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Big Tesla backer doesn’t oppose a Musk ouster: ‘I don’t think he needs to be CEO’

Mike Blake | Reuters
SpaceX founder Elon Musk looks on at a post-launch news conference after the SpaceX Falcon 9 rocket, carrying the Crew Dragon spacecraft, lifted off on an uncrewed test flight to the International Space Station from the Kennedy Space Center in Cape Canaveral, Florida, March 2, 2019.

A major Tesla backer doesn't fear an SEC-inspired ouster of CEO Elon Musk, according to a new report by Barron's.

“We wouldn't be against him having a different role,” James Anderson, head of global equities for Baillie Gifford, told Barron's. “I don't think he needs to be CEO.”

Baillie Gifford is the second-largest stakeholder in Tesla behind Musk. The U.K.-based investment firm owns 7.7 percent of the company — or roughly $3.8 billion worth — according to FactSet. Musk owns 19.7 percent, while the third-largest investor, T. Rowe Price, owns 5.2 percent.

Musk is facing contempt of court allegations after he tweeted what the SEC claims was “inaccurate” information about Tesla's production outlook. Tesla admitted to the SEC that Musk had not received approval to tweet the information, which is required by a settlement agreement struck between the agency and Tesla last fall.

Tesla has long touted the importance of keeping Musk in the top spot, saying in annual SEC filings that Tesla is “highly dependent on the services of Elon Musk, our Chief Executive Officer and largest stockholder.”

Anderson agreed that Musk is essential to Tesla, but suggested a less formal role to Barron's like “chief ideologue.”

In December, Baillie Gifford contributed to a $500 million fundraising round in Musk's rocket company, SpaceX, according to the Wall Street Journal.

Renault dismisses question marks over its alliance with Nissan and Mitsubishi

Ensuring permanence of auto alliance a priority, Renault CEO says
1 Hour Ago | 04:24

Renault's new CEO told CNBC that there is no “question mark” hanging over his firm's alliance with Japanese firms Nissan and Mitsubishi.

The partnership was plunged into crisis in November when former Nissan chairman and Renault CEO Carlos Ghosn was arrested in Japan following allegations of financial misconduct. It transpired that Nissan executives had been helping Japanese prosecutors with evidence.

On Tuesday, and after more than three months of detention, Ghosn was granted bail. A Tokyo court approved his release, having denied two previous requests, on the condition he agrees to video surveillance.

Now his replacement at Renault, Thierry Bollore, has told CNBC that over the last month the company had spent a large amount of time working with its Japanese partners to re-establish trust.

Speaking at the 89th Geneva International Motor Show on Tuesday, Bollore said the future of the auto alliance was not under threat.

“It is not at all a question mark. We need more alliance, we need better alliance. This is independent of events,” he told CNBC's Annette Weisbach, before claiming that all three firms were now looking to deepen their cooperation with each other.

“We need to permanently make the alliance progress with our three companies, and make sure we can deliver better together,” Bollore said.

Renault chairman 'extremely confident' in alliance's future
1 Hour Ago | 00:47

Also on Tuesday, Renault's new chairman, Jean-Dominique Senard, said he was also “extremely confident” in the future of the alliance.

“We are working hard to make sure the future of this alliance is brilliant. I'm totally convinced it will happen and we will find ways to make sure it is understood by everybody,” Senard added.

Renault outlook

In mid-February Renault posted its first set of results since the arrest of Ghosn. The French carmaker reported a 35 percent slump in net profit for 2018 to 3.45 billion euros ($3.9 billion).

On Tuesday, Bollore claimed the results were good in the face of a “very shaky year.” The chief executive said he expected the first six months of 2019 to reap “moderate growth” but that a raft of new product launches after the summer would improve sales.

Bollore admitted that the key China market had proved sluggish but said the company was continuing to learn.

Shares of Renault and Nissan have dipped by around 7 percent since Ghosn's arrest.

Hyundai Motor Group develops tech that allows cars to be unlocked and started with smartphone

SAUL LOEB Saul Loeb | AFP | Getty Images

The Hyundai Motor Group has developed a digital key that enables drivers to unlock, start and drive their car using a smartphone.

In an announcement Tuesday, the company said the technology, which can be downloaded using an app, could replace a physical key. As many as four people can be authorized to use the digital key.

Near Field Communication, or NFC, technology, is used to detect the digital key when it's near a vehicle's door, unlocking it.
When the vehicle has been unlocked, the user places their phone on a wireless charging pad, presses the “start” button on their dashboard and the car can be driven.
The technology also enables a vehicle to store the keyholder's preferred settings, such as seat and mirror positions, and automatically apply them when their key is used.

Hyundai added that the key could use Bluetooth Low Energy technology to carry out several features remotely, such as locking, unlocking and starting a car's engine.

The company is aiming to introduce the technology gradually, beginning later this year.
Ho Yoo, group leader of Hyundai Motor Group's Electronics Development Group, said in a statement Tuesday that the digital key would enable “innovative new schemes for vehicle sharing.”
“We are studying other ways to harness this type of connected-car technology to greatly enhance the driving and ownership experience,” Yoo added.

The Hyundai Motor Group is not unique in developing technology that allows users to unlock a vehicle using a phone.

Customers of car sharing firm Zipcar, for instance, can use an iPhone or Android app to both lock and unlock their vehicle during their reservation period.

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Next 5 to 10 years could be ‘really tough’ for our competitors, VW chief says

picture alliance | picture alliance | Getty Images
The Audi Q4 e-tron concept is presented at the Geneva Motor Show on the first press day. The 89th Geneva Motor Show starts on 7 March and lasts until 17 March.

The transition towards the electrification of vehicles is a challenge for car industry and whoever manages it best will succeed, the CEO of German automaker Volkswagen Group told CNBC Tuesday.

“We are really getting into a transition period of the automotive industry and, reading between the lines of all the communications our competitors are doing, it will be tough times because we have to invest in new technology, not only electric drive trends but autonomous driving, connectivity,” Herbert Diess, chief executive of Volkswagen, told CNBC's Annette Weisbach at the Geneva Motor Show.

“So, this period of the next five to ten years will be very tough for all our competitors,” he said, adding: “I think the company that manages this transition best will succeed.”

Volkswagen showcased an all-electric dune buggy at the Swiss car show on Monday and announced last November that it will spend 44 billion euros ($50 billion) on new plants, electric cars, autonomous driving and mobility services between 2019 and 2023. VW has also said it is looking to partner with other manufacturers on electric vehicles in a bid to lower development and production costs.

Earlier this year, VW and Ford announced a plan to build commercial vans and medium-sized pickup trucks together as early as 2022. They also announced plans to work together on autonomous vehicle research.

VW Group is one of the world's largest automakers and comprises twelve brands including VW, Audi, Seat, Skoda, Bentley, Bugatti, Lamborghini and Porsche. In the last few years the company was wracked with the diesel emissions cheating scandal, however, and more recently has faced the threat of U.S. tariffs on European car imports and car parts. EU and U.S. officials are due to hold trade talks on Wednesday with Europe keen to avert the threat to its car industry. German-listed shares of Volkswagen have fallen 5 percent in the last six months reflecting investor concerns.

Diess said that all automakers were seeing their shares trading at a discount and said this was because of the transition taking place in the industry. Diess believed VW had the best chance of success in the transition towards electric vehicles but conceded that the group should be more efficient.

“We think we have the best story, we have to explain it probably a bit better maybe and for sure it's also about efficiency, we have still a lot of synergies in the group, it's big with all the different brands, but that takes time. But I think we're on the right way and I think once the market understands our story the share price will go up,” he said.

Volkswagen CEO: Brexit 'won't sink our company'
2 Hours Ago | 03:37

Commenting on the threat of U.S. sanctions on European car imports, Diess said VW had done everything it could to “convince the U.S. administration that we're really committed to investing further into the U.S.”

“It is a critical situation for us,” Diess said, “because mostly our premium brands here in Germany are depending on the import market of the U.S. So, Audi and Porsche have significant market share there so this is a threat,” he said.

“We do what we can but at the end of the day it's a negotiation of tariffs which not only cover the automotive sector but also other entities so it's hard to predict what's the outcome,” he said.

German auto giants BMW and Daimler team up to develop self-driving technologies

BMW Group/Daimler AG
The two companies will work together on a variety of autonomous technologies.

Daimler and the BMW Group are to work together on automated driving technologies.
In an announcement on Thursday, the auto giants said their initial focus would be on the development of “next-generation technologies” for automated driving on highways, driver assistance systems and parking features.
BMW and Daimler said that their collaboration would focus on Levels 3 and 4 of SAE International's levels of driving automation. Five “levels” of driving automation have been defined by SAE International, a global association of over 128,000 engineers.
At Level 5, automated driving features can drive a vehicle under all conditions. At Levels 3 and 4, automated driving features allow technology to drive a vehicle under certain, limited conditions.
The two companies said they viewed their partnership as being a “long-term, strategic cooperation”, adding that they were aiming to make “next-level technologies widely available” by the middle of the 2020s.
Thursday's announcement comes a week after BMW and Daimler announced anew one billion euro mobility partnership.
Earlier this week, the CEO of Arm Holdings told CNBC that it would be “a while” before self-driving cars 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 with CNBC's Karen Tso at the Mobile World Congress in Barcelona, Spain, said earlier this week.

“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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Short-seller Block: Musk should relist Tesla shares in Germany, where he can tell ‘mistruths’ easier

Original Article

Tesla ‘much bigger’ than Elon Musk and is doing things others can only dream of, analyst says

Tesla is 'much bigger' than Elon Musk, analyst says
8 Hours Ago | 04:15

There's more to Tesla than its billionaire boss, according to one analyst.

Philippe Houchois, equity research analyst for U.S. and European autos at Jefferies, said the company has become “much bigger” than Chief Executive Elon Musk, who is seen by many as the face of the electric vehicle maker.

“Tesla at this stage is much bigger than Musk,” Houchois told CNBC's “Squawk Box Europe” on Monday. “Of course, Musk gets a lot of attention. But Tesla has been able to be profitable, at a level of pricing and product that nobody expected to generate cash.”

Houchois does not own shares of Tesla, he told CNBC later in the day by email.

Last year was a challenging one for Tesla and its CEO, marked by an ill-fated take-private deal, quibbles with Wall Street analysts and what Musk described on Twitter as a transition “from production hell to delivery logistics hell.”

Musk's tweets have proven to be a source of contention for investors. He and Tesla were fined $20 million each last year over a tweet in which the former said he had “funding secured” for a deal to take Tesla private at $420 a share. The Securities and Exchange Commission claimed he had misled investors.

Then, earlier this year, regulatory issues returned to haunt the company and its boss, after the SEC asked a judge to hold him in contempt for violating its settlement deal by making an “inaccurate” February 19 tweet about production.

Musk has continued to use Twitter to make announcements related to the company. Just overnight, Musk said Tesla would unveil its highly anticipated Model Y SUV on March 14.

Tesla doing things others are only 'dreaming about'

Tesla turned its first quarterly profit in two years in the third quarter of 2018, and followed up with a smaller profit in the fourth quarter. Musk, however, has since warned that he doesn't expect the carmaker to report a profit in the first quarter of 2019, citing one-time charges and challenges with deliveries to Europe and China.

Getty Images
Elon Musk

His comments arrived as Tesla launched the long-awaited $35,000 standard version of its Model 3 sedan, and said it would shift all sales online, a move that will result in store closures and job cuts.

Many on Wall Street reacted negatively to the news, with Barclays analyst Brian Johnson going as far as to call it the “un-iPhone moment.”

Houchois takes a different view.

“Every carmaker dreams about the ability to sell cars online,” he said. “They are implementing a number of developments… that other carmakers are only just thinking about or dreaming about.”

The strategist said the investment case for Tesla only works if it puts the brakes on growth, adding that it was his expectation the company would “definitely” grow at a slower pace in 2019.

Long term, Houchois says he hopes the automaker will grow profitably and destress its balance sheet, “and from that it can grow again.” Tesla paid off a $920 million debt obligation in cash on Friday.

It has also made a number of cost-cutting decisions at looks to lower the price of its vehicles, including scrapping a customer referral program that offered benefits like limited free charging and laying off 7 percent of its full-time workforce.

“I think right now… what they will demonstrate hopefully… is the ability to stabilize the cash generation and stabilize the balance sheet by growing more slowly while still moving to that phase where they're not just a niche premium into a more volume,” Houchois said.

He added: “If they go into that phase reasonably successfully, I think there's a very strong case that Tesla can be self-funded.”

Tesla’s onslaught of announcements is raising red flags about demand for its cars

Source: Tesla.
Tesla teases the Model Y.

Tesla's onslaught of announcements is starting to make analysts wonder if customers are losing interest in its cars.

CEO Elon Musk said Sunday that Tesla's upcoming Model Y crossover vehicle will be unveiled on March 14. While it could be a great vehicle with high demand, RBC analyst Joseph Spak said the timing of the announcement raises concerns. Musk tweeted the news days after the company made considerable price cuts to its other models and said Tesla needs to cut its showrooms and sales staff. It also spent nearly $1 billion paying off debt last week.

On Thursday, Tesla unveiled its long-awaited $35,000 Model 3, cut prices on upgrades to its autopilot automated driver assistance system and made significant price cuts to its Model S and Model X vehicles after saying it will only sell its vehicles online to reduce costs. Its shares fell nearly 8 percent Friday and slid by another 2.5 percent in morning trading Monday.

All of this suggests Tesla is rushing to strengthen demand for its products, which could be waning in the U.S., Europe and China, Spak told investors in a research note Sunday.

“A Model Y announcement so shortly after the $35k [Model 3] suggests that consumer reaction toward the $35k Model 3 may not have been as strong as the company had hoped,” Spak said. “We believe there has been a fall- off in U.S. demand and softer than expected demand in Europe/China.” The price cuts on Tesla's three models, the X, S and 3, backs up the idea that demand has softened, he added.

It is important to note that Musk has teased mid-March as a possible date for the unveiling of the Model Y before. He had said as far back as May 2018 that the Y could be revealed on March 15. “I just made that up, because the Ides of March sounded good,” Musk said on Twitter.

Investors have long worried about whether Tesla can sustain interest in its cars at their current high prices. Tesla is somewhat boxed in by the need to keep prices high enough to recoup its massive investments and turn a profit, while keeping them low enough to compete with bigger manufacturers that are pouring money into electric vehicles.

High prices weren't as much of an issue when Tesla was making premium electric vehicles, such as the Model S and Model X. But the Model 3 is meant for the mass market. Up through the end of 2018, Tesla's sales were bolstered by a federal tax credit of $7,500 for electric car buyers. But that credit was halved starting Jan. 1, and some have questioned whether that will hurt demand.

On the positive side, the Model Y launch a few weeks before the quarter closes could bring a fresh infusion of cash into the company from customer deposits. Musk told reporters Friday he was doubtful Tesla will turn a profit in the first quarter. The company also spent $920 million paying off debt Friday.

More than 400,000 customers shelled out $1,000 each to reserve a Model 3 in 2016, according to Tesla's count, which boosted the company's cash by $400 million that year. Interest in the Model Y, given that it will compete in the highly popular crossover segment, may yield a similar benefit to its bottom line, analysts said.

The downside of that is that the new Model Y could steal demand away from the Model 3, which Tesla has spent years and piles of cash trying to produce in high volume, analysts said.

Volvo to cut top speed on vehicles

Source: Volvo

At a time when automakers are pushing speed and acceleration to make their vehicles more appealing, Volvo is taking a different approach. The Swedish carmaker is cutting the top speed for all of its new models to 112 miles per hour starting next year.

Currently, the top speed for Volvo's is 130 mph.

“While a speed limitation is not a cure-all, it's worth doing if we can even l save one life,” Volvo President and CEO Hakan Samuelsson said in a statement announcing the decision.

The move is part of Volvo's Vision 2020 initiative to eliminate fatalities or serious injuries by next year.

It's unclear how much limiting the top speed to 112 mph might curb accidents or fatalities given the speed is still high. Still, Volvo is venturing into an area automakers have been hesitant to approach: reducing the speed of cars and trucks.

The automaker is considering other possibilities to limit how fast its models travel in certain areas. For example, the company is looking at ways to use software and geofencing technology to limit the speed of Volvos when they drive by schools and hospitals.

“We want to start a conversation about whether car makers have the right or maybe even an obligation to install technology in cars that changes their driver's behavior, to tackle things like speeding, intoxication or distraction,” said Samuelsson.

Safety advocates are increasingly warning higher speeds are a factor behind traffic and fatalities staying at high levels. The National Safety Council estimates 40,000 people were killed in traffic accidents in the U.S. last year.

Tesla pays off $920 million convertible bond in cash

Kiichiro Sato | AP
Tesla CEO and founder of the Boring Company Elon Musk.

Tesla has paid off its $920 million convertible bond obligation in cash, sources familiar with the matter told CNBC. The company also confirmed that it made the payment today.

The $920 million in convertible senior notes expired March 1, at a conversion price of $359.87 per share. Since Tesla's stock hasn't traded at or above $359 in weeks, the electric vehicle maker had to pay in all-cash rather than half-stock and half-cash as it had previously intended.

In its 2018 annual report, Tesla said it had $3.69 billion in unrestricted cash and equivalents to end the year.

When asked about the payment earlier this week, a Tesla spokesperson pointed to comments from the fourth-quarter shareholder letter, when the company said it has “sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019.” Tesla also said that its cash position improved by $1.45 billion in the second half of 2018, and that it expects positive net income and positive free cash flow “in every quarter beyond Q1 2019.”

WATCH: Tesla shifts to online sales, lowers price of Model 3

Tesla shifts to online sales, lowers price of Model 3
10 Hours Ago | 06:24