance game, reviewers are quick to point out. So have Japanese rivals like Nissan's Infiniti and Toyota's high-line Lexus, the Japanese giant's CEO Akio Toyoda declaring the need to put more “passion” into its products.

Source: Paul Eisenstein
2019 BMW 330i

An equally serious challenge is being posed by new entrants, such as Genesis, the luxury brand recently spun off by Korea's Hyundai. Its first entry into the compact sports sedan segment has generated intense buzz, the G70 winning the coveted Motor Trend magazine Car of the Year award.

By hiring away former BMW executives including Albert Biermann, now its R&D chief, as well as executives from Bentley, Bugatti, Mercedes and Lamborghini, Hyundai's luxury brand has been able to “build a legitimate 3 Series competitor,” Motor Trend declared in awarding the G70 its trophy.

The reality is that Genesis G70 sales have been marginal so far, but there's an even bigger threat coming from California now that Tesla appears to have finally resolved the “production hell” problems at its battery and assembly plants. The all-electric Model 3 has also taken aim at BMW's “heart and soul” and is rapidly leaving the 3 Series in the dust, at least from a sales perspective. It delivered around 18,000 of the compact sport sedans last month, according to industry estimates, compared with 3,218 3 Series.

The BMW numbers may be a bit misleading, as demand typically dips ahead of the launch of a new model. Sales for the 3 Series fell 47.9 percent year over year in November. But even using year-earlier figures, the Model 3 would have outsold the 3 Series by nearly 3 to 1.

There's an even bigger challenge, said analyst McElroy. “People are drifting away from sedans to SUVs and CUVs, so the biggest competitor may be the product on the other side of the BMW showroom.”

Indeed, in sharp contrast to the declining demand for the 3 Series, BMW's compact crossover utility vehicle, the X3, posted a 77 percent year-over-year sales jump last month, while year-to-date demand is up 45.1 percent.

And it's not just the 3 Series that has seen sales upended. BMW passenger car sales, on the hole, were down 2.5 percent in the U.S. through the end of November. The brand's crossover lineup — or sport activity vehicles, as it prefers to call them — rose 10.8 percent year over year.

BMW officials contend that their goal isn't to make the 3 Series the best-selling compact sport sedan in the industry, just the one that sets the benchmark for performance and handling. It may not be number one, but it's the model that continues to define the brand, whatever model you're talking about, sedan, coupe, wagon, sports car or sport utility vehicle.

And from the standpoint of the initial reviews, that's where the new 2019 BMW 3-Series is truly delivering.

Source: Paul Eisenstein
2019 BMW 330i

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Ex-Google engineer says he just finished first cross-country self-driving car trip

Angela Merendino | AFP | Getty Images
Anthony Levandowski, Otto Co-founder and VP of Engineering at Uber.

Anthony Levandowski, the engineer at the center of a now-settled lawsuit between Alphabet self-driving car company Waymo and Uber, claims he has completed a trip across the country in a self-driving car.

Levandowski is launching a new autonomous driving start-up, Pronto.ai, according to The Guardian, and is touting the impressive feat as the company's first success.

“We are not building technology that tells vehicles how to drive. Instead, our team of engineers is building tech that can learn how to drive the way people do,” Levandowski said in a Medium post. “Our new approach has already enabled us to make great progress. We drove a vehicle coast-to-coast without any human intervention.”

Levandowski told the Guardian he didn't touch the steering wheel or pedals — except for periodic rest stops — for the full 3,099 miles. He posted a video that shows a portion of the drive, though it's hard to fact-check the full journey.

It would be quite the milestone for autonomous driving, and a potential comeback for the engineer, who was one of the pioneers of Google's self-driving car efforts (before they were rebranded as Waymo), and later defected to Uber. The companies got into a legal battle over confidential documents that Levandowski allegedly took with him, and he was briefly barred from the autonomous driving industry during the trial. The companies settled the case early this year.

The technology isn't “perfectly autonomous,” Levandowski said. And, he added, “The age of autonomous vehicles crisscrossing the country by themselves is still quite a ways off.”

Pronto is rolling out it first product next year.

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Tesla Model S catches fire in California town: Fire Department

A Tesla caught fire Tuesday in a business parking lot in Los Gatos, according to the Santa Clara County Fire Department.

The silver Tesla Model S caught fire a little after 2 p.m. in the parking lot of Los Gatos Tire and Auto Repair at University Avenue and Industrial Way, fire officials said.

No injuries were reported, and the vehicle was not involved in a collision nor was there work being done on it, fire officials said.

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An employee of the tire shop said the vehicle was brought in on a tow truck, and he noticed a hissing sound coming from it, then within minutes, the vehicle was on fire.

Fire crews responded and extinguished the blaze, but the batteries continued to burn long after the larger flames were put out, fire officials said. Crews remained at the scene to keep the batteries cool and ensure they didn't reignite.

A witness, who did not wish to be named, was walking his dog and said he saw a big plume of white smoke. He did not see how the original fire ignited.

The entire front of the Tesla was charred. The adjacent building was not damaged, fire officials said.

A Tesla spokesperson said in a statement: “We are currently investigating the matter and are in touch with local first responders. We are glad to hear that everyone is safe.”

TSLA