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CEO Musk Risks Becoming Liability for Tesla

Stock plunges again after weepy interview, SEC probe revealed.

by on Aug.20, 2018

Musk has said he's been working up to 120 hours a week - but is that really benefitting Tesla?

Since the era when Lee Iacocca was the seemingly ever-present face of Chrysler, perhaps no other automotive executive has been more closely linked with his company than Tesla’s constantly tweeting CEO Elon Musk – and Iacocca didn’t have access to the social media tools that routinely help Musk make headlines.

But the events of recent weeks have started raising questions about the 47-year-old Tesla chief’s role, some observers beginning to wonder whether Musk is starting to become more asset than liability. That has become underscored in recent days as backlash continues to mount over the tweet Musk posted early this month announces his goal of taking Tesla private and suggesting that the necessary funding had been “secured.”

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That has triggered a new probe by the Securities and Exchange Commission, it was revealed last week, about the same time Musk sat down by an unexpectedly emotional interview with the New York Times that raised questions about both his health and his ability to remain at Tesla’s helm and, as this week begins, it has led to new warnings about Tesla finances, the automaker’s shares taking a sharp tumble as Monday trading began on Wall Street.

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Lincoln Pushing Dealers to Split from Ford Stores

Company offering incentives to build standalone locations.

by on Aug.14, 2018

Lincoln is pushing dealers with twin Ford-Lincoln dealerships to split those locations up, creating standalone stores, like Lincoln of Troy (Michigan).

Lincoln is the latest luxury brand looking to exploit the advantages of this trend: stand-alone dealerships.

After escaping death at the hands of former Ford CEO Alan Mulally nearly five years ago, the company is asking owners of Ford-Lincoln dealerships in 30 major markets to build separate stores for the Lincoln brand.

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The concept isn’t entirely new as plenty of automakers have asked dealers to do the same throughout the years, the most recent being Hyundai and Genesis, although that program is in its infancy. Lincoln has a bit of history with stores separate from Ford-branded outlets from the days when it was Lincoln-Mercury. (more…)

Musk, Tesla Board, Move Forward on Privatization Plan

Carmaker hires Goldman, Silver Lake to advise.

by on Aug.14, 2018

Whether Elon Musk could justify tweeing "funding secured" is a matter of hot debate.

Even as questions mount about CEO Elon Musk’s plan to take the automaker private, the car company’s board is beginning the necessary steps to evaluate a proposal, with investment firms Silver Lake and Goldman Sachs brought in to offer advice on what appears to be a Saudi-funded buy-out.

Those developments come just a week after CEO Musk tweeted his interest in taking Tesla private while also hinting that “funding (is) secured.” Precisely where the funding will come from has become a central question, though Musk on Monday put up a blog post indicating he has been meeting with managers of the Saudi Arabian sovereign investment fund who have expressed interest in backing the plan.

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Tesla, meanwhile, now faces a probe by the SEC, as well as at least two lawsuits filed last week questioning whether the South African-born executive’s proposal was, in reality, a “nuclear attack” on by short-sellers.

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Tesla Stock Tumbles Hard as Questions Mount About Proposal to Go Private

Investors are “raising a lot of sensible questions,” while the SEC also begins sniffing around.

by on Aug.09, 2018

Investors -- along with the SEC -- are raising concerns about CEO Musk's proposal to take Tesla private.

Barely two days after euphoric investors started snapping up Tesla stock, buoyed by a tweet from CEO Elon Musk suggesting the company was ready to go private, gravity has set in. After nearing an all-time record, Tesla’s share price settling back to barely above where it started.

While the battery-carmaker’s board – along with at least one major investor — has cautiously backed the idea, saying it will now explore the idea of taking Tesla private, there appear to be more questions than answers. One of the uncertainties is how the SEC is viewing what happened this week, the federal agency set to take a close look at Musk’s suggestion that “Funding (is) secured” to make the transition once Tesla stock hit $420 a share.

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That number was certainly a big jump from where TSLA shares began the day on Tuesday, just over $340 a share. By the end of the day it had rocketed close to Tesla’s record closing of $389.61. But concerns were apparent almost immediately with some analysts pointing, among other things, to the “420” in Musk’s tweet, a number more often used as slang for marijuana.

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China Retaliates; New Tariffs Hit U.S. Auto Exports, Jobs

BMW, Mercedes, Ford, other makers could be hard hit, forced to cut American production.

by on Aug.09, 2018

The BMW X5 is the #1-selling American-made vehicle in the Chinese market.

The auto industry has found itself at Ground Zero as the U.S. and China escalate their trade war.

After the latest move by the Trump Administration to target Chinese imports, the Beijing government has announced it will strike back with 25% tariffs on $16 billion in imported U.S. goods. China previously enacted new duties on $34 billion worth of goods, bringing the total to $50 billion. And with the White House threatening to add another $200 billion to the U.S. list, the trade war could escalate rapidly.

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The latest round sees the Chinese Ministry of Commerce placing an additional 25% duty on a list of American products that includes coal, crude oil and metal scrap, as well as automobiles and motorcycles. A number of automakers could be hit hard by the new sanctions, including Ford Motor Co., Mercedes-Benz and BMW.

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Tesla CEO Musk Lays Out Plan to Take EV Maker Private

SpaceX appears to be the blueprint.

by on Aug.07, 2018

Tesla CEO Elon Musk wants to take the EV maker private — at $420 a share.

Sometimes Tesla founder and CEO Elon Musk means what he tweets — in this case, taking the company private at $420 a share.

Earlier today, Musk hopped on telling his millions of followers, “Am considering taking Tesla private at $420 a share. Funding secured.”

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That set off two flurries. One a thread of tweets about everything from what a great idea it is to how followers love marijuana references to how the Securities and Exchange Commission frown on these sorts of pronouncements. (more…)

Musk Tweets Suggests He Could Take Tesla Private

But is his 420 reference a doper joke or a serious price target?

by on Aug.07, 2018

Tesla founder and CEO Elon Musk told the Twitterverse today he was considering taking the EV maker private.

For those in on doper slang, “420” is a familiar reference to marijuana. And to those in the financial community, it’s a number that has many today asking what Tesla CEO Elon Musk might be smoking.

Musk once again set the Twittersphere on fire Tuesday when he sent out a short tweet declaring “Am considering taking Tesla private at $420. Funding secured.”

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Tesla’s stock has been on fire since the automaker released its second-quarter earnings numbers last week, Musk repeating a pledge to deliver both a profit and positive cashflow for the second half of the year. Shares of TSLA were up by another nearly 8.5% as of midday trading, at around $375 rapidly taking aim at the carmaker’s previous record high of $389.61. (more…)

Automakers Caught “In Limbo” As New CAFE Rules Face Major Legal Hurdles

Anticipated court battle could delay changes for years.

by on Aug.03, 2018

Automakers are caught in the middle over the CAFE debate and could face even more challenges if the proposed Trump rollback drags on in court.

Despite, or perhaps because of, the Trump Administration’s plan to roll back the Corporate Average Fuel Economy, automakers are finding themselves in what one long-time industry analyst calls “limbo,” and it could be a year or more before they’ll actually be able to incorporate the CAFE update into their plans due to anticipated legal challenges.

As a result, it could be well into the upcoming decade before the White House revisions actually have any significant impact, according to numerous industry executives who spoke to TheDetroitBureau.com, if any changes ever actually occur.

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There is the very real possibility that the courts could rule against the proposed changes or that the legal battle drags on long enough for a new administration to come into office and revert back to the guidelines established under the Obama White House. As a result, automakers and suppliers face a major conundrum when it comes to planning for products set to come out through the middle of the coming decade.

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Toyota Motor Reports Increased Q1 Profits

Strong sales in U.S. and cost-cutting efforts pave way to profits.

by on Aug.03, 2018

Toyota's Masayoshi Shirayanagi noted that increased trade tensions and U.S. tariffs will eat into Toyota's bottom line.

Toyota Motor Corp. rode a wave of increased sales and decreased costs to a 7.2% increase in net income in its fiscal first quarter of 2018. Revenues also increased 4.5% during the quarter.

The company also announced it was ending its partnership with Isuzu Motor Ltd. The companies built diesel engines, but with oil burners falling out of favor, replaced by EVs and potentially fuel cells down the road, the two sides will split.

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Toyota owns a 5.89% stake in Isuzu. (more…)

19 States, DC Launch Legal Move to Block CAFE Cuts

“We are prepared to put the brakes on this reckless and illegal plan.”

by on Aug.02, 2018

Massachusetts Attorney-General Maura Healey is taking the lead in opposing the CAFE cuts.

It didn’t take long for the backlash to begin as critics took aim at the White House effort to roll back the federal mileage mandate, 19 states, along with the District of Columbia, announcing plans to sue the Trump Administration.

The plan revealed Thursday would freeze the Corporate Average Fuel Economy, or CAFE, standard at 37 miles per gallon, the target automakers had been expected to achieve by 2020, on the way to an official target of 54.5 mpg by 2025 – though the original, real-world number would be in the low to mid-40 range. The administration said the move would not only save new vehicle buyers an average of $2,340 but also save 1,000 lives annually. Critics, however, contend the move will increase demand for imported oil, boost household energy costs and worsen global warming.

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“We are prepared to go to court to put the brakes on this reckless and illegal plan,” the coalition of states attorneys-general, led by Massachusetts Attorney General Maura Healey, said in a news release.

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