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Tesla Worried By China Even As Deliveries Surge

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Tesla Worried By China Even As Deliveries Surge

Tesla Inc announced record quarterly car production numbers on Tuesday but warned it was facing major problems with selling cars in China due to new tariffs that will force it to accelerate investment in its factory in Shanghai.

The California-based electric carmaker, emerging from several months of turmoil around its Chief Executive Elon Musk, confirmed numbers leaked to an industry news site on Monday that showed it produced roughly 80,000 cars in the third quarter.

Deliveries reached a record 83,500, above Wall Street estimates of 80,000 and including almost 56,000 of the Model 3 sedan whose ramp-up is widely seen as crucial to the company’s drive to become profitable.

That overshadowed concerns expressed by the company over a 40 percent tariff being charged by China for the import of its cars, which it said was blocking sales in the world’s biggest electric car market. Shares gained 0.5 percent at the open.

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“Yes it sounds like the tariff comments could haircut some of their profit plans but the production ramp is very impressive and it should continue to move higher,” analyst Chaim Siegel of Elazar Advisors said.

“The company’s at an inflection point for units and profit.”

Tesla did say that it had missed its weekly Model 3 production target on Tuesday and outlined a series of barriers it faced due to the worsening of President Donald Trump’s trade war with China.

The electric car maker said it was speeding up construction of its Shanghai factory as it seeks to combat a huge competitive disadvantage against other producers and even other imported cars, which it said are carrying a lower 15 percent tariff.

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“Tesla is now operating at a 55 percent to 60 percent cost disadvantage compared to the exact same car locally produced in China,” the company said.

Musk in July landed a deal with Chinese authorities to build a new auto plant in Shanghai, its first factory outside the United States, that would double the size of the electric car maker’s global manufacturing.

The company flagged the tariff issue in August but said only that it was likely to have “some” impact on Chinese volumes and would not heavily affect global vehicle deliveries.

“With production stabilized, delivery and outbound vehicle logistics were our main challenges during Q3,” the company said on Tuesday. “We made many improvements to these processes throughout the quarter, and plan to make further improvements in Q4 so that we can scale successfully.”

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Tesla produced over 5,300 Model 3 cars in the last week of September, falling short of its target of 6,000.

Overall in the third quarter the company produced 53,239 of the cars in the third quarter, in line with its target of 50,000 to 55,000 Model 3s, and delivered 55,840 of the vehicles to customers.

Tesla first met a long-held target of 5,000 vehicles per week at the end of June after a series of production bottlenecks and delays. Since then the company has been striving to sustain and increase that level.

World News

Israel Hits Targets Across Gaza After Rocket Attack

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Israel Hits Targets Across Gaza After Rocket Attack

Israeli forces have struck targets across the Gaza strip through Tuesday, including the offices of Hamas supreme leader, in response to a surprise rocket attack from the Palestinian territory.  The military has bolstered its troops and rocket-defense systems in anticipation of a new round of heavy fighting with the Islamic militant group.

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Israel opened public bomb shelters in most major cities and civil defense authorities canceled sports events and public transportation in southern Israel.

Prime Minister Benjamin Netanyahu, who had hurried back to Israel from Washington because of the rocket attack, said Israel will not tolerate this, and that he, personally, would not tolerate it. He said Israel will respond forcefully to the rocket attack he called wanton aggression.

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Israeli military said it had retaliated to the latest rocket attacks with fifteen airstrikes.  It also said Hamas military sites and those for smaller jihad group had been hit.

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Hamas has been leading weekly protests along the Israeli border for the past year in hopes of easing an Israeli-Egyptian blockade, but the demonstrations in which nearly two hundred persons have been killed by Israeli fire, have done little to improve conditions.

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World News

Theresa May Loses Control Of Brexit Negotiations, Parliament Takes Over

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Theresa May Loses Control Of Brexit Negotiations, Parliament Takes Over

British Prime Minister, Theresa May, could not be said to have had a good day on Tuesday as she lost control of the Brexit negotiations.  The Prime Minister says parliament’s decision to take control of the stalled process of leaving the European Union underscores the need for lawmakers to approve her twice-defeated deal.

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The House of Commons voted on Monday to take control of the parliamentary timetable on Wednesday so lawmakers can vote on alternatives to the withdrawal agreement the prime minister negotiated with the EU.

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Health secretary, Matt Hancock said on BBC news on Tuesday the government won’t “pre-commit” to accepting the option backed by lawmakers.  He wants lawmakers to support the prime minister’s agreement because, as he put it, the best way through the impasse is the one deal the prime minister has already negotiated with the EU.

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Tuesday’s events are sure to further complicate the process of Britain leaving the bloc.

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African News

UN Says Around 1.85 Million People Affected By Cyclone In Mozambique

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UN Says Around 1.85 million People Affected By Cyclone In Mozambique

The United Nations’ humanitarian agency OCHA has on Tuesday disclosed that close to 1.85 million people have now been affected by Cyclone Idai and its aftermath in Mozambique alone.

“Some will be in critical, life threatening situations. Some will sadly have lost their livelihoods, which whilst an appalling tragedy is not immediately life threatening,” OCHA coordinator Sebastian Rhodes Stampa said.

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Relief organizations, including the international federation of the red cross and red crescent societies, say some cases of cholera had already been reported. Meanwhile, in Zimbabwe the country’s entertainment stars have organized a concert to raise funds to help victims.  There is growing fear of starvation in communities that have been cut off by smashed bridges or destroyed roads.

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The United Nations is also making an emergency appeal for $282 million for the next three months to help Mozambique start recovering.

The UN funding will be used to provide water, sanitation, education and restoring the livelihoods of the hundreds of thousands of displaced people, UN humanitarian chief Mark Lowcock said Monday.

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