Tesla hits record profit despite parts shortage, ship delays

Tesla hits record profit despite parts shortage, ship delays
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Updated 21 October 2021

Tesla hits record profit despite parts shortage, ship delays

Tesla hits record profit despite parts shortage, ship delays

DETROIT: Record electric vehicle sales last summer amid a shortage of computer chips and other materials propelled Tesla Inc. to the biggest quarterly net earnings in its history.
The company said Wednesday that it made $1.62 billion in the third quarter, beating the old record of $1.14 billion set in the second quarter of this year. The profit was nearly five times larger than the $331 million Tesla made in the same quarter a year ago.
Revenue of $13.76 billion from July through September also set a record, but it fell short of Wall Street expectations of just over $14 billion, according to FactSet.
Excluding special items such as stock-based compensation, Palo Alto, California-based Tesla made $1.86 per share, beating analyst estimates of $1.62. CEO Elon Musk has said he's moving the headquarters to Austin, Texas, the dateline of Wednesday's earnings release.
Some of the quarterly profit, though, came from selling regulatory credits to other automakers. Tesla made $279 million on credits during the quarter.
"A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed," the company said in a statement to shareholders.
Earlier this month Tesla said it delivered a record 241,300 electric vehicles in the third quarter even as it wrestled with the shortages that have hit the entire auto industry. Most automakers reported sales declines in the U.S. last quarter due to chip and other shortages, including General Motors and Ford.
Previously, Musk has said Tesla kept its manufacturing lines running largely by finding chips from alternate suppliers and then scrambling to rewrite some of the software in its cars to ensure all the technology remained compatible.
Third-quarter sales rose 72% over the 140,000 deliveries Tesla made for the same period a year ago.
So far this year, Tesla has sold around 627,300 vehicles. That puts it on pace to soundly beat last year’s total of 499,550.
While sales grew in the third quarter, the average sales price fell 6% because Tesla is selling more less-expensive Models 3 and Y and fewer pricier Models S and X.
Tesla also took an impairment charge of $51 million due to a decline in value of its Bitcoin holdings.
Musk didn't appear on this quarter's conference call with with analysts and investors. He said previously that he would show up only when he had something important to say.
That left Chief Financial Officer Zachary Kirkhorn and Vice President of Vehicle Engineering Lars Moravy to answer questions.
Kirkhorn said the company was able to hit an operating margin — how much it makes pretax after variable production costs — of just under 15%.
But Kirkhorn said Tesla may face some difficulties in the future that could threaten that margin, including rising commodity prices and labor shortages. Tesla's biggest cost exposure is for nickel, which goes into battery cells, and aluminum, which the company uses for other nonbattery components, he said. Tesla also will face inefficiencies as it starts production at new factories in Texas and Germany next year, he said.
The company already is seeing commodity cost increases, which have resulted in price hikes, Kirkhorn said. Next year it's possible that Tesla will see more. "It's difficult to say precisely, but the volatility and the increases are just so substantial," he said.
Tesla executives also made their first public comment on multiple investigations of the company by U.S. safety regulators. Moravy said Tesla is cooperating as much as possible.
The National Highway Traffic Safety Administration has opened an investigation into why Tesla's Autopilot driver-assist system keeps running into parked emergency vehicles. Of the dozen crashes that are part of the probe, 17 people were injured and one was killed.
The safety agency also is questioning why Tesla didn't recall vehicles with Autopilot when it did an over-the internet software update so they better recognize firetrucks and police cars in low light. NHTSA said the update addressed a safety defect.
Kirkhorn said safety is important to Tesla as the auto industry transitions from traditional cars to being more software-oriented. “Regulatory bodies, and understandably so, are interested in understanding how to regulate in this environment, and NHTSA is no exception,” he said. “Were excited to partner and we'll work collaboratively with all the different regulatory bodies.”
Tesla hasn’t always cooperated with the safety agency, though. In January, Tesla resisted a request from NHTSA to recall about 135,000 vehicles because their touch screens could go dark. The agency said the screens were a safety defect because backup cameras and windshield defroster controls could be disabled.
A month later, after NHTSA started the process toward holding a public hearing and taking Tesla to court, the company agreed to the recall.
In its shareholder statement, Tesla also said that construction of its new factory near Austin is progressing as planned and it’s preparing equipment and “fabricating our first pre-production vehicles.”
The factory, which is centrally located versus Tesla’s other assembly plant in Fremont, California, will send Model Y small SUVs and new Cybertruck pickups to East Coast population centers.
Tesla said it expects to expand its factory capacity quickly, and over a “multi-year horizon” it expects sales to grow an average of 50% annually.
Shares of Tesla Inc. fell 1.6% to $851.80 in after-hours trading Wednesday.


France urges producers to cap oil price over Ukraine

France urges producers to cap oil price over Ukraine
Updated 26 June 2022

France urges producers to cap oil price over Ukraine

France urges producers to cap oil price over Ukraine

ELMAU, Germany: France on Sunday urged oil producers to cap the price of the commodity in order to put the squeeze on Russia which is benefiting from soaring energy prices.

Paris backs a US proposal for a maximum oil price, but said that “it would be much more powerful if it came from the producing countries,” said the French presidency.

To make such a measure work, it was “necessary to get into a discussion with OPEC+ and with the world’s oil producers,” said the source.

The US had suggested a price cap decided by consuming countries, a proposal that is due to be discussed by G7 leaders meeting in the Bavarian Alps on Sunday.

But Germany believes that the measure would be too difficult to put in place.

A senior German official said: “We are still intensively discussing how this would work and how that can fit in with the American, British, European and Japanese sanction regimes.”

EU President Charles Michel also said discussions were ongoing but “we want to go more into the details.”

“We want to make sure that ... the goal is to target Russia and not to make our life more difficult and more complex,” he said.


US aims to raise $200bn as part of G7 rival to China’s Belt & Road

US aims to raise $200bn as part of G7 rival to China’s Belt & Road
Updated 26 June 2022

US aims to raise $200bn as part of G7 rival to China’s Belt & Road

US aims to raise $200bn as part of G7 rival to China’s Belt & Road

WASHINGTON: The US aims to raise $200 billion in private and public funds over five years to fund needed infrastructure in developing countries under a G7 initiative aimed at countering China’s multitrillion-dollar Belt and Road project, the White House said on Sunday.
US President Joe Biden will unveil the plans, flanked by other Group of Seven leaders, some of whom have already unveiled their own separate initiatives, at their annual gathering being held this year at Schloss Elmau in southern Germany.

Partnership
Increasingly worried about China, G7 leaders first floated plans for the project last year, and are formally launching it now under a fresh title, “Partnership for Global Infrastructure and Investment” while dropping the moniker “Build Back Better World” first coined by Biden during his presidential campaign.
Biden will unveil several specific projects at a G7 side event, joined by leaders from Britain, Germany, Japan, the European Union and Canada, vowing to focus on projects that help tackle climate change as well as improve global health, gender equity and digital infrastructure. Notably absent will be French President Emmanual Macron who had formally joined the Chinese infrastructure program.
“The president’s not thinking that we need to spend dollar for dollar versus China ... though if you add up what the US and the G7 partners are going to be announcing, it comes pretty close to the number,” one senior US official told reporters.
The funds would be raised through grants and federal funds, and by leveraging private-sector investments, the White House said, adding that hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

BRI scheme
China’s Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, involves development and investment initiatives in over 100 countries, with a range of projects including railways, ports and highways.
White House officials say Xi’s plan to create a modern version of the ancient Silk Road trade route has provided little tangible benefit for many developing countries, with top jobs going to Chinese workers, while increasing rates of forced and child labor.
Biden will highlight several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the US Export-Import Bank, US firm AfricaGlobal Schaffer, and US project developer Sun Africa.
Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines.

Childcare Incentive Fund
The US Agency for International Development will also commit up to $50 million over five years to the World Bank’s new global Childcare Incentive Fund, a project aimed at address the gap in suitable childcare infrastructure.


Saudi-Italian forum to explore opportunities to boost bilateral trade

Saudi-Italian forum to explore opportunities to boost bilateral trade
Updated 26 June 2022

Saudi-Italian forum to explore opportunities to boost bilateral trade

Saudi-Italian forum to explore opportunities to boost bilateral trade

RIYADH: Saudi Arabia’s Ministry of Investment will host a high-level Italian business delegation led by Italian Minister for Foreign Affairs and International Cooperation Luigi Di Maio on Monday.

With the aim of exploring mutually beneficial investment opportunities, the Saudi-Italian Investment Forum will see participation by a range of private sector representatives from both countries, according to a statement. 

The forum will focus on finance, infrastructure and mobility, tourism and culture, and renewable energy. 

It will conclude with bilateral business meetings. It will serve as a platform for Italian investors to explore the support services available from Invest Saudi, the Kingdom’s investment promotion platform.


Egypt’s chemical industry exports rise by 33% to $3.5bn 

Egypt’s chemical industry exports rise by 33% to $3.5bn 
Updated 26 June 2022

Egypt’s chemical industry exports rise by 33% to $3.5bn 

Egypt’s chemical industry exports rise by 33% to $3.5bn 

CAIRO: Egypt's chemical and fertilizer industries’ exports have increased by 33 percent to a record $3.5 billion during the first five months of 2022, compared to $2.6 billion during the same period last year, the latest official data revealed.

According to the Chemical Industries and Fertilisers Export Council, the sector ranked first in terms of the volume of its exports from Egypt's total non-oil exports.

The chemical and fertilizer sector accounted for around 22 percent of Egypt’s total non-oil exports. This was followed by the building materials sector, which accounted for 20 percent of the total exports, with a value of about $3.2 billion.

According to official data, most of the sector's exports witnessed increases in varying proportions.

Fertilizers ranked first, with an estimated export volume of $1.16 billion, compared to $768 million during the same period last year, with a growth rate of 51 percent.

Plastics exports came in second place, with exports estimated at $1.09 billion, an increase of 12 percent over the same period last year when exports amounted to about $970 million.

In third place came the inorganic chemicals, which witnessed a noticeable increase in the volume of their exports by 144 percent, rising from $225 million to $550 million. 


Egypt In-Focus — Fintech startups raise $167m; deal signed to import 180K tons of wheat from India

Egypt In-Focus — Fintech startups raise $167m; deal signed to import 180K tons of wheat from India
Updated 26 June 2022

Egypt In-Focus — Fintech startups raise $167m; deal signed to import 180K tons of wheat from India

Egypt In-Focus — Fintech startups raise $167m; deal signed to import 180K tons of wheat from India

RIYADH: Fintech startups in Egypt have raised $167 million in the first half of 2022, according to a report published in Fintech Galaxy. 

According to the report, the amount was collected in 31 transactions of which series A and B funding accounted for around 90 percent. 

The growth of the fintech sector in Egypt is primarily driven by the Central Bank of Egypt’s Sandbox and the recent launch of Nclude Fintech fund, the report added. 

Egypt to import 180,000 tons of wheat from India

The Egyptian government has successfully closed a deal to import 180,000 tons of wheat from India, Reuters reported citing Supply Minister Aly Moselhy.

The minister said that the contracted wheat will be shipped once it reaches the Indian ports. 

Strategic reserves

Egypt has strategic reserves of wheat sufficient for 5.7 months, the supply minister said in a news conference on Sunday, adding that the country has procured 3.9 million tons of wheat in the local harvest so far.

Egypt is one of the world’s biggest wheat importers.

He added that the strategic reserves for sugar were sufficient for more than six months and those for vegetable oils are sufficient for 6.2 months, while the country is self-sufficient for rice for 3.3 months.

 

(With input from Reuters)