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Musk damaged Tesla's brand in just a few months, fixing it will likely take longer

Musk damaged Tesla's brand in just a few months, fixing it will likely take longer

Elon Musk has been called a Moonshot Master, the Edison of Our Age and the Architect of the Future, but he's got a big problem at his car company and it's not clear he can fix it: damage to its brand.
Sales have plunged for
amid protests and boycotts over Musk's embrace of far right-wing views. Profits have been sliced by two-thirds so far this year, and rivals from China, Europe and the U.S. are pouncing.
On Tuesday came some relief as Musk announced in an earnings call with investors that he would be scaling back his government cost-cutting job in Washington to a 'day or two per week" to focus more on his old job as Tesla's boss.
Investors pushed up Tesla's stock 5% Wednesday, though there are plenty of challenges ahead.
Who wants a Tesla?
Musk seemed to downplay the role that brand damage played in the drop in first-quarter sales on the investor call. Instead, he emphasized something more fleeting — an upgrade to Tesla's best-selling Model Y that forced a shutdown of factories and pinched both supply and demand.
While financial analysts following the company have noted that potential buyers probably held back while waiting for the upgrade, hurting results, even the most bullish among them say the brand damage is real, and more worrisome.
'This is a full blown crisis,' said Wedbush Securities' normally upbeat Dan Ives earlier this month. In a note to its clients, JP Morgan warned of 'unprecedented brand damage."
Musk's take on the protests
Musk dismissed the protests against Tesla on the call as the work of people angry at his leadership of the Department of Government Efficiency because 'those who are receiving the waste and fraud wish it to continue.'
But the protests in Europe, thousands of miles from Washington, came after Musk supported
there. Angry Europeans hung Musk in effigy in Milan, projected an image of him doing a straight-arm salute on a Tesla factory in Berlin and put up posters in London urging people not to buy 'Swasticars' from him.
Sales in Europe have gone into a free fall in the first three months of this year — down 39%. In Germany, sales plunged 62%.
Another worrying sign: On Tuesday, Tesla backed off its earlier promise that sales would recover this year after dropping in 2024 for the first time a dozen years. Tesla said the global trade situation was too uncertain and declined to repeat the forecast.
Here come the rivals
Meanwhile, Tesla's competition is stealing its customers.
Among its fiercest rivals now is Chinese giant BYD. Earlier this year, the EV maker announced it had developed an electric battery that can
. And Tesla's European rivals have begun offering new models with advanced technology that is making them real Tesla alternatives just as popular opinion has turned against Musk.
Tesla's share of the EV market in the U.S. has dropped from two-thirds to less than half, according to Cox Automotive.
Pinning hopes on cybercabs
Another rival, Google parent Alphabet, is already ahead of Tesla in an area that Musk has promised will help remake his company: Cybercabs.
One of the highlights of Tesla's call Tuesday was Musk sticking with his previous prediction that it will launch driverless cabs without steering wheels and pedals in Austin, Texas, in June, and in other cities soon after.
But Google's service, called Waymo, already has logged
in San Francisco, Phoenix, Los Angeles, and Austin as part of a partnership with ride-hailing leader Uber.
A driverless future for Tesla owners?
Musk also told analysts that this driverless capability will be available on the Tesla vehicles already on the road through software updates over the air, and put a timeline on it: 'There will be millions of Teslas operating autonomously in the second half of the year."
But he has made similar promises before, only to miss his deadlines, such as in
when he vowed full automation by the end of the next year. He repeated the prediction, moving up the date, several more times, in following years.
A big problem is federal investigators have not given the all-clear that Tesla vehicles can drive completely on their own safely. Among other probes, safety regulators are looking into Tesla's so-called Full Self-Driving, which is only partial self-driving, for
like when there is sun glare.
On the positive side
In competition with rivals in the U.S., Tesla currently has one clear advantage: It will get hurt by less by tariffs because most of its vehicles are built in the countries where they are sold, including those in its biggest market, the U.S.
'Tariffs are still tough on a company where margins are still low, but we do have localized supply chains,' Musk said Tuesday. 'That puts us in a strong position.'
The company also reconfirmed that a cheaper version of its best-selling vehicle, the Model Y sport utility vehicle, will be ready for customers in the first half of this year. That could help boost sales.
Another plus: The company had a blow out first quarter in its energy storage business. And Musk has promised to be producing 5,000 Optimus robots, another Tesla business, by the end of the year.
Pricey stock
Even after falling nearly 50% from its December highs, Tesla's stock is still very richly valued based on the one yardstick that really matters in the long run: its earnings.
At 110 times its expected per share earnings this year, the stock is valued more than 25 times higher than General Motors. The average stock on in the S&P 500 index trades at less than 20 times earnings.
That leaves Tesla little margin for error if something goes wrong.

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China's EV leaders surge ahead of Tesla in autonomous technology
China's EV leaders surge ahead of Tesla in autonomous technology

Time of India

time38 minutes ago

  • Time of India

China's EV leaders surge ahead of Tesla in autonomous technology

Chinese electric-vehicle makers led by BYD have beaten Tesla in the competition to produce affordable electric vehicles . Now, many of those same fierce competitors are pulling into the passing lane in the global race to produce self-driving cars. BYD shook up China 's smart-EV industry earlier this year by offering its "God's Eye" driver-assistance package for free, undercutting the technology Tesla sells for nearly $9,000 in China. "With God's Eye, Tesla's strategy starts to fall apart," said Shenzhen-based BYD investor Taylor Ogan , an American who has owned several Teslas and driven BYD cars with God's Eye, which he called more capable than Tesla's "Full Self-Driving" (FSD). It's not just BYD. Other Chinese auto and tech companies are offering affordable EVs with FSD-like technology for a relative pittance. China's Leapmotor and Xpeng, for instance, offer systems capable of highway and urban driving in $20,000 vehicles. A slew of Chinese firms are chasing the same technology, an industry push backed by China's government. BYD's assisted-driving hardware costs are far lower than Tesla's, according to analyses performed for Reuters by companies that dismantle and analyze vehicles for automakers. The comparisons, which have not been previously reported, show that BYD's costs to procure components and build a system with radar and lidar are about the same as Tesla's FSD, which doesn't have such sensors. That undercuts Tesla's unusual technological approach, which aims to save costs by nixing such sensors and relying solely on cameras and artificial intelligence. The rising competition from Chinese smart-EV players is among the chief problems confronting Tesla CEO Elon Musk after his rocky tenure as a Trump administration advisor as he refocuses on his business empire, as Tesla vehicle sales are tanking globally. The stakes are made higher by a moment-of-truth challenge this month in Tesla's home base of Austin, Texas, where it plans to launch a robotaxi trial with 10 or 20 vehicles after a decade of Musk's unfulfilled promises to deliver self-driving Teslas. Tesla did not respond when reached for comment about its Chinese competitors. Previously, Musk has described Chinese car companies as the most competitive in the world. Chinese competition was one factor driving Tesla's strategic pivot away from mass-market EVs last year, when Reuters reported it had killed plans to build an all-new EV expected to cost $25,000. Musk has since staked Tesla's future instead on self-driving robotaxis, the hopes for which now underpin the vast majority of the automaker's stock-market value of roughly $1 trillion. Now Tesla faces the same stiff competition on vehicle autonomy from many of the same Chinese automakers who undercut its affordable-EV plans. Adding to the challenge are tech firms including Chinese smartphone giant Huawei, which supplies autonomous-driving technology to major Chinese automakers. Short of full autonomy, today's driver-assistance systems offer a critical competitive edge in China, the world's largest car market, where Tesla sales are falling amid a protracted price war among scores of homegrown EV brands. Tesla is further handicapped by China's regulations preventing it from using data collected by Tesla cars in China to train the artificial intelligence underpinning FSD. Tesla has been negotiating with Chinese officials, so far without success, to get permission to transfer such data back to the United States for analysis. Tesla's competitors in China do benefit from subsidies and other forms of policy support from Beijing for advanced assisted driving technology. Their advantages also stem from another consequential factor: cut-throat smart-EV competition that has characterized their industry over the past decade. The resulting EV boom created economies of scale and the industry's tendency to forgo some profit margins to expand new technologies' market penetration quickly, leading to lower manufacturing costs. Streets of Shenzhen BYD investor Ogan, of Shenzhen-based Snow Bull Capital, has a front-row seat to China's autonomous-tech battleground. He recently drove several BYD models equipped with God's Eye, he said, and didn't have to take over driving in any of them while traveling the congested streets of Shenzhen, a bustling southern China megalopolis of 18 million people. Another notable smart-EV player in China is Huawei, experts say. Huawei lends its technology and branding to a half dozen automakers including heavyweights Chery, SAIC and Changan, and has lower-profile partnerships with more than a dozen other carmakers, Huawei representatives said. Reuters journalists rode in an Aito M9 - a luxury electric SUV from Seres with Huawei driver-assistance technology - as it navigated Shenzhen roadways in April. With a driver's hands off the wheel, the vehicle exited a highway seamlessly into a congested urban zone, where the M9 proceeded cautiously and slowed to a crawl as a construction worker appeared like he might walk into the roadway. At one point the vehicle turned right and slowly drifted left to avoid two men unloading boxes from a parked truck. The vehicle then parallel parked itself at Huawei's Shenzhen headquarters. Huawei was among several Chinese companies, including automakers Zeekr, Changan and Xpeng, that touted progress towards fully-autonomous cars at April's Shanghai auto show, even as Beijing announced a new marketing crackdown on terms such as "smart" and "intelligent" driving in the wake of a deadly crash in a Xiaomi vehicle involving driver-assistance technology. Huawei said it's ready to undergo a new validation regime being developed by Chinese regulators to certify so-called Level 3 driving systems, meaning they are capable enough to allow drivers to look away unless notified by the system to take over. Zeekr, a luxury brand of China auto giant Geely, also plans to soon sell cars with Level 3 systems. Tesla has yet to release such an "unsupervised" version of FSD because its technology needs more training to operate without a driver's hands on the wheel and eyes on the road. Tesla plans to launch self-driving robotaxis in Austin this month. Little is known about its plans. The company has said it aims to initially deploy between 10 and 20 fare-collecting driverless robotaxis in restricted geographic areas of the city, which Tesla has not publicly identified. 'God's Eye' one the cheap Chinese EV makers are moving quickly to develop driver-assistance systems in a market where car buyers are demanding them at a faster pace than in other regions, analysts say. Their ability to do so at lower costs poses the biggest threat to Tesla's new autonomy-based business model. BYD buyers can get an FSD-comparable version of God's Eye as a standard feature in cars priced at about $30,000. The cheapest FSD-equipped Tesla in China is a Model 3 selling for about $41,500. According to an analysis by A2MAC1, a Paris-based tear-down firm that benchmarks components, the mid-level God's Eye version most comparable to Tesla's FSD runs on an Nvidia computing chip with data collected through 12 cameras, five radars, 12 ultrasonic sensors, and one lidar sensor, at a cost of $2,105. That compares to $2,360 for Tesla's FSD, which uses cameras without sensors and two AI chips, the firm estimates. Cameras, radar and ultrasonic sensors are cheaper in China than comparable devices in Europe and the United States, A2MAC1 estimates. Lidar sensors cost about 20 per cent less, the firm says. Sensor costs have fallen because China's EV boom created economies of scale, said A2MAC1 engineer Elena Zhelondz. The fierce competition also pushed carmakers and suppliers to accept lower profits on driver-assistance equipment, she said. BYD's 22 per cent gross margin will likely fall as it gives away God's Eye but it will benefit from a vehicle-sales boost, said Chris McNally, head of global automotive and mobility research for advisory firm Evercore. More cars, more miles, better AI Falling behind the Chinese brands on driver-assistance technology would compound Tesla's challenges in China, where it's already losing market share to rivals, including BYD, which sells an entry-level EV for less than $10,000. The growing scale of BYD and others could also provide a technological advantage: Racking up more miles on China roads helps train the AI technology needed to perfect automated-driving systems. BYD has a "clear and ongoing market-share driving advantage" over Tesla in gathering such on-road data to refine God's Eye, Evercore's McNally said, adding that advantage might only increase as offering God's Eye for free helps sell more BYD vehicles. BYD's scale also helps lower costs by providing uncommon leverage over suppliers. In November, a BYD executive in charge of passenger-vehicle operations wrote to suppliers telling them that the automaker sold 4.2 million vehicles last year (more than double the number of Teslas sold) because of "technical innovation, economies of scale, and a low-cost supply chain." The executive noted the new year would likely bring more growth, but also fiercer competition. Without specifically mentioning God's Eye, he ended the letter by asking the suppliers for an across-the-board 10 price cut on all parts and systems starting on January 1, calling the new year a final "knockout round."

Starlink Price In India: Elon Musk May Launch Satcom Plans At Rs 3,000-4,200 Per Month, Says Report
Starlink Price In India: Elon Musk May Launch Satcom Plans At Rs 3,000-4,200 Per Month, Says Report

News18

time44 minutes ago

  • News18

Starlink Price In India: Elon Musk May Launch Satcom Plans At Rs 3,000-4,200 Per Month, Says Report

Last Updated: Elon Musk's Starlink might commence operations in India within the next two months after receiving its licence last week. Even as Elon Musk-owned Starlink has received a licence for satellite communication (satcom) services in India, speculations are rife about its prices in the country. According to the latest report by Business Standard citing sources, Starlink is expected to launch its services at monthly subscription charges between Rs 3,000 and Rs 4,200. Its kit, which includes a satellite dish and a Wi-Fi router, is also likely to be at about Rs 33,000. This is in contrast with the recent reports that indicated that Starlink is expected to debut in India with promotional unlimited data plans priced below $10 per month – nearly Rs 850. Earlier estimates had suggested Rs 3,000-Rs 7,000 per month. These are the speculations, and the exact official prices are yet to be known. According to the BS report, Starlink has so far prices its services at two-three times of traditional telcos in both high-income countries like the US and developing markets like Kenya or Nigeria. 'The company doesn't have much gain by dropping the price to attract more customers as internet capacity from satellite will remain capped," the report said citing people in the know. High-Speed Internet for Remote India Starlink operates a constellation of low Earth orbit (LEO) satellites positioned just 550 km above the Earth – significantly closer than traditional geostationary satellites – enabling faster, low-latency internet access. The system has already been deployed in over 70 countries and aims to expand to the most remote and disaster-prone regions globally. SpaceX has already deployed approximately 7,000 LEO satellites globally and aims to increase this to over 40,000, enabling internet access even in the most remote and challenging terrains – from conflict zones to disaster-stricken areas. When Will Starlink Satellite Communication Services Start in India? Elon Musk-owned Starlink has received a licence for satellite communication (satcom) services in India. It comes after the government last month had issued a letter of intent (LoI) to the entity. Before launching its services, Starlink still needs approval from the Indian National Space Promotion and Authorisation Centre (IN-SPACe) and must be allocated spectrum by the government. According to a PTI report, Starlink will be granted trial spectrum within about two weeks. According to an ANI report citing sources, Starlink is preparing to commence operations in India within the next two months after receiving its licence last week. Starlink's hardware will be available at retail outlets of telecom operators Bharti Airtel and Reliance Jio. In April, Starlink signed pacts with Reliance Jio and Bharti Airtel, which together control more than 70 per cent of the country's telecom market, to bring the US satellite internet giant's services to India. Starlink has become the third company to secure a satcom licence from the Department of Telecommunications (DoT), after Eutelsat's OneWeb and Reliance Jio.

He wants to speak to me: Donald Trump on plans to speak to Musk on phone
He wants to speak to me: Donald Trump on plans to speak to Musk on phone

India Today

timean hour ago

  • India Today

He wants to speak to me: Donald Trump on plans to speak to Musk on phone

US President Donald Trump has said he has no immediate plans to speak with tech mogul Elon Musk, amid their escalating feud over the Republican-backed tax and spending bill. However, Trump also hinted he was open to a conversation, telling reporters, "If I were him, I would want to speak to me".Asked whether a phone call with the Tesla and SpaceX chief was on the horizon, Trump responded, "Umm I haven't really thought about it actually. I would imagine he wants to speak to me. Maybe he's already called. You'd have to ask him. Ask him if he's already called. But I'd have no problems with it".advertisementThe latest comments come after a dramatic fallout between Trump and Musk, once considered allies, following Musk's vocal opposition to a Republican tax-cut package championed by the White House. Though Musk hasn't directly addressed Trump in recent days, he has continued to slam the legislation, which included key components of Trump's domestic economic agenda. The rift became public last week when Musk, who had informally advised Trump during his first term, criticised what the president called the "Big, Beautiful Bill". Trump had initially remained silent, but later told reporters aboard Air Force One that he was "very disappointed" in the billionaire a sharp escalation, Musk declared that Trump would have lost the last election without his backing and even floated the idea of impeachment. The tech mogul, who reportedly spent nearly USD 300 million on Trump's 2024 presidential campaign, had previously vowed to reduce his political donations and called for the ouster of lawmakers who "betrayed the American people".advertisementIn response, Trump suggested his administration could sever government ties with Musk's companies, including lucrative contracts involving SpaceX and its satellite internet wing, the height of the standoff, Musk even threatened to withdraw SpaceX's Dragon spacecraft from NASA missions to the International Space Station, a move that would jeopardize the US space program. He later walked back the strained relationship threatens to ripple through Republican circles ahead of the crucial midterm elections next year. With Musk hinting at pulling financial support and other Silicon Valley donors watching closely, the Republicans risk losing a critical source of influence and InMust Watch

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