Author: CNBC Online news

Tesla replaces general counsel Dane Butswinkas after two months

Tesla general counsel leaves after 2 months on the job
11 Hours Ago | 01:12

Tesla is replacing its general counsel, Dane Butswinkas, the company said Wednesday. Jonathan Chang, Tesla's current vice president of legal, will take over Butswinkas' position, effective Wednesday.

It is yet another executive departure for Tesla, which has seen a great deal of turnover in its ranks over the last several years. Most recently, CFO Deepak Ahuja said he will be leaving the company, after serving his second stint with the electric car maker.

This is likely more evidence that Tesla is not a company for everyone and that Elon Musk is a tough boss, said Gene Munster, managing partner at Loup Ventures.

“He's in a one in a billion type of person,” Munster said. “And this is yet further evidence. And I think that is the biggest challenge that the company has — retaining top talent.”

Chang, who is 40 years old, has been with Tesla for eight years. He most recently oversaw legal issues relating to securities, mergers and acquisitions, real estate, compliance, and sales in the U.S. and Europe, Tesla said. He has been involved in Tesla's efforts to overturn state laws prohibiting the direct sale of cars to customers across the United States. He will report directly to CEO Musk.

Tesla shares were down nearly 1 percent midmorning Thursday.

“I'm grateful for the opportunity over the past seven months to have worked with both Elon and Tesla, first as outside counsel and most recently as General Counsel at Tesla. I am returning to my home in Washington, DC and to my trial practice at Williams & Connolly,” Butswinkas said. “I look forward to continuing my work with Tesla in an outside counsel role. I have observed and have tremendous confidence in Jonathan's leadership skills and in the Tesla team. When I joined the company, I said it would be hard to identify a more timely or essential mission than Tesla's—that's as true today as it was then.”

Butswinkas left after just two months on the job. A person familiar with the matter said he was not a good cultural fit with Tesla and wanted to return to his family and law practice in Washington, D.C.

Report of a Model 3 leasing program could be a bad sign for Tesla investors

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

A report saying that Tesla might be starting a leasing program for its Model 3 sedan could be a bad sign for investors in the electric car maker, according to one analyst.

The timing of the report could be a sign that the gradual expiration of federal tax credits for Tesla vehicles is hitting demand for the sedan, said CFRA analyst Garrett Nelson in a note published Wednesday. The reduction in the tax credits began this year.

“While TSLA has meaningfully driven down vehicle unit costs in recent quarters, we have growing concerns regarding top-line results due to combination of moderating sales volume, price reductions and mix,” Nelson said. “Looking past the near term, we expect TSLA to face significantly increased EV competition starting with the 2021 model year.”

Tesla responded to a report from news site Electrek published on Tuesday saying the electric vehicle manufacturer is planning a leasing program, but that it has not finalized the dates when it will begin.

“This is simply an internal document to ensure teams are prepared for when we eventually introduce a leasing option to customers,” said a statement from Tesla send to CNBC, referring to the email referenced in the Electrek report. “No decision has been made about when Model 3 leasing will be available, but it will definitely be after the dates outlined in this document.”

CEO Elon Musk also said on the company's fourth-quarter earnings calls that Tesla might wait until later this year to start a program.

“We've been reluctant to introduce leasing on Model 3 because of its effect on GAAP financials,” Musk said on the call. “It is worth noting that demand to date is with zero leasing. Obviously, leasing is a way to improve demand, but it makes our financials looks worse. So we're not wanting to introduce that right away. We'll introduce it sometime later this year probably.”

Tesla already offers leases on its other models, and it is common for customers to lease vehicles in the premium end of the car market.

Several manufacturers are either already selling electric vehicles or planning to release new models in the next few years. Some are aimed at the higher end of the market, where Tesla's vehicles are priced, especially the full-size Model S sedan and Model X SUV.

Musk billed the Model 3 as a relatively affordable electric car, and initially Tesla intended to sell them at a starting price of $35,000, much lower than the current price. Competitors are eyeing that end of the market as well.

It seems impossible that Tesla will have full self-driving car tech ready in a year, says analyst

Elon Musk tends to be more accurate, says Kelley Blue Book's Brauer
1 Hour Ago | 02:52

At least one auto industry analyst is skeptical about Tesla CEO Elon Musk's bold claim that the electric car maker will have all the features necessary for full autonomy by the end of the year.

In fact Musk may be misleading the public over how capable Tesla's cars are, said Karl Brauer, executive publisher at Cox Automotive, on CNBC's “The Exchange” on Wednesday.

“I think the term 'misled' works here. I mean, there are so many variables out there,” he said. “There are so many different ways that a car has to be able to deal with driving: weather, lighting, traffic, pedestrians, bicyclists. To say you'll have all conditions solved in the next 12 To 18 months, nobody else is making that claim and there are some pretty big companies out there like Google who are doing this and have been doing this for a decade.”

Musk made his claims about Tesla's progress in self-driving cars in an interview with Cathie Wood and Tasha Keeney of ARK Invest, a group of funds that has positions in Tesla. He said he expects Tesla to have all the features necessary for fully self-driving cars by the end of the year, and to be capable of safely transporting a sleeping passenger in an autonomous vehicle within two years.

“Elon's got one of the best systems currently available in terms of semi-autonomous driving,” Brauer added in an email to CNBC. “But the concept of any car handling all the variables that exist on the road is still hard to fathom. Doing it in the next 12-18 months seems impossible.”

On Tuesday's podcast, Musk did say that having all the features necessary did not mean “now it works with 100% certainty, requiring no observation, perfectly.” He added that regulators will play a big role in determining how these technologies are used and how reliable they will have to be.

Tesla has long offered automated driver assistance technology with its cars through a system called Autopilot. Tesla has apparently been trying to pursue fully self-driving cars, albeit in ways that are very different from competitors.

Musk has famously, and controversially, insisted the laser infrared technology lidar so favored by the vast majority of competitors is not necessary for full self autonomy. The company also uses very different methods from most of its rivals for testing the technology.

Musk also has a reputation for making big claims about how far along Tesla is in terms of certain aspects of its business, such as how quickly it is developing a given technology or producing cars. Musk has said some of his predictions are rough estimates.

“Elon Musk's established history of predictions plays into his latest claims,” Brauer said. “He's missed these kind of predictions in the past, so people shouldn't be surprised he's willing to make them again, or that they might be unrealistic. The current AutoPilot technology is among the most advanced available, but it's nowhere near full self-driving under all conditions. Getting there by the end of this year, or even the end of next year, feels out of scope, but I guess we'll see.”

Tesla declined a request for comment.

Elon Musk tweeted, then revised, Tesla financial guidance. He probably shouldn’t have.

Bobby Yip | Reuters
Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China.

Elon Musk tweeted — then revised — projections for full-year Tesla manufacturing numbers.

The CEO said late Tuesday that Tesla would make “around” 500,000 vehicles in 2019, later clarifying he “meant to say” the company's annualized production rate at the end of 2019 could be around 500,000 vehicles — or a production rate of 10,000 cars per week. Total deliveries for the year are still estimated at 400,000, Musk said.

The posts seem unoffensive by Musk's standards, given his penchant for inflammatory tweets. But the incident raises questions about the effectiveness of an SEC fraud settlement and attempts to rein in Musk's online antics.

As part of the company's settlement with the SEC in September — which stemmed from a now-infamous Musk tweet about taking the company private — Tesla was supposed to create a system for monitoring Musk's statements to the public about the company, whether on Twitter, blog posts or any other medium.

“It comes back to, the company is still running like a start-up,” Loup Ventures founder Gene Munster told CNBC's “Squawk Box” on Wednesday. “This is a $50-60 billion market cap company. This should not be run like a start-up.”

It's unclear whether there's a system in place to monitor Musk's tweets about the company. Musk told CBS' “60 Minutes” in December that no one was reading his tweets before he published them.

“I have always had this hope that Elon would change, and I think it's reiterated that he is not going to change,” Munster said.

Musk's tweets have proven to move the stock as much as 10 percent in some cases, and invited a defamation lawsuit from a British rescue diver who sparred with Musk online.

Separately Wednesday, Tesla announced its general counsel was leaving the company after only two months on the job. Share prices were down slightly in early trading Wednesday.

Correction: This story was revised to correct the references for the days of the week.

WATCH: Tesla general counsel leaves after 2 months on the job

Tesla general counsel leaves after 2 months on the job
2 Hours Ago | 01:12

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Chinese electric automaker Kandi shares rocket 40% higher on approval to import cars to the US

Imaginechina via AP Images
Chinese workers push an EV past electric vehicles displayed at a parking lot of Zhejiang Kandi Vehicles Co., Ltd, in Hangzhou city, east China's Zhejiang province.

Shares of Kandi Technologies Group rocketed up more than 35 percent in trading Wednesday after the Chinese electric automaker announced it received approval to import two of its cars to the United States.

The National Highway Traffic Safety Administration (NHTSA) approved Kandi to ship its Model EX3 and Model K22 cars to the U.S.

“With this, we are confident in introducing our reliable vehicles to the American public,” Kandi CEO Hu Xiaoming said in a statement. “We believe both the EX3 and K22 are competitive in price and quality with advanced tech features that are in demand by American consumers.”

While the two cars are all-electric, Kandi is not a “pure play” electric automaker like Tesla or Nio. Kandi Technologies is the joint venture of Kandi Vehicles and Geely Group, which is one of China's largest automakers.

Kandi shares have risen more than 120 percent in the past year and hit a new 52-week high on Wednesday of $8.37 a share.

Elon Musk: Tesla will have all its self-driving car features by the end of the year

J. Emilio Flores | Corbis | Getty Images
Elon Musk, Tesla CEO

Tesla CEO Elon Musk expects that the electric car maker will have the technology needed to essentially operate vehicles without drivers by the end of the year.

The entrepreneur made the comment on a podcast with Cathie Wood and Tasha Keeney of ARK Invest, a firm that owns shares in the company. Tesla's automated driver assistance system Autopilot has garnered both positive attention for the sophistication of its features and negative attention for its association with a number of high-profile accidents.

“I think we will be feature complete — full self-driving — this year,” Musk said. “Meaning the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention, this year. I would say I am of certain of that. That is not a question mark.”

This is in line with previous comments Musk made on Tesla's fourth-quarter earnings call.

“However,” he added, “people sometimes will extrapolate that to mean now it works with 100 percent certainty, requires no observation, perfectly. This is not the case.”

In addition, the speed at which the technology makes it into the hands of customers depends on what regulators will allow, Musk added.

However within two years, the technology ought to be there for cars to operate without any help from a driver at all.

“My guess as to when we would think it is safe for somebody to essentially fall asleep and wake up at their destination? Probably towards the end of next year,” he said. “That is when I think it would be safe enough for that.”

Tesla was not immediately available for comment.

ARK Invest has a significant investment in Tesla — the carmaker comprises about 8 percent of its holdings. The firm has a famously high $4,000 price target on the stock, but recently sold a portion of its share in the company.

One of its flagship ETFs has reduced its share in Tesla, though the stock remains one of ARK Invest's top holdings across several funds.

— CNBC's
Lora Kolodny
and
Eric Rosenbaum
contributed to this story.

WATCH:Elon Musk's big ambitions may be killing Tesla

Tesla's earnings were better than expected, but Elon Musk still has a lot on his plate
8:48 PM ET Wed, 2 May 2018 | 05:31

BMW’s US boss slams tariffs as South Carolina factory approaches record production numbers

BMW increasing production at South Carolina plant, says North American CEO
11:10 AM ET Wed, 13 Feb 2019 | 04:25

BMW's North American boss has some tough words on tariffs, as automakers await a potentially pivotal decision on tariffs from the Trump administration.

The Commerce Department is expected to deliver a report within days that many industry experts say could deem auto imports into the United States a threat to national security and seek tariffs as high as 25 percent on all vehicles imported into the U.S. The tariffs for most light vehicles is now at 2.5 percent, and there is a long-standing 25 percent tariff on imported pickup trucks.

“If tariffs go up, it's not good for the consumer it's not good for our dealer network it is not good for the economy in total,” said Bernhard Kuhnt, CEO of BMW North America told CNBC on Wednesday.

“I'm not at politician, but we'll deal with the consequences,” he added.

BMW is a German company that both imports vehicles into the United States and exports them out, many from a factory in Spartanburg, South Carolina — BMW's largest globally. The automaker is expanding production at the plant and expects to hit a near-record level of production this year of more than 400,000 vehicles, most of them premium sport utility vehicles and crossovers which are quickly growing in popularity with buyers both in the United States and around the world. BMW says it is the largest U.S. exporter of vehicles in terms of total sales. It exported $8.8 billion in vehicles in 2017, according to the Commerce Department.

Meghan Reeder | CNBC
Bernhard Kuhnt, CEO of BMW North America.

Part of problem for BMW is that it stands to be hit with import tariffs on sedans imported into the United States, and potentially hit with retaliatory tariffs in other countries on U.S.-made vehicles. China, for instance, briefly raised tariffs on any U.S.-made vehicles to 40 percent in 2018 in response to U.S. duties on Chinese products.

U.S. premium SUV sales climbed from roughly 1 million in 2015 to 1.3 million in 2018 and are expected to hit 1.5 million by 2020.

President Donald Trump has repeatedly railed against what he says is a fundamental trade imbalance between the United States and its trading partners, including China and European countries. Tariffs, such as the 25 percent tax on imported pickups, have been successful in keeping American-made trucks popular and U.S. workers employed, he said on Twitter in late November.

“The reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the “chicken tax,'” he said. “If we did that with cars coming in, many more cars would be built here…..”

Correction: BMW expects to hit a near-record level of production at the Spartanburg, South Carolina, plant this year of more than 400,000 vehicles. An earlier version misstated the number of vehicles.

As Trump ponders auto tariffs, free-trade Republicans push back

Patrik Stollarz | AFP | Getty Images
Volkswagen cars at the harbor of Bremerhaven, Germany.

The Commerce Department is expected to deliver its long-awaited report on auto tariffs to the president by a Feb. 17 deadline, according to two sources familiar with the matter. But as President Trump deliberates his next moves – by law, he has 90 days to decide –he will face an uphill battle from companies, foreign allies and Republican lawmakers if he decides to impose duties.

The report was crafted under section 232 of a 1962 trade law, a provision that allows tariffs on items that threaten national security that was scantly used before the Trump Administration. In March 2018, the president used the provision to slap duties on foreign steel and aluminum, and called for an investigation into automobiles several months later, tweeting before the research was conducted that he'd be interested in a 25 percent rate.

Trade war will bring debt crisis within two years, Emergent Asset CEO says
9:03 AM ET Fri, 15 Feb 2019 | 02:24

Whether the Commerce Department took the president's lead in recommending tariffs on all imported automobiles is unclear. But such a move would face resistance in the West Wing. “There's not a whole lot of support for auto tariffs,” a senior administration official told CNBC. “But only one person's opinion matters.”

In July 2018, President Trump called on Twitter for tariffs of 20 percent on foreign automobiles, and in November upped the suggestion to 25 percent following news of layoffs at General Motors.

Business groups are already warning of the economic impacts. A new study by the Center for Automotive Research found a 25 percent tariff on autos and parts would increase the price of a car by an average of $2,750 and as many as 366,900 U.S. jobs would be lost. Its analysis factors in exclusions for South Korea and assumes Canada and Mexico would also be exempt under the yet-to-be-passed U.S. Mexico Canada trade agreement.

Pro-free-trade Republicans are building new tools to push back, in case the president implements new tariffs in the name of national security.

Sen. Pat Toomey (R-PA) introduced a bill last month that would give Congress sixty days to approve any proposed tariffs under section 232. It would also apply retroactively to steel and aluminium tariffs, giving Congress 75 days to pass a resolution to approve those tariffs.

Sen. Toomey says he has heard from dozens of Pennsylvania companies who use steel and aluminium products who have been hurt by the increased cost of materials. “We have seen this administration use this tool in a way that was never intended,” said Toomey.

Sen. Robert Portman (R-OH) also has a proposal to address what he sees as the misuse of national security in trade fights. Under his proposal, the Pentagon would make the primary determination that a tariff is needed, not the Commerce Department. And Congress would have the right to disapprove of those measures.

Retaliatory tariffs hit U.S. boating industry
2:26 PM ET Fri, 15 Feb 2019 | 01:49

Sen. Portman said his measure is timely because of the widespread opposition among Republicans to placing tariffs on auto imports, most of which come from allied countries. Any action taken out of spite, and not because of a true security concern, will backfire.

“If it's not based on fairness, it comes back to haunt us,” Portman said. “If you are going to say minivans from Canada are a national security threat, Canada is going to react, knowing that's not legitimate.”

Sen. Chuck Grassley (R-IA), chairman of the influential Senate Finance Committee, is working to come up with a compromise between Toomey and Portman's proposals that can get broad bipartisan support. But he brushed off any association between that effort and the Trump Administration's recent actions.

“Our moving on 232 has nothing to do with autos or aluminium or steel, it's comes from the proposition that Congress in 1962 delegated too much Constitutional authority to the president,” Sen. Grassley told reporters on Wednesday.

3,500 jobs at risk as Honda refuses to deny UK factory closure

Tim Ireland | PA Images | Getty Images
Workers on the Honda CR-V production line at the Honda Plant in Swindon.

Japanese automaker Honda looks set close its Swindon car plant, risking the loss of 3,500 jobs.

In an emailed statement to CNBC on Monday, Honda failed to deny it would close the plant.

“At this point, we are not able to make any comments regarding the speculation. We take our responsibilities to our associates very seriously and will always communicate any significant news with them first,” said a spokesperson from Honda U.K.

The U.K. lawmaker responsible for the area in which the factory is based, Justin Tomlinson, took to Twitter to apparently confirm the closure.

The North Swindon Conservative MP added that a task force would be set up to support employees, before adding that no job losses were expected until 2021.

The Swindon factory builds the Honda Civic five-door hatchback and the CR-V crossover for sale in Europe and the U.S.

The announcement, first reported by Sky News, suggested Honda would confirm the closure on Tuesday.