359.01 -0.51 (-0.14%)
After hours: 7:59PM EST
|Bid||358.90 x 1000|
|Ask||359.20 x 3000|
|Day's range||347.80 - 359.99|
|52-week range||176.99 - 379.49|
|Beta (3Y monthly)||0.59|
|PE ratio (TTM)||N/A|
|Earnings date||28 Jan 2020 - 3 Feb 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||264.97|
(Bloomberg) -- The National Transportation Safety Board concluded its first investigation of a fatal crash involving an autonomous test vehicle by issuing several recommendations aimed at tightening the limited oversight of companies that test self-driving cars on public roads.Among other things, the board called for developers of autonomous vehicles to be required to assess their safety procedures and not test cars on the road until regulators sign off on the document.“We feel that we’ve identified certain gaps and these gaps need to be filled, especially when we’re out testing vehicles on public roadways,” NTSB Chairman Robert Sumwalt said after a board meeting on the March 2018 crash involving an Uber Technologies Inc. self-driving test vehicle and a pedestrian.The case had been closely watched in the emerging autonomous vehicle industry, which has attracted billions of dollars in investment from companies such as General Motors Co. and Alphabet Inc. in an attempt to transform transportation.“Ultimately, it will be the public that accepts or rejects automated driving systems and the testing of such systems on public roads,” Sumwalt said. “Any company’s crash affects the public confidence. Anybody’s crash is everybody’s crash.”The NTSB detailed a litany of failings by Uber that contributed to the death of Elaine Herzberg, 49, who was hit by an Uber self-driving SUV as she walked her bicycle across a road at night in Tempe, Arizona.Uber halted self-driving car tests after the accident. Information released since then highlighted a series of lapses -- both technological and human -- that the board cited as having contributed to the crash.Uber resumed self-driving testing late last year in Pittsburgh.The “immediate cause” of the crash was the backup safety driver’s failure to monitor the road ahead because she was distracted by her mobile device, the board found. A lax safety program at Uber contributed to the accident, the NTSB found.The National Highway Traffic Safety Administration said it would review the NTSB’s report and recommendations. “While the technology is rapidly developing, it’s important for the public to note that all vehicles on the road today require a fully attentive operator at all times,” the agency said in a statement.In a statement, Uber said it regrets the fatal crash and is committed to improving the safety of its self-driving program, and implementing the NTSB’s recommendations. “Over the last 20 months, we have provided the NTSB with complete access to information about our technology and the developments we have made since the crash,” Nat Beuse, head of safety for Uber’s self-driving car operation, said in a statement. “While we are proud of our progress, we will never lose sight of what brought us here or our responsibility to continue raising the bar on safety.”The Uber vehicle’s radar sensors first observed Herzberg about 5.6 seconds prior to impact before she entered the vehicle’s lane of travel and initially classified her as a vehicle. The self-driving computers changed its classification of her as different types of objects several times and failed to predict that her path would cross the lane of self-driving test SUV, according to the NTSB.The modified Volvo SUV being tested by Uber wasn’t programmed to recognize and respond to pedestrians walking outside of marked crosswalks, nor did the system allow the vehicle to automatically brake before an imminent collision. The responsibility to avoid accidents fell to the lone safety driver monitoring the vehicle’s automation system. Other companies place a second human in the vehicle for added safety.The safety driver was streaming a television show on her phone in the moments before the crash, despite company policy prohibiting drivers from using mobile devices, according to police. The NTSB has also said that Uber’s Advanced Technologies Group that was testing self-driving cars on public streets in Tempe didn’t have a standalone safety division, a formal safety plan, standard operating procedures or a manager focused on preventing accidents.“The inappropriate actions of both the automatic driving system as implemented and the vehicle’s human operator were symptoms of a deeper problem, the ineffective safety culture that existed at the time,” Sumwalt said at the opening of the hearing.Uber made extensive changes to its self-driving system after several reviews of its operation and findings by NTSB investigators. The board pointed out that Uber had been very cooperative with its inquiry. The company told the NTSB that the new software would have been able to correctly identify Herzberg and triggered controlled braking to avoid her more than 4 seconds before the original impact, the NTSB has said.To contact the reporters on this story: Ryan Beene in Washington at firstname.lastname@example.org;Alan Levin in Washington at email@example.comTo contact the editors responsible for this story: Jon Morgan at firstname.lastname@example.org, John Harney, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China's Didi Chuxing will trial a premium ride hailing service in Japan offering Tesla , Lexus and Mercedes Benz vehicles, a company representative said. The ride-hailing firm will roll out a "DiDi Premium" trial later this month in some areas in Tokyo in a move to diversify its operations in Japan, the representative told Reuters via a text message on Tuesday.
(Bloomberg) -- The world’s biggest lithium-ion battery is about to get even bigger, with Tesla Inc. set to beef up capacity at the Hornsdale site in South Australia.The system will be expanded by 50% to 150 megawatts, according to an announcement from Neoen SA, the French company that operates the site. The storage site has already saved consumers more than A$50 million ($34 million) in its first year of operation.Since its 2017 installation, the battery has helped to stabilize the grid, avoid outages and lower costs by offsetting the intermittency of renewable power generation. That’s helped blaze a trail for other plants around the world. “The Hornsdale battery is a ground-breaking project that has proven what batteries can do for our electricity system,” said Darren Miller, head of Arena, the government’s renewable energy agency, which is helping to fund the expansion. Affordable utility-scale batteries are seen as the missing link needed to make solar and wind power realistic competitors to fossil fuels. While green sources can be cheaper, they lack the reliability of traditional fuels, making the carbon-intensive energy difficult to jettison, which is necessary to avoid catastrophic impacts from climate change.In the meantime, the storage industry is increasingly important in places like South Australia, which has relatively less access to traditional fossil-fuel sources such as coal and natural gas. While Tesla’s outback battery was never intended to be a cure-all for the state’s power problems, it has provided valuable insights into the potential contributions storage systems offer grids.A raft of big battery projects are in development in Australia as energy planners focus on firming up the country’s expanding wind and solar capacity. Another French company, Total Eren SA, is looking to build a 270 megawatt storage system for its Kiamal solar farm in Victoria, while EPS Energy is looking to tap into the proposed South Ausralia-New South Wales interconnector with a 280 megawatt solar farm and 140 megawatt battery at Robertstown.Neoen has also outlined plans to build a giant renewables complex in South Australia, including battery storage that could dwarf Hornsdale. The Goyder South project will include up to 1,200 megawatts of wind generation, 600 megawatts of solar and 900 megawatts of battery storage, with an initial investment of up to A$1 billion, Neoen said in September.(Updates with government comment in fourth paragraph)To contact the reporter on this story: James Thornhill in Sydney at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Rob VerdonckFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Volkswagen AG’s chief executive officer, who’s grown increasingly chummy with Tesla Inc.’s Elon Musk, said the electric-vehicle maker may find Germany a more accommodating place for manufacturing than its home state of California.“What Tesla probably is looking for is the environment, the infrastructure, to build high-quality cars, which is probably much more the case here in Germany than on the West Coast of the United States,” VW CEO Herbert Diess told analysts and investors on a call Monday. Musk announced last week that Tesla will build a vehicle and battery factory on the outskirts of Berlin, plus an engineering and design center within the city limits. While the plant will be the second to assemble Teslas outside the U.S. -- one near Shanghai is on the verge of making cars for sale -- the company’s massive facility in Fremont, California, isn’t going anywhere. Preparations are underway for Model Y crossover production to start next summer.Tesla hasn’t yet said where it will build a new electric pickup that Musk, 48, plans to unveil in Los Angeles later this week.\--With assistance from Christoph Rauwald.To contact the reporter on this story: Craig Trudell in New York at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Ford Motor Co. is reinventing one of its marquee models -- the Mustang muscle car -- as a battery-powered crossover to become a player in the electric-vehicle market that is expected to take off in the coming decade.In a splashy ceremony Sunday ahead of the Los Angeles Auto Show, the carmaker unveiled the Mustang Mach-E, a swoopy hatchback with distinctive pony-car haunches and familiar shark nose that it claims has the power to take on Porsche. When it goes on sale next fall, Ford hopes to convince mainstream buyers its electrified Mustang is an alternative to the Tesla models dominating the EV market.And Ford, which exited the battery-car business last year when it pulled the plug on its slow-selling Focus EV, is betting it’s cracked the code on turning a profit on plug-ins. By building the Mach-E in Mexico, where labor costs are low, and with a price starting at $43,895, the automaker says it will avoid the losses automakers typically suffer selling high-cost EVs.The company is even considering making the car in China, depending on how the trade war plays out, Ford Chief Executive Officer Jim Hackett told Bloomberg News. Read more: Ford May Make New Electric Mustang Mach-E in China (1)The Mach-E will make a profit “on vehicle one,” he said in a Bloomberg TV interview. “That’s surprising a lot of people because electrics have not had a history of making money. This will.”Hackett said it will turn a profit because the vehicle “creates the passion that follows with Mustang” and prices start in the mid-$30,000 when U.S. subsides on electric cars are factored in. “So it’s attractive to customers.”Ford is building it in Mexico because it had an open factory there and it needed to be overhauled to build an electric vehicle, Hackett said. “As we start to adopt more electric vehicles — we had capacity down there, we had no capacity in the United States — we’re going to have electric capacity here in the United States. They’ll be building other electric platforms.”Still, it’s a high-risk gambit. The Mustang is Ford’s signature sports car, having sold more than 10 million units since it debuted in 1964 with simultaneous cover stories in Time and Newsweek. When Ford decided to abandon the traditional passenger-car business last year, it spared only one model: The Mustang.New ConfigurationFor more than half a century, the Mustang has embodied high-octane power and unbridled strength. And Ford will continue to make gasoline-fueled versions of the classic muscle car.The Mach-E is not only the first electric version of the Mustang, it’s also the first time it has been configured into a sport utility vehicle. That will test the elasticity of a brand built on low-slung speedsters.“Calling this a true sports car would be stretching it,” said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive. “The market obviously has gone in the direction of the SUV body type, that’s what’s selling. But the Mustang is not an SUV. It’s been a sports car.”Ford, having struggled to sell more mundane electric cars, is embarking on a strategy to electrify its icons, starting with the Mustang and following quickly thereafter with a plug-in version of its top-selling F-150 pickup. It is part of $11.5 billion the automaker is investing to roll out 40 electric and hybrid vehicles by 2022. The idea is to show that Ford’s EVs can be fast and tough and are not just “compliance cars” intended to meet more stringent environmental regulations around the world.“We changed our whole strategy two years ago,” Ted Cannis, Ford’s global head of electrification, said at a briefing on the Mach-E at the company’s design studios in Dearborn, Michigan. “We said, ‘Let’s play to our strengths -- performance vehicles, pickups, vans, SUVs, the things Ford knows how to do.’”EV GrowthRegulations to curb emissions will drive demand for electric vehicles over the next decade, especially in China, the world’s largest auto market. In the U.S., where President Donald Trump has eased fuel economy rules, EV growth will be slower, but still strong. Sales of battery-powered vehicles will quadruple by 2025 to 809,537 models, accounting for 4.8% of the U.S. auto market, up from 1.3% now, according to LMC Automotive.New electric offerings will mushroom to 110 choices in the U.S. by the middle of next decade, from just 19 now, LMC predicts. Standing out in such a crowded field will be difficult, especially for Ford, which ranked fifth behind Toyota, Tesla, Honda and Nissan among consumers surveyed recently by CarGurus on which brand of electric vehicle they would consider buying.That’s a key reason Ford decided to affix the Mustang pony to the front of the Mach-E, which originally was conceived in 2017 as merely inspired by the sports car. But as Ford executives were shown design concepts by the small team working on the project, they kept asking for more Mustang influence. By early last year, the decision was made to call it a Mustang.Design Pressures“This had massive implications,” said Jason Castriota, brand director of battery-electric vehicles for Ford. “You can only imagine the amount of tension and strife this brought through the company.”That pressure was most acute on the engineers, who had to come up with a way to translate fossil-fuel fury into clean-running power from lithium-ion batteries.“When we realized we weren’t really doing a Mustang-inspired thing, we were doing a Mustang, the pressure ratcheted up,” said Ron Heiser, the Mach-E’s chief engineer. “We’ve got a lot of people in this company that are staking their engineering reputations that we’re delivering a Mustang.”Electric motors have some inherent advantages, such as immediate thrust. Heiser’s engineers placed them between the wheels fore and aft, which, combined with batteries configured like a skateboard beneath the car, create an even weight distribution. That allows the car to ride low and hug the road like a Mustang.Heiser says the base all-wheel-drive Mach-E can beat a Porsche Macan SUV from zero to 60 miles per hour, and he claims the 450-horsepower GT version comes “very, very close” to a Porsche 911 GTS. For those who miss the roar of a big V8, he says the Mach-E will have tunable technology to create an “authentic” sound.‘Back in the Game’The focus on performance should make the Mach-E “a more compelling alternative” to Tesla’s similarly priced Model 3 sedan, Dan Levy, a Credit Suisse analyst, wrote in a Nov. 14 report. “The ultimate proof point of its success will be if it can truly take battery electric vehicle share from the Model 3 -- far from guaranteed.”Ford won’t say how many Mach-Es it expects to sell annually, but it will be the only model built at the 4.3 million square foot factory in Cuautitlan, Mexico, that most recently was cranking out more than 100,000 Fiesta subcompacts a year.LMC Automotive predicts the Mustang Mach-E will top out around 50,000 sales annually by 2021.“This is the first step in getting back in the game for Ford, after being viewed as behind in this space,” Schuster said. “They need to have a solid launch with no quality issues and, from a driving standpoint, it has to live up to the name.”(Updates with detail on possible China production in third paragraph.)\--With assistance from Ed Ludlow and Will Davies.To contact the reporter on this story: Keith Naughton in Southfield, Michigan at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Kevin MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. plans to invest 4 billion euros ($4.4 billion) in its newly announced factory in Berlin that will produce up to 150,000 cars annually, Bild reported on Sunday, without saying how it obtained the information.The first production line at Tesla’s Berlin factory, unveiled by founder and Chief Executive Officer Elon Musk earlier this week, will manufacture the company’s SUV Model Y, which could be produced as early as 2021, according to the newspaper. The electric car maker could receive about 300 million euros in subsidies subject to approval by the European Union, Bild reported.Musk has until now relied on a single auto-assembly plant in Fremont, California, to build a company that has a market value of more than $63 billion. The Berlin site is to initially employ 3,000 people, a number that could eventually rise to 7,000, according to Bild.Tesla’s spending is dwarfed by a plan announced by German rival Volkswagen AG on Friday. The Wolfsburg-based car maker said it will spend 60 billion euros, compared with 44 billion euros previously announced, on electric vehicles, automated driving and other new technology over a period of five years.To contact the reporter on this story: Eyk Henning in Frankfurt at email@example.comTo contact the editors responsible for this story: Kenneth Wong at firstname.lastname@example.org, James Amott, Todd WhiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Earlier this week, my Bloomberg Opinion colleague Chris Bryant examined the ongoing troubles for advanced jet engines used on today’s commercial airliners. These engines now seem to be reaching their technical limits, and as Bryant says, we may be asking too much of the technology.That’s not great news for the companies making those turbines, or for those flying the aircraft. It’s also not the best news for the climate, given the trajectory of emissions from air travel and air freight. Carbon dioxide emissions from commercial aviation made up 2.4% of global emissions in 2018 and, according to the International Council on Clean Transportation, have grown 32% in just five years.The geography of those emissions is highly concentrated. Three markets — the U.S., the European Union and China — account for more than half of all emissions; the top 10 emitters contribute more than 70% of the global total.There’s something hopeful, actually, in that geographical distribution. High concentration means that tackling emissions in just three markets can have an outsized impact, and standards set in those large markets are easy for others to follow. There’s another aspect to the distribution of aviation emissions that’s worth examining: emissions by type of aircraft. Bryant writes of problems with engines on both widebody and narrowbody aircraft: the Rolls-Royce Holdings Plc Trent 1000 engines used on the widebody Boeing Co. 787, and United Technologies Corp. subsidiary Pratt & Whitney’s geared turbofan used on the narrowbody Airbus SE A320neo. While widebody aircraft make up one-third of global emissions, narrowbody and regional passenger plans are almost half. If the turbines used to propel the largest and longest-range of aircraft are approaching technical limits but almost half of emissions are from shorter-range and smaller aircraft, then there’s space to innovate, for emissions’ sake, at the short and small end. And that space looks electric and hybrid. Next month, Vancouver-based Harbour Air will fly its first electric seaplane, a De Havilland DHC-2 Beaver prototype retrofitted with a propulsion system from Seattle-based electric aviation company MagniX. It’s a first look at what electric commercial flight could be, and as it draws upon a sophisticated, global and continually improving network of battery makers while the cost of batteries continues to decrease, it has room to grow. “Because of airborne mobility development, this technology is unstoppable, and it’s getting more practical as every day goes by,” says Greg McDougall, Harbour Air’s CEO. “The brainpower and money involved is snowballing, and there’s no doubt we can roll out what we’re doing to other small airlines.” It’s an infectious enthusiasm, but it just might take to the air elsewhere, too. Weekend readingThe Qantas Group plans to reach net zero carbon emissions by 2050. Meanwhile, Formula 1 plans to reach that milestone by 2030. Ferrari says its new Roma coupe is inspired by the postwar Eternal City. It’s a bit of a step up from the Vespas and Topolinos of the film “Roman Holiday.” The European Investment Bank will not consider new financing of unabated fossil fuels, including natural gas, after 2021. Sweden’s Riksbank is selling bonds issued by the Canadian province of Alberta and the Australian states of Queensland and Western Australia due to those areas’ large climate impacts. How Australia’s big businesses saw the climate turning point coming. The world’s biggest gun has helped solve a long-standing space mystery: the risk that orbiting microdebris poses to satellites. Weather-tech startup Understory is selling Hail Safe, an insurance product that protects auto dealers from hailstorm damages. Think tank Macro Polo’s deep dive into the organic light-emitting diode (OLED) supply chain in East Asia. Adidas has abandoned its robot factory experiment. Open-source code will survive the apocalypse in an Arctic cave. Silicon Valley’s Singularity University is cutting staff, and its CEO is stepping down. Elon Musk’s keep-it-in-the-family deal for SolarCity has become the top threat to Tesla Inc.’s future. The new dot-com bubble is here: It’s called online advertising. Designer Iris van Herpen’s work is inspired by the Large Hadron Collider. A fascinating look at how American brands became indelibly Japanese. In data journalism, technology still matters less than people. The coming age of generative biology. Get Sparklines delivered to your inbox. Sign up here. And subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Nathaniel Bullard at email@example.comTo contact the editor responsible for this story: Brooke Sample at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The Zacks Analyst Blog Highlights: Toyota Motor, Honda Motor, Nissan Motor, Tesla and Advance Auto Parts
Elon Musk’s commitment to donate $1 million to the planning of trees in forests around the world appears to clash with the fact that Tesla will need to cut down trees to build its new gigafactory
Tesla Inc's Model 3 and S sedans both regained "recommended" status in Consumer Reports magazine's annual reliability survey, allowing the electric carmaker's overall standing to rise slightly. Tesla's ranking improved four spots to No. 23 out of 30 brands in the U.S. market as it worked to resolve production problems with the Model 3, said Jake Fisher, senior director of auto testing at Consumer Reports. "People really like their cars," he said of Tesla owners.
(Bloomberg) -- Tesla Inc.’s Model 3 and S sedans reclaimed recommendations from Consumer Reports, though the electric-car maker still ranks toward the bottom of the group’s annual reliability survey along with other U.S. automakers’ brands.The two Tesla models earned an average rating in Consumer Reports’ reliability survey, leading the organization to restore endorsements it revoked from the Model 3 in February and the Model S a year ago. Five of General Motors Co. and Fiat Chrysler Automobiles NV’s brands placed among the 10 worst in the survey, which was again dominated by Japanese and Korean carmakers.Consumer Reports’ fluctuating views of Tesla’s sedans reflect the company’s frequent design changes and rush to ramp up production, according to Jake Fisher, senior director of auto testing. The Model X still scores among the least reliable in the survey, leaving the electric-car maker’s brand ranking 23rd out of 30.“We recommend the Model 3 with a caveat,” Fisher said in an interview. “I don’t know what will happen in the next six or 12 months because the car keeps changing, so results may vary.”GM’s WoesReliability issues for established automakers including GM and Volkswagen AG frequently relate to their new vehicles offering technologically advanced features for the first time, such as touchscreen infotainment and driver-assistance systems.“GM really has consistently had problems with new model launches as they add new technology, and it was across the board for their vehicles,” Fisher said. Three of its four brands finished in the bottom 10, with Cadillac finishing dead last, thanks in part to a troublesome infotainment system. VW’s namesake fell nine spots to 27th, and its luxury brand Audi slipped seven places to 14th.Buick, the only GM brand to finish around the middle of the pack, fell five spots to 18th. Chevrolet ranked 25th, with some of its highest-volume models -- the Chevy Colorado mid-size pickup and Silverado full-size truck -- scoring poorly.Chevy’s Silverado rated 20 on a 100-point scale, matching Ford’s F-150 and narrowly beating the Ram pickup’s 18. The overall Ford brand ranking was unchanged from a year ago, at 16th.GM’s is having trouble with the drive system and in-vehicle electronics on the new Chevy Silverado and GMC Sierra pickups. That’s problematic especially since the new trucks underwent modest changes and have disappointed Consumer Reports’ test drivers. GM probably took a conservative approach to engineering the new trucks because the previous-generation Silverado and Sierra had reliability issues, Fisher said.For GM, improvement is a must. The Silverado and Sierra are among its most profitable vehicles, and the automaker has been fending off a challenge from Fiat Chrysler’s Ram, which has gained market share at Chevy’s expense. There’s also more competition on the way: Tesla plans to show off an electric truck on Nov. 21. The pickup, which Chief Executive Officer Elon Musk has said is inspired by the sci-fi film “Blade Runner,” will try to crack Detroit’s profit center along with another electric upstart, Amazon.com Inc.-backed Rivian Automotive Inc.Asian DominationAsian brands fared best in the study. Toyota Motor Corp.’s Lexus luxury line again took top honors, its namesake brand finished third, and Japanese partner Mazda was sandwiched in between. The best vehicle in the study was the Lexus IS sedan, with a score of 99.The Genesis luxury brand from South Korea’s Hyundai Motor Co. placed fifth, and the company’s namesake line finished in sixth. Among European brands, only Porsche and Mini were in the top 10.Tesla’s Model 3 was initially recommended by Consumer Reports in 2018 because the early models fared well in terms of customer satisfaction and reliability was initially good enough. Tesla made a lot of changes to the car that year, including adding more comfortable seating and improving the suspension to soften the ride. But some tweaks brought about glitches that cost the car the group’s blessing.In the past year, Tesla has fixed many of those problems, and its two sedans have risen in the rankings. Fisher spoke with Musk after the Model 3 lost its recommendation last year and said the CEO was eager to hear what owners were complaining about.“He wanted the feedback,” Fisher said. “He wants to build the best cars in the world.”To contact the reporter on this story: David Welch in Southfield at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Kevin Miller, Keith NaughtonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
While Japan's 1 carmaker Toyota (TM) misses fiscal second-quarter 2020 earnings estimates, its top peer Honda (HMC) surpasses the same.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Foreign companies continue to invest more in China even after President Donald Trump called on U.S. firms to look elsewhere, as the rising spending power of 1.4 billion people proves too hard to resist.Companies from Tesla Inc. to Walmart Inc. are expanding operations in the world’s second-biggest economy, joined by counterparts from Korea, Japan and Europe. That’s helping offset the departure of goods manufacturers that have had to rethink supply chains after U.S. tariffs made their products more expensive.Foreign direct investment into China rose nearly 3% in the first nine months of 2019 from a year earlier, according to the Ministry of Commerce, the same pace as 2018’s increase. While the U.S. outstripped that increase last year, investment has dropped off since Trump became president.“Multinational firms are now more likely to invest in China since serving the market from abroad will be risky given the mutual trade barriers that have been erected and the fact that any truce in the trade war is likely to be only temporary,” said David Dollar, a senior fellow at the Brookings Institution in Washington.Almost 75% of China’s inbound investment is now into services, utilities and other sectors aimed at the domestic market, said Dollar, a former U.S. Treasury attache in Beijing. If anything, the trade war is encouraging companies to ensure they have a China base, he said.That’s the opposite of what President Trump has pushed for: in August the president tweeted that U.S. companies should “immediately start looking for an alternative to China.”“If you go to major U.S. companies and say, ‘well the politics in D.C. says we have to decouple so you are going to leave the China market,’ they would say ‘no we can’t because the prize is too big’,” Arthur Kroeber, head of research at Gavekal said in a presentation in Hong Kong this month.One complication in analyzing the trend is the difficulty in determining how much of the spending represents real investment, and how much is Chinese companies moving money offshore and then bringing it back to the mainland. Some three quarters of China’s FDI in 2018 came from Hong Kong, the British Virgin Islands or the Cayman Islands, which a recent International Monetary Fund report called sources of “phantom FDI.”EV BoomYet there’s also plenty of news demonstrating the big bet on China’s consumer. Tesla is eyeing mass production out of its first factory outside the U.S. in a plant near Shanghai for which the automaker has received as much as $521 million in loans from Chinese banks. Such spending generates a hive of activity right along the supply chain.LG Chem Ltd., the world’s second-biggest manufacturer of lithium-ion battery cells and said to be one of Tesla’s initial suppliers for its made-in-China Model 3 cars, said in October it plans to invest about $430 million in its Chinese business. In June, it teamed up with Geely Automobile Holdings Ltd. on a joint venture to produce electronic vehicle batteries.“China is a focal point for our battery investment,” spokesman Yoo Won Jae said in an interview this month.Economic BoostSuch inflows could help put a floor under an overall slowdown in investment, helping China hit its jobs targets even as the economy grows at its slowest rate in decades.Among other recent announcements:General Electric Co.’s GE Renewable Energy announced in July investments for undisclosed amounts in a new offshore wind factory and operation and development centerBASF SE in January signed a framework agreement with the government of Guangdong Province for a $10 billion manufacturing complex. In a first for a foreign chemical maker, BASF received permission to own 100% of the project rather than work with a local partnersWalmart in July said it will spend 8 billion yuan ($1.1 billion) on distribution centers in ChinaTrade war or not, the lure of 1.4 billion people can’t be ignored, AstraZeneca Plc Chief Executive Officer Pascal Soriot said in an interview at the second annual China International Import Expo in Shanghai. “We have to invest more in China.”Chinese investors have received a frosty reception in the U.S. By contrast, American companies are still being welcomed in China, according to Ker Gibbs, president of the American Chamber of Commerce in Shanghai.“At the provincial and municipal level, we sense an even heightened degree of enthusiasm for foreign investments,” he said. “They are very much courting us.”\--With assistance from Heesu Lee, Dong Lyu and James Mayger.To contact the reporters on this story: Bruce Einhorn in Hong Kong at email@example.com;Enda Curran in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Malcolm Scott at email@example.com, ;Emma O'Brien at firstname.lastname@example.org, Bruce Einhorn, James MaygerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
To unclog bottlenecks last year at his Tesla Inc plant in California, Elon Musk flew in six planeloads of new robots and equipment from Germany to speed up battery production for its Model 3. Now the Tesla CEO is trying to tap that German automation ecosystem directly with Tuesday's announcement that the electric carmaker will build a European car and battery factory near Berlin. The new German factory is designed to help change all that.
Nov.19 -- Ford unveils the Mustang Mach-E, a battery-powered crossover designed as an alternative to Tesla models dominating the EV market. The car was revealed Sunday ahead of the Los Angeles Auto Show.