Tag: tesla

Tesla CEO Elon Musk Faces Shareholder Lawsuit for Alleged $7.5 Billion Insider Trading

A Tesla shareholder filed a lawsuit on Thursday accusing CEO Elon Musk of insider trading when he sold over $7.5 billion of shares of the electric car maker in late 2022, saying the billionaire entrepreneur sold the shares before potentially disappointing production and delivery numbers were made public.

Shareholder Michael Perry, in the lawsuit filed in Delaware Chancery Court, said that Tesla’s share price plummeted after the company’s fourth-quarter numbers were made public on Jan. 2, 2023, and claimed that Musk “improperly benefited” by about $3 billion in insider profits.

“Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla,” the lawsuit said, asking the court to direct Musk to return the profits made from the trades.

According to the lawsuit, Musk sold the shares on various dates in November 2022 and December 2022.

The lawsuit also accused Tesla’s directors of breaching their fiduciary duty by allowing Musk to sell the shares.

Musk and Tesla did not immediately respond to a Reuters request for comment.

In the lawsuit, Perry said Musk – who in 2022 said demand for Tesla’s vehicles was “excellent” – found out about the lower-than-expected numbers mid-November, with his access to real-time data, and sold his shares before the information was public.

Following news of vehicle price discounts that sparked demand concerns and the release of the numbers in January, Tesla’s stock tanked.

“Had (Musk) waited to make these sales until after the release of material adverse news,… his sales would have netted him less than 55% of the amounts realized from his November and December 2022 sales,” the lawsuit said.

The lawsuit is the latest legal headache for Musk.

It comes as Musk faces opposition from some Tesla shareholders who are set to vote on June 13 on whether to ratify his $56 billion pay package, which a Delaware judge voided in January because she found he improperly controlled the process.

Tesla is incorporated in Delaware.

Musk is also in the middle of a regulatory probe to determine whether he broke federal securities laws in 2022 when he bought stock in social media platform Twitter, which he later renamed X. Musk said the U.S. Securities and Exchange Commission was trying to “harass” him through unwarranted investigations.

Musk and the top U.S. markets regulator have been in a years-long feud, dating back to 2018, when he tweeted that he had “funding secured” to take Tesla private.

A separate shareholder lawsuit has accused Musk of defrauding X investors by delaying disclosure of his stake in the social media company to amass shares at lower prices.

© Thomson Reuters 2024

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Elon Musk Postpones India Visit Due to ‘Very Heavy Tesla Obligations’

Tesla Inc. Chief Executive Officer Elon Musk said he is postponing a visit to India which would have included a meeting with Prime Minister Narendra Modi.

“Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year,” the billionaire said in a post on X.

Musk was earlier scheduled to visit the South Asian nation for two days — April 21 and 22 — to announce plans to enter the Indian market.

The visit was critical in terms of timing for both the men. India has kicked off voting for its national elections where PM Modi is seeking a third term citing the nation’s economic rise. Investments from billionaires like Musk will burnish his appeal among voters.

Musk is seeking permission for SpaceX’s Starlink Inc. to operate in what will be by far its biggest market. Starlink has already received assurances from India’s government that it will be able to start operating in the country as soon as the third quarter of this year, people familiar with the matter told Bloomberg earlier.

© 2024 Bloomberg L.P.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Tesla Chief Elon Musk Said to Meet PM Modi in April, Announce India Investment Plans

Tesla chief Elon Musk will visit India this month to meet Prime Minister Narendra Modi and is expected to make an announcement on plans to invest and open a new factory in the country, two sources with direct knowledge said.

The billionaire will meet PM Modi in the week of April 22 in New Delhi, and will separately make an announcement about his India plans, said the two sources, who declined to be named as the trip details are confidential.

The Tesla CEO will be accompanied by other executives during his visit, said the first source.

Reuters is first to report details of Musk’s planned India visit. PM Modi’s office and Tesla did not respond to requests for comment. Musk’s final India trip agenda could still change.

Musk and PM Modi last met in New York in June, and Tesla for months lobbied India to lower import taxes on electric vehicles while it weighed up a factory there. India last month unveiled a new EV policy lowering import taxes to 15 percent from 100 percent on some models if a manufacturer invests at least $500 million (roughly Rs. 4,168 crore) and sets up a factory too.

Reuters has previously reported that Tesla officials are expected to visit India this month to look at sites for a manufacturing plant that would require an investment of about $2 billion (roughly Rs. 16,674 crore).

Tesla has also begun production of right-hand drive cars at its German plant for export to India later this year, sources have said.

Musk said this week on X that “India should have electric cars like every other country has electric cars. It’s a natural progression to provide Tesla electric vehicles in India”.

Tesla’s push into India comes as slowing EV demand in its main US and Chinese markets coincides with intensifying competition from Chinese automakers. Tesla reported a drop in first-quarter deliveries that missed analyst estimates.

India’s EV market is small but growing and dominated by local carmaker Tata Motors. EVs made up just 2 percent of total car sales in 2023. The government is targeting 30 percent by 2030.

© Thomson Reuters 2024

Samsung launched the Galaxy Z Fold 5 and Galaxy Z Flip 5 alongside the Galaxy Tab S9 series and Galaxy Watch 6 series at its first Galaxy Unpacked event in South Korea. We discuss the company’s new devices and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Xiaomi Launches SU7 Electric Car in China as Smartphone Maker Takes Aim at EV Giant Tesla

Chinese smartphone maker Xiaomi launched a sporty electric car on Thursday with styling cues drawn from Porsche and priced below Tesla’s Model 3, highlighting the stiff competition from new entrants in an already crowded EV market in China.

During the two hour-long event, Xiaomi CEO and founder Lei Jun told a packed room whose attendees included the bosses of Chinese EV makers Nio and Xpeng that the standard SU7 EV model will be priced at CNY 215,900 ($29,872.02 or roughly Rs. 24,89,948), while the Pro and Max versions will cost CNY 245,900 (roughly Rs. 28,35,934) and CNY 299,900 (roughly Rs. 34,58,709) respectively.

“It’s 30,000 (CNY) cheaper than the Model 3,” he said. Tesla’s Model 3 starts at CNY 245,900 in China.

He also said many of the capabilities of the SU7, which has drawn comparisons with Porsche’s Taycan and Panamera models, surpassed that of Tesla’s and Porsche’s. For example, its minimum range of 700 km beat Tesla Model 3’s 567km, Lei said.

The launch fulfils the ambition of Xiaomi’s founder, who announced the company’s foray into EVs in 2021 and pledged to invest $10 billion (roughly Rs. 83,348 crore) in its auto business as “the last major entrepreneurship project” of his life.

The company formed a manufacturing partnership with state-owned automaker BAIC Group and first showcased the SU7 – short for Speed Ultra 7 – sedan, in December.

The company, best known for its smartphones and a wide range of affordable appliances, started taking orders for the SU7 from 10 p.m. Beijing time (1400 GMT) and said it received 50,000 orders within the first 27 minutes.

Deliveries for the Standard and Max models will start in late April, and the Pro models will follow by the end of May.

Lei also said that the shift from electronics to car manufacturing had not been easy. “In the three years of developing this car, my biggest realization is that making cars is extremely difficult. Even a giant like Apple gave up on it,” Lei said. “So today, every person who is still persevering in making cars is a hero of our time.”

The SU7 will go on sale in 211 stores across 39 Chinese cities by end of this year, he added. Xiaomi has not said whether it has any plans to sell the car abroad.

Price war

Analysts have been split on whether Xiaomi’s car project will succeed. Some say it is a natural extension for the company, whose rice cookers, air purifiers and other electronics are ubiquitous in Chinese homes.

But the SU7 marks a departure from the company’s image as an affordable brand. “Can (Chinese consumers) take that leap psychologically from mass-market, cool, inexpensive consumer products and home products to premium EV?” said Tu Le, founder of consultancy Sino Auto Insights.

In addition, the car goes on sale during a difficult time for China’s auto market.

“The current market environment is quite challenging for newcomers with the top 10 players continuously expanding their market share,” said Gavekal Dragonomics analyst Ernan Cui.

“If Xiaomi can’t sell at scale in a short time, it’s facing the risk of being a profit dragger for the company for longer.”

Working in Xiaomi’s favour, however, is revenue generated by other businesses, said Le of Sino Auto Insights.

Moreover, analysts say Xiaomi’s smartphone expertise gives it an edge over traditional automakers when it comes to smart cockpits – a feature Chinese consumers prize.

The SU7 uses the company’s self-developed Hyper OS as the operating system that connects EV users to its other devices, including smartphones.

© Thomson Reuters 2024

Xiaomi launched its camera focussed flagship Xiaomi 13 Ultra smartphone, while Apple opened it’s first stores in India this week. We discuss these developments, as well as other reports on smartphone-related rumours and more on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Mahindra Calls for EV Level Playing Field Amid Tesla’s India Entry Plans

Indian automaker Mahindra & Mahindra has told the government there must be a level playing field between domestic and foreign players and local manufacturing must be promoted, a top executive said, as New Delhi seeks to lure carmakers such as Tesla.

Mahindra and Tata Motors have pressed Indian officials privately not to lower import taxes of 100 percent on electric vehicles and protect domestic firms and their foreign investors as the government reviews Tesla’s plans to enter the market, Reuters reported last month.

Asked about Tesla’s entry and New Delhi’s planned policy to lower import taxes, Mahindra Managing Director Anish Shah said his company had made representations to Indian officials saying global EV makers must be nudged to invest in India.

“It should be a level playing field and investing in India is important,” Shah told Reuters in an interview at the World Economic Forum annual meeting, without referring to Tesla by name.

“Our approach is essentially to create a stronger industry in India, and not to be in a situation where manufacturing is done outside India, and India just becomes an importer of products,” he added.

India sold 4 million cars last year and just 82,000 of those were EVs, but the nascent segment clocked sales growth of 115 percent versus the previous year.

Mahindra has raised around $400 million (roughly Rs. 3,325 crore) from Singapore’s Temasek and British International Investment, while private equity firm TPG and Abu Dhabi state holding company ADQ invested $1 billion (roughly Rs. 8,312 crore) in 2021 in Tata.

Shah said Mahindra has plans to list its EV unit, but not before 2029 “because we need to be able to show significant success in that business.”

“For us, electric is the future,” he said.

Tesla has proposed setting up an Indian factory but also demanded lower import taxes for electric cars. India is working on a new policy to cut import taxes on EVs to as low as 15 percent for companies committing to some local manufacturing, Reuters has reported.

But that has worried the Indian industry with sources saying Tesla’s entry could risk future fundraising of Indian EV companies as they need a stable and favourable import tax regime.

© Thomson Reuters 2024

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Hertz plans to sell 20,000 EVs, including Teslas

Rental firm Hertz Global Holdings said Thursday it would sell about 20,000 electric vehicles from its US fleet due to higher expenses related to collision and damage, and will opt for gas-powered vehicles.

Shares of the company, which operates vehicles from Elon Musk’s Tesla and Swedish EV maker Polestar among others, fell about 3% at market open.

Hertz had said it would order 100,000 Teslas by the end of 2022 and followed that with a decision to buy up to 65,000 units over five years from Polestar.


Hertz had said it would order 100,000 Teslas by the end of 2022. REUTERS

“Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter…,” Hertz said in a regulatory filing on Thursday.

The company had previously set a target for 25% of its fleet to be electric by the end of 2024.

Hertz expects about $245 million of incremental depreciation expenses from the proposed sale in the fourth quarter of 2023 and warned of a hit to adjusted corporate core profit for the period.


Tesla shares fell on Thursday. CAROLINE BREHMAN/EPA-EFE/Shutterstock

The company said it would continue to focus on improving profitability for the remainder of its EV fleet.

Hertz’s used car website lists more than 700 EVs on sale including BMW’s i3, Chevrolet’s Bolt and Tesla’s Model 3 and Model Y SUVs.

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Tesla Cybertruck With Higher Price Tag, Lower Driving Range Arrives Two Years Behind Schedule

Tesla’s pricier-than-expected Cybertruck pickup, which offers driving ranges that fell well short of what CEO Elon Musk had promised, has deeply disappointed some but fascinated others with its futuristic, SUV-like feel.

The Cybertruck, two years behind schedule, enters a hot pickup truck market to compete with the likes of Ford’s F150 Lightning, Rivian Automotive’s R1T and General Motors’ Hummer EV.

Reddit co-founder Alexis Ohanian, who was among the first dozen customers to pick up the vehicle on Thursday, said the Cybertruck drives and feels like Tesla’s Model X sport utility vehicle.

“Initial feeling about this vehicle – smooth, drives a lot like my Model X. It is big but not unwieldy,” Ohanian said as he live-streamed his first drive of the Cybertruck on social media platform X. He said he’d be the “coolest dad” picking up his kid at school.

Starting at $60,990 (roughly Rs. 51 lakh), the Cybertruck is over 50 percent more expensive than what CEO Elon Musk had touted in 2019. That may narrow the appeal of the vehicle. Tesla’s stock is down over 2 percent since before the launch.

Among those disappointed is Texas-based financial services executive Christian Cook, who had booked a Cybertruck in 2019 after Musk promised a cheaper pickup that travels farther on a single charge.

“The truck pricing and range is a huge let down,” Cook, who drives a Model 3 and told Reuters he had made certain financial decisions based on his plans to buy a Cybertruck. “My respect for Musk has taken a huge hit. My loyalty to Tesla has taken a huge hit.”

CFRA analyst Garrett Nelson said the steep price tag will lead to customers cancelling reservations and expects Tesla to adjust the pricing based on demand going ahead.

The Cybertruck, made of shiny, bullet-proof stainless steel and inspired from a car-turned-submarine from a James Bond movie, is likely to uplift Tesla’s brand that has been dented from steep price cuts to boost demand, according to analysts and branding experts.

“The Cybertruck gets a lot of attention. It brings Tesla back top of mind,” said Spencer Imel, a partner at consumer insights firm Langston.

“But we don’t see it helping Tesla gain ground in terms of becoming a mass market brand and competing with brands like Ford that are serving the everyday car buyer,” he said.

Indeed, the electric pickup’s price and longer wait time for significant financial payoff left analysts concerned.

Musk’s personal ability to build the Tesla brand has also been questioned this week after a live interview in which he cursed out advertisers who left his X social media platform, formerly known as Twitter, over antisemitic material.

That was creating nervousness among investors and some consumers and could be drag on Tesla’s appeal, said Allen Adamson, co-founder of brand and marketing consultancy Metaforce.

“Many of Tesla’s early adopters who bought into the dream of a sustainable future are being kind of rudely woken up,” by some of the “strange things” he has done, turning him from a “rebel” into a “misguided person” for some people, said JP Kuehlwein, an adjunct professor of marketing at Columbia University Business School.

Cybertruck will not do much for Tesla’s financials next year, analysts said. Bernstein forecast 250 deliveries this year and 75,000 for next year, saying both “may be ambitious”.

Musk has said Tesla was likely to reach a production rate of roughly 250,000 Cybertrucks a year in 2025.

The company has repeatedly warned that it would face significant challenges in ramping the product and becoming free cash flow positive – likely not until mid-2025 – which could negatively impact profitability.

A brand refresh will be critical for Tesla, especially at a time when the company is battling softening electric-vehicle demand as well as rising competition.

“Tesla has a product problem – i.e., an older line-up that does not address enough of the market, and has no new mass market offerings until likely late 2025,” Bernstein analysts added.

© Thomson Reuters 2023

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xAI, Elon Musk’s AI Startup, to Release First AI Model to Select Group

Elon Musk‘s artificial intelligence startup xAI will release its first AI model to a select group on Saturday, the billionaire and Tesla CEO said on Friday.

This comes nearly a year after OpenAI‘s ChatGPT caught the imagination of businesses and users around the world, spurring a surge in adoption of generative AI technology.

Musk co-founded OpenAI, the company behind ChatGPT, in 2015 but stepped down from the company’s board in 2018.

“In some important respects, it (xAI’s new model) is the best that currently exists,” he posted on his X social media platform.

“As soon as it’s out of early beta, xAI’s Grok system will be available to all X Premium+ subscribers,” Musk posted.

X, formerly known as Twitter, rolled out two new subscription plans last week, a $16 (nearly Rs. 1,330) per month Premium+ tier for users willing to pay for an ad-free experience and a basic tier priced at $3 (nearly Rs. 250) per month.

The billionaire, who has been critical of Big Tech’s AI efforts and what he calls censorship, said earlier this year he would launch a maximum truth-seeking AI that tries to understand the nature of the universe to rival Google’s Bard and Microsoft’s Bing AI.

The team behind xAI, which launched in July, comes from Google’s DeepMind, the Windows parent, and other top AI research firms.

Although X and xAI are separate, the companies work closely together. xAI also works with Tesla and other companies.

Larry Ellison, co-founder of Oracle and a self-described close friend of Musk, said in September that xAI had signed a contract to train its AI model on Oracle‘s cloud.

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Tesla Autopilot Investigation Will Be Resolved, Could Make Announcement Soon, Says US Agency

The National Highway Traffic Safety Administration (NHTSA) will resolve its two-year investigation into Tesla Autopilot and could make a public announcement soon, the agency’s acting head told Reuters. “We’ll get to a resolution (of the Tesla probe),” Acting NHTSA Administrator Ann Carlson told Reuters in an interview at the agency’s headquarters.

Speaking broadly of advanced driver assistance systems, she said: “It’s really important that drivers pay attention. It’s also really important that driver monitoring systems take into account that humans over-trust technology.” 

She declined to discuss how the Tesla investigation might be resolved, but added “hopefully you’ll hear something relatively soon.” Tesla did not immediately respond to a request for comment.

The agency is investigating the performance of Autopilot after identifying more than a dozen crashes in which Tesla vehicles hit stationary emergency vehicles. It is also investigating whether Tesla vehicles adequately ensure drivers are paying attention when using the driver assistance system.

In June 2022, NHTSA upgraded the probe into 830,000 Tesla vehicles it first opened in August 2021 to an engineering analysis – a required step before it could potentially demand a recall. Last month, NHTSA sought updated responses and current data from Tesla in the probe. 

Autopilot is intended to enable cars to steer, accelerate, and brake automatically within their lane, while enhanced Autopilot can assist in changing lanes on highways.

Separately, since 2016, NHTSA has opened more than three dozen Tesla special crash investigations in cases where driver systems such as Autopilot were suspected of being used, with 23 crash deaths reported to date.

Carlson noted the Autopilot investigation “is complicated” given the large number of crashes under investigation. “They are big numbers and we are working on that,” Carlson said.

NHTSA has said previously that evidence raised questions about the effectiveness of Tesla’s alert strategy, which seeks to compel driver attention.

The agency said in 2022 nine of 11 vehicles in prior crashes exhibited no driver engagement, or visual or chime alerts, until the last minute preceding a collision, while four showed no visual or chime alerts at all during the final Autopilot use cycle. 

NHTSA closed an earlier investigation into Autopilot in 2017 without taking any action. The National Transportation Safety Board (NTSB) has criticized Tesla’s lack of system safeguards for Autopilot and NHTSA’s failure to ensure the safety of Autopilot. 

NTSB chair Jennifer Homendy has said NHTSA should require automakers to “incorporate system safeguards that limit the use of automated vehicle control systems to those conditions for which they were designed.” 

© Thomson Reuters 2023 

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Twitter Now ‘X’ on Both Android and iOS Platforms; Tweets Relabeled as ‘Posts’

Twitter was recently rebranded as X by owner Elon Musk. On Friday, Musk claimed that the social media platform reached “new heights” with more than 540 million monthly users as compared to the reported 229 million monthly active users in May 2022. Musk took over the site in November 2022, and has since made several changes including laying off almost 50 percent of the firm’s workforce and appointing Linda Yaccarino as the CEO. This rebrand is the latest among all of Musk’s changes and riptides, as Twitter continues to struggle with its advertisement revenue.

Between talks of the patent rights of the letter X, the mobile application icon for Twitter on both Android and iOS platforms has changed to ‘X’ with an update. Now, the content shared by users, previously known as tweets, are now called posts. The Twitter 10.1.0-beta.1 version now appears on some Android devices at ‘X Beta,’ although the apk file is still called com.twitter.android. Even on Apple’s iOS handsets, the update appears with the new logo but the old name.

X for Android has also changed the “Tweet” option on the bottom right corner of the homepage to “Post,” which suggests that Musk’s idea of rebranding is to do away with all things old and essential of Twitter. Each step is closer to achieving his dreams of building “the Everything App.”

It is likely that Musk’s rebrand train may face a few legal roadblocks. The alphabet or the symbol X is very widely used and it could be a potential legal point of conflict. Case in point, its rival social media platform Facebook-parent Meta Platforms owns a 2019-registered federal trademark registered which covers a blue-and-white letter “X” for fields including software and social media. Even Microsoft has owned an X trademark since 2003 with regard to communications about its Xbox video-game system.

Experts say that the companies are likely to not sue unless they feel threatened that Twitter’s X “encroaches on brand equity they built in the letter.” Notably, even Meta faced legal backlash from investment firm Metacapital and virtual-reality company MetaX when they changed their name from Facebook to Meta and later settled over its infinity-symbol logo.

Samsung launched the Galaxy Z Fold 5 and Galaxy Z Flip 5 alongside the Galaxy Tab S9 series and Galaxy Watch 6 series at its first Galaxy Unpacked event in South Korea. We discuss the company’s new devices and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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