Month: March 2019

Tesla debuts $35,000 Model 3, sees loss in first quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tesla Inc said on Thursday it would not be profitable in the first quarter, as it offered for the first time a $35,000 version of its Model 3 sedan and said its global sales would now be online-only, steps designed to increase demand and cut overhead costs for the electric vehicle maker.

Chief executive Elon Musk’s warning on profit during a conference call with members of the media, which did not include Reuters, contrasted with Tesla’s statements last month that it was expecting a “very small” net profit in the first quarter.

Shares of Tesla fell 3.4 percent after hours. Investors have voiced concerns about whether Tesla would be able to maintain profit margins through cost cutting – such as recent layoffs – as it reduces prices of its newest vehicle.

Still, the price drop could quell concerns from some analysts that demand for the higher-priced versions of the Model 3 was beginning to dry up in the United States, especially after a federal tax credit was cut in half this year.

“Tesla wants to drum up demand,” said Elazar Advisors’ Chaim Siegel. “There was a slowdown in the US as the tax credits dropped. (There are) more tax credit hits later in the year too so they are trying to be proactive.”

Musk has often shared that his strategy for Tesla was to build higher-priced cars – the Model S and X – whose success would ultimately usher in a $35,000 mass-market car, followed by an SUV, the Model Y, which is currently in development. But customers who reserved the Model 3 at that lower price have waited nearly three years since Musk first promised it.

An online-only sales strategy, along with other changes, would allow vehicle prices to fall by about 6 percent on average, Tesla said in a blog on its website. Over the next few months, Tesla will wind down “many” of its stores, while investing in its service system, it said.

Online-only sales represent a dramatic shift for the company that has prided itself on its boutique retail stores. In June 2017, Musk pledged to increase the number of stores, saying they had “barely touched the surface” of what was possible.

As of the fourth quarter, Tesla said it recently opened 27 new locations, bringing its total of stores and service centres to 378.

Thursday was the third time this year that Tesla lowered the price on the Model 3, which recently started at $42,900.

The new $35,000 version has a top speed of 130 miles per hour (209 km per hour) and can go from zero to 60 mph in 5.6 seconds, Tesla said. For $2,000 more, Tesla offers a version with a range of 240 miles (386 km) and a top speed of 140 mph.

Game Changer With Speed Bumps

A $35,000 Model 3 is a major shot in the arm for Tesla sales during a period of major challenges, including deliveries of the Model 3 to Europe and China and construction of a factory in Shanghai.

“This is a game changer,” said Wedbush Securities analyst Daniel Ives. Since tax credits will continue to decline over 2019, “this is really exactly what the doctor ordered,” he said.

He warned, however, there could be “more speed bumps ahead,” if more sales volume exacerbates prior problems with deliveries and service to customers.

Musk declined to answer a question on what the profit margins of the $35,000 vehicle would be, according to the New York Times. Gross margins on the car were above 20 percent in the fourth quarter.

“The margin on the vehicle obviously is going to be very small if there’s any margin there at all,” said David Kudla, CEO of Mainstay Capital Management, which has a short position in Tesla.

As part of cost-cutting efforts, Tesla last month reduced its full-time headcount by 7 percent, following a similar cut of 9 percent to its workforce in June 2018.

The price cut on the Model 3 comes three days after renewed tensions between Musk and US Securities and Exchange Commission. The agency petitioned a judge this week to have Tesla’s CEO found in contempt of an October settlement between the parties. The SEC accuses Musk of having made material statements about production levels on Twitter without first having them vetted internally.

That settlement between Musk, Tesla and the SEC concerned Musk’s August Twitter post in which he claimed to have “funding secured” to take Tesla private at $420 per share.

On Friday, Tesla is due to repay a $920 million convertible bond. Convertible issues give bondholders the right to trade their debt for equity after shares rise over a certain price. Tesla shares are currently about $40 below the $359.87 conversion price.

Tesla had $3.7 billion in cash and cash equivalents at the end of December.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Subsidised LPG cylinder price hiked by Rs 2.08; non-subsidised rate also rises

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Domestic cooking gas (LPG) price will affect every household budget now as the price gets hiked by Rs 2.08 per cylinder, and non-subsidised gas by Rs 42.50 per bottle, said Indian Oil Corporation (IOCL). The increase comes after three straight monthly reduction in rates. The rise has been necessitated due to tax impact on increased market rate of the fuel, IOCL said in a statement.

Therefore, a 14.2 kg subsidised LPG cylinder will now cost Rs 495.61 as against Rs 493.53 in the national capital from March 1 onwards.

IOCL also said that non-subsidised or market-priced LPG rates have been hiked by Rs 42.50 per cylinder “mainly due to change in international price and foreign exchange fluctuations.” Thus, it will now cost Rs 701.50 per 14.2-kg cylinder in Delhi.

All LPG consumers buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2 kg each per households in a year by providing the subsidy amount directly in bank accounts of users. This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.

According to tax rules, the goods and services tax on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates. So, with the rise in market price or non-subsidised LPG price, the tax incidence on subsidised cooking fuel has also increased, leading to the current price hike.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s diesel demand to hit record highs in 2019 ahead of general elections

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s diesel consumption may rise to a record this year on increasing infrastructure spending by the current government as it tries to hold off challengers in general elections that will be held over April and May.

Surging diesel consumption in India, the world’s third-largest oil user, underscores the country’s importance as a driver of global oil demand. Amid increasing concerns that crude demand growth may slip in 2019 because of slowing economic growth, India’s burgeoning fuel consumption may help underpin oil and fuel prices.

Analysts at Fitch Solutions and consultants Wood Mackenzie forecast India’s diesel demand to rise in 2019 by 5.7 percent and 6.4 percent, respectively, from 2018. The country consumed a record 6.9 million tonnes of diesel a month in 2018, or about 1.7 million barrels per day (bpd), data from the Ministry of Petroleum showed.

“There is strong energy demand which is bound to happen because of different sectors… We are a diesel driven economy,” said Sanjiv Singh, chairman of Indian Oil Corp, the country’s top refiner.

“The bottom-line remains that energy demand is bound to grow. We’re seeing GDP at more than 7 percent, (and) … a lot of urbanization,” Singh added.

India’s economy is expected to grow by 7.2 percent in the 2018/2019 financial year, which runs from April to March, versus 6.7 percent the previous year, according to government data.

“Tied to a constructive GDP outlook – and alongside the country’s positive demographics, low vehicle penetration and loose monetary policy – is our forecast for rapid growth in vehicle sales, which again will be positive for diesel,” said Peter Lee, an analyst at Fitch Solutions, adding that diesel cars account for nearly a quarter of new vehicles in India.

According to 2015 data, the latest available, from the International Organization of Motor Vehicle Manufacturers, India held 22 cars per 1,000 people versus 821 cars per 1,000 people in the United States.

Election Boom

Election rallies, the deployment of polling officers and security officers will add to the diesel demand boost from infrastructure projects that the ruling Bharatiya Janata Party have planned ahead of the polls.

The country’s interim budget unveiled earlier this month allocated 190 billion rupees ($2.67 billion) for building roads in the countryside, where two-thirds of Indians live.

“Increased travel activity for campaigning and implementation of infrastructure projects ahead of the elections will bolster diesel demand in the first half of 2019,” said Aman Verma, a research analyst at Wood Mackenzie.

During the last general elections in 2014, monthly diesel sales averaged 6.2 million tonnes during the polling months, 7 percent higher than the monthly average sales that year.

The implementation of a nationwide goods and services tax (GST) has also been beneficial for diesel demand.

“The GST has led to the removal of interstate taxes. This is a structural shift, resulting in increased demand for heavy and medium-duty trucks to achieve economies of scale and operational efficiency,” Wood Mackenzie’s Verma said.

Indian sales of commercial vehicles, which largely run on diesel, rose to a record last year, and Jan. 2019 sales climbed to 87,600, a record high for this time of the year, according to data on Refinitiv Eikon.

India’s diesel expansion will likely continue despite rising air pollution concerns, especially in the capital of New Delhi. The country’s fuel standards have improved, removing much of the sulphur from the diesel pool.

By April, the New Delhi capital region will adopt the so-called Bharat VI standard that is equal to the most stringent European standard, which the rest of the country will adopt next year.

Diesel consumption also faces increasing competition from electric vehicles (EV). The Indian government has set a target of EVs making up 30 percent of new car and motorcycle sales by 2030 from less than 1 percent today.

At the moment though EVs are not making much of an impact in India. Electric car sales actually declined by 40 percent to a mere 1,200 units in the financial year 2018 over the financial year 2017, although electric two-wheeler sales rose 138 percent to 54,800 units during the same period, according to Wood Mackenzie.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US stocks edge downward as Wall Street takes a pause

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Wall Street’s main indexes fell slightly on Thursday as support from better-than-feared U.S. GDP data was countered by concerns about earnings and US-China trade relations.

Also on Thursday, President Donald Trump said he had walked out of his Vietnam summit with Kim Jong Un because of demands from the North Korean leader to lift US-led sanctions.

Commerce Department data on Thursday showed that while the US economy missed a 3 percent annual growth target for 2018, a better-than-expected fourth quarter pushed gross domestic product up 2.9 percent for the year.

But investors were cautious, nothing that the S&P has risen 11 percent year-to-date at the same time as expectations for current quarter earnings have turned negative.

That’s a “disconnect that needs to be reconciled” said Terry Sandven, portfolio manager and chief equity strategist at US Bank in Minneapolis.

Wall Street analysts now expect first-quarter earnings to fall 1.1 percent compared with Jan. 1 estimates for 5.3 percent growth, according to IBES data from Refinitiv.

“This week we’ve lacked directional drivers. Fourth quarter earnings is coming to a quick close and there’s been no news on the US-China trade negotiations. On balance, we’re due for a period of consolidation and retrenchment,” said Sandven.

Investors were also unimpressed by White House economic adviser Larry Kudlow’s assurance Thursday that US-China trade negotiations were moving forward after “fantastic” progress made last week.

“Unlike a month ago, where a statement by an official was probably sufficient to push stocks higher, it no longer is. It’s time for concrete progress,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.

“What’s pushing markets down and counterpointing GDP is the concern about corporate earnings.”

The Dow Jones Industrial Average fell 69.16 points, or 0.27 percent, to 25,916, the S&P 500 lost 7.89 points, or 0.28 percent, to 2,784.49 and the Nasdaq Composite dropped 21.98 points, or 0.29 percent, to 7,532.53.

The S&P and Dow both registered their third straight day of losses on Thursday.

Of the 11 major S&P 500 sectors, the materials sector was the biggest percentage decliner with a 1.27 percent drop, while the energy sector was the second biggest percentage loser, with a 0.97 percent fall.

The healthcare sector fell 0.3 percent with drags from UnitedHealth, down 3 percent on concerns about the potential for a single-payer US healthcare system.

Also, Celgene Corp fell 8.6 percent after activist investor Starboard Value LP said it will vote against drugmaker Bristol-Myers Squibb Co’s proposed $74 billion acquisition of the biotech company. Bristol-Myers rose 1.4 percent.

Booking Holdings Inc fell 10.96 percent after missing quarterly earnings expectations and was the biggest single-stock drag on the S&P. Also dragging on the S&P was HP Inc, which plunged about 17.3 percent after it reported revenue that missed analysts’ estimates.

Monster Beverage Corp jumped 8.7 percent, making it the biggest percentage gainer on the S&P, after it beat Wall Street estimates for quarterly revenue and profit.

Declining issues outnumbered advancing ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favoured decliners.

The S&P 500 posted 40 new 52-week highs and two new lows; the Nasdaq Composite recorded 57 new highs and 34 new lows.

Volume on US exchanges was 8.22 billion shares, compared to the 7.34 billion-share average for the last 20 sessions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sonchiriya Review: Romancing the rebels in the ravines

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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‘How’s this film?’ asks one character in the film to another, pointing to a movie poster.  ‘It’s dumb. It’s got bandits on horses,’ is the reply. The first character laughs, ‘Whoever heard of dacoits on horses?’

Indian films like Reshma Aur Shera, Ganga Jamuna, Sholay and a whole bunch of American cowboy films, and heck even Kurosawa flash upon my mind’s eye but I laugh with the rest of the audience because we know that the police have chased Steeplechase sprinters like Paan Singh Tomar across the dusty ravines of the Chambal on foot, and in this film, set in the times of Man Singh they’re chasing what is left of his gang…

I’m watching Sonchiraiya which releases Friday, March 1, 2019. And I’m discovering that bad guys do indeed make great stories. I grew up reading Louis L’Amour and Zane Grey. Sudden by Oliver Strange is still my all-time favourite cowboy character. Am happy to watch a Bollywood film about bad guys with golden hearts and guns and endless bullets. And I’m happy to report that the film is worth every penny you will spend on the ticket.

Manoj Bajpai! I want to scream with joy to see the sleepy-eyed professor from Aligarh the movie shows up as the dreaded dacoit Man Singh in Sonchiraiya. Man Singh was like Robin Hood for the poor in the Chambal region (a folk song about him goes, ‘Rasta chalta koi nahi loota, na bahino se chheene haar’). And the story is about his gang of dacoits.

Sushant Singh Rajput has been sprayed in the dust to turn him into Lakhna daku and he’s rather splendid. He’s Man Singh’s best man, a partner in the last horrible thing they did. A thing that haunts both of them. One has seen many Westerns in which the cowboys talk of redemption and their loneliness and the desert Sun play tricks on them. It is such a pleasure to see that the director feeds us similar cinematic devices and the result is spectacular. Both Man Singh and Lakhna are unable to get the image of the bleeding kid out of their heads. Is she death? Is she a reminder that they owe much because of their sin…

Deep! You take another swig of your black coffee in the theatre (it’s a Chambal Western, so picture the billy can bubbling over with strong chai, except, in reality, the dakus went mostly hungry). The philosophical bit blends seamlessly with the action on screen.

The action is great. Ashutosh Rana serves up the meanest cop any side of the Chambal. Usually, it’s the cops you want to win but you don’t know whether to like the zeal of the cops or to like the golden-hearted philosophically conflicted dacoits. And that’s a good thing. Ashutosh Rana driving the dead dacoits through the village is one of the coolest ‘cruel’ scenes in cinema.

‘Bairi beimaan, baaghi savdhaan!’ is the battle cry of the dacoits and Ranveer Shorey as Vakil is a very, vicious daku. You are alarmed at his meanness and want to comfort him when he realises why Man Singh chose to die.

The river Chambal – for those of you who have never seen it – will surprise you. It is a very big, very wide river. If you remember the film Paan Singh Tomar, you And director Abhishek Chaubey’s camera directs your attention to the sun-kissed river until you see two eyes slowly creeping up to the boat where our dusty band is sitting down joking about life as dacoits and the little child’s injured hand is trailing in the water. The river suddenly turns dangerous despite the needless shot of the little girl’s bleeding fingers in the water (made me come home and Google: ‘do crocodiles smell blood like sharks’).

That brings us to the integral plot of the film. Lakhna and two other dacoits save a woman and a child at the cost of loyalty to the gang. They need to drop the woman and the injured child to a hospital, with the cops, the gang they deserted and the family of the woman chasing them. Here is where I saw a problem. Bhumi Pednekar is amazing as the supposed virago who killed to save the injured girl. But the backstory does not match up to what we see on screen. The moment she is rescued, she behaves like a damsel in distress. Where’s the gun we saw in the poster? Only in one scene does she show spunk. But it’s mostly, ‘Bachao! Help me!’

In contrast, I loved it when Phuliya or Phoolan Devi shows up on screen. The violence of Phoolan’s revenge off screen is mind-blowingly brilliant. How many times one has thought of doing that to some people in real life and it was truly satisfying to watch the scene unfold in the film. This makes the film truly special.

The undercurrents of the omnipresent caste, ways of the villages and questions about justice and loyalty are treated without any fanfare and without being judgemental. This is a great achievement of storytelling. And then it doesn’t matter that Man Singh died in 1955 and this story is set in 1975.
Yes, there are bodies piled up and gratuitous shots of people being shot in the face. But it’s all in good faith. These were members of the polite Dadda Man Singh’s gang, the dacoit who announced his arrival on a megaphone. Well, I’ve said much because I was thoroughly impressed with the way the end works itself up to the surface. Satisfaction guaranteed.

Manisha Lakhe is a poet, film critic, traveller, founder of Caferati — an online writer’s forum, hosts Mumbai’s oldest open mic, and teaches advertising, films and communication.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow