Elon Musk, chief executive officer of Tesla Inc., smiles while speaking to members of the media outside federal court in New York, U.S., on Thursday, April 4, 2019.Natan Dvir | Bloomberg | Getty ImagesCitigroup and Goldman Sachs, who are underwriting Tesla's latest effort to raise $2 billion in new funds, held a “broad investor call” on Thursday, where CEO Elon Musk and CFO Zach Kirkhorn answered brokers' questions about their plans for the electric vehicle maker.
According to two invitees who attended the call, CEO Elon Musk talked up Tesla's self-driving strategy right off the bat, expanding what he and other execs said at a recent event for investors that the company dubbed “Autonomy Day. ”
Musk confidently told investors on the call that autonomous driving will transform Tesla into a company with a $500 billion market cap, these people said. Its current market cap stands around $42 billion. He also said that existing Teslas will increase in value as self-driving capabilities are added via software, and will be worth up to $250,000 within three years.
The call came as the company is looking to raise $650 million in equity and $1.35 billion in convertible bonds. Filings indicate that Tesla plans to use the capital for general corporate purposes. On the call, Musk said Tesla would be able to fund its business needs through cash flow, but that it was wise to have a buffer in case of a recession or weak global auto demand.
Kirkhorn reminded investors on the call that nothing has changed in Tesla's outlook for Q2. The company still expects to deliver 90,000 to 100,000 vehicles in the second quarter, and 360,000 to 400,000 vehicles total this year.
On an unadjusted basis, Tesla lost $702.1 million, or $4.10 a share, during the first quarter of 2019. The company's shares rose more than 4% on Thursday following the announcement of the new funding solicitation, but remain down more than 25% year to date.
It's all about driverless nowAccording to the two investors who heard the call, Musk described Tesla's existing electric vehicle, solar, and energy storage business lines as a backstop of value to Tesla's business in a new driverless era.
He said that even though Tesla drivers need to keep hands on the wheel today, that will become less necessary over time. Musk said that competitors such as GM's Cruise and Alphabet's Waymo can't catch up because Tesla has a fleet of connected cars on the road today, and a proprietary chip.
The hundreds of thousands of Teslas already on the road constantly slurp up data and send it back to Tesla's servers, which helps the company improve and advance its Autopilot and Full Self-Driving systems. Meanwhile, the company's self-driving computers, which it started working on about three years ago, are exclusive to Tesla and allegedly use less power in the vehicle than offerings from competitors like Nvidia.
Musk reiterated that because Teslas can be upgraded “over-the-air” with new software-enabled features and functionality, they will appreciate in value, unlike nearly every other car on the market. A Tesla will be worth $150,000 to $250,000 in 3 years, he claimed. He also said that a full self-driving upgrade will increase the value of any Tesla by a half order of magnitude, or five times.
Tesla expects to have 1 million vehicles on the road next year that are able to function as “robo-taxis,” Musk said, reiterating statements made at Autonomy Day and on the company's Q1 earnings call. Each car should be able to do 100 hours of work a week for its owner, making money as a robo-taxi he told investors.
Some investors and analysts have expressed skepticism about the robo-taxi plan and Tesla's self-driving strategy in general.
For instance, in a note to investors after Autonomy Day, Cowen analyst Jeffrey Osborne wrote: “We see a significant amount of technology and execution risk in the shift in strategy from competing in just electrification to Tesla also beating Nvidia in hardware, Google in software, and building a better ride-hailing service than current ride hailing leaders. ”
He added in the note, “The Tesla Network robotaxi plans seemed half baked, with the company appearing to either not have answers to or not even considered pretty basic question on the pricing, insurance liability, or regulatory and legal requirements.”
Zachary Kirkhorn, CFO, TeslaSource: TeslaOn Thursday's investor call, according to the people who heard it, Musk and other Tesla execs declined to give details when it came to more pragmatic issues like where the company's order book stands today, what they are doing to ameliorate problems with Tesla service and repairs, how much income Tesla expects to generate from regulatory credits for the rest of this year, and who will supply battery cells to Tesla in Asia as it begins manufacturing Model 3s in Shanghai.
One person asked what Tesla could do to improve its gross margins from the approximately 20% reported in the first quarter of 2019. The company previously promised it could achieve 25% margins.
Musk told investors Tesla would try to improve efficiency in its supply chain, but would feel good about 20% gross margins moving forward.
But he also tried to drive the conversation back to autonomy, calling it the fundamental driver of value for Tesla, and urged investors to stop nit-picking over vehicle margins.
WATCH: We went inside Tesla's first Gigafactory
VIDEO8:5008:50We went inside Tesla's first GigafactoryCNBC Reports
Author: CNBC Online news
Here’s the email Tesla sent employees telling them to stop leaking info
Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City. A federal judge will hear oral arguments this afternoon in a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) that seeks to hold Musk in contempt for violating a settlement deal.Drew Angerer | Getty ImagesTesla's security team sent a warning to employees this week to stop leaking company information.
The email, which was shared with CNBC and verified with multiple current employees who requested anonymity, warned that outsiders who “will do anything to see us fail” are “targeting” employees for information via social networks and other methods.
It reminded employees that they signed confidentiality agreements, and warned them, “Tesla will take action against those who improperly leak proprietary business information or violate the non-disclosure obligations to which we all agreed. This includes termination of employment, claims for damages, and even criminal charges.”
The email was in part directed at leaks to the media, noting, “In January an employee was identified for sharing confidential business information on Twitter, including production numbers, with journalists.”
It also said somebody was recently fired for posting the phone number to an internal meeting on social media.
Tesla and CEO Elon Musk have a love-hate relationship with the media, as well as social networks including Twitter, which Musk uses obsessively, and Facebook, which he disdains.
In the past two weeks alone, reporters have broken unfavorable news about Tesla, including:
Its failure to secure an exemption on tariffs for its made-in-China components that go into its Model 3 electric sedans.A resurgence of production glitches affecting employees at its car plant in Fremont.Its strained relationship with battery cell suppliers and Gigafactory partner Panasonic.Extremely long waits for Tesla service and repairs.Tesla's beef with a vocal critic aligned with short sellers on Twitter.These stories can overshadow some of the company's recent accomplishments including:
Seeing enough interest in its attempt to raise new capital to raise its target from $2 billion to $2.7 billion, overnight.The opening of new service centers and authorized body shops, in places like Pearl, Mississippi; Des Moines and Memphis.Progress on automated manufacturing and the solar roof at its Sparks, Nevada, battery plant.CEO Elon Musk's promises that Tesla will grow into a driverless car company worth $500 billion.So it's not surprising that Tesla's security team chose this week to send around a warning to employees telling them, in so many words, that loose lips sink ships.
Here's the full e-mail:
Subj. Please Read – Confidentiality Reminder
If you read the news, you know that there is an intense amount of public interest in anything related to Tesla. As a result of our success, we will continue to see an interest from people who will do anything to see us fail. This includes people who are actively seeking proprietary information for their own gain, targeting Tesla employees through personal networks or on social networks like LinkedIn, Facebook or Twitter. These solicitations are not only potentially damaging to our company, they can also be illegal, putting you and your colleagues/friends at risk for termination or even the possibility of criminal charges.
As an employee and a shareholder, each of us has a responsibility to safeguard all information and technology we use and generate every day.
When anyone joins Tesla, they agree they “will hold in strictest confidence and will not disclose, use, lecture upon or publish” any of Tesla's confidential and proprietary information. Tesla will take action against those who improperly leak proprietary business information or violate the non-disclosure obligations to which we all agreed. This includes termination of employment, claims for damages, and even criminal charges. If you would like another copy of your Confidentiality Agreement, please send an email to your HR partner or email [HR email address redacted].
If you receive a solicitation for information via social media do not respond and please forward it directly to [Security email address redacted].
The security team will determine whether any additional action is necessary.
We recognize that not everyone who leaks information may be doing so intentionally or with an intent to harm the company. To that point, we ask that you assume what you are working on is sensitive, and do not share details of your work with friends, family, or people outside the organization.
Contact [Security email address redacted] if you think you or your team may benefit from training or a more complete understanding of how to protect our intellectual property and confidential business information.
If you're unsure about what constitutes unacceptable behavior, illegal disclosures or theft of intellectual property, here are some recent examples to illustrate inappropriate conduct and the potential consequences:
* This month, an employee posted the dial-in information of an internal meeting on social media. This employee was identified and terminated the following day.
* A felony charge was filed last month against a former employee who exfiltrated confidential business information from the Tesla domain to his personal account and threatened to disclose confidential company information.
* A former employee uploaded Tesla intellectual property to a personal iCloud account and left the company for a competitor. Tesla filed a lawsuit and is suing him for stealing trade secrets.
* Tesla filed a lawsuit against former employees and a competitor for stealing proprietary information and trade secrets to help the competitor leapfrog past years of work needed to develop and run its own warehousing, logistics, and inventory control operations.
* In January an employee was identified for sharing confidential business information on Twitter, including production numbers, with journalists. The employee was terminated for violating their NDA and Tesla's Communications policy.
It's every employee's responsibility to honor and sustain our culture of progress and sharing, while still abiding by company policy. To do otherwise would be a disservice to your colleagues, our mission, and the hard work you do every day. Thank you for doing your part to advance Tesla's mission by raising awareness and protecting your valuable work.
WATCH: Elon Musk is interested in buying $25 million Tesla stock
VIDEO1:0401:04Elon Musk is interested in buying $25 million in Tesla stock
Fiat Chrysler shares jump after mixed first-quarter earnings
Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.Rebecca Cook | ReutersShares of Fiat Chrysler seesawed Friday after the company reported disappointing first-quarter earnings but said it's still on track to meet its 2019 profit target.
U.S. shares of the Italian and American company dropped as much as 2.8% before surging 6% in intraday trading.
The automaker said slowing sales in North America and Europe drove profit south. However, it said, sales of new U.S. pickup trucks, including the Jeep Gladiator and Ram models, would help lift its 2019 profit target of more than 6.7 billion euros ($7.5 billion).
Sales of its popular line of Ram trucks jumped 22% year over year as overall U.S. sales fell 3.1% during the first three months of the year.
Fiat Chrysler also reported that its first-quarter net profit fell 47% from the same time period a year prior, dropping to 508 million euros ($568 million) from 951 million euros ($1.06 billion) during the same quarter last year.
In addition, earnings per share failed to meet Wall Street's expectations, coming in at 40 cents (0.36 euros) compared with analysts' estimates of 52 cents (0.47 euros).
Fiat Chrysler's stock has climbed 10.17% so far this year. In the past 12 months, the stock has declined 29.17%.
GM joins Tesla, Ford in building EV pickups — but Texas ranchers don’t want a ‘playboy’s truck’
Rivian EV Pickup Truck.Adam Jeffery | CNBCGeneral Motors, the nation's largest automaker, is joining Ford, Tesla and start-up Rivian in adding an all-electric pickup to its portfolio.
But Detroit's Big Three and their challengers may have a hard time persuading the ranchers, roughnecks and handymen who make up a lot of their core clientele to trade in their diesel duallys for a battery-powered 4X4 pickup.
Arguably, the most critical question, said Sam Abuelsamid, a senior automotive tech analyst with Navigant Research, is “whether there's a market for an all-electric truck.”
GM CEO Mary Barra didn't offer any details about the pickup, but said GM “will not cede our leadership” in the pickup segment, leading to widespread speculation about what GM is developing and when it will come to market.
Slow to catch onConsidering the heavy use that many buyers subject their pickups to, that's no easy question.
Electric vehicles, in general, have been slow to catch on with American car buyers. While sales of all plug-based vehicles — including all-electric and plug-in hybrid models — jumped from 195,226 in 2017 to 360,353 last year, according to industry data, that was still less than 2% of the overall new vehicle market. And pure battery-electric vehicles alone generated barely half of that total.
The vast bulk of the market is currently made up of a single vehicle, the Tesla Model 3 sedan. But manufacturers hope to spur growth with the addition of new products as diverse as the Audi e-tron SUV, the Porsche Taycan sports car and the Jaguar I-Pace crossover that was named World Car of the Year at the New York International Auto Show last month.
Tesla pickupNow, manufacturers want to add all-electric pickups to the option list. Tesla has been hinting at its plans for a truck for several years, and CEO Elon Musk is promising to reveal more in the coming months. Detroit-based Rivian got a leg up on Tesla and other competitors by unveiling its own battery model, the R1T, at the Los Angeles auto show last November. Ford, which is investing $500 million in Rivian, has confirmed it is working up what is expected to be an all-electric version of its best-selling F-150.
Abuelsamid is one of those speculating about what GM might have in store. While a battery-based version of the big Chevrolet Silverado seems likely, he said the automaker could deliver a surprise. By opting for a midsize model, along the lines of the smaller Chevy Colorado, said Abuelsamid, it “would give them a chance to have a unique product in the market because everyone is focusing on full-size trucks.”
What is all but certain, however, is that GM — and Ford and Tesla, for that matter — will have to echo Rivian's lead, delivering a vehicle that boasts plenty of horsepower and stump-pulling torque with great range and significant levels of towing and cargo capacity. The start-up's R1T will make “close to” 800 horsepower, CEO RJ Scaringe said in Los Angeles, enough to hit 60 mph in 3 seconds. Its roughly 1,000 pound-feet of torque will let it haul a trailer of up to 11,000 pounds, and it is expected to get up to 400 miles on a 180 kilowatt-hour battery pack.
Rivian R1T electric pickup truckSource: Rivian'Playboy's truck'Those are the sort of numbers that would seem to play well with classic pickup users such as rancher Frank Helvey, who raises cattle and is active in the livestock auction community near Pearsall, Texas.
“I wouldn't buy one at all. It wouldn't make sense for me. It sounds like a playboy's truck, instead of a work truck,” he said in an interview.
In Texas, where everything is bigger, the truck market is no exception.
The Lone Star state is home to the Dallas Cowboys, the world's best barbecue and the biggest truck market in the U.S. Texas buyers account for 15.7% of the nation's half-ton pickup market, according to Stephanie Brinley, principle auto analyst at IHS Markit. That means one out of every six half-ton pickups — like the Ford F-150, Chevy Silverado and Ram 1500 — are sold in Texas.
Jeff Williams, another Texas rancher, said the technology interests him, “especially if they can make an electric that has the same power and range as a one-ton diesel.” But he remains skeptical of Rivian's claims and the promises made by other automakers that their electric pickups will offer capabilities matching their gas and diesel models.
Williams operates two farms and six ranches in what he called “far West Texas,” 275 miles from El Paso and even further from San Antonio. So, for him, the two critical challenges are range and charging. And out in his part of the Lone Star State there are few public chargers, especially the high-speed ones he'd need access to when hauling his livestock to market.
City dwellers “The other issue, out in the remote area where I live, is access to a mechanic,” Williams added. He employs a mechanic who can handle his diesel and gas trucks, but if an all-electric model “breaks down, what do I do?”
For his part, rancher Helvey says he does expect there'll be a market for all-electric trucks “for city dwellers and weekend warriors.”
But even some of the folks that might fall into those categories remain skeptical.
“I like the idea” of a battery-powered truck,” said Jennifer Stevenson, an emergency room physician at a suburban Detroit hospital and an owner of a new Ford F-150 Lariat. And while she rarely hauls much cargo or tows a trailer, Stevenson and her fiancé take frequent trips in remote places, such as Michigan's Upper Peninsula, and “I don't want to have to worry about finding a place to plug in.”
So, if ranch owners and weekend warriors remain skeptical, who might be ready to plug in with an all-electric pickup? The most likely target is fleet owners, said Brendan Jones, the chief operating officer of Electrify America. That's the company funded by $2 billion out of Volkswagen's settlement of its diesel emissions scandal, and it is spending most of that money to set up a nationwide network of EV chargers.
Workhorse W-15 Electric Pickup Truck.Source: WorkhorseElectrify AmericaFleet owners “know how and where they use their trucks” and whether they can deliver on their daily needs, both in terms of payload capacity and range, said Jones, during a conversation at Electrify America's headquarters outside Washington, D.C. They may also find the lower operating costs and reduced maintenance that battery-electric vehicles require attractive.
Jones pointed to the fact that a number of fleets are already moving to larger commercial trucks, or at least testing them out. That includes delivery services such as UPS and FedEx. Amazon has also teamed up with Rivian, leading a consortium that will pump $700 million into the start-up. While the online retailer hasn't said what it has in mind, it has been widely speculated it wants to launch a fleet of battery-powered delivery trucks.
Fleets have the advantage of not only knowing their daily needs but also the ability to set up their own charging systems. For work-oriented vehicles such as pickups to gain traction with retail customers, said Jones, “You're not going to see (that happen) until you have an infrastructure.” And that's something Electrify America and competitors such as EVgo and ChargePoint hope to put in place over the coming decade.
Paul Eisenstein is a freelancer for CNBC. His quotes from Electrify America COO Brendan Jones came from an interview in Washington, D.C., where the company paid for Eisenstein's travel and accommodations.
We went inside Tesla’s Gigafactory. Here’s what it looked like
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China can now rival the US with new innovations in tech, VW finance chief says
VIDEO1:4501:45VW CFO: China is tremendously important for usChina is helping to drive technological change in the automotive sector, the chief financial officer of Volkswagen told CNBC Thursday.
When asked about new innovations such as self-driving cars and 5G mobile networks, VW's Frank Witter said he was impressed by the rate of technological advancements coming from the world's second-largest economy.
“I think for the longest time we have been used to looking to the west coast of the United States when we were talking about innovation and new technologies,” Witter told CNBC's “Squawk Box Europe.”
“This is still valid but at the same time you are absolutely right to point to China,” he added.
Witter said that, looking at motor shows in China year-over-year, it was “just amazing how quickly the industry is progressing,” highlighting development at China's OEMs (original equipment manufacturers).
“The driver of technology is China, and we are very pleased with the progress we are making, together with our partners but also in Mobility Asia,” he added.
The Volkswagen Group's relationship with China dates back to 1978. In 2017, it launched a joint-venture with the state-owned Anhui Jianghuai Automobile Co., looking at e-mobility.
In May 2018, it set up Mobility Asia, which focuses on connectivity, smart mobility ecosystems, infrastructure ecosystems, service and data monetization, and autonomous cars.
Looking at the bigger picture, when it comes to autonomous driving a range of technologies are being developed and tested.
At the end of April 2019, South Korean telecoms giant SK Telecom signed an agreement with the Incheon Free Economic Zone (IFEZ) to develop 5G-based self-driving infrastructure.
In a statement at the time, SK Telecom said it would produce a high definition map covering the whole IFEZ area. It added that the map would have “centimeter-level accuracy” and provide information relating to road conditions, lanes, road slopes and speed limits.
5G refers to the fifth generation of mobile networks. While it promises cell phone users incredibly fast browsing experiences, it will also benefit the autonomous vehicle sector through its ability to process reams of information and data simultaneously and quickly.
VW says it’s ‘optimistic but also realistic’ after US tariff threat on cars
VIDEO2:3302:33VW CFO: Special items related to diesel close to 30 billion eurosVolkswagen said Thursday it would continue to hope for the best possible outcome amid heightened fears that the U.S. could soon impose tariffs on EU cars.
But, the German automaker emphasized it plans to monitor the prospect of additional charges with a sense of realism too.
It comes after President Donald Trump said in February that he would impose tariffs on cars imported from the EU if U.S. talks with the bloc couldn't produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.
Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.
“We certainly hope that the trade disputes can be resolved but it is no secret that 100% of the Porsche cars are being exported from Europe to the United States,” Frank Witter, chief financial officer of Volkswagen, told CNBC's “Squawk Box Europe” on Thursday.
He explained that approximately 70% of all Audi products were sold in the U.S., while for Volkswagen passenger cars it was a very small percentage being exported from Europe to the U.S. since most of their cars were built in North America.
“So, we still hope for the best, we do whatever we can but we are not party to the negotiations … We continue to be optimistic but also realistic,” Witter said.
Earlier this year, Volkswagen CEO Herbet Diess said the carmaker would need to redouble its efforts in 2019 in order to meet its ambitious annual targets.
Diess told the Financial Times in February that the biggest risk to Volkswagen's 2019 profit would be potential tariffs from Trump's administration.
At the time, he estimated the worst-case scenario regarding potential U.S. tariffs could cost around 2.5 billion euros a year — roughly 13% of expected earnings.
VIDEO1:4501:45VW CFO: China is tremendously important for usEarnings in line with expectationsOn Thursday, Volkswagen reported first-quarter earnings in line with expectations, as the company attempts to increase the pace of its transformation.
The German firm posted operating profit of 3.9 billion euros ($4.4 billion) for the first three months of the year. That compared with operating profit of 4.2 billion euros a year earlier. Analysts polled by Reuters had expected first-quarter operating profit to come in at 3.9 billion euros.
Shares rose over 2.3% during early morning deals.
Volkswagen, which is still battling to recover from a 2015 scandal over emissions test cheating, also said it had decided to take a 1 billion euro charge in the first quarter, as a result of legal risks.
“It is certainly very unfortunate that we had to book more provisions but we assess every single risk and exposure we have continuously and it was the point in time to make those provisions,” Witter said.
The company confirmed its full-year guidance and said it expected sales to increase as much as 5%. It projected an operating return on sales between 6.5% and 7%.
Revenue advanced 3.1% to 60 billion euros for the first three months of 2019, despite a drop in deliveries.
The company did not provide a net profit figure.
Elon Musk and SEC again ask for more time to reach deal over Twitter dispute
Elon Musk, chief executive officer of Tesla Inc., smiles while speaking to members of the media outside federal court in New York, U.S., on Thursday, April 4, 2019.Natan Dvir | Bloomberg | Getty ImagesTesla Chief Executive Elon Musk and the U.S. Securities and Exchange Commission on Thursday sought a second delay and requested to provide the court another joint submission on or before April 30, indicating whether they have reached an agreement to settle a dispute over Musk's use of Twitter, both parties said in a court filing.
The SEC in February sought to have Musk found in contempt of a fraud settlement last year after the CEO tweeted details about Tesla production numbers that were not vetted by the electric vehicle company's attorneys.
Instead, U.S. District Court Judge Alison Nathan in Manhattan ordered Musk and the SEC to try to resolve the dispute on their own. The parties have already requested one extension.
The SEC sued Musk last year for making fraudulent statements after he tweeted on Aug. 7 that he had “funding secured” to take Tesla private at $420 per share. The parties later settled and Musk agreed to step down as chairman and have the company's lawyers pre-approve written communications, including tweets with material information about the company. Musk's lawyers have argued that the February tweet did not contain new information that was material to investors.
South Korea’s SK Telecom to develop a 5G-based map for self-driving cars
Sungjin Kim | Moment | Getty ImagesSouth Korean telecoms giant SK Telecom has signed an agreement with the Incheon Free Economic Zone (IFEZ) to develop 5G-based self-driving infrastructure.
The memorandum of understanding (MOU) will also focus on the development of information and communications technology start-ups in the IFEZ, a specially-designated economic zone located in the city of Incheon in the northwest of the country. The IFEZ was set up in 2003 and is made up of the areas of Songdo, Yeongjong and Cheongna.
5G refers to the fifth generation of mobile networks. While it promises cell phone users incredibly fast browsing experiences, it will also benefit the autonomous vehicle sector through its ability to process reams of information and data simultaneously and quickly.
In a statement Monday, SK Telecom said it would produce a high definition map covering the whole IFEZ area. It added that the map would have “centimeter-level accuracy” and provide information relating to road conditions, lanes, road slopes and speed limits.
The hope is that the map will help the IFEZ area become ready for Level 4 autonomous vehicles, as defined by SAE International. A global association of over 127,000 engineers, SAE International has defined five “levels” of driving automation. An example of Level 4 automation could be a driverless taxi, while at Level 5 a vehicle's automated features can drive it under all conditions.
The map will be built using a 5G-based platform that will automatically update when it gets road observation data from advanced driver assistance systems over the 5G network.
Advanced driver assistance systems, or ADAS, are becoming increasingly important tools in modern vehicles. They use a range of technologies, including sensors and cameras, to detect potential hazards, and can undertake action – be it automatically or by warning a driver – to prevent accidents from happening.
VIDEO3:0803:085G will change your phone and your world
In order to detect any changes on the road, SK Telecom said it planned to install both ADAS and 5G communication technologies to public transport vehicles and government cars in the IFEZ.
“The core of 5G lies in its power to transform all industries to deliver unprecedented value to people's daily lives,” Park Jin-hyo, SK Telecom's chief technology officer, said Monday.
“We will work closely with the IFEZ Authority to accelerate IFEZ's transition to a smart city powered by SK Telecom's 5G network and mobility technologies,” he added.
While there is a great deal of excitement in relation to self-driving cars, the CEO of Arm Holdings told CNBC earlier this year that it would be “a while” before they become mainstream.
“It is a phenomenally hard problem to anticipate what a car could do under absolutely any set of circumstances,” Simon Segars, who was speaking to CNBC's Karen Tso, said.
“I think you're going to start to see early services, in quite a constrained way, quite soon over the next couple of years,” he added, explaining that there was “some way to come” before the technology was “completely mainstream.”
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Elon Musk emailed employees about how great Tesla’s autonomy day was, but the plan has lots of holes
Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019.Frederic J. Brown | AFP | Getty ImagesTesla CEO Elon Musk did what he does best on Monday when he presented bold, visionary promises that only his most loyal followers would take at face value.
Specifically, Musk gave guidance that Tesla will have a million “robotaxis” on the road next year, meaning a million truly driverless cars that can operate commercially in a ride-hailing network, generating passive income for their owners.
Musk celebrated the day in an email to all employees on Monday afternoon.
Subj. Great day for Tesla!
The Autonomy Day was extremely well-received. Feedback has been incredible. [Smiling emoji here.]
Awesome result of extremely intense effort by the Autopilot Team!
[two clapping emoji]
Elon
Promising safe, driverless cars within a year is already exceedingly optimistic. But Musk went further to say that each Tesla — equipped with some future version of its Autopilot and Full Self-Driving software — could generate $30,000 in gross income for owners each year if operated as a robotaxi.
VIDEO1:2601:26Elon Musk says Tesla will have 'robotaxis' on the road by 2020That's not realistic, considering Tesla's production numbers to date and the average salary of a ride-hailing driver in the US today.
The event served as a distraction from Tesla's recent operational, regulatory and financial troubles, which will be in full focus during the company's first-quarter earnings report on Wednesday.
Among some of its recent challenges, Tesla slowed production of its Model S and X vehicles in recent quarters and recently closed stores and laid off thousands of employees. Plus, Musk remains locked in a battle with the SEC over his use of social media to disseminate material business information. Tesla had around $180 million in debt coming due this month. And sales of its Model 3 slowed down in the first quarter.
A history of self-driving promisesIn 2018, ride-hailing trade publication Ridester found that human drivers working 40 hours a week for the likes of Uber or Lyft make annual salaries of about $31,000 before vehicle expenses, and about $20,000 after expenses but before taxes in the US.
Those people are driving cars already deemed street legal, and picking up fares in major cities and at airports where local laws have been, for the most part, hashed out authorizing them to drive there.
Meanwhile, the company has produced only about 600,000 cars to date. Not all of them are still on the road.
Tesla said in its fourth-quarter earnings release that it was aiming to deliver 360,000 to 400,000 vehicles in 2019, about 45 percent to 65 percent more than its deliveries last year.
VIDEO8:0508:05Tesla loses $2.90/share, revenue light, as wellTo reach a million robotaxis in 2020, Tesla would have to continue producing cars near the high-end of its previous guidance. Then, the majority of those cars would have to get the necessary software updates to reach Full Self-Driving status, which currently costs $5,000 when customers order the car or $7,000 as an upgrade if added after delivery, although these prices could change over time. Finally, owners would have to agree to let their cars participate in a Tesla robotaxi network.
Meanwhile, truly driverless vehicles do not yet exist. Tesla doesn't sell one. Neither does any other company.
Deutsche Bank analyst Emmanual Rosner, who took a test drive of the vehicles Tesla showed on Tuesday, was skeptical, writing, “Throughout the ride, the car performed relatively well but experienced a few rough maneuvers and had one disengagement where it failed to recognize cones blocking off some parked vehicles on the side of the road.”
He continued, “Given our own test ride still faced issues despite being on a pre-planned course and under relatively simple road conditions, we believe the company's targeted timeline for both full self-driving and its robotaxi service is at the very least aggressive. Ultimately, we still wonder whether Tesla can even solve the large challenges of fully autonomous driving with its vision-based approach alone.”
Musk has made grandiose promises about self-driving before.
In October 2016, Musk touted Tesla's second-generation autonomous driving hardware, saying that system could power full level 5 autonomy in his company's cars — that means the car could drive in all conditions with zero human attention. Musk said the company expected that a Tesla would be able to complete a hands-free trip across the US by late 2017. As of April 2019, Tesla has not demonstrated any of its vehicles completing such a trip, although self-driving pioneer Anthony Levandowski says a car from his new start-up accomplished the task last December.
Analysts were generally skeptical. Cowen analysts wrote, “The Tesla Network robotaxi plans seemed half baked, with the company appearing toeither not have answers to or not even considered pretty basic question on the pricing,insurance liability, or regulatory and legal requirements.”
Even some historical Tesla bulls were not swayed by the presentation.
Dan Ives, Managing Director of Wedbush Securities said, “The presentation was more visionary and lacked the details the Street wants to know which is key to credibility. It was more geared to the autonomy world as Musk is telling technologists 'don't forget about Tesla,' with Waymo and Uber getting a ton of credit.”
Tesla stock traded down about 4% on Monday, and ticked up by less than a point in mid-day trading on Tuesday. The stock is down about 30% from its most recent peak in December, and down about 9% from a year ago.
VIDEO2:3902:39Tesla's Elon Musk promises 'robotaxis' by 2020