Elon Musk blames Tesla Energy’s troubles on the Model 3 and the pandemic

Tesla CEO Elon Musk wearing a construction helmet.
Elon Musk said Tesla’s solar energy division was tripped up by production of the Model 3, then the pandemic.

  • Elon Musk appeared in court Monday to defend Tesla’s 2016 acquisition of SolarCity.
  • Musk said Tesla’s solar energy division underperformed because it had focused on Model 3 production.
  • After the Model 3 went to market, Musk said the solar division ran up against the pandemic.
  • See more stories on Insider’s business page.

Elon Musk has said that Tesla’s solar energy division hasn’t taken off because his company had to focus on getting the Model 3 to market, and then ran “headlong” into the pandemic.

The Tesla CEO made the comments Monday at the Delaware Court of Chancery, where he’s defending Tesla’s acquisition of solar panel company SolarCity in 2016.

SolarCity was founded by Musk’s cousins and Musk had a 22% stake in the business. It was absorbed into Tesla and became Tesla Energy. The court case was brought by shareholders who claim that the deal amounted to a backdoor bailout of SolarCity.

Musk told the court Monday he blamed Tesla Energy’s failure to live up to expectations on Tesla diverting its resources to focus on getting its Model 3 to market, according to the AP and the Washington Post. Per the AP, Musk said the Model 3 became an “all hands on deck” effort.

Tesla’s Model 3 production ramp was notoriously difficult, particularly over 2017 and 2018 when Musk described the process as”production hell.”

Read more: Tesla and real-estate giant Brookfield are building a neighborhood in Austin full of renewable-energy tech

After that, Musk said, Tesla Energy ran “headlong into a pandemic.” Per the Washington Post’s Will Oremus, who was present at the trial, Musk insisted that Tesla Energy would take off as the pandemic eases – although the lawyer cross-examining Musk said he had failed to keep promises.

The court case is expected to last for two weeks. If Musk loses he could be liable for $2.6 billion.

Tesla Energy has lost market share since the 2016 acquisition. When Tesla bought SolarCity it was the top installer of solar panels in the US, but in 2019 it fell into third place behind Sunrun and Vivint Solar.

In April, Tesla raised prices for its flagship Solar Roof product. Customers who had already signed contracts had their prices jacked up by more than 100%. One customer whose roof went from $71,000 to $146,000 filed a class-action lawsuit against Tesla.

During Tesla’s Q2 earnings call in April, Musk said the company had made “significant mistakes” calculating the cost of the solar roof.

Do you work at Tesla Energy or are you a Tesla Energy customer? Contact this reporter at ihamilton@insider.com or iahamilton@protonmail.com. If you are an employee always use a non-work email.

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Tesla just beat out Ford as the most American-made car for the first time ever

Tesla Model 3
The Tesla Model 3, which is manufactured in Fremont, California.

  • Tesla’s Model 3 sedan topped Ford’s Mustang in the Cars.com American-Made Index this year.
  • It’s the first time in 16 years that Tesla has topped the list.
  • The American-Made Index ranks American cars by how much of the car and its parts are made in the US.
  • Visit the Business section of Insider for more stories.

In a ranking of dozens of American cars, Tesla took the top spot over rivals from American giants like Ford and Jeep – but not for the reasons you might think.

The Cars.com American-Made Index, now in its 16th year, ranks dozens of American-made cars to determine which is the most “made in America” of all. It takes five primary factors into account: final assembly location, origin of parts, origin of engines, origin of transmissions, and manufacturing workforce.

To that end, Tesla’s Fremont, California-made Model 3 sedan took the top spot – the first time ever for Tesla.

Ford’s Mustang, made in Flat Rock, Michigan, took the second spot, while Tesla’s Model Y SUV rounded out the third spot.

Ford and Tesla have come into increasingly close competition lately, with Ford’s wildly successful Mustang Mach-E directly taking on Tesla in electric car sales. Ford’s first all-electric Mustang made a big enough splash when it launched earlier this year that it immediately cut Tesla’s market share in the electric car market by over 10%.

Despite the competition, Tesla CEO Elon Musk and Ford CEO Jim Farley appear to share a mutual appreciation of each other.

“Tesla & Ford are the only American carmakers not to have gone bankrupt out of 1000’s of car startups. Prototypes are easy, production is hard & being cash flow positive is excruciating,” Musk tweeted in March. “Respect,” Farley said in response.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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Tesla will now monitor drivers via in-car cameras to make sure they’re paying attention when Autopilot is on

EM   Photo by Christophe Gateau:picture alliance via Getty Images
Tesla CEO Elon Musk.

  • Tesla cars will now monitor drivers who use Autopilot via in-car cameras.
  • The cameras, above the rearview mirror, will check that drivers are paying attention while using Autopilot.
  • Previously, Tesla used sensors in the steering wheel to check drivers were paying attention.
  • See more stories on Insider’s business page.

Tesla cars will now monitor drivers who use Autopilot through in-car cameras, TechCrunch reports.

Tesla will activate the cameras, located above the rearview mirror, in Model 3 and Y cars to check that drivers are paying attention to the road while using Autopilot driver assist, it said in a message to drivers.

Until now, Tesla cars relied on steering-wheel sensors that detected whether drivers were holding on, but many drivers have shared their tricks to fool the sensors and go hands-free.

“The cabin camera above your rearview mirror can now detect and alert driver inattentiveness while Autopilot is engaged. Camera data does not leave the car itself, which means the system cannot save or transmit information unless data sharing is enabled,” Tesla said in a release note to its drivers, which was shared by one Tesla owner on Twitter.

Another Twitter user shared a photo of the same update for their vehicle.

Last year, Tesla activated its cabin-facing cameras installed in its Model 3 and Y vehicles in a software update. The camera, if approved by the driver, would “help engineers develop safety features and enhancements in the future,” Tesla said in its release notes at the time.

Tesla CEO Elon Musk had previously rejected using cameras and infrared sensors to track drivers’ eye movements, saying that eye-tracking functions were ineffective.

Tesla has faced criticism over the safety of its self-driving features. The National Highway Traffic Safety Administration (NHTSA) has opened at least 27 investigations into Tesla car crashes, and Autopilot was involved in at least three fatal crashes since 2016, Reuters reported.

Tesla did not immediately respond for comment.

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Tesla says it’s working with China to investigate a crash in which a policeman reportedly died

Tesla Shanghai
Elon Musk walks with former Shanghai Mayor Ying Yong in 2019

  • Tesla said it is cooperating with Chinese officials in an investigation into a fatal crash.
  • Video footage of the accident went viral in China on Tuesday, according to Bloomberg.
  • The accident comes after a protest at the Shanghai Auto Show drew attention to Tesla safety concerns.
  • See more stories on Insider’s business page.

Tesla said it is working with Chinese authorities to investigate a crash involving one of its cars in which a local policeman was killed, Bloomberg reported.

The accident involved a Tesla and two traffic policemen in the eastern Chinese city of Taizhou, according to Bloomberg, and local authorities later said that one of the policemen was killed after sustaining injuries. On Tuesday, in a statement on Weibo, a popular Chinese social network, Tesla said that it had provided a report on the accident to Chinese officials and was working with the agency to investigate the cause of the crash.

Video footage of the accident, which was covered by Chinese media, was widely shared on social media Tuesday.

Chinese authorities are still investigating another Tesla crash in the southern Chinese city of Shaoguan. Earlier in the month, a Tesla driver died after rear-ending a truck. Authorities say the cause of the accident is still under investigation.

The accidents have garnered hundreds of posts from Chinese Tesla drivers expressing concern over the safety of the company’s electric cars, with some pointing to a brake malfunction.

Last month, a woman climbed onto a Tesla car at the Shanghai Auto Show, protesting a brake malfunction in her electric car. The incident went viral and the company faced an onslaught of criticism. Though, Tesla told Bloomberg it had tried to solve the issue.

Following the incident, China’s Central Political and Legal Affairs Commission issued a statement saying that the company must stop “pretending to be oblivious to hidden dangers of which it’s well aware,” and that it needs to “face up to the torment of its Chinese customers,” The Wall Street Journal reported.

It was not the first time a customer had complained of brake failure. In April, a Tesla Model 3 driver lost control of their vehicle and it caught fire. The incident was believed to be linked to a brake failure, of which there have been over ten accidents where Teslas in China have spontaneously gone “out of control” in the past year, according to Global Times.

Tesla has also faced safety concerns in the US – a market where it is the No. 1 selling electric carmaker by vehicle registrations. Last month, US senators came together to discuss regulating autonomous vehicles. Tesla was the focal point of the conversation due to concern over a series of Tesla accidents, including a fatal crash in Texas. Last week, a preliminary investigation by the National Transportation Safety Board into the incident said Tesla’s autopilot feature was not engaged during the fatal Texas crash.

Even prior to the Shanghai Auto Show incident, Tesla’s relationship with the Chinese government has encountered complications since the company started selling its car in China at the end of 2019. Five Chinese regulatory agencies are probing the quality of its Shanghai-produced Model 3 vehicles.

The country’s military also reportedly banned Tesla cars from its locations over privacy concerns related to the car’s cameras. Though, Tesla CEO Elon Musk said the onboard cameras are not enabled in China.

China represents an important market for Tesla car sales and the company’s recent run of bad publicity has stunted interest in its vehicles. Following the safety concerns in China, sales in the market dropped 27% between April and March, CNN reported.

Tesla did not respond to a request for comment.

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Tesla stock drops as China sales decline 27% in April

Tesla Model 3
Tesla’s Model 3.

  • Tesla shares fell by more than 7% on Tuesday following sales data from China.
  • The electric vehicle maker’s sales fell 27% in April from March, according to China’s Passenger Car Association.
  • Tesla has been facing PR issues in China that hurt monthly sales, said Wedbush.
  • See more stories on Insider’s business page.

Tesla shares dropped Tuesday after the electric vehicle maker’s monthly sales in China fell by on a double-digit percentage basis, setting the stock on course for a second consecutive session of losses.

The company sold 25,845 vehicles made in China in April, a fall of 27% from the 35,478 vehicles sold in March, the China Passenger Car Association reportedly said Tuesday.

In a separate report from Reuters, Tesla, due to uncertainty created by tensions between the US and China, has put on hold plans to buy land to expand its flagship plant in Shanghai into a global export hub. The report cited people familiar with the matter.

Tesla dropped as much as 7.3% to $583.20 during premarket trade then pared the fall to 1.7% after the regular trading session began. Losses on Tuesday would add to the stock’s 6.5% drop on Monday when fears of rising inflation prompted a selloff in the broader tech sector. The shares, however, have jumped by roughly 288% over the past 12 months.

The company’s market share gains stagnated against domestic vehicle makers Nio, Xpeng, and Li Auto in April as the company faced “a handful of negative PR issues in China” related in part to safety issues and a protest at the Shanghai Auto Expo, said Wedbush analyst Dan Ives in a note Tuesday.

“Taking a step back, Tesla is clearly facing chip shortage issues which is putting more pressure on production and logistics to fulfill demand globally and speaks to more cars heading to Europe this month than the Street expected,” Ives said, adding that Tesla’s overall China demand appears on track for an annual run rate of at least 300,000 units and is poised to represent about 40% of deliveries for Tesla by 2022.

“That said, clearly Musk & Co. need to play nice in the sandbox with Beijing and smooth out PR issues in the region which have been a black eye for Tesla over the last month and clearly impacted China sales negatively in the month of April,” said Ives, referring to Tesla’s CEO Elon Musk. Wedbush maintained its outperform rating on Tesla and its $1,000 price target.

Meanwhile, Musk on Tuesday tweeted a poll asking his followers if they want Tesla to accept the dogecoin cryptocurrency as payment. Earlier this year, Musk said Tesla would begin accepting bitcoin as payment for its vehicles.

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Tesla has scrapped plans to expand its Shanghai Model 3 factory, and will slow production in China because of US-Beijing tensions, according to a report

Tesla Shanghai
Elon Musk walks with former Shanghai Mayor Ying Yong in 2019

Tesla no longer intends to buy land to increase capacity at its Shanghai factory, Reuters reported.

Tesla also plans a general slowdown in China-based production despite soaring revenues in the country, sources familiar with the matter told Reuters.

The electric-car maker was expected to bid on a plot of land next to its Shanghai factory, but did not make a bid, the sources said. The plot was about about half the size of its current 80-hectare facility, they said.

Tesla has never publicly said it wanted to buy the plot of land. The company told Reuters its Shanghai plant was “developing as planned.”

Local media reports showed construction next to Tesla’s Shanghai plant last month.

The facility makes 450,000 Model 3 and Model Y cars every year, and with the extra space Tesla could have made an extra 200,000 vehicles, the sources said.

Tesla sells its China-made Model 3 cars in Europe, and had considered exporting to more markets including the US, sources said.

The company has now decided to slow down its China output due, in part, to an extra 25% tariff on China-made vehicles imported into the US introduced by former President Donald Trump in 2018, sources told Reuters.

The company made $3 billion in revenue in China in its first quarter, or 30% of its total revenue, but faces a potential regulatory clampdown from state authorities.

Chinese regulators met with Tesla representatives in February after a series of customer complaints about the safety of its vehicles. Since October, the automaker has recalled nearly 85,000 vehicles in China for suspension failures and problems with their touchscreen.

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Tesla raised the prices of its Model 3 and Model Y cars by $500, its 4th price change of the year

elon musk
Tesla CEO Elon Musk.

  • Tesla lifted the prices of its Model 3 Standard Range Plus, Model 3 Long Range AWD, and Model Y Long Range AWD by $500.
  • It also raised the price of its Model 3 Performance by $1,000, to $56,990.
  • It’s the fourth price change of the year for Tesla vehicles.
  • See more stories on Insider’s business page.

Tesla can’t make up its mind on how much its electric vehicles should cost.

Electrek first reported Friday that Tesla had once again hiked up the US prices of its Model 3 and Model Y cars – marking its fourth price change in 2021 so far.

The Model 3, its cheapest sedan, has been hit by the most price changes this year. In the latest change, Tesla raised the price of the Standard Range Plus from $37,990 to $38,490, and the Long Range AWD from $46,990 to $47,490. The Performance version had an even bigger increase, from $55,990 to $56,990.

Read more: Apple will never deliver a car because it can’t figure out how to work with the automakers who could make it happen

The automaker also raised the price of its Model Y Long Range AWD from $49,990 to $50,490.

Electrek also noted that the Model 3 price hike was accompanied by a small design update, adding a new wooden door trim, which Tesla had already rolled out on Model 3 vehicles produced at its Shanghai, China Gigafactory.

Tesla Model 3 trim
Tesla Model 3s in the US now come with a wooden door panel.

Customers told CNBC that Tesla had double-charged for new cars in mid-March, leaving them with bills of up to $142,000.

A Tesla customer, Terry Oelschlaeger, told Insider’s Kate Duffy he was double-charged for a Tesla Model Y costing nearly $54,000 on March 25, and that a Tesla service center employee told him the error had affected “many” buyers.

The company has since refunded the customers, including Oelschlaeger, and offered them $200 in credit at its online store.

Tesla posted record sales in the first quarter of 2021 despite a worldwide shortage of semiconductor chips. It sold 184,800 vehicles in the first three months of 2021, and Wall Street now expects the electric-vehicle company to sell more than 800,000 cars this year.

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Tesla refunded customers who were overcharged up to $71,000 on new cars, and gave them $200 to spend at its online store

GettyImages 1288827259
Tesla CEO Elon Musk.

  • Tesla customers who were charged twice for a new car were refunded the extra money a week later, CNBC reported.
  • Tesla offered the customers $200 in credit to spend at the company’s online store.
  • The buyers were left with bills of up to $142,000, and were charged for overdraft fees.
  • See more stories on Insider’s business page.

Tesla has refunded customers who were double-charged for new electric cars in mid-March, and has offered them $200 in credit at its online store, six people told CNBC on Wednesday.

Tesla refunded the extra money about a week after the customers told CNBC that Tesla had charged them twice without authorization and left them with bills of up to $142,000.

The customers said they received the money back on their double charges on or before April 1, but that they also had to pay for overdraft fees from their large bills.

Elon Musk’s car company sent the overcharged customers an email, which they shared with CNBC, that apologized and gave them $200 in credit. Tesla said the credit must be used in a single transaction, would expire on January 30, 2022, and couldn’t be spent on Tesla Tequila.

Tesla didn’t immediately respond to Insider’s request for comment.

Three California-based Tesla customers first shared their stories with CNBC in March. CNBC’s journalists reviewed their purchase agreements, correspondence with Tesla, and bank statements.

Clark Peterson, Tom Slattery, and Christopher T. Lee initially told CNBC they had purchased Teslas ranging from $37,000, the price of a Model 3 sedan, to $71,000, the cost of a Model Y crossover SUV with premium features.

A former banking executive from North Carolina, who wanted to remain anonymous for privacy reasons, also told CNBC he was charged twice for a new Model Y costing about $54,000.

Read more: DeepMind’s cofounder partied with Elon Musk for his raucous 40th birthday party on the Orient Express, a new book revealed

These buyers all authorized the payment of their brand-new electric vehicles through ACH direct debit, but the next day found that the money had been taken from their account twice, meaning in total they had spent between $74,000 and $142,000 on the cars.

Now they’ve been refunded, they said Tesla customer service needs to improve.

Peterson told CNBC: “While happy to have the whole situation sorted, I still feel that the response time was inadequate. It took days before Tesla had any kind of response, and they were holding our significant funds the whole time. And it took them five minutes to take those funds from our account.”

Another Tesla customer, Terry Oelschlaeger, told Insider he was also double-charged for a Tesla Model Y costing $53,993.70 on March 25. He shared his bank statement with Insider, showing a duplicate charge for a new car.

Oelschlaeger said he phoned the company three times to complain and drove to a Tesla service center in California, where an employee told him the error had impacted “many” buyers.

The company told him the refund would arrive in his bank account in one to three business days. He eventually received a payment in full from Tesla on March 31.

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Tesla has restarted Model 3 production in California after a 2-day shutdown due to a parts shortage, Elon Musk said

Tesla Fremont factory
Tesla’s Fremont, California factory.

  • Tesla restarted production at its Fremont, California factory on Wednesday, CEO Elon Musk said.
  • The factory stopped production for two days because of parts shortages, Musk said.
  • Tesla said last month that production could be impacted by the global semiconductor shortage.
  • Visit the Business section of Insider for more stories.

Tesla restarted production at its Fremont, California factory on Wednesday after a two-day hiatus caused by parts shortages, CEO Elon Musk said Thursday.

“Fremont shut down for two days (parts shortages) & restarted yesterday,” he tweeted, without elaborating.

Tesla said last month that it might face a temporary impact from a global semiconductor shortage.

Several automakers, including General Motors, Volkswagen, and Ford, are hit by the shortage of chips, forcing them to scale down production.

President Biden signed an executive order on Wednesday ordering a review into various US supply chains, including semiconductors.

Musk’s announcement on Twitter followed a report by Bloomberg that workers on a Model 3 production line in Fremont were told their line would be down from February 22 until March 7.

Affected staff were reportedly told they’d be paid for February 22 and 23, but not for February 28 through to March 3, a source close to the matter told the publication. February 22 and 23 were the days the factory halted production, according to Musk’s tweet.

The Fremont plant has an annual production capacity of 500,000 Model 3s and Model Ys combined.

Over the weekend Tesla also has stopped taking orders for its Model Y standard range, its second-cheapest vehicle, just days after slashing its price by $2,000.

It is unknown why the vehicle, which had only been on sale for a month, is no longer listed or whether the move is permanent.

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Tesla has reportedly temporarily halted production on its Model 3 line in California

Tesla Fremont factory
Tesla’s Fremont, California factory.

  • Tesla told workers at its Fremont, California factory it would temporarily shut down production, a source told Bloomberg.
  • The Tesla Model 3 line shutdown would last from February 22 to March 7, the source said.
  • Tesla said last month that production could be impacted by the global semiconductor shortage.
  • Visit the Business section of Insider for more stories.

Tesla has told workers it will temporarily halt some production at its car assembly plant in California, Bloomberg reported on Thursday, citing a person familiar with the matter.

Workers on a Model 3 production line in Fremont were told their line would be down from February 22 until March 7, according to the report.

Affected staff were reportedly told they’d be paid for February 22 and 23, but not for February 28 through to March 3, the source said. They were reportedly told to use vacation days where possible.

The report did not clarify the reason for the halt, and Tesla could not be immediately reached for comment.

It was also unclear how much volume or revenue Tesla would lose due to the production halt. The Fremont plant has an annual production capacity of 500,000 Model 3s and Model Ys combined.

Tesla said last month that it might face a temporary impact from a global semiconductor shortage.

Several automakers, including General Motors, Volkswagen, and Ford, are hit by the shortage of chips, forcing them to scale down production.

President Biden signed an executive order on Wednesday ordering a review into various US supply chains, including semiconductors.

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