TSLA May 2020 415.000 call

OPR - OPR Delayed price. Currency in USD
369.78
0.00 (0.00%)
As of 10:51AM EST. Market open.
Stock chart is not supported by your current browser
Previous close369.78
Open374.00
Bid281.95
Ask290.50
Strike415.00
Expiry date2020-05-15
Day's range369.78 - 374.00
Contract rangeN/A
Volume3
Open interest89
  • Tesla & Panasonic to Abort Solar-Cell Production in New York
    Zacks

    Tesla & Panasonic to Abort Solar-Cell Production in New York

    Tesla (TSLA) and Panasonic's decision to cease their solar cell partnership for Gigafactory 2 comes as another setback to the already strained relationship between the two firms.

  • Tesla Sinks on Weak China Registrations Before Brunt of Virus
    Bloomberg

    Tesla Sinks on Weak China Registrations Before Brunt of Virus

    (Bloomberg) -- Tesla Inc. shares fell after China registration data indicated a significant sequential slowdown in demand before the electric-car maker started feeling the brunt of any impact from the coronavirus.Registrations of new Tesla cars plunged 46% to 3,563 in January from December, according to state-backed China Automotive Information Net, which gathers industry data based on insurance purchases. Of the January registrations, 2,605 were for cars built in China.While Tesla had bucked the trend in China’s waning electric-car market in the previous two months, the January drop shows that the U.S. brand isn’t immune to challenges the broader industry is facing. China’s car market probably is headed for a third straight annual decline as the coronavirus outbreak exacerbates a slump started by an economic slowdown and trade tensions.Tesla shares dropped as much as 6.8% shortly after the start of regular trading. The stock had soared 86% this year through the close Wednesday, partly driven by optimism about the company starting to produce Model 3 sedans at a newly built plant near Shanghai.In total, deliveries of new-energy vehicles in China from carmakers to dealerships tumbled 54% last month, according to the China Association of Automobile Manufacturers, an industry body.Tesla began delivering locally built Model 3s to customers in China last month, seeking to boost volumes amid rising competition from the likes of BMW AG and Daimler AG, which are also bringing out new electric cars. The sedans assembled domestically qualify for tax exemptions and subsidies the company has missed out on in the past.The locally manufactured models helped Tesla’s January registrations increase from just 853 a year earlier.The timing of China’s Lunar New Year complicates year-over-year comparisons in the first months of 2020. The holiday fell in January this year and in February in 2019.But business has ground to a halt this month due to the coronavirus, and automakers are expected to come up well short of last year’s sales levels in February. Deliveries to dealers this month are set to slide about 75%, resulting in about a 40% drop in the first two months of 2020, according to the China Passenger Car Association.(Updates with regular trading in deck headline and fourth paragraph)To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at czhang714@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Craig Trudell, Tony RobinsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • The Zacks Analyst Blog Highlights: Tesla, Enbridge, DuPont de Nemours, Delta Air Lines and Palo Alto Networks
    Zacks

    The Zacks Analyst Blog Highlights: Tesla, Enbridge, DuPont de Nemours, Delta Air Lines and Palo Alto Networks

    The Zacks Analyst Blog Highlights: Tesla, Enbridge, DuPont de Nemours, Delta Air Lines and Palo Alto Networks

  • Bloomberg

    A Bailout Won’t Help China’s Tesla Wannabe, NIO

    (Bloomberg Opinion) -- Will a provincial government be able to save China’s Tesla wannabe? Investors seem to think so. The reality may be different.New York-listed NIO Inc., a self-described pioneer in China’s premium electric vehicle market and rival to Elon Musk’s company, said Tuesday that it has made a tentative agreement with the municipal government of Hefei in Anhui province for funding support. The company will move its China headquarters there from Shanghai and says it plans to raise more than 10 billion yuan ($1.43 billion) in light of the partnership. Other details were sparse. The stock surged as much as 34%.Those are lofty ambitions considering the company was sitting on $1.5 billion of debt and is expected to post negative free cash flow of $1.4 billion for 2019, according to Bloomberg estimates. Earlier this month, NIO said it had raised $100 million in one-year convertible notes, bringing the aggregate to $200 million of private placements this year. It said it was “working on several financing projects, the outcome of which is uncertain at this stage.” Meanwhile, as the coronavirus hobbles China Inc., NIO can’t afford to pay its workers on time.The company has done a few similar partnerships. Last year, it entered into a 10 billion yuan agreement to finance research and development and a new manufacturing facility with a state-owned fund in Beijing, E-Town Capital, in exchange for a minority stake. NIO counts the likes of Baillie Gifford  & Co. (a big Tesla investor), Tencent Holdings Ltd. and Temasek Holdings Pte among its backers. It has continuously burned cash since before going public in 2018. In the third quarter, it went through around 1.5 billion yuan to 2 billion yuan, Goldman Sachs Group Inc. analysts estimate. They also forecast another cash outflow of 14 billion yuan before the company can break even in 2023. As NIO noted in its latest results announcement for the third quarter, its “cash balance is not adequate to provide the required working capital and liquidity for continuous operation in the next 12 months.”A helping hand from Beijing can’t turn around its operations at this rate of burn. Part of the fundamental problem is that the company doesn’t make its own cars. They’re manufactured by state-backed Anhui Jianghuai Automobile Group Corp., or JAC, at a plant in Hefei – where it’s moving – under a five-year agreement signed in 2016. The cost-effectiveness is questionable: For the first three years, NIO paid on a per-car basis and foot the bill for the plant’s operating losses. It isn’t clear what the arrangement is now.Under the new agreement, NIO plans to build a manufacturing facility. It previously scrapped plans for one in Shanghai, where Tesla has been welcomed by the local government. Even though car sales have inched up, NIO has continued to spend well beyond its means. The cost of selling vehicles and other products rose faster than revenues in the third quarter. But its cost of sales rose to 2.1 billion yuan, up 2.3% from the second quarter, and climbed 30% from a year earlier. Research and development expenses came down from the second quarter but were almost flat on-year at 1.02 billion yuan, accounting for almost 60% of revenues.In its latest earnings call, the company said it was taking cost-reduction measures. It cut around 2,000 jobs between January and September last year. What money NIO does bring in may be better spent on making the cars, rather than feeding hype around them. More than cash, NIO seems to need a new strategy if it wants to survive.To contact the author of this story: Anjani Trivedi at atrivedi39@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Coronavirus Fears: Should You Be Investing or Playing It Safe?
    Zacks

    Coronavirus Fears: Should You Be Investing or Playing It Safe?

    If you have been talking anything about the coronavirus, then this is the episode for you. We touch on every facet of the subject and give you a deep dive into how investors could be navigating this volatile market.

  • Tesla, Panasonic Ending Solar-Roof Partnership at N.Y. Plant
    Bloomberg

    Tesla, Panasonic Ending Solar-Roof Partnership at N.Y. Plant

    (Bloomberg) -- Tesla Inc. and Panasonic Corp. plan to end their solar partnership at the electric-car maker’s state-subsidized factory in New York.Panasonic is ceasing its participation in the venture as part of a global overhaul of its solar business, according to a statement. The company will end its manufacturing operations at the factory in Buffalo, New York, by May, and exit the facility by the end of September.The Japanese conglomerate’s withdrawal comes as Tesla again tries to ramp production of its sleek Solar Roof product and nears a deadline to meet certain staffing requirements. The glass roof tiles have yet to capture a significant piece of the market in the years since Chief Executive Officer Elon Musk used the product to justify acquiring debt-ridden SolarCity Corp. in 2016.“Does it complicate the solar-roof story? Yes,” said Gordon Johnson, an analyst at GLJ Research and a Tesla bear. “Musk has been saying they’re going to ramp the solar-roof business in a big way. He promised 1,000 solar roofs a week by the end of last year, but that did not happen.”Tesla didn’t address an inquiry seeking comment. Panasonic spoke for its partner in its statement announcing that it would pull out: “According to Tesla, this does not impact Tesla’s future solar growth business plans,” the Osaka-based company said.As of earlier this month, the Buffalo plant needed to add about 360 more workers to bring its total to 1,460 by April, or pay a $41.2 million penalty.“Tesla informed us that they have not only met, but exceeded their next hiring commitment in Buffalo,” Howard Zemsky, chairman of the Empire State Development, a New York economic agency, said in a statement. “As of today, Tesla said they have more than 1,500 jobs in Buffalo and more than 300 others across New York State.” He added that the agency would work to verify those numbers.Tesla has begun rolling out the Solar Roof to customers in California, many of whom are affluent homeowners who already own its electric cars. The company is racing to hire roofers, installers and electricians in more than a dozen U.S. states.Panasonic and Tesla have had a tumultuous relationship since they unveiled an agreement in 2014 for the Japanese company to make the batteries that power the American company’s electric cars. Last year, Musk publicly blamed Panasonic for constraining production of Model 3 sedans. Just this month, Chinese battery maker Contemporary Amperex Technology Co. won a two-year contract to supply Tesla’s new factory near Shanghai.In the statement Wednesday, Panasonic said it will continue to produce car batteries with Tesla at a plant in Nevada. That operation was profitable for the first time in the quarter that ended in December.The Nikkei reported Panasonic’s plans to end the New York partnership earlier. The newspaper said Tesla has been using cells sourced from China for the Solar Roof.“Making a solar roof is more technically challenging than producing a normal solar panel,” Xiaoting Wang, an analyst at BloombergNEF, said in an email. Roofs are “supposed to play two roles and should meet more strict standards, such as higher mechanical strength.”(Updates with BloombergNEF analyst’s comment in the last paragraph)\--With assistance from Dana Hull.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Brian Eckhouse in New York at beckhouse@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, ;Peter Elstrom at pelstrom@bloomberg.net, Chester DawsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Coronavirus Concerns Further Plague China Auto Industry
    Zacks

    Coronavirus Concerns Further Plague China Auto Industry

    Amid coronavirus, the China auto industry has taken a severe beating of late, with shutdown of factories, dealerships with less customer traffic, supply-chain disruption and annual motor show delay.

  • Panasonic to exit solar production at Tesla's NY plant as partnership frays
    Reuters

    Panasonic to exit solar production at Tesla's NY plant as partnership frays

    TOKYO/LOS ANGELES (Reuters) - Panasonic Corp said it would exit solar cell production at Tesla Inc's New York plant, the latest sign of strain in a partnership where Panasonic's status as the U.S. electric vehicle (EV) maker's exclusive battery supplier is ending. The move increases uncertainty over Tesla's solar business which is already under scrutiny, having been drastically scaled back since the U.S. firm bought it for $2.6 billion in 2016. Tesla has informed New York that Panasonic's withdrawal "has no bearing on Tesla's current operations", the state said in a statement.

  • Panasonic to exit solar production at Tesla's New York plant as partnership frays
    Reuters

    Panasonic to exit solar production at Tesla's New York plant as partnership frays

    TOKYO/LOS ANGELES (Reuters) - Panasonic Corp said it would exit solar cell production at Tesla Inc's New York plant, the latest sign of strain in a partnership where Panasonic's status as the U.S. electric vehicle (EV) maker's exclusive battery supplier is ending. The move increases uncertainty over Tesla's solar business which is already under scrutiny, having been drastically scaled back since the U.S. firm bought it for $2.6 billion in 2016. Tesla has informed New York that Panasonic's withdrawal "has no bearing on Tesla's current operations", the state said in a statement.

  • Tesla’s Autopilot, Cell Phone Use Blamed in 2018 Fatal Crash
    Bloomberg

    Tesla’s Autopilot, Cell Phone Use Blamed in 2018 Fatal Crash

    (Bloomberg) -- U.S. crash investigators faulted Tesla Inc.’s Autopilot system and the driver’s distraction by a mobile device for a fatal accident in 2018 and called on Apple Inc. and other mobile phone makers to do more to keep motorists’ attention on the road.Tesla was heavily criticized for not doing enough to keep drivers from using its driver-assist function inappropriately. American regulators, which have guidelines but no firm rules for the emerging automated driving systems, were also attacked by the safety board.“It’s time to stop enabling drivers in any partially automated vehicle to pretend that they have driverless cars, because they don’t have driverless cars,” National Transportation Safety Board Chairman Robert Sumwalt said.The hearing was a searing critique of how Tesla and other carmakers have introduced new technologies that automate aspects of driving but still require constant human supervision, and of the National Highway Traffic Safety Administration’s light-touch approach to regulating the safety of those systems.Even though the Tesla SUV in the 2018 crash in northern California had previously veered toward a concrete barrier, the driver, an Apple employee, allowed the semi-autonomous system to essentially steer itself as it passed that same location and moved toward a highway barrier, the NTSB concluded. The driver failed to intervene because he was distracted, likely because he was playing a game on a mobile phone provided by his company, which lacked a policy prohibiting employees from using devices while driving, the NTSB found.The NTSB has for years issued warnings about distracted driving and its deadly toll on the roadways. During the hearing, it called on Apple and other mobile phone manufacturers to develop protections to prevent misuse of electronic devices behind the wheel as a default setting.The agency also urged the NHTSA to conduct a fresh evaluation of Autopilot and take enforcement action if necessary if the agency finds defects.“We urge Tesla to continue to work on improving their Autopilot technology and for NHTSA to fulfill its oversight responsibility to ensure that corrective action is taken when necessary,” Sumwalt said.The death of 38-year-old Apple engineer Walter Huang in March 2018 in Silicon Valley prompted the NTSB to issue its strongest findings to date on safety risks posed by automated driving systems and driver distraction by mobile devices.“Limitations within the Autopilot system caused the SUV to veer towards the area with a concrete barrier that it ultimately struck, which the driver didn’t attempt to stop due to distraction,” the board found.NTSB recommended that both mobile device manufacturers such as Apple, Google and Samsung Electronics Co., as well as employers more broadly, do more to combat distracted driving.Mobile phone manufacturers should lock out features on the devices as a default setting, rather than as an optional feature that must be activated manually, the NTSB said. Employers should adopt policies banning non-emergency mobile phone use by employees when behind the wheel.The NTSB posted a document on Monday in its public record on the crash showing Apple didn’t have a policy on distracted driving.“I checked around with various groups and we do not have a policy related to phone use and driving,” wrote an Apple representative in an email response to the NTSB, which was posted to the safety board’s public investigative files on Monday.An Apple spokesman said the company expects its employees to follow the law. Tesla didn’t respond to a request for comment but has said it has updated Autopilot in part to issue more frequent warnings to inattentive drivers and that its research shows drivers are safer using the system than not. Tesla has also repeatedly stressed that drivers must pay attention while using Autopilot.The combination of growing mobile device use in semi-autonomous cars, in which drivers can take their eyes off the road for long periods, is a combustible mix, said NTSB Vice Chairman Bruce Landsberg.“What this crash illustrates is not only do we have the old kind of distraction” Lansberg said. Partly-automated driving systems present “yet another kind, which is the automation complacency of the system almost kind of always works, except when it doesn’t.”NTSB board member Jennifer Homendy criticized the NHTSA for issuing a recent statement saying it was trying to limit regulations to make cars more affordable.“What we should not do is lower the bar on safety,” Homendy said. “That shouldn’t even be considered for an agency that has the word safety in its name.”NHTSA said in a statement it was aware of the NTSB’s report and would review it. It also said distracted driving remains a concern and that drivers of every motor vehicle available currently on sale are required to remain in control at all times.It is also conducting more than a dozen of its own investigations into Tesla crashes linked to its semi-autonomous system known as Autopilot. Tesla is one of the leading developers of automated driving technology.Warnings to DriverHuang’s Tesla struck the concrete highway barrier at about 70 miles (113 kilometers) per hour. His hands weren’t detected on the steering wheel for about one-third of the drive and the car twice issued automated warnings to him.A protective barrier on the highway designed to reduce the crash impact wasn’t in place, the NTSB found.In addition, Tesla and government agencies haven’t bothered to respond to NTSB’s recommendations related to an earlier, similar crash.Smartphone manufacturers and software developers have taken some steps to address distracted driving. Apple’s iPhone, for example, has a feature to block text message and other notifications when driving that a user can activate in the phone’s settings.“The challenge is that they’re all passive systems. They require you as the owner of the phone to take that action, and many won’t or don’t because they don’t have to,” said Kelly Nantel, vice president of roadway safety at the National Safety Council.While the safety board stopped short of concluding that NHTSA’s lack of actions were part of the cause of the crash, it found that the regulator hadn’t done enough to set safety standards and called its approach to semi-automated vehicles “misguided.”Separately, the NTSB is prepared to cite the highway-safety regulator’s actions in another fatal Tesla crash as a contributing factor.In a March 2019 crash in Delray Beach, Florida, a Tesla drove into the side of a truck without braking, killing the driver. The conclusions of the investigation haven’t been published, but were read by Homendy during Tuesday’s meeting.(Updates with details from hearing, beginning in the fourth paragraph)To contact the reporters on this story: Ryan Beene in Washington at rbeene@bloomberg.net;Alan Levin in Washington at alevin24@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman, John HarneyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tesla and U.S. regulators strongly criticized over role of Autopilot in crash
    Reuters

    Tesla and U.S. regulators strongly criticized over role of Autopilot in crash

    NTSB board members questioned Tesla's design of its semi-automated driving assistance system and condemned the National Highway Traffic Safety Administration (NHTSA) for a "hands-off approach" to regulating the increasingly popular systems. NHTSA has "taken a nonregulatory approach to automated vehicle safety" and should "complete a further evaluation of the Tesla Autopilot system to ensure the deployed technology does not pose an unreasonable safety risk," NTSB said.

  • Bloomberg

    Jaguar Supplier ‘Paddling Like Hell’ to Support Slow-Selling EVs

    (Bloomberg) -- American Axle & Manufacturing Holdings Inc., a supplier that derives three quarters of its sales from trucks and SUVs, knows the times are a-changing for the auto industry: going electric is the way of the future.But almost all battery-powered models have been slow off the blocks, sales-wise. Take Jaguar’s I-Pace for example. American Axle supplies the electric drive system for the British brand’s debut plug-in crossover, but sales are running at roughly half of what the carmaker expected.“We’ve had to adjust our business accordingly,” American Axle Chief Executive Officer David Dauch said at an investor conference Tuesday. “That’s just a reflection of where electrification is, period. The Volt was that way, the Bolt was that way, the Leaf has been that way,” he said, referring to two Chevrolets and one Nissan model.“The only thing that’s really met its numbers,” Dauch said, “and it took some time to meet its number, was Tesla.”Dauch’s comments are an unusually candid assessment of the bind major auto suppliers find themselves in. With global vehicle demand already shrinking, they’re also being forced to support carmakers making an uncertain shift away from the tried-and-true internal combustion engine. So far, only Tesla Inc. and its Model 3 sedan has proved compelling enough to be bought in significant volumes.“We’re not here to argue electrification,” Dauch said during a Wolfe Research conference in New York. “We’re here to say that electrification is here, it’s only going to grow going forward.”Dauch, 55, took over as CEO from his father, Dick Dauch, in 2012, a year before the co-founder of the company died. Electric trucks, sport utility vehicles and crossovers pose the “biggest threat” to American Axle’s core business, David Dauch said. He specifically mentioned Rivian Automotive Inc., which raised almost $3 billion last year from investors including Amazon.com Inc. and Ford Motor Co. and plans to start selling R1T pickups and R1S SUVs late this year.“You’re seeing some of the lifestyle vehicles that are coming out or leisure vehicles that are coming out with the Rivians and the others,” Dauch said. “I acknowledge and applaud what they’re doing there. I think it’s great with the technology. I don’t see that cannibalizing the existing truck and SUV market today. I actually see it adding to that.”Workhorse trucks that are purpose-built for agriculture and construction work are going to continue to be around for some time, and they’ll primarily have internal combustion or gas-electric hybrid powertrains, Dauch said. While he sees American Axle continuing to benefit from demand for those big rigs, the company also is going to supply a high-performance luxury electric vehicle that he didn’t identify, plus a battery-powered model for Baojun, General Motors Co.’s budget brand in China.“I want us to have product offerings that are bookshelf technology and when the market and the customers are ready for that technology, we’re prepared to support that,” Dauch said. “We’re kind of like a duck on water, where we look calm on top of the water. But when we’re in the water, we’re paddling like hell.”To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson, Melinda GrenierFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Virgin Galactic Options Show Earnings May Push Shares to Record
    Bloomberg

    Virgin Galactic Options Show Earnings May Push Shares to Record

    (Bloomberg) -- Virgin Galactic Holdings Inc. options investors are anticipating a 23% move in the stock after the company’s fourth-quarter earnings report, with a tilt toward contracts betting on gains that would propel shares past last week’s record high.The stock has already more than tripled in 2020, trading around $35 on Tuesday afternoon, as institutional and retail investors alike pile in on the prospects of Richard Branson’s space transport company becoming profitable as an early entrant to a nascent industry. That enthusiasm is also evident in the options market, where daily volume has increased about 150% in the past four weeks.Options expiring Friday are leaning bullish. Among all of them, calls outnumber puts by a ratio of 1.12-to-1. A closer look at just those contracts with strike prices between $27 and $43, which make up the bulk of open interest, shows calls outnumber puts by 1.27-to-1.The earnings release due out after the close of trading Tuesday will be the second since Virgin Galactic Holdings Inc. acquired Virgin Galactic LLC for $1.3 billion in October. However, it will be the first accompanied by a conference call. Wall Street coverage is sparse, with only three analysts officially covering the stock. All of them have buy ratings, and their average price target is $19.Options expiring on Friday make up about 21% of the total open interest. Among all contracts on Virgin Galactic, the ratio of calls to puts is 1.75-to-1. Current implied volatility is elevated at 307%, which is more than 3 times the 90-day average of 89.To contact the reporter on this story: Gregory Calderone in New York at gcalderone7@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer, Brendan WalshFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • NIO Soars on China Government Deal Bernstein Calls a Bailout
    Bloomberg

    NIO Soars on China Government Deal Bernstein Calls a Bailout

    (Bloomberg) -- NIO Inc. reached a preliminary agreement to relocate its headquarters to another Chinese city in a deal that would raise much-needed cash. The electric-car maker’s shares surged.The framework pact with the municipal government of Hefei, where NIO’s main manufacturing hub is already located, is still subject to discussion. But in light of the partnership, the company said it plans to raise more than 10 billion yuan ($1.43 billion).NIO shares soared as much as 34% to $5.19 shortly after the open of regular trading Tuesday in New York. The stock had been slumping since early last year, as heavy spending on marketing and splashy showrooms failed to generate demand for its ES8 and ES6 electric sport utility vehicles. More recently, the company has had to contend with concerns about Tesla Inc. posing a greater competitive threat by starting local production near Shanghai.“We think the news puts speculation around NIO’s funding issues to bed -- at least in the foreseeable future,” said Robin Zhu, an analyst at Sanford C. Bernstein Ltd. who called the deal a bailout by the Hefei government and upgraded NIO to the equivalent of a hold.“We remain dubious over the company’s fundamental outlook, and remain concerned about Tesla competition,” Zhu wrote in a report. “But the existence of a government backstop means the ‘EV call option’ thesis for investing in NIO gains some credibility.”(Updates with regular trading in the third paragraph)\--With assistance from Chunying Zhang.To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Andrew Noël, Chester DawsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tesla’s Followers Are Trying to Piggyback Off Elon Musk’s Sales Wins
    Bloomberg

    Tesla’s Followers Are Trying to Piggyback Off Elon Musk’s Sales Wins

    (Bloomberg) -- Tesla Inc. has been a trailblazer for direct-to-consumer sales, but the path for other electric-vehicle startups is still pretty thorny.Plug-in truck maker Rivian Automotive Inc., which aims to begin selling its R1T pickup and R1S SUV late this year without a franchised dealer network, had hoped to build its first store in Colorado, where Tesla has three. But almost a year after raising the idea with state legislators, it’s still lobbying them -- with EV enthusiasts and car dealers lining up to testify for and against.Rivian will instead open its first showrooms in California, which makes it easier for newcomers than most other states that have tough, decades-old franchise laws designed to protect car dealers.Tesla has spent years lobbying states to loosen these laws, which ban car manufacturers from owning or operating their own stores. Tesla, which sells cars at fixed prices online, now has showrooms or galleries –- spaces to display vehicles without technically selling them -- in 28 states. It did that largely by finding loopholes and negotiating deals limited to its own business.The Model 3 maker reached a settlement last month in the home state of General Motors Co. and Ford Motor Co. when a Michigan court effectively allowed Tesla to bypass laws preventing most auto manufacturers from selling directly to consumers.To pry open the door further, Rivian is waging a state-by-state campaign on behalf of its operations and those of others to come. The effort is led by Jim Chen, a former Tesla lobbyist who’s now vice president of public policy at the Michigan-based startup.“These laws were never intended to shut out competition between different brands,” Chen said by phone last month. “A manufacturer should freely be able to choose whether it wants to enter the franchise system or sell directly.”Dealers, of course, feel differently. They say cars aren’t suited for online-only sales and that franchise laws protect consumers. Tim Jackson, president of the Colorado Automobile Dealers Association and a vocal Tesla critic, helped kill Rivian’s proposal last year, which would have allowed any company solely making EVs to sell them in Colorado without dealers.“We don’t want to further broaden, or further make accessible the factory-to-consumer direct sales model,” Jackson said in an interview last month. “We prefer, of course, the franchise model.”Jackson was back at the legislature in Denver on Feb. 18 with a posse of dealers to thwart Rivian’s latest proposal, which would expand the carve-out to any car manufacturer with EVs to sell. The bill has survived in the state senate so far, in part with new language that addresses dealers’ fears by reiterating their exclusive rights to sell existing brands in specific geographic areas.One might think Colorado, which became the 10th state to adopt California’s electric-vehicle mandate last September, would be relatively friendly territory for Rivian. But even with bipartisan sponsorship and the backing of newly elected Democratic Governor Jared Polis, passage seems far from assured.With an onslaught of new electric models coming from automakers like Ford and Volkswagen AG, dealers worry that such exceptions could give all manufacturers free rein to compete directly against them.Traditional carmakers are already beginning to shake up their retail models to sell EVs. Volkswagen announced Feb. 19 it’s using a new approach in Germany for its ID family of electric cars. Dealers will receive a commission and bonus but will no longer negotiate price or arrange financing or insurance -- an important profit source.Other startups intend to follow Tesla’s lead. California-based Lucid Motors Inc. wants to sell its luxury electric sedan, the Air, through its own network of stores.Rivian, which raised nearly $3 billion last year from investors including Amazon.com Inc. and Ford, has also introduced bills in Washington, New York and Pennsylvania. At the same time, it plans to open stores in friendlier states including California, Florida, Massachusetts and Utah, Chen said. The first ones will open around Los Angeles and San Francisco in the next year.Like Tesla, Rivian will allow people to set up a test drive, configure, order online and take home delivery.It’s also planning a subscription service that will include finance and insurance, following the lead of Porsche and Volvo Cars, Chief Executive Officer R.J. Scaringe said in an interview last month. Volvo dealers in California last year petitioned state regulators to investigate the company’s Care by Volvo program, arguing it violates franchise laws.The plan to service cars is still a bit opaque, leaving Rivian open to criticism that it can’t provide adequate maintenance for its vehicles. But Chen told legislators at the hearing in Denver this month that Rivian plans to establish service centers and mobile service teams -- like Tesla does -- and that it may rely on its strategic investors for help with infrastructure to distribute auto parts.The automotive arm of privately held Cox Enterprises Inc., which owns a stable of auto businesses including Kelley Blue Book and Manheim auction services, put $350 million into Rivian in September. That’s raised the hackles of some dealers, who share data and buy ads and used cars from Cox.“We do business with Cox Automotive,” said Thom Buckley, a Colorado dealer who testified at the hearing. “I’m very concerned about doing business with a vendor who will compete with us.”\--With assistance from Ed Ludlow.To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester DawsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S. safety board to issue new recommendations in probe of fatal Tesla Autopilot crash
    Reuters

    U.S. safety board to issue new recommendations in probe of fatal Tesla Autopilot crash

    The National Transportation Safety Board will hold a public hearing on Tuesday to establish the probable cause of a fatal March 2018 Tesla Autopilot crash in California and will issue a series of safety recommendations, two people briefed on the matter said on Monday. The safety board is expected to issue recommendations to the National Highway Traffic Safety Administration (NHTSA), Tesla and a California transportation agency, the sources said. The NTSB issued recommendations after other Tesla Autopilot crashes and planned to reiterate some of the guidance.

  • S&P 500’s 5% Rout Hammers Mom-and-Pop Investors Who’ve Piled In
    Bloomberg

    S&P 500’s 5% Rout Hammers Mom-and-Pop Investors Who’ve Piled In

    (Bloomberg) -- If the source of any of the resilience in U.S. stocks this year has been retail investors fired up by zero-commission trading, markets are about to find out how sturdy that money is.The sell-off stands as the first major test for mom-and-pop investors who, emboldened by a brokerage price-war, have effectively doubled their trades in equities over the last several months. The surge in interest from a group notoriously known for chasing winners has helped fuel a rally in stocks from tech giants to small-caps.The shares they love, from Tesla Inc. to Plug Power Inc., are plunging now, with a Goldman Sachs Group Inc. basket of retail favorites falling the most in nine months.“A lot of that money does tend to be hot money,” said Alec Young, managing director of global markets research at FTSE Russell. “It’s very sensitive to near-term losses.”Global markets buckled Monday, pushing the S&P 500 down almost 5% from its record close five days ago, the bull market’s biggest interruption in six months. Concern about a possible pandemic drove investors out of risky assets and into bonds and gold.Goldman’s basket tracking the 50 most-popular stocks among individual investors fell 3.9%, the biggest retreat since last May. All but two declined as Tesla and Plug Power each sank more than 6%. It’s a decisive turnaround for retail investors, whose picks as tracked by Goldman had surged 13% in 2020 before this week. That’s almost four times as much as the S&P 500.Though impossible to prove, a case exists that individual investors streaming into the market have contributed to the relative buoyancy of equities at a time when fixed-income has sent much more dire signals. The stock market rally that fell apart Monday came against a backdrop of steadily falling yields in Treasury markets that are dominated by institutional traders.Others see a perfectly ordinary bull market occurring in stocks that requires no special influence or agency to drive it and are skeptical individuals have played an outsize role. If anything, it’s bonds, not stocks, that are being boosted by small investors.“A lot of what is happening with bonds has to do with demographics,” said Michael Antonelli, market strategist at Baird. “Baby Boomers are retiring, the world is starved for yields.” The equity market, on the other hand, “is really controlled by institutions. This up-and-down price action, that’s not retail money,” he said.The bull market, which turns 11 years old in two weeks, also predates the recent uptick in small-investor interest. At an all-time high last week, the S&P 500 traded at 19 times forecast earnings, the highest multiple since the dot-com era.Perhaps no other investor group than retail has a greater propensity to chase winners regardless of valuations and company fundamentals. Among retail’s darling stocks, 10 scored year-to-date gains exceeding 20%, including Plug Power, Tesla and Virgin Galactic. Yet only two made profits in 2019.While hardly the only ones to fall into love with megacap tech, their affection for Apple Inc., Amazon.com Inc., Facebook Inc. and Microsoft Corp. has likely contributed to a top-heavy market that some strategists have warned is becoming hard to sustain.It reminds Peter Cecchini of the retail over-involvement in the late 1990s that spelled the golden age of equities and foreshadowed the crash.“While retail involvement in and of itself is not always a sign of frothy markets, when that involvement generally appears to be based on a fear of missing out or otherwise uniformed decision-making, as now, then it is cautionary,” said Cecchini, chief global market strategist at Cantor Fitzgerald LP. “The coronavirus may help demonstrate how quickly it can all come unraveled when fundamentals disconnect from the narrative hype.”Retail money, indifferent participants for much of the 11-year bull market, just made an epic comeback, lured by brokerages slashing commission fees to zero and an equity rally that added $7.5 trillion in market values last year. Daily average trades at E*Trade Financial Corp. and TD Ameritrade Holding Corp. have almost doubled to all-time highs since last September, data compiled by Sundial Research showed.“History has shown that retail investors do respond to near-term volatility, so folks are rather fickle,” said Mike Skillman, chief executive officer of Cadence Capital Management. “If we see an increase in volatility in the next several weeks, flows into the market will slow down, if not reverse.”\--With assistance from Claire Ballentine.To contact the reporters on this story: Lu Wang in New York at lwang8@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Chris Nagi, Richard RichtmyerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Tesla to Face Fresh Autopilot Scrutiny After Company Snubs NTSB

    (Bloomberg) -- The National Transportation Safety Board on Tuesday will convene its second hearing on a fatal crash involving Tesla Inc.’s automated driver-assist technology even though the pioneering automaker hasn’t filed formal responses to recommendations stemming from the first one more than two years ago.The NTSB in 2017 recommended that automakers including Tesla make their driver-assist systems more resilient to misuse by inattentive drivers, and limit the operation of those systems to only the driving for which they were designed.Automakers -- including Volkswagen AG, Nissan Motor Corp., BMW AG -- have told NTSB how their systems ensured driver engagement, which agency deemed acceptable responses. Tesla has had no formal correspondence with NTSB officials responsible for monitoring how safety recommendations are implemented, NTSB spokesman Chris O’Neil said.“It’s not the norm,” O’Neil said. “Most recommendation recipients respond in the prescribed 90-day window.”Tesla didn’t respond to a request for comment but has said it updated Autopilot in part to issue more frequent warnings to inattentive drivers.The role of Tesla’s automated driver-assist features known as Autopilot along with other factors including driver distraction and highway infrastructure will be examined at an NTSB meeting on Tuesday examining a March 2018 crash in Mountain View, California, that killed 38-year-old Apple Inc. engineer Walter Huang after his Tesla SUV slammed into a highway barrier while using Autopilot.The probe was marked by an unusually public display of tensions between the agency and Tesla Chief Executive Officer Elon Musk that peaked when the agency kicked Tesla off the probe after he released information about the crash despite prohibitions against such disclosures during an investigation.The hearing could hold lessons for the auto industry as automated driving features are becoming increasingly common on new vehicles. Several other automakers have also equipped their vehicles with technologies that can provide automated steering, accelerating and braking, and some have installed systems to ensure drivers pay attention. General Motors Co. and Subaru Corp. use infrared cameras to track head and eye movement, and Nissan last year said it would include a similar driver monitor in a system designed to offer hands-free driving on the highway.Tesla has said Autopilot makes drivers safer, pointing to internal data it releases quarterly that it says demonstrates that drivers crash less frequently while using it than while driving manually. The company stresses that drivers must remain attentive with their hands on the wheel while using Autopilot, which monitors by sensing steering wheel inputs by the driver.The company has said it has adjusted the the warnings drivers receive if their hands are off the wheel for too long, which federal investigators have faulted for being easy to sidestep.In 2017, the NTSB closed its first probe of a fatal crash linked to Autopilot by calling on companies to develop ways to better ensure drivers pay attention while using automated driving features that require human supervision. It also called on automakers to take steps to limit the use of automated driver-assist features to only the driving scenarios for which they’re designed.The recommendations stemmed from the agency’s probe of a 2016 crash in which former Navy SEAL Joshua Brown died after his Tesla Model S crashed into a commercial truck crossing the road in front of him on a Florida highway while using Autopilot. The agency cited an over-reliance on the car’s automation by Brown and a lack of built-in safeguards to prevent inattention as key factors that contributed crash.Last fall, the NTSB again cited inattention and Autopilot’s design in a January 2018 crash in which a Tesla driver rear-ended a parked fire truck on a freeway near Los Angeles. The agency said Autopilot’s design allowed the driver, who was uninjured in the crash, to stop paying attention to the road.After that crash, Tesla said it has updated Autopilot in part to issue more frequent warnings to inattentive drivers. The company has also been in regular contact with NTSB investigators and provided information about its systems to the agency, O’Neil said.“That doesn’t replace the need for formal responses to safety recommendations,” he said. “It’s a process designed to help us understand what they’re doing to implement those safety recommendations and what their progress toward them are, which may inform whether we feel other recommendations are necessary.”Records from the Mountain View investigation hint at several factors the NTSB could highlight during the meeting Tuesday. With Autopilot engaged and set to cruise at 75 miles per hour, Huang’s 2017 Tesla Model X sped up and slammed into a concrete barrier. Vehicle data showed neither the driver nor the vehicle’s automatic systems applied the brakes prior to impact, the NTSB has said.Huang had complained that Autopilot had repeatedly veered his vehicle toward the same spot during earlier trips on that same stretch of highway, according to the agency. Data taken from his Tesla’s computer confirmed that the situation had occurred at the same location four days before the fatal crash and once more several weeks earlier, records released by the NTSB show.The tip of the concrete lane divider struck by Huang’s Tesla was supposed to have been protected by a crash attenuator, a device attached to highway infrastructure to absorb impact forces like a car’s crumple zone. It was damaged 11 days earlier and hadn’t been repaired by the California Department of Transportation before Huang’s crash.Records reviewed by NTSB found Huang was playing a game on his Apple-provided mobile device before the collision, the agency said, citing data transmission records. However, the data couldn’t show how engaged he was with the game or whether he was holding the device with both hands at the time of the crash, the NTSB said.Crash investigators at the National Highway Traffic Safety Administration have opened 14 inquiries into Tesla crashes believed to involve Autopilot, plus 11 more involving other manufacturers with partial-automation systems.\--With assistance from Alan Levin.To contact the reporter on this story: Ryan Beene in Washington at rbeene@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Stock-Market Bubble Fears Are Greatly Overblown
    Bloomberg

    Stock-Market Bubble Fears Are Greatly Overblown

    (Bloomberg Opinion) -- Anyone paying attention to finance, markets and the economy doesn't have to look very hard to find complaints that we are on the cusp of a bubble of one type or another.Perhaps the area most often targeted by the bubble believers is tech. I was curious about just how widespread this belief is: “Tech bubble” has doubled on Google Trends this year alone; Google News generates more than 3.6 million hits for the phrase.(1)Defining a bubble isn't too hard and one will do as good as another. “A market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset. Bubbles are often hard to detect in real time because there is disagreement over the fundamental value of the asset,” Nasdaq says.  So let's turn to the pro-bubble argument: It has been a decade since the financial crisis and two decades since the dot-com implosion. That's enough time for people to have forgotten the trauma of that disaster. Since the Great Recession ended, there has been too much capital sloshing around, leading to excessive tech valuations. And not just in public equities, but in private markets, too. Unicorns and other SoftBank Vision Fund debacles have imploded, an early warning sign for publicly traded companies, the argument goes.Central banks have made the bubble worse, providing cheap capital that has artificially inflated profits. The bubble advocates also urge us not to overlook the impact of these low borrowing costs on the surge in share buybacks; reducing the total amount of a public company’s shares outstanding has the effect of making earnings per share look better.Then there are the anecdotes: Tesla’s stock has more than doubled in the past three months, and the company now has a market value of more than $165 billion -- higher than Volkswagen, General Motors and Ford combined. This is to say nothing of the companies valued at more than $1 trillion, such as Apple, Microsoft, Amazon and Google parent Alphabet. But let's also be generous and acknowledge that some things do look overvalued, whether it's Bitcoin (maybe), WeWork (obviously) or Tesla (I'm not getting in the middle of that one).But here's the thing: None of that is proof of a stock-market bubble. Let's look at some themes and issues to demonstrate why this is so:Business models: In the 1990s, the internet captivated the collective imagination of investors, too many of whom indiscriminately threw cash at anything with dot-com attached to it. The 2000 collapse taught investors that it took more than a high-concept idea to make a stock worth buying: growth and future cash flow matter a lot, too. The collapse of WeWork’s initial public offering last year brought this home once again. Investors realized that renting out office space short term while locking the company into long-term, expensive real-estate leases was a terrible business model. Public investors grasped this flaw -- something private investors seemingly failed to understand -- and the market worked the way it's supposed to. Revenue and earnings: Unlike the dot-coms of the '90, today's tech businesses are gigantic cash machines. Apple posted fourth-quarter revenue of $91.8 billion and net income of $22.2 billion. Without much fanfare, Microsoft's revenue grew 14% in the latest quarter, to $36.9 billion, while net income surged 38% to $11.6 billion. Alphabet, Amazon, Facebook all continue to mint revenues and profits. These companies also have accumulated hundreds of billions of dollars in cash. This is not the profitless tech boom of the 1990s.Sentiment: Maybe there is some excessive optimism. But that isn't the same as the full-blown delusion that bubbles produce. Talk of bubbles is offset by chatter about recession: Remember that less a year ago investors were anticipating a downturn and in the fourth quarter of 2018 major market indexes fell 20%, meeting the normal definition of a bear market, however brief. Meanwhile, the American Association of Individual Investors Bullish Readings index is 40.6, which is just a hair above the average reading of 39.5 for the past 25 years.Performance: Broad market performance is robust, but not crazy. Last’s year's 31% gain in the S&P 500 is misleading: most of that simply reflected the rebound from the 2018 fourth-quarter tumble cited above.So let's take a step back and consider the S&P 500 since 2015: It has had annual gains of 11.8%, for a total cumulative five-year return of 75%. Before fintwits howl “Now do the Nasdaq,” here it is: 17.6% annually and cumulative total returns of 125%. Fine, good, but not bubble material.Now compare those figures with the five years before the market peaked in March 2000: The Nasdaq generated annual returns of 60% and a five-year total return of 946% during that period, while the S&P 500 gained 25% annually and 211% for the five years. This is obvious, right?Sure, there are pockets of excessive optimism and foolishness in markets. There always are. But there also are lots of companies that are not participating in this bull-market rally. Those who were around in the 1990s know what a real bubble looks like: This isn't it.(1) Some recent examples:Barron’s:"Tesla’s Manic Rally Isn’t the Only Sign of a Market Bubble. What You Need to Know"CCN:"An Epic Stock Market Crash Is Looming, Analysts Warn"Yahoo:"The stock market is on steroids and it could end up like the dot com bubble"Barron’s (again): "Is the Fed Building Another Stock Bubble?"Bloomberg: “Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades”To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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