Tag: tesla inc

CNBC Daily Open: Don’t be fooled by big banks’ earnings
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Workers erect a construction barrier in front of JPMorgan Chase & Co. headquarters in New York, U.S., on Friday, Jan. 11, 2019.

Michael Nagle | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

On Friday three big U.S. banks reported better-than-expected first-quarter earnings. But investors realized this wasn’t an unambiguously good sign for markets.

What you need to know today

JPMorgan Chase, Wells Fargo and Citi reported earnings Friday. All three big U.S. banks handily beat profit and revenue expectations. JPMorgan’s numbers were the most impressive, with profit surging 52% in the first quarter.

U.S. markets fell Friday as weak retail sales overshadowed banks’ stellar earnings. Asia-Pacific stocks were mixed Monday. China’s Shanghai Composite rose 1.21% on the back of two pieces of good news: The country’s economy is expected to expand 4% in the first quarter, and its home prices grew the fastest, month over month, in almost two years.

PRO Markets this week will mostly be influenced by earnings reports, writes CNBC Pro’s Scott Schnipper. One important tip: Investors shouldn’t assume all better-than-expected numbers are good — because earnings forecasts have been negative for so long.

The bottom line

Investors weren’t misled by big banks’ bonanza of incredible earnings.

Yes, profit and revenue for all three banks that reported Friday rose compared with a year earlier. JPMorgan reported a record revenue of $39.34 billion, a 25% jump that beat analysts’ estimate by more than $3 billion. Wells Fargo’s revenue popped 17%, and Citi’s rose 12%.

Investors rewarded the banks for their sterling balance sheets: JPMorgan soared 7.55% and Citi added 4.78% — though Wells Fargo dipped 0.05%, not because its numbers were bad but, I suspect, because it didn’t beat Wall Street expectations as much as the other two banks.

Why were the figures so good? They had to thank rising interest rates, which allow banks to charge more for loans they make, while keeping the interest on saving accounts low. Banks pocket the difference, which is known as net interest income. It seems banks will continue benefiting from today’s high interest-rate environment: JPMorgan predicted net interest income will be $7 billion more than the bank had previously forecast.

But high interest rates are a double-edged sword. Even though higher rates fueled big banks’ earnings, they also expose weaknesses in balance sheets, as Dimon himself warned. This means that regional banks, lacking the financial heft of bigger ones to cushion possible losses — that’s essentially how SVB failed — might not have such good news to share when they report earnings next week.

In other words, what’s good for big banks’ income is not necessarily good for the economy. Indeed, data released Friday showed the economy is slowing down. Retail sales in March declined 1%, two times more than economists had expected, according to an advanced reading. Citigroup CEO Jane Fraser said on an investor call that the bank saw a “notable softening” in consumer spending this year.

Despite the excitement over the big banks’ earnings, then, investors kept a cool head, causing the three major indexes to fall. The S&P 500 lost 0.21%, the Dow Jones Industrial Index slid 0.42% and the Nasdaq Composite fell 0.35%.

Further earnings this week will give investors a clearer sense of markets.

Here are some key reports to look out for: Charles Schwab on Monday; Bank of America, Goldman Sachs and Netflix on Tuesday; Morgan Stanley, IBM and Tesla on Wednesday; American Express on Thursday; Procter & Gamble on Friday. By the end of this week, investors should know if the disconnect between a profitable corporate America and a flagging economy is limited to big banks — or if it’s another side effect of the strange times we live in.

Subscribe here to get this report sent directly to your inbox each morning before markets open.
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April 16, 2023
CNBC Daily Open: Don’t be misled by the big banks
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JPMorgan Chase & Co. headquarters in New York, US, on Wednesday, Jan. 18, 2023.

Gabby Jones | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

On Friday three big U.S. banks reported better-than-expected first-quarter earnings. But investors realized this wasn’t an unambiguously good sign for markets.

What you need to know today

JPMorgan Chase, Wells Fargo and Citi reported earnings Friday. All three big U.S. banks handily beat profit and revenue expectations. JPMorgan’s numbers were the most impressive, with profit surging 52% in the first quarter.

PRO Markets this week will mostly be influenced by earnings reports, writes CNBC Pro’s Scott Schnipper. One important tip: Investors shouldn’t assume all better-than-expected numbers are good — because earnings forecasts have been negative for so long.

The bottom line

Investors weren’t misled by big banks’ bonanza of incredible earnings.

Yes, profit and revenue for all three banks that reported Friday rose compared with a year earlier. JPMorgan reported a record revenue of $39.34 billion, a 25% jump that beat analysts’ estimate by more than $3 billion. Wells Fargo’s revenue popped 17%, and Citi’s rose 12%.

Investors rewarded the banks for their sterling balance sheets: JPMorgan soared 7.55% and Citi added 4.78% — though Wells Fargo dipped 0.05%, not because its numbers were bad but, I suspect, because it didn’t beat Wall Street expectations as much as the other two banks.

Why were the figures so good? They had to thank rising interest rates, which allow banks to charge more for loans they make, while keeping the interest on saving accounts low. Banks pocket the difference, which is known as net interest income. It seems banks will continue benefiting from today’s high interest-rate environment: JPMorgan predicted net interest income will be $7 billion more than the bank had previously forecast.

But high interest rates are a double-edged sword. Even though higher rates fueled big banks’ earnings, they also expose weaknesses in balance sheets, as Dimon himself warned. This means that regional banks, lacking the financial heft of bigger ones to cushion possible losses — that’s essentially how SVB failed — might not have such good news to share when they report earnings next week.

In other words, what’s good for big banks’ income is not necessarily good for the economy. Indeed, data released Friday showed the economy is slowing down. Retail sales in March declined 1%, two times more than economists had expected, according to an advanced reading. Citigroup CEO Jane Fraser said on an investor call that the bank saw a “notable softening” in consumer spending this year.

Despite the excitement over the big banks’ earnings, then, investors kept a cool head, causing the three major indexes to fall. The S&P 500 lost 0.21%, the Dow Jones Industrial Index slid 0.42% and the Nasdaq Composite fell 0.35%.

Further earnings this week will give investors a clearer sense of markets.

Here are some key reports to look out for: Charles Schwab on Monday; Bank of America, Goldman Sachs and Netflix on Tuesday; Morgan Stanley, IBM and Tesla on Wednesday; American Express on Thursday; Procter & Gamble on Friday. By the end of this week, investors should know if the disconnect between a profitable corporate America and a flagging economy is limited to big banks — or if it’s another side effect of the strange times we live in.

Subscribe here to get this report sent directly to your inbox each morning before markets open.
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April 16, 2023
Tesla, Netflix earnings due: Cheaper cars, cheaper content, more workout videos, as ‘earnings recession’ seems likely

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For anyone watching Netflix, the streaming services’ recent moves to cut costs could mean fewer films, lower-budget shows and — depending on your subscription — more ads. For anyone buying a Tesla, its moves to cut prices will make it easier on customers, but harder on profit-seeking investors.

With both companies reporting results this week, Wall Street will get a look at who still wants a Tesla, amid growing competition, and what kind of growth and viewership anyone can expect from Netflix, as it recalibrates its streaming ambitions and focuses more on profitability following years of rapid growth.

Netflix Inc.
NFLX,
-2.18%,
which reports first-quarter results on Tuesday, is trying to crack down on shared accounts, and analysts polled by FactSet see subscriptions coming in well below the average. However, BofA analyst Jessica Reif Ehrlich said that first-quarter results would likely “mark the low point” of the year, “reflecting the initial impact of password sharing efforts in select markets.”

Netflix will report as shareholders’ growing influence over the streaming universe raises questions over what shows and films get streamed, and for how long, as Wall Street tries to wring more bottom-line gains from an industry that boomed before and during the pandemic but burned cash and got crowded in the process. Netflix, along with Walt Disney Co.
DIS,
-0.93%,
have laid off employees, while Warner Brothers Discovery Inc.
WBD,
-1.85%
fuses its streaming holdings together.

“We expect Netflix to continue reining in spending, particularly by seeking alternatives to its past practices,” Wedbush analysts Alicia Reese and Michael Pachter wrote in a research note on Thursday. “The company appears to us to be producing fewer feature length films, which we have always viewed as a poor investment, and appears focused on lower cost television content.”

“We are equally encouraged that Netflix is looking at low-cost content like workout videos, which we believe will present a lot of value to subscribers at very low cost,” they added later.

The analysts said that they felt Netflix was well positioned, as other streamers rethink their approach to expansion and financials. And they said Netflix “should be valued as an immensely profitable, slow-growth company.” They also said that Netflix’s decision to launch a cheaper ad-supported option was a “great decision” after growth stalled in the U.S. and Canada and the company’s business in Europe, the Middle East and Africa reaches the saturation point.

For Tesla Inc.
TSLA,
-0.48%,
which reports results on Wednesday, the focus for investors will be on price-cutting and its impact on margins. Still, Potter, an analyst at Piper Sandler, has said Tesla is on a “warpath” and “maintaining its aggressive approach to pricing,” and said investors “should expect relentless price cuts to continue.”

Base prices for Tesla’s Model S and Model X have fallen by around $5,000, MarketWatch has noted, as the electric-vehicle maker tries to stimulate demand. The company is also selling a more affordable Model Y SUV.

“Tesla concerns on pricing and a race to the bottom persisted as general sentiment on the stock is souring given recent price cuts after a brief period of stabilization,” TD Cowen analyst Jeffrey Osborne said in a note.

Tesla will report as the Biden administration tries to take a harder stance on auto pollution. The EPA recently proposed new emissions restrictions intended to hasten electric-vehicle usage, by incrementally curtailing tailpipe emissions each year for vehicle model years 2027 through 2032. However, some analysts said the measures would push prices higher for regular and electric vehicles.

This week in earnings

The first-quarter earnings reporting season will pick up steam in the week ahead, with 60 S&P 500 companies, including six from the Dow Jones Industrial Average
DJIA,
-0.42%,
reporting quarterly results, according to FactSet. Those companies will report as Wall Street analysts remain pessimistic about results for the quarter, and the prospect of another so-called “earnings recession” in which profits contract for at least two straight quarters.

“As of today, the S&P 500 is reporting a year-over-year decline in earnings of -6.5% for the first quarter, which would mark the largest earnings decline reported by the index since Q2 2020 (-31.6%) and the second straight quarter the index has reported a decline in earnings,” FactSet Senior Earnings Analyst John Butters said in a report on Friday.

After investors cheered JPMorgan Chase & Co.’s
JPM,
+7.55%
quarterly results on Friday — despite Silicon Valley Bank’s collapse and broader recession anxieties — other banking giants, like Bank of America Corp.
BAC,
+3.36%,
Goldman Sachs Group Inc.
GS,
+1.44%
and Morgan Stanley
MS,
+1.19%
report during the week ahead. So does Johnson & Johnson
JNJ,
-0.16%,
after it agreed to pay as much as $8.9 billion to settle scores of lawsuits alleging that its talc baby powder was linked to cancer. Charles Schwab Corp.
SCHW,
-1.40%,
United Airlines Holdings Inc.
UAL,
-0.71%
and AT&T Inc.
T,
-0.15%
also report during the week.

The calls to put on your calendar

Supply-chain update, anyone? Shipping rates have fallen. Labor tensions have risen. Railroad safety is under scru t iny. Elsewhere in that industry, hedge funders are applying pressure. Memories of 2021’s supply-chain meltdown are still fresh after it led to shipping delays and put the low-work labor that fuels much of that distribution network under a spotlight.

At any rate, trucking and logistics company J.B. Hunt Transportation Services Inc.
JBHT,
+1.23%
reports on Monday, while railroad giant CSX Corp.
CSX,
+0.13%
reports on Thursday. Both companies report after a drop-off in demand for goods last year, as inflation remolded consumers’ buying habits. They also report after rail workers threatened to strike over what they said were inadequate sick-time policies. More recently, a group representing the terminal operators at the ports of Los Angeles and Long Beach alleged that dockworkers were disrupting daily operations at the two massive import gateways, as the workers’ union and the terminal operators try to work out a contract. The quarterly financial reports and earnings calls will offer a look at what the year ahead has in store.

The number to watch

Credit-card transactions, charge-offs: Credit-card providers Discover Financial Services
DFS,
+0.68%
and American Express Co.
AXP,
+0.57%
report Wednesday and Thursday, respectively. The companies will report after Discover took a hit in January after it forecast credit-card net charge-offs — a measure of debt a company doesn’t think it’ll get back — that were worse than what Wall Street expected. Similar to the results from the big banks, the results from American Express and Discover will tells us how much consumers are still spending, and whether more are falling behind on their bills, as recession anxieties prevail.

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April 16, 2023
Three investors on how to protect your portfolio | CNN Business
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A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

New York
CNN
—

Wall Street has been hit with a barrage of complex signals about the economy’s health over the past month. From banking turmoil to weakening jobs data to slowing inflation, and now the start of earnings season, investors have remained largely resilient.

But the Federal Reserve’s March meeting minutes revealed last week that officials believe the economy will enter a recession later this year. While that’s not new news to investors who have worried that a recession is on the horizon for the past year, it does mean that markets could take a turn for the worse.

So, how should investors protect their portfolios? Investors say there isn’t one asset that Wall Street should pile all their bets on, but there are fundamentals that should underlie their investment strategies.

Jimmy Chang, chief investment officer at Rockefeller Global Family Office, says he advises clients to be patient, defensive and selective when navigating the market.

In other words, investors should make decisions based on logic, not a fear of missing out.

“You chase these rallies and then it fizzles out — you’re left holding the bag,” he said.

Chang also recommends that investors stay defensive by investing in high-quality blue chip stocks with solid balance sheets and keep dry powder.

Doug Fincher, portfolio manager at Ionic Capital Management, says investors should brace their portfolios against inflation.

The Personal Consumption Expenditures price index rose 5% for the 12 months ended in February, showing that inflation remains much higher than the Fed’s 2% target.

Coupled with the fact that the central bank has signaled that it plans to pause interest rate hikes sometime this year, it’s possible inflation could prove stickier than Wall Street expects.

“It is the boogeyman of traditional investments,” Fincher said.

He manages the Ionic Inflation Protection exchange-traded fund, which seeks to specifically perform well during periods of high inflation. The portfolio’s core exposure is inflation swaps, which are transactions in which one investor agrees to swap fixed payments for floating payments tied to the inflation rate. The fund also invests in short-duration Treasury Inflation Protected Securities.

Megan Horneman, chief investment officer at Verdence Capital Advisors, says that her firm has hedged its portfolio in cash. A well-known haven, cash is a better alternative to other perceived safe spots like gold, which tends to be volatile and run up too fast, she said.

Investors have rushed into money market funds in recent weeks after the banking turmoil both shook their confidence in the banking system and sent ripples through the market.

“Cash is actually earning you something at this point,” Horneman said. “You have to look long term.”

Earnings season kicked off Friday with a bonanza of earnings from the nation’s largest banks.

Perhaps most noteworthy out of the bunch was JPMorgan Chase, which reported record revenue and an earnings beat for its latest quarter.

The bank has $3.67 trillion in assets, making it the largest bank in the country and a bellwether for the economy. Strong earnings reports from the New York-based bank and its peers including Wells Fargo, Citigroup and PNC Financial Services have shown a promising start to the earnings season.

Charles Schwab, Goldman Sachs, Bank of America and Morgan Stanley report next week.

Here are some key takeaways from JPMorgan Chase’s first-quarter earnings:
The company guided net interest income to be about $81 billion in 2023, up $7 billion from its previous estimate. That’s especially important because this earnings season is all about guidance, as investors try to gauge whether the economy is headed for a recession and which companies will be able to weather a potential downturn.

CEO Jamie Dimon said in the post-earnings conference call that while financial conditions are a bit tighter after the collapse of Silicon Valley Bank and Signature Bank, he doesn’t see a credit crunch. But chances of a recession are now higher, he said.

The company said that its portfolio’s exposure to the office sector is less than 10%, addressing concerns that the $20 trillion commercial real estate industry could be the next space to see turmoil.
Read more here.

Monday: Empire State manufacturing index and homebuilder confidence index. Earnings report from Charles Schwab (SCHW).

Tuesday: Earnings reports from Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Netflix (NFLX), United Airlines (UAL) and Western Alliance Bancorp (WAL).

Wednesday: Earnings reports from Citizens Financial Group (CFG), Morgan Stanley (MS), Tesla (TSLA) and International Business Machines (IBM). Speech from NY Federal Reserve President John Williams.

Thursday: Philadelphia Fed manufacturing index, jobless claims, mortgage rates, US leading economic indicators and existing home sales. Earnings reports from AutoNation (AN) and American Express (AXP).

Friday: Manufacturing PMI and services PMI. Earnings report from Procter & Gamble (PG).
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April 16, 2023
Elon Musk is reportedly planning an A.I. startup to compete with OpenAI, which he cofounded

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Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, January 27, 2023.

Jonathan Ernst | Reuters

Tesla CEO Elon Musk is planning to launch an artificial intelligence startup that would go head-to-head with OpenAI, the Financial Times reported Friday.

Musk — the CEO of Tesla, SpaceX and Twitter — has been building a team of researchers and engineers and has been in conversation with multiple investors, the Financial Times reported, citing sources familiar with the matter. He has also reportedly been recruiting from other top AI firms, including Alphabet-owned DeepMind.

related investing news

“It’s real and they are excited about it,” a source familiar with the matter told the Financial Times.

Musk has secured thousands of Nvidia GPU processors, according to the report. Those chips are an integral part of building a large language model, or LLM, to compete with OpenAI’s GPT. Musk said he was acquiring the processors for his companies in a Twitter Spaces interview with the BBC this week.

“It seems like everyone and their dog is buying GPUs at this point,” Musk said. “Twitter and Tesla are certainly buying GPUs.”

Musk was once a major financial backer at OpenAI, committing $1 billion over multiple years, according to an earlier report from Semafor. But Musk backed out of his financial and operational commitments to the artificial intelligence firm at the same time OpenAI added a for-profit business segment. Microsoft invested $1 billion in OpenAI shortly after Musk ruptured with the group and, earlier this year, committed to a new multibillion-dollar investment.

Musk has publicly questioned ChatGPT-creator OpenAI’s approach. In March, Musk signed an open letter calling for an immediate, six-month-long halt on any research on AI models more advanced than OpenAI’s GPT-4. He has said AI is “one of the biggest risks to the future of civilization.”

Musk’s reported venture could become the latest entrant to an increasingly crowded space. Beyond Microsoft and Google, Amazon announced Thursday that it’s entering the generative AI space.

Musk did not immediately respond to CNBC’s request for comment.

Read more at the Financial Times.

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April 14, 2023
Twitter now lets its paid subscribers tweet 10,000 characters

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The logo and trading symbol for Twitter is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, July 11, 2022.

Brendan McDermid | Reuters

Twitter has launched a new feature that lets its Blue subscribers tweet up to 10,000 characters in messages that will also support bold and italic formatting.

The new features allow for longer-form writing that’s more similar to an essay than the short snippets of text that defined Twitter for years. Twitter had a 140-character limit for years, before doubling it in 2017 to 280 characters.

Twitter Blue is the company’s subscription product that offers more features than the free version, including a blue checkmark. It costs $8 per month if you sign up through Twitter.

“We’re making improvements to the writing and reading experience on Twitter! Starting today, Twitter now supports Tweets up to 10,000 characters in length, with bold and italic text formatting,” one of Twitter’s official accounts said Thursday. “Sign up for Twitter Blue to access these new features, and apply to enable Subscriptions on your account to earn income directly on Twitter.”

Twitter is also expanding its monetization options, allowing users to subscribe to their favorite content creators in exchange for subscriber-only content. The subscriber-only model is similar to offerings from services such as Substack.

Twitter CEO Elon Musk said creators would receive the lion’s share of subscription income.

“You will receive whatever money we receive, so that’s 70% for subscriptions on iOS & Android (they charge 30%) and ~92% on web (could be better, depending on payment processor),” Musk tweeted. “After first year, iOS & Android fees drop to 15% and we will add a small amount on top of that, depending on volume. We will also help promote your work. Our goal is to maximize creator prosperity.”

Musk, who is also CEO of Tesla and SpaceX, also launched a subscription product for his own account, charging users $4 a month to view his private subscription-only Tweets.

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April 14, 2023
Warren Buffett-backed BYD announces new shock absorption tech for premium EVs

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BYD’s Han electric car, pictured here at the 2021 Shanghai auto show, is one of the most popular new energy vehicles in China.

Evelyn Cheng | CNBC

SHENZHEN, China — Electric vehicle giant BYD is banking on new driver-assist technology to smooth out car rides.

BYD, backed by Warren Buffett’s Berkshire Hathaway, announced Monday a new technological system for stabilizing car rides through rugged terrain, sharp turns and even shallow water. The shock absorption tech is set to be a feature of the company’s recently launched premium brand Yangwang.

“Traditionally, luxury cars were determined by brand and history. For luxury new energy vehicles, it’s a matter of what tech and products,” BYD founder Wang Chuanfu said in Mandarin at a launch event Monday, according to a CNBC translation.

He claimed the tech represented a “breakthrough” that “leads and surpasses foreign technological level.”

The update comes ahead of the Shanghai Auto Show, set to kick off next week, where many Chinese car companies are set to make product and model announcements.

Part of the tech system uses the same “lidar” sensors used in assisted driving, according to BYD. Lidar, short for “light detection and ranging,” uses lasers to create detailed maps of the surrounding area.

The automaker said in a release its new “DiSus” system “provides a foundation for the future development of Advanced Driver Assistance Systems (ADAS).”

The company has taken a relatively cautious approach to self-driving tech.

When asked about “smart driving” during a call with investors in late March, BYD management said autonomous driving still faces the challenge of determining liability in the event of an accident. Still, management said, advanced assisted driving tech has the potential to improve overall safety. That’s according to a filing of last month’s call accessed through the Wind Information database.

The industry as a whole has been working to balance ambitious driver-assist options with measured safety protocols. EV leader Tesla in February recalled more than 360,000 cars over assisted-driving software for city streets that it said may cause crashes.

That urban assisted driving software is not available for Tesla drivers in China.

BYD

It was not immediately clear how Tesla’s shock absorption capabilities compared with BYD’s, but other car companies in China are looking into similar technology.

In September, Nio’s investment fund Nio Capital led a $39 million financing round into Boston-based ClearMotion, which develops software for active suspension.

Many details still unknown

BYD’s Wang didn’t address what the company’s new DiSus system would cost to use, or when it would become widely available.

Two of the compatible car models — Yangwang’s forthcoming U8 SUV and the Denza N7 SUV — are not yet available for deliveries. Auto giant Daimler has a small stake in BYD’s Denza brand.

BYD said some of its existing Han, Tang and Denza models are set to receive the new tech through an over-the-air upgrade.

The new system comes in three versions — “damping,” “air,” and “hydraulic” — which are set for individual integration with certain BYD models.

Read more about electric vehicles from CNBC Pro

In the first quarter, BYD said it sold 264,647 all-electric passenger cars, up more than 80% from a year ago. Hybrid passenger vehicle sales doubled from a year ago to 283,270 in the first quarter.

Tesla, for its part, said it delivered more than 422,000 cars worldwide in the first quarter, without sharing a regional breakdown. China typically accounts for well over 20% of Tesla’s revenue.

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April 11, 2023
Stocks making the biggest moves midday: Micron, Pioneer Natural Resources, Block, AMC and more

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A general view of Micron Technology’s building in Singapore, June 23, 2020.

Micron Gcm Studio | Reuters

Check out the companies making headlines in midday trading Monday.

Block — Shares of the payments stock lost 3% following a downgrade to market perform from outperform by KBW. The firm cited pressures from “‘small risks starting to add up,” including potential regulatory scrutiny of its Cash App business.

related investing news

Tesla — Shares of Elon Musk’s electric vehicle company fell more than 1.5% after the firm announced another price cut in the U.S., its fifth since the start of the year. The move came as tougher U.S. standards are set to reduce the $7,500 tax credit available for Tesla’s Model 3. The EV maker also said Sunday it will open a new Megafactory in Shanghai that is capable of producing 10,000 Megapacks — large batteries —a year.

Pioneer Natural Resources – Shares of the fracking giant popped nearly 6% after The Wall Street Journal reported that Exxon Mobil has held informal talks to acquire Pioneer. Exxon shares fell 0.6%.

Micron Technology — Micron Technology’s shares gained 8% after its rival Samsung Electronics announced that it plans to cut memory chip production in the near term. Many Wall Street analysts said the move could accelerate a return to supply-demand balance and potential rebound in the chipmaking sector. Chip giant Western Digital also added about 8%.

Excelerate Energy, EQT and other gas stocks — Shares of Excelerate Energy, EQT and other gas stocks ticked higher as natural gas futures climbed. Excelerate added more than 1%, while EQT jumped 3.7% and Matador Resources gained 2.9%. Excelerate also got a boost from a new Deutsche Bank report, wherein the firm initiated coverage of the stock, rated it a buy and said it was trading below its industry peers.

Apple, Google, Microsoft — Shares of major technology companies were in the red during Monday’s trading session. Apple’s stock price lost 2%, Google-parent Alphabet shed 2.8% and Microsoft lost 1.4%.

Taiwan Semiconductor — Shares of the chip giant dropped 2.2% in midday trading after the company saw a decline in monthly revenue for the first time in four years. The stock is still up roughly 17% from the start of the year. Last month, Bank of America upgraded its price target on the company, believing it stands to benefit from investor interest in generative artificial intelligence.

New Fortress Energy — The stock gained 4% after Deutsche Bank initiated New Fortress as a buy. The bank said the company is well positioned in the liquified natural gas sector, which it believes has “potential to create outsized investment opportunities.”

Nikola — Shares fell 3% after Evercore ISI reiterated its in line rating. The firm also cut its price target in half to $1, saying the company has too many headwinds.

Five Below — Shares of the discount retailer gained 3.9% after Roth MKM said that Five Below might be helped by the success of “The Super Mario Bros. Movie,” which reported stronger-than-anticipated box office results.

AMC Entertainment, IMAX, Cinemark Holdings — Shares of major theater chains were in the green on Monday after the box office success of “The Super Mario Bros. Movie,” which was made by Universal Pictures. AMC’s stock price popped 6.7%, IMAX soared by 2% and Cinemark gained 5.7%.

— CNBC’s Jesse Pound, Hakyung Kim, Samantha Subin, Yun Li, Alex Harring and Brian Evans contributed reporting

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “The Super Mario Bros. Movie.”

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April 10, 2023
This hedge fund is beating the S&P 500 and Dow. Here’s what its manager is buying — and avoiding

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April 9, 2023
Tesla to open a new Megafactory in Shanghai, China, company says

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A Tesla Megapack in Moss Landing, California

Andrew Evers | CNBC

Tesla will open a new Megafactory in Shanghai, China, that is capable of producing 10,000 Megapacks a year, the company announced in a tweet Sunday.

A Megapack is a very large battery that stores energy, helps stabilize the power grid and prevents outages. These batteries enable grid operators to move extra capacity between counties or states and ensure that power from intermittent sources can be stored and used when demand is higher, or when there are unplanned outages in a transmission network.

Tesla currently has a Megafactory in Lathrop, California, that is capable of producing 10,000 Megapacks units each year, according to the company’s website. In a tweet Sunday, Tesla CEO Elon Musk said the factory in China will supplement output from the factory in California.

The company is planning to start constructing the factory during the third quarter of this year, and it will aim to start production around halfway through 2024, the Chinese state media outlet Xinhua reported Sunday from a signing ceremony in Shanghai.

Tesla and Musk did not immediately respond to requests for comment.

Read more about electric vehicles from CNBC Pro

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April 9, 2023
Elon Musk wants to pause ‘dangerous’ A.I. development. Bill Gates disagrees—and he’s not the only one

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If you’ve heard a lot of pro-A.I. chatter in recent days, you’re probably not alone.

AI developers, prominent A.I. ethicists and even Microsoft co-founder Bill Gates have spent the past week defending their work. That’s in response to an open letter published last week by the Future of Life Institute, signed by Tesla CEO Elon Musk and Apple co-founder Steve Wozniak, calling for a six-month halt to work on AI systems that can compete with human-level intelligence.

The letter, which now has more than 13,500 signatures, expressed fear that the “dangerous race” to develop programs like OpenAI’s ChatGPT, Microsoft’s Bing AI chatbot and Alphabet’s Bard could have negative consequences if left unchecked, from widespread disinformation to the ceding of human jobs to machines.

But large swaths of the tech industry, including at least one of its biggest luminaries, are pushing back.

“I don’t think asking one particular group to pause solves the challenges,” Gates told Reuters on Monday. A pause would be difficult to enforce across a global industry, Gates added — though he agreed that the industry needs more research to “identify the tricky areas.”

That’s what makes the debate interesting, experts say: The open letter may cite some legitimate concerns, but its proposed solution seems impossible to achieve.

Here’s why, and what could happen next — from government regulations to any potential robot uprising.

What are Musk and Wozniak concerned about?

The open letter’s concerns are relatively straightforward: “Recent months have seen A.I. labs locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one — not even their creators — can understand, predict, or reliably control.”

AI systems often come with programming biases and potential privacy issues. They can widely spread misinformation, especially when used maliciously.

And it’s easy to imagine companies trying to save money by replacing human jobs — from personal assistants to customer service representatives — with A.I. language systems.

Italy has already temporarily banned ChatGPT over privacy issues stemming from an OpenAI data breach. The U.K. government published regulation recommendations last week, and the European Consumer Organisation called on lawmakers across Europe to ramp up regulations, too.

In the U.S., some members of Congress have called for new laws to regulate A.I. technology. Last month, the Federal Trade Commission issued guidance for businesses developing such chatbots, implying that the federal government is keeping a close eye on AI systems that can be used by fraudsters.

And multiple state privacy laws passed last year aim to force companies to disclose when and how their A.I. products work, and give customers a chance to opt out of providing personal data for A.I.-automated decisions.

Those laws are currently active in California, Connecticut, Colorado, Utah and Virginia.

What do A.I. developers say?

At least one A.I. safety and research company isn’t worried yet: Current technologies don’t “pose an imminent concern,” San Francisco-based Anthropic wrote in a blog post last month.

Anthropic, which received a $400 million investment from Alphabet in February, does have its own A.I. chatbot. It noted in its blog post that future A.I. systems could become “much more powerful” over the next decade, and building guardrails now could “help reduce risks” down the road.

The problem: Nobody’s quite sure what those guardrails could or should look like, Anthropic wrote.

The open letter’s ability to prompt conversation around the topic is useful, a company spokesperson tells CNBC Make It. The spokesperson didn’t specify whether Anthropic would support a six-month pause.

In a Wednesday tweet, OpenAI CEO Sam Altman acknowledged that “an effective global regulatory framework including democratic governance” and “sufficient coordination” among leading artificial general intelligence (AGI) companies could help.

But Altman, whose Microsoft-funded company makes ChatGPT and helped develop Bing’s AI chatbot, didn’t specify what those policies might entail, or respond to CNBC Make It’s request for comment on the open letter.

Some researchers raise another issue: Pausing research could stifle progress in a fast-moving industry, and allow authoritarian countries developing their own A.I. systems to get ahead.

Highlighting A.I.’s potential threats could encourage bad actors to embrace the technology for nefarious purposes, says Richard Socher, an A.I. researcher and CEO of A.I.-backed search engine startup You.com.

Exaggerating the immediacy of those threats also feeds unnecessary hysteria around the topic, Socher says. The open letter’s proposals are “impossible to enforce, and it tackles the problem on the wrong level,” he adds.

What happens now?

The muted response to the open letter from A.I. developers seems to indicate that the tech giants and startups alike are unlikely to voluntarily halt their work.

The letter’s call for increased government regulation appears more likely, especially since lawmakers in the U.S. and Europe are already pushing for transparency from A.I. developers.

In the U.S., the FTC could also establish rules requiring A.I. developers to only train new systems with data sets that don’t include misinformation or implicit bias, and to increase testing of those products before and after they’re released to the public, according to a December advisory from law firm Alston & Bird.

Such efforts need to be in place before the tech advances any further, says Stuart Russell, a Berkeley University computer scientist and leading A.I. researcher who co-signed the open letter.

A pause could also give tech companies more time to prove that their advanced AI systems don’t “present an undue risk,” Russell told CNN on Saturday.

Both sides do seem to agree on one thing: The worst-case scenarios of rapid A.I. development are worth preventing. In the short term, that means providing A.I. product users with transparency, and protecting them from scammers.

In the long term, that could mean keeping A.I. systems from surpassing human-level intelligence, and maintaining an ability to control it effectively.

“Once you start to make machines that are rivaling and surpassing humans with intelligence, it’s going to be very difficult for us to survive,” Gates told the BBC back in 2015. “It’s just an inevitability.”

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April 8, 2023
Tesla shares drop after deliveries report raises investor concern that more price cuts are coming

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Employees of the Tesla Gigafactory Berlin Brandenburg work on the final inspection of the finished Model Y electric vehicles. The Tesla plant was opened and put into operation on March 22, 2022.

Patrick Pleuil | Picture Alliance | Getty Images

Tesla shares fell more than 7% on Monday after the company’s quarterly deliveries report led some investors to worry that more price cuts will be needed to drive sales, eating into margins.

Over the weekend, Tesla reported first-quarter deliveries of 422,875 electric vehicles and production of 440,808 cars. The record numbers for Tesla represented 4% growth in deliveries from the prior period and followed repeated price cuts in the U.S., China and Europe.

Some of the price reductions in the U.S. were implemented in part to enable Tesla and its customers to take advantage of tax credits available under the Inflation Reduction Act. But one ongoing concern is that increased competition will force the company to keep lowering prices if it wants to attract buyers as new EVs continue to hit the market.

“Many investors believe that Tesla’s recent price cuts reflect a structural cost advantage that will enable it to pressure rivals and capture outsize volume and dominate the EV market,” wrote Toni Sacconaghi, an analyst at Bernstein, in a note following the deliveries report. “We maintain that price cuts have and will undermine industry profitability (including Tesla’s), but that incumbents are deep pocketed and not likely to back down.”

Bernstein has a $150 price target on the stock, well below the current price of just over $193. Sacconaghi said, “The key question for investors is what might margins be, amid significant price cuts but improving commodity costs?”

Tesla’s first-quarter deliveries fell shy of Wall Street expectations, judging by a consensus compiled by FactSet. However, the numbers were inline with numbers compiled by Tesla and sent by the company to some shareholders before the report was published.

According to FactSet, analyst were expecting Tesla to report deliveries of around 432,000 vehicles for the quarter. Estimates ranged from 410,000 to 451,000. An independent researcher widely followed by Tesla fans and bulls, who uses the handle @TroyTeslike on Twitter, had been expecting deliveries of around 427,000.

Tesla said in its email to shareholders that analysts were expecting deliveries of around 421,500 vehicles, based on a consensus of 25 analysts tracked by the company.

For 2023, Tesla previously said it expects to produce 1.8 million cars and implied it intends deliveries around that amount. Company executives said they’re aiming for 50% annual growth on average in production volume and sales over a multi-year horizon.

Achieving that level of growth will likely require further price cuts, some analysts said.

According to Dan Levy of Barclays, who has a neutral rating on the stock and $275 price target, the buildup of vehicle inventory is a continuing trend over the last three quarters. He wrote that “incremental price cuts likely needed,” especially as the company ramps up production at new factories in Austin, Texas, and outside of Berlin.

— CNBC’s Michael Bloom contributed to this report

WATCH: CNBCs full interview with Bernstein’s Toni Sacconaghi

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April 3, 2023
Chinese EV brand Li Auto sees first-quarter deliveries surge by 66%

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Chinese electric car startup Li Auto saw deliveries surge by nearly 66% in the first quarter from a year ago.

Zhang Peng | Lightrocket | Getty Images

BEIJING — Chinese electric car brand Li Auto delivered more cars in March than Xpeng did in the first quarter, according to company releases.

Li Auto delivered 20,823 vehicles in March — for a total of 52,584 deliveries in the first three months of the year. That’s up by nearly 66% from the first quarter of 2022.

In contrast, Xpeng only delivered 18,230 cars in the first quarter — down by about 47% from the same period a year ago.

Xpeng delivered 7,002 vehicles in March, above the monthly average for the first quarter. Nearly half of the deliveries last month were of the company’s new P7i sports sedan that launched in March.

Nio reported first-quarter deliveries of 31,041, up 20.5% from a year ago. The company delivered 10,378 vehicles in March.

Li Auto’s vehicles — all SUVs — each come with a fuel tank to charge the battery and extend driving range.

The company claimed in a release it now has nearly 20% of the market for SUVs in the 300,000 yuan ($43,674) to 500,000 yuan price range in China.

For comparison, Tesla’s mid-size SUV, the Model Y, sells in a price range of 261,900 yuan to 361,900 yuan.

Xpeng’s G9 SUV starts at 309,900 yuan. The company’s new P7i sedan starts at 249,900 yuan — and costs 269,900 yuan if drivers want to use Xpeng’s assisted driving tech for cities. Tesla’s version of the tech, called Full Self Driving, isn’t available in China.

However, so far Xpeng’s assisted driving tech for cities is only available in Shenzhen, Guangzhou and Shanghai — where rollout began Friday.

Read more about electric vehicles from CNBC Pro

The Chinese electric car startups’ delivery figures pale in comparison with BYD, whose numerous models sell at a range of prices.

BYD said it sold 264,647 purely battery-powered passenger cars in the first three months of the year, up more than 80% from a year ago. Hybrid passenger vehicle sales doubled from a year ago to 283,270 in the first quarter.

Tesla said Sunday it delivered more than 422,000 cars worldwide in the first quarter. The company did not break out figures for China, which typically accounts for well over 20% of Tesla’s revenue.

Tesla shares year-to-date.

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April 2, 2023
Tesla sales again fall short of production | CNN Business

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CNN
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Tesla reported a modest 4% rise in sales in the first quarter compared to the final three months of last year, despite a series of price cuts on its lower priced vehicles and talk by CEO Elon Musk about strong demand at those lower prices.

The first quarter also marked the fourth straight quarter that Tesla has produced more vehicles than it has delivered to customers. Some of that may be due to the ramp up in production at two new factories, one in Texas, the other in Germany, which opened last spring, and a lag between that increased production and sales.

Tesla said there was an increase in the number of its more expensive models, the Model S and Model X, in transit to Europe, the Middle East and Africa, as well as to the Asia Pacific region.

But it does mean that over the last 12 months Tesla has produced 78,000 more cars than it has sold, suggesting that talk of strong demand by Tesla executives may not be backed up by the numbers.

“Early this year, we had a price adjustment. After that, we actually generated a huge demand, more than we can produce, really,” said Tom Zhu, Tesla’s executive in charge of global production and sales. “And as Elon said, as long as you offer a product with value at affordable price, you don’t have to worry about demand.”

The company reported it completed sales of 422,875 vehicles in the quarter. That’s short of the forecast of 430,000 vehicles from analysts surveyed by Refinitiv. But Dan Ives, tech analyst for Wedbush Securities, said the consensus that Wall Street was looking for was deliveries of 421,500, which would mean a very narrow beat for Tesla.

Even Ives, a bull on Tesla stock, said the lower prices that Tesla got for cars in the quarter will mean tighter profit margins going forward. Tesla will report full first quarter financial results on April 19.

“The big question will be margins as cutting prices will have an impact on this front,” he said in a note to clients Sunday.

First quarter production was up only 0.2% from the final three months of 2022, despite it efforts to ramp up production in Germany and Texas.

Production and sales were up much more when compared to the first quarter of 2022, with production up 44% and deliveries up 36%. But even that suggests that Tesla is below the 50% annual growth target it has set for the company long term.

Shares of Tesla

(TSLA), which fell 65% in 2022 for its worst annual performance ever, closed Friday up 68% so far in 2023. Still that left shares off 41% from where they stood at the end of 2021.

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April 2, 2023
Tesla reports 422,875 deliveries for first quarter of 2023

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Tesla Superchargers are seen at a charging station on March 17, 2023 in Beijing, China.

Vcg | Visual China Group | Getty Images

Tesla on Sunday posted its first-quarter vehicle production and delivery report for 2023.

Here are the key numbers from the electric vehicle maker:

Total deliveries Q1 2023: 422,875

Total production Q1 2023: 440,808

Deliveries are the closest approximation of sales disclosed by Tesla and are not broken out by individual model or region.

The first quarter numbers represent a 36% increase in deliveries compared to the 310,048 reported during the same period a year earlier, and 4% growth in deliveries sequentially compared to the 405,278 they company reported in the last quarter of 2022.

The company reported deliveries of 10,695 of its higher-priced Model S and X vehicles, about 2% of deliveries in the quarter.

Tesla reported deliveries of 412,180 of its lower priced Model 3 sedan and Model Y crossover during the quarter.

The company did not include production and delivery numbers for its heavy-duty Semi trucks.

Tesla said it produced 19,437 Model S and X vehicles, and 421,371 of its Model 3 and Y vehicles for the period ending March 31, 2023.

“We continued to transition towards a more even regional mix of vehicle builds,” the company wrote in a statement Sunday.

Tesla now sells four models which are produced at two vehicle assembly plants in the US, one in Shanghai and another outside of Berlin. In March, CEO Elon Musk announced the company plans to build a new factory in Monterrey, Mexico, a day’s drive from its factory in Austin, Texas.

The company also produces a heavy-duty truck, the Semi, at its battery plant in Sparks, Nevada. The company began deliveries of the Semi in December 2022.

According to a mean of estimates, compiled by FactSet as of Friday, Wall Street was expecting Tesla to report deliveries around 432,000 vehicles for the quarter. Estimates included in the FactSet analysis ranged from 410,000 to 451,000 deliveries expected.

The independent researcher who publishes under the handle TroyTeslike was expecting deliveries of 427,000 and production totaling 445,920 vehicles.

The first quarter of 2023 was marked by repeated price cuts by Tesla including in the U.S., Europe and China.

Tesla’s moves sparked a so-called “price war” in EVs, and posed a challenge to competitors including Ford and General Motors who are trying to gain marketshare in the fully electric vehicle segment domestically.

Tesla shares rose more than 60% in the first quarter to close at $207.46 on Friday ahead of the production and deliveries report. (They closed at $123.18 on December 30th, the last day of trading in 2022.)

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April 2, 2023
OpenAI faces complaint to FTC that seeks investigation and suspension of ChatGPT releases

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GPT-4 sign on website displayed on a laptop screen and OpenAI logo displayed on a phone screen are seen in this illustration photo taken in Poland on March 14, 2023.

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OpenAI is facing a new complaint to the Federal Trade Commission that urges the agency to investigate the group and suspend its commercial deployment of large language models, including its latest iteration of the popular tool ChatGPT.

The complaint, made public by the nonprofit research group Center for AI and Digital Policy on Thursday, accuses OpenAI of violating Section 5 of the FTC Act, which prohibits unfair and deceptive business practices, and the agency’s guidance for AI products.

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CAIDP calls GPT-4 “biased, deceptive, and a risk to privacy and public safety.” The group says the large language model fails to meet the agency’s standards for AI to be “transparent, explainable, fair, and empirically sound while fostering accountability.”

The group wants the FTC to require OpenAI establish a way to independently assess GPT products before they’re deployed in the future. It also wants the FTC to create a public incident reporting system for GPT-4 similar to its systems for reporting consumer fraud. It also wants the agency to take on a rulemaking initiative to create standards for generative AI products.

CAIDP’s president Marc Rotenberg signed onto a widely-circulated open letter released on Wednesday that called for a pause of at least six months on “the training of AI systems more powerful than GPT-4.” Tesla CEO Elon Musk, who co-founded OpenAI, and Apple co-founder Steve Wozniak were among the other signatories.

OpenAI did not immediately respond to a request for comment. The FTC declined to comment.

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March 30, 2023
Stocks making the biggest moves midday: Tesla, First Republic, KeyCorp, UBS and more

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Image taken with a drone) A Tesla collision center is seen in this aerial view in Orlando.

Paul Hennessy | Lightrocket | Getty Images

Check out the companies making headlines in midday trading Tuesday.

Tesla — Shares popped 5% after Moody’s upgraded Tesla to Baa3 rating from its junk-rated credit. Moody’s called the electric-vehicle maker the “foremost manufacturers of battery electric vehicles” and said the upgrade reflects Tesla’s prudent financial policy and management’s operational track record.

First Republic, KeyCorp, U.S. Bancorp — Regional bank stocks rebounded on Tuesday as Treasury Secretary Janet Yellen said the government would consider backstopping deposits at more banks in order to protect the financial system. Shares of First Republic jumped more than 41%, while KeyCorp added 9%. U.S. Bancorp rose nearly 8%.

JPMorgan, Bank of America — Shares of larger U.S. banks rose on Tuesday as investors showed increased optimism after Yellen’s remarks. JPMorgan gained about 3% and Bank of America rose by 3.5%.

Foot Locker — Foot Locker gained 6% after Citi upgraded the retail stock to a buy from neutral after its investor day on Monday. The firm said the company’s move away from malls and toward digital, kids and loyalty projects is a step in the right direction.

Harley-Davidson — Shares of Harley-Davidson rose more than 5% after Morgan Stanley upgraded the motorcycle maker and said its focus on its core business can lift the stock by more than 30%. Jefferies also upgraded the stock, saying the company’s risk and reward are more balanced after a recent decline.

UBS — U.S.-listed shares of the Swiss-based bank gained 12% during midday trading following its agreement over the weekend to buy Credit Suisse for $3.2 billion. Credit Suisse rose 5% after taking a nearly 53% plunge on Monday.

Roblox — Shares rose more than 3% after D.A. Davidson said the online game platform has an “underappreciated” opportunity in artificial intelligence.

Emerson Electric — Shares added nearly 2% after Morgan Stanley said shares of the multinational tech company are too attractive to ignore . The firm upgraded the stock to overweight from equal weight.

Exxon Mobil — The oil and gas giant’s stock price gained 3% after Morgan Stanley said it likes the company’s robust “competitive positioning.”

— CNBC’s Alex Harring, Jesse Pound, Tanaya Macheel and Michelle Fox Theobald contributed reporting.

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March 21, 2023
Wall Street Journal: Elon Musk is planning to build his own town | CNN Business

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CNN
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What do you get for the billionaire who has everything? Perhaps his own town.

Entities connected to Elon Musk and his companies have reportedly been acquiring thousands of acres of land in Texas with the hope of starting a town where his employees could live and work, according to a report from the Wall Street Journal Thursday.

These entities have purchased at least 3,500 acres near Austin and are in the process of working toward incorporating a town called Snailbrook, an apparent reference to the mascot of Musk’s tunneling firm, the Boring Company, according to the Journal.

The report cites county deeds and other land records, as well as city and county emails, internal company communications, state licensing records and interviews with land owners and city and county officials. (CNN has not reviewed all of the land and other records cited in the Journal report.)

Over the years, tech companies have offered numerous amenities on campus to recruit workers and sometimes incentivize them to put in longer hours. By building out a company town of his own, Musk could take that approach even further.

According to the report, Musk wants employees at his companies Boring Co., Tesla and SpaceX — all of which have major production facilities near Austin — “to be able to live in new homes with below-market rents.” The Snailbrook effort also reportedly includes plans to build more than 100 homes, as well as neighborhood features such as a pool and outdoor sports area.

Incorporating a town might also give Musk, who has been known to clash with state and federal regulators, more say over how things are run.

Musk in 2020 announced he would move Tesla’s headquarters and his personal residence from California to Texas, blaming frustrations with California’s coronavirus-related restrictions. Last year, Tesla opened a new Gigafactory manufacturing facility in Austin. Musk’s SpaceX and Boring Co. also have facilities in Texas, and Boring Co. has reportedly been in talks with Austin about the possibility of building tunnels in the city, according to a February report from the Austin American Statesman.

Property records for Bastrop County, which is adjacent to Austin, show that the Boring Co. owns 11 parcels of land on one address near the Colorado River where mobile homes were built over the past three years, according to records reviewed by CNN. The Texas Commission on Environmental Quality is set to hold a meeting on plans for a wastewater treatment plant on the same site, which were submitted by an LLC registered to a Boring Co. executive, according to a public announcement of the meeting.

That same entity also owns a number of parcels of nearby property comprising commercial and residential building plots and pasture and farming land, public records show. The Journal reported that Musk’s team has discussed incorporating the town in Bastrop County. The county told the Journal that it had not received an application for incorporation, which requires a certain number of residents, from Musk or any of his entities.

Tesla, SpaceX and Boring Co. did not immediately respond to a request for comment on the report.

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March 9, 2023
US safety regulators to investigate Tesla for steering wheels that can fall off | CNN Business

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CNN
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Federal safety regulators are investigating Tesla’s Model Y SUV after at least two instances in which owners said their steering wheels became detached while the vehicle was being driven.

The National Highway Traffic Safety Administration is looking at the 2023 model year. It said in the two instances in which the steering wheel came off, the cars were delivered to buyers without the retaining bolt that attaches the steering wheel to the steering column.

The report from the agency did not say if there were accidents or injuries as a result of the problem.

NHTSA said around 120,000 vehicles on US roads could be affected by the problem. This is an investigation, a step the agency takes before ordering a recall.

Tesla is not the only company facing safety questions about its steering wheel. Nissan also just disclosed to NHTSA that it is recalling about 1,100 Nissan Ariyas, its electric SUV, because it may be missing a bolt required on its steering wheel.

There were three vehicles found in dealer inventories in which there was too much play in the steering wheels, and upon inspection it was discovered the bolts were missing in each. But in none of those cases did the steering wheel come off while the cars were being driven, and there were no reports of accidents or injuries caused by the missing bolts.

In February, Tesla was required to issue a recall of nearly 363,000 vehicles equipped with what it calls its “Full Self Driving” software after NHTSA determined it “led to an unreasonable risk to motor vehicle safety based on insufficient adherence to traffic safety laws.”

Among the traffic rules the cars violated in FSD mode was “traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution.”

Tesla CEO Elon Musk objected to calling that a “recall,” saying it entailed only an over-the-air software update that did not require the owner to bring the cars to service centers to be fixed.

But Tesla did order a recall last month of 3,470 2022-2023 Model Y cars due to bolts in the second-row seat back frames not being secured correctly, which could cause the seat belts in those seats to not work properly in a crash.

Tesla has not had a public relations staff for several years and email inquiries to its press office are no longer accepted.

CNN’s Ramishah Maruf contributed to this report.

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March 8, 2023
Tesla recalls almost 3,500 Model Y cars for loose bolts | CNN Business

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CNN
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Tesla is recalling 3,470 2022-2023 Model Y cars due to bolts in the second-row seat back frames not being secured properly.

An estimated 4% of cars are affected, a recall report submitted in late February said.

The loose bolts could cause the seat belts to not work properly in a crash, “which may increase the risk of an injury for occupants seated in affected second-row seating positions,” the National Highway Traffic Administration said.

On Model Y vehicles, the second-row driver- and passenger-side seat back frames are secured with four bolts per seat back. But during production for certain Model Y cars, one or more of the bolts securing the seat back frames to the lower seat frame “may not have been torqued to specifications.”

Owners can tell if their car is affected by seeing if their second-row seat back frame folds improperly or if it’s loose and rattles when driving.

Tesla found five warranty claims regarding the bolts since last December, but is not aware of any injuries or deaths due to it.

A driver in Fremont, California, found a faulty seat back bolt last December, triggering a Tesla investigation and risk assessment which ended February 17. A recall determination was made on the same day.

Tesla will inspect the bolts and tighten them if necessary for free of charge, and owner notification letters will be mailed.

The recall was filed the same month Tesla recalled all 363,000 US vehicles with the “Full Self Driving” driver assist software due to safety risks, a significantly larger recall, which was a blow to the automaker’s business model.

The NHTSA said, based on its analysis, Tesla’s “Full Self Driving” feature “led to an unreasonable risk to motor vehicle safety based on insufficient adherence to traffic safety laws.” And it warned the feature could violate traffic laws at some intersections “before some drivers may intervene.”

“The FSD Beta system may allow the vehicle to act unsafe around intersections, such as traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution,” said the recall notice, posted on NHTSA’s website.

Tesla will attempt to fix the feature, which costs $15,000, through an over-the-air software update, the notice added.

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March 4, 2023