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Two new factories for Tesla

Tesla’s Fremont factory

Tesla will be announcing locations for two new Tesla factories in a couple of months.

Currently, Tesla has one factory which was previously utilised by General Motors and Toyota. Located in Fremont, California, the automaker makes use of this factory to build its Model S, Model X, and Model 3 electric vehicles (EVs). According to CEO Elon Musk, the factory is “jammed to the gills.” 

Tesla is now searching for a new manufacturing location to begin operations within the next two years. This plant will be responsible for the production of Tesla’s upcoming vehicle, the Model Y. Depending on the size of the plant, it may also be used to either broaden current production numbers.

Musk also brought to light a second Gigafactory that the company plans to build in China. The existing Gigafactory located in Reno, Nevada has a primary focus of manufacturing batteries and the motors shared between the Model 3 and Tesla Semi. 

It was also mentioned that all future Tesla plants would be manufacturing both vehicles and batteries in the same facility. This is unlike the currently established model, where Tesla must transport its batteries over 320 kilometres from the Gigafactory to its Fremont facility.

Tesla’s production numbers of the Model 3 have been under scrutiny over the last several months, as the automaker struggled to meet production goals. An increase in space will allow Tesla to build a more robust platform for the production of their fleet of electric vehicles. 

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Tesla beats expectations

Tesla’s Fremont factory

Tesla reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues of $3.4 billion (NZ$4.86 billion).

This is a win for Tesla, as analysts polled by FactSet expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago. Last quarter, Tesla reported revenues of $3.29 billion. Tesla also ended Q1 with $2.7 billion in cash.

However, the electric vehicle (EV) manufacturer posted a record US$709.6 million (NZ$1.014 billion) net loss in the first quarter and burned through US$745.3 million (NZ$1.065 billion) in cash while struggling to crank out large numbers of its Model 3 mass-market electric car.

The loss raises questions about the company’s future and whether it will be able to pay all of its bills by early next year without more borrowing or another round of stock sales.

Tesla also provided some updates to its Model 3 production, stating that they have managed to produce 2,270 cars per week for three straight weeks in April.

“Even at this stage of the ramp, Model 3 is already on the cusp of becoming the best-selling mid-sized premium sedan in the US, and our deliveries continue to increase,” Tesla CEO Elon Musk and CFO Deepak Ahuja wrote in a letter to investors.

“Consumers have clearly shown that electric vehicles are simply more desirable when priced on par with their internal combustion engine competitors while offering better technology, performance and user experience.”

Tesla expects to hit its ideal production rate of 5,000 Model 3 units per week within two months and plans to increase that goal to 10,000 shortly after that.

“In the end, this is all about having factories that are producing the world’s highest quality cars as quickly and as cost-effectively as possible, and with as close to zero injuries as we can possibly get,” the investor letter states. “Our automation strategy is key to this and we are as committed to it as ever.”

Assuming Tesla hits its 5,000 Model 3 cars produced per week goal, Tesla expects to be profitable in Q3 and Q4, excluding non-cash, stock-based compensation. Tesla also expects to achieve full GAAP profitability in Q3 and Q4 as well.

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Tesla hit with lawsuit

Tesla vs. Nikola – Source: Teslarati

Nikola Motor Company has filed a lawsuit against Tesla alleging they copied patents from their all-hydrogen truck. Nikola is seeking NZ$2.8 billion in damages in return.

“It’s patently obvious there is no merit to this lawsuit,” a spokesperson for Tesla told The Verge. 

A representative for Nikola Motors said in a statement to The Verge that “[w]e are not commenting because it is in the courts. The lawsuit speaks for itself.”

Nikola was founded in 2014, and the company showed off its first a hydrogen-electric semi truck in May 2016. 

The complaint filed by Nikola lays out a number of claims that viewed together, the company says prove Tesla copied from the startup’s patents. Nikola points to the trucks’ front fenders, wraparound windshields, mid-entry doors, aerodynamic fuselage for similarities.

Nikola also claims that a recruiter for Tesla, Aaron Hoyos, tried to poach Nikola’s chief engineer just a few months after the startup unveiled its hydrogen semi truck and that this is evidence that Tesla was aware of Nikola’s unique design features.

Nikola says that Tesla’s truck is causing “confusion in the market,” and claims that “Tesla’s infringement has harmed Nikola’s ability to attract investors and partners because investors can now partner with Tesla to have an alternative fuel semi-truck.”

Nikola announced that it will refund all current reservation-holders’ deposits, without changing their place in line for its hydrogen fuel-cell semi trucks.

The company said deposits would be refunded within 60 days, and noted that “we have never used a dollar of deposit money in the history of our company.” New reservations won’t require a deposit, the company said.

 

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Tesla driver banned

Tesla Model S

A man who switched on his car’s autopilot before moving to the passenger seat while travelling along a motorway has been banned from driving for 18 months.

Bhavesh Patel, 39, pleaded guilty to dangerous driving at St Albans Crown Court in the UK. 

While his Tesla S 60 was in motion, Patel chose to switch on the supercar’s autopilot function before moving across to the passenger seat and leaving the steering wheel and foot controls completely unmanned.

A witness noticed Patel, who had owned the car for a maximum of five months at the time of the incident, sitting in the passenger seat of the vehicle.

No one could be seen in the driver’s seat and Patel appeared to have his hands behind his head. The witness, who was a passenger in another car, filmed Patel as the car drove past.

Witnesses estimated that the vehicle was travelling at approximately 65km/h at the time.

Footage of the incident was first posted on social media before it was reported to police.

He was later interviewed by officers at Stevenage Police Station, where he admitted that he knew what he had done was silly, but that the car was capable of something “amazing” and that he was just the “unlucky one who got caught.”

As part of the investigation, officers obtained a statement from a Tesla engineer who described autopilot as a ‘suite of driver assistance features’.

They stated that these are hands-on features intended to provide assistance to a “fully-attentive driver.”

Investigating officer PC Kirk Caldicutt, from the Bedfordshire, Cambridgeshire and Hertfordshire Road Policing Unit, said: “This case should serve as an example to all drivers who have access to autopilot controls and have thought about attempting something similar. I want to stress that they are in no way a substitute for a competent motorist in the driving seat who can react appropriately to the road ahead.”

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Tesla to build Model 3 24/7

Tesla Model 3 – Source: Washington Post

Tesla says it will start building cars around the clock in order to ramp up Model 3 output to 6,000 a week.

An internal company email says the company will boost production to a 24/7 operation by the end of June. 

“As part of the drive toward 6k, all Model 3 production at Fremont will move to 24/7 operations. This means that we will be adding another shift to general assembly, body and paint,” Chief Executive Elon Musk wrote. The email was obtained by the website Electrek.

Tesla will also be adding about 400 people per week for several weeks, Musk wrote. The company had previously said it was targeting 5,000 a week by around the end of the second quarter.

Musk, who has said his automaker will be profitable and cash-flow positive in the third and fourth quarters also outlined cost-saving measures in his email.

“I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification,” he wrote.

“All capital or other expenditures above a million dollars, or where a set of related expenses may accumulate to a million dollars over the next 12 months, should be considered on hold until explicitly approved by me.”

“The reason that the burst-build target rate is 6,000 and not 5,000 per week in June is that we cannot have a number with no margin for error across thousands of internally and externally produced parts and processes,” Musk said. He noted the carmaker produced 2,250 of the mission-critical sedans last week.

Musk said that going forward, workers should walk out of meetings or drop off of a call “as soon as it is obvious you aren’t adding value” and avoid using “acronyms or nonsense words for objects, software or processes at Tesla” to boost their productivity.

“We are burning the midnight oil to burn the midnight oil,” he added.

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Drivers struggle to stay engaged

The difficulty of keeping drivers in automated vehicles engaged is a growing safety concern that has spurred several car companies, including General Motors (GM) and Subaru, to position infrared cameras in the cockpit trained on the driver to track head and eye movement.

However, U.S. safety investigators have called on carmakers to do more to ensure drivers stay engaged when using an autonomous vehicles. The National Transportation Safety Board (NTSB) has opened three investigations, two of which involve Tesla vehicles, that call into question the progress that’s been made in guarding against motorist misuse of autonomous/semi-autonomous driving technology.

Tesla has lagged behind automakers in embracing driver monitoring. While the electric carmaker still relies on technology that federal investigators said was too easy to sidestep, it’s now working on unspecified improvements to its vehicles, according to the NTSB.

“They have indicated that they have already made some improvements and are working on additional improvements,” agency spokesman Peter Knudson said to Bloomberg, in the first indication that the company is contemplating more changes to its driver-assistance system. NTSB highway investigators have been in contact with Tesla technical staff, he added.

Driver-monitoring technology is needed for any vehicle that needs humans to handle part of the driving task, said Bryan Reimer to Bloomberg News, who studies driver behaviour at the Massachusetts Institute of Technology. This includes conventional vehicles without driver-assist systems, cars that guide themselves for some periods without human inputs, such as cruise control, and self-driving cars with people serving as safety monitors.

Motorists today are bombarded by distractions, from mobile phones to in-dash navigation systems, Reimer added. “Drivers need help making better decisions.”

The NTSB is investigating two crashes this year in which Tesla drivers were using Autopilot. The system can automate steering and follow traffic in some conditions, but the company warns drivers they must monitor it at all times. The system isn’t designed to be fully autonomous and can’t detect some objects in its path, according to Tesla. 

In the most recent case, a Model X slammed into a concrete highway barrier on March 23 in Mountain View, California, killing the driver Walter Huang. His family has hired Minami Tamaki LLP to explore legal options, the firm said Wednesday in a statement.

Tesla said in a blog post last month that Huang, 38, didn’t have his hands on the wheel for six seconds prior to striking the barrier where lanes split on the freeway.

“The driver had received several visual and one audible hands-on warning earlier in the drive,” the company said in the March 30 blog post.

“What Tesla has is basically a sensor that just detects whether your hands are on the wheel,” said Mike Ramsey, an analyst at researcher Gartner Inc. “If it doesn’t detect anything on the wheel for a certain amount of time, it first gives a visual warning, then an audible warning, then the car starts slowing down. It’s somewhere in the neighbourhood of 10 seconds or longer. At 70 miles per hour, that’s a long time — a lot can happen in that period of time.”

Tesla has installed an inward-facing camera above the rear-view mirror in its new Model 3 sedan, but hasn’t confirmed whether it could be used to monitor drivers.

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Tesla reveals production date for Model Y

Tesla has announced that November 2019 will be the start of production for its Model Y sport utility vehicle, with production in China to begin two years later.

Two sources told Reuters this week that Elon Musk is currently accepting preliminary bids for supplier contracts on the Model Y, a compact crossover companion to the Model 3 sedan.

Tesla has given suppliers limited details about the program and had not provided a production time frame, but has signalled that the vehicle would begin to be built at its Fremont, California, plant in 2019, the two sources said.

This shows that even though Tesla is struggling to produce the Model 3, which was launched in July, Tesla is pushing ahead on plans to build a new vehicle.

Despite attracting about 500,000 advance orders in the form of refundable deposits, the sedan’s launch has been overrun with delays and factory bottlenecks.

Competitive bidding is an important step in the process of automotive manufacturing. After the automaker discloses its plans, suppliers compete based on factors including cost and technology.

With a new car model, automakers normally choose parts suppliers two to two-and-a-half years before the start of production, said the sources. At about one-and-a-half years away, a November 2019 start date for the Model Y would be considered “aggressive, but possible.”

Tesla is known for its aggressive timelines and high risk-tolerance in order to get cars to market quicker.

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Tesla tops electric chart

The Tesla Model S

Tesla continues to lead sales of pure electric vehicles (EVs), according to statistics for the first quarter of 2018. The Model S notched up 44 registrations and the Model X came third with 37 with Hyundai’s Ioniq sandwiched between them on 39.

By comparison, in the first three months of 2017 Model S sales came in at 32 and 10 Model Xs were registered.

During the whole of last year, the Models S and Model X racked up 128 and 116 sales respectively, according to Motor Industry Association statistics. These figures made Tesla New Zealand’s top-selling brand in the pure EV class in which 546 units were registered overall.

Sales of cars other than those powered by petrol or diesel are still led by plug-in hybrids. They accounted for the bulk of 797 registrations in the “other” category for the first quarter of 2017.

Toyota dominates this segment with three of its hybrids – the Corolla with 195 sales, the Camry on 103 and the Prius C with 88 – commanding a market share of 57 per cent.

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China threatens new EV tariffs

China has recently announced that electric vehicles (EVs) will be included among American products that will incur additional tariffs, a huge setback for EV manufacturers. 

Tesla Inc. is at particular risk. The car maker relies on US-built vehicles for all its Chinese sales, whereas US carmakers General Motors Co. and Ford Motor Co. manufacture in China and import few vehicles into the world’s largest market. 

China is Tesla’s biggest market after the US, and an additional tariff would hand local EV manufacturers a huge pricing advantage. 

“The jump in tax levy hurts Tesla the most as it had not yet started local production in China,” said Cui Dongshu, the secretary general of China’s Passenger Car Association to Bloomberg News. “For GM and Ford, they can always make up with China-produced ones.”

The U.S. carmaker is already hindered by China’s current 25 per cent import tax that hikes the prices of Model S sedans and Model X, relegating Tesla into a niche marque only afforded by the seriously wealthy.

China’s import taxes have contributed to other carmakers’ decisions to produce in China under joint-venture agreements. Volkswagen AG makes most of the vehicles it sells in the country at local plants, and about two-thirds of BMW and Daimler sales come from domestic factories.

 Proposed factory
Tesla said it was working with Shanghai’s government to explore assembling cars, an agreement hasn’t been clinched due to the two sides disagreeing on the business structure for a proposed factory.

Tesla’s reluctance in investing in local manufacturing means losing out on a chance to capitalise on China’s hard sell for new-energy vehicles (NEVs), such as all or hybrid EVs.

In the US, Tesla accounted for the majority of the 104,471 battery-powered cars, according to data compiled by Bloomberg. However in China, Tesla sold a mere 14,883 vehicles, accounting for just 3 per cent of the nation’s battery-powered EV sales of 449,431 units.

 
 
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Driver killed in Tesla crash

A driver has died after his Tesla Model X crashed in California on Friday morning, and concerns about its exposed battery contributed to more than six hours of lane closures, according to the California Highway Patrol.

The accident was reported when the 2017 Tesla, traveling at freeway speed, collided with a median barrier. 

Soon after the crash, the vehicle caught on fire, and then an approaching Mazda and Audi hit the Tesla.

The Tesla driver was removed from the car and taken to hospital with major injuries, and was pronounced dead Friday afternoon, Officer Art Montiel said. 

Road crews were prevented from immediately clearing the wreck from the roadway because explosion concerns after the car’s sizeable battery was exposed by the crash.

Engineers from Tesla were sent to evaluate the battery, and after about an hour they deemed the car safe to transport, Montiel said.

The semiautonomous Autopilot feature had also been turned on before the crash raising more questions about the safety of the company’s self-driving technology.

The company said in a statement posted on its website that the driver in the crash last week had “about five seconds and 150 meters of unobstructed view” before he crashed into a median barrier, adding that “the vehicle logs show that no action was taken.”

The driver had been given “several visual and one audible hands-on warning earlier in the drive,” Tesla said.

Still, Tesla defended its Autopilot hardware. In its statement, the company said there was one automotive fatality for every 138 million kilometres across all vehicles in the United States, compared with one fatality for every 515 million kilometres in vehicles equipped with Autopilot.

“If you are driving a Tesla equipped with Autopilot hardware, you are 3.7 times less likely to be involved in a fatal accident,” the company said.

The crash occurred five days after a fatality which involved the first pedestrian death associated with self-driving technology.

 

 

 

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Tesla to train a new generation of EV technicians


Tesla has launched a new automotive training program with colleges called ‘Tesla START’ to train a new generation of electric car technicians.

Prior to the new program, Tesla had mainly been recruiting technicians who have been working for other automakers or coming out of training programs where they mainly worked on internal combustion engines.

Of course, electric cars have several components in common with gas-powered cars, but the powertrains are entirely different and it requires a significant amount of training to service them even for an experienced auto technician.

Tesla has been conducting that training internally for all its service technicians across over 100 service centres around the world. Now the automaker is partnering with colleges to offer the training to students before starting to work at Tesla.

The 12-week long training program is already underway at Central Piedmont Community College in Charlotte, North Carolina, where the first class fo 13 students are going to graduate next week, and at Rio Hondo College in Whitter, California.

After the program, Tesla helps place graduates at service locations across North America.

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