Hot Wheels will ship you a Cybertruck long before Tesla is likely to make any deliveries on their electric retro-future wheeled trapezoid: The toy maker just unveiled two different RC Cybertruck models, including a 1:64 scale model at just $20, and a much larger 1:10 scale version for $400.
These are available to pre-order now, but like most of Tesla’s cars, just because they’re introduced doesn’t mean you can go out and buy one immediately. They’re set to ship in time for the holidays, however, with a December 15, 2020 estimated availability date, according to the Hot Wheels website.
These look like very faithful representations of the Cybertruck that Tesla unveiled at a special event back in November, and the large version includes a “reusable cracked window vinyl sticker” that you can use to recreate the onstage flub that happened at the actual reveal. You’ll have to supply your own large metal medicine ball.
Other features of the 1:10 scale Cybertruck include functioning headlights and taillights, all-wheel drive, true to form “Chill” and “Sport” modes, a removable tonneau cover, a working telescopic tailgate and more.
The smaller and much more affordable version is just three inches long, which is basically what you’d expect from a traditional Hot Wheels mini model, and it can achieve an “up to 500mph scale speed,” which someone who is better than me at math can figure out what that translates to.
These are available to people in the U.S. and Canada, but I expect them to be pretty hot sellers based on the general fervor and interest around all things Cybertruck to date.
Several companies rolled out electric pickups in 2019. Tesla’s Cybertruck got most of the attention, but don’t sleep on General Motors and Ford — bringing electric pickups to market is critical for the viability of electric vehicles.
Automakers build vehicles around shared components. These platforms, the underpinnings of the vehicles, often live for 10 or more years, and are critical to each automaker’s economic stability. The exterior sheet metal might change, but dozens of models often share the frame, powertrain and electrical components.
Electric pickup platforms offer vehicle makers a new revenue source. Instead of building electric vehicles designed to move people, these platforms can move goods. That’s key to building a long-term strategy around electric vehicles.
Look at Ford, whose best-selling F-150 is just a portion of its success. From the F-150, the automaker has dozens of commercial vehicles built off platforms that share components. If Ford can produce an electric pickup — which it says it’s doing alongside startup Rivian — Ford will be able to electrify its commercial offering more quickly.
Specific vehicle platforms are perfect for electrification. Vehicles with a predictable driving route like municipal vehicles, delivery vans and even hearses could benefit from electric powertrains.
Electric powertrains have long offered advantages over internal combustion; electric counterparts feature fewer moving parts and are now often smaller, allowing for more interior space. And then there’s the torque that gives electric vehicles near-superhero strength.
Tesla’s Model 3 is among the top 10 choices for car buyers in 2020, according to Consumer Reports. The nonprofit organization released its “Top Picks” of the year on Thursday, and it included Tesla’s most affordable vehicle alongside cars from automakers including Toyota, Subaru, Honda, Kia and Lexus.
The Model 3 was chosen as one of three vehicles in the $45K-$55K category, alongside the Lexus RX and the Toyota Supra. CR lauded its “thrilling driving experience,” including “impressive handling and quick precise steering [that] help it feel like a sports car.” They did ding it slightly for having a “stiff ride” overall, but said that that’s more than made up for by its long EV battery range and emission-free eco-friendly qualities.
Consumer Reports also specifically called out a worry about the Model 3 that “Autopilot, an optional system on the vehicle, does not require the driver to stay engaged, creating safety concerns.” Tesla has always positioned Autopilot as a driver-assist feature that still requires a driver to be ready to take over control at a moment’s notice, but critics have suggested its implementation can lead to misuse resulting in inattentiveness.
Clearly, that concern wasn’t enough to prevent CR from counting the Model 3 among its top recommendations for vehicles in 2020. Tesla also ended up ranking 11th overall out of 33 automakers in Consumer Reports’ 2020 automotive brand report card, climbing eight positions from last year. The Model 3, and the rapid improvements that Tesla was able to make in its production as it scaled assembly of the vehicle, clearly helped it in the eyes of the consumer-focused nonprofit.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This is the first Equity Shot in what feels like a long time, so, let me explain. Most of the time Equity comes out on Friday. It’s a mix of news and chat and venture happenings. It’s fun! But sometimes, a topic comes up that demands more immediate attention. That’s what happened today as we stared at Tesla’s share price wondering what in the hell was going on.
Shares of the electric car company are surging — again — today, pushing ever-closer to the $1,000 per-share mark. So, Danny, myself and Chris on the turntables got together to riff and chat about what is going on.
For those of you who want some links, here you go:
Today was all about fun. The main, more serious (kinda) show is back Friday. Stay cool!
Tesla and SpaceX CEO Elon Musk is once again sounding a warning note regarding the development of artificial intelligence. The executive and founder tweeted on Monday evening that “all org[anizations] developing advance AI should be regulated, including Tesla.”
Musk was responding to a new MIT Technology Review profile of OpenAI, an organization founded in 2015 by Musk, along with Sam Altman, Ilya Sutskever, Greg Brockman, Wojciech Zaremba and John Schulman. At first, OpenAI was formed as a non-profit backed by $1 billion in funding from its pooled initial investors, with the aim of pursuing open research into advanced AI with a focus on ensuring it was pursued in the interest of benefiting society, rather than leaving its development in the hands of a small and narrowly-interested few (i.e., for-profit technology companies).
All orgs developing advanced AI should be regulated, including Tesla
— Elon Musk (@elonmusk) February 17, 2020
At the time of its founding in 2015, Musk posited that the group essentially arrived at the idea for OpenAI as an alternative to “sit[ting] on the sidelines” or “encourag[ing] regulatory oversight.” Musk also said in 2017 that he believed that regulation should be put in place to govern the development of AI, preceded first by the formation of some kind of oversight agency that would study and gain insight into the industry before proposing any rules.
In the intervening years, much has changed – including OpenAI. The organization officially formed a for-profit arm owned by a non-profit parent corporation in 2019, and it accepted $1 billion in investment from Microsoft along with the formation a wide-ranging partnership, seemingly in contravention of its founding principles.
Musk’s comments this week in response to the MIT profile indicate that he’s quite distant from the organization he helped co-found both ideologically and in a more practical, functional sense. The SpaceX founder also noted that he “must agree” that concerns about OpenAI’s mission expressed last year at the time of its Microsoft announcement “are reasonable,” and he said that “OpenAI should be more open.” Musk also noted that he has “no control & only very limited insight into OpenAI” and that his “confidence” in Dario Amodei, OpenAI’s research director, “is not high” when it comes to ensuring safe development of AI.
While it might indeed be surprising to see Musk include Tesla in a general call for regulation of the development of advanced AI, it is in keeping with his general stance on the development of artificial intelligence. Musk has repeatedly warned of the risks associated with creating AI that is more independent and advanced, even going so far as to call it a “fundamental risk to the existence of human civilization.”
He also clarified on Monday that he believes advanced AI development should be regulated both by individual national governments as well as by international governing bodies, like the U.N., in response to a clarifying question from a follower. Time is clearly not doing anything to blunt Musk’s beliefs around the potential threat of AI: Perhaps this will encourage him to ramp up his efforts with Neuralink to give humans a way to even the playing field.
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Hello again — or perhaps for the first time. This is Kirsten Korosec, senior transportation reporter at TechCrunch and your host here at The Station. This weekly newsletter will also be posted as an article after the weekend — that’s what you’re reading now. To get it first, subscribe for free. Please note that there will not be a newsletter February 22.
It was a drama-filled week with a hearing on the hill in D.C. about autonomous vehicle legislation that got a bit tense at times. Meanwhile, Uber tipped its hat to the past, EV startup Lucid started to lift the veil on its Air vehicle (scroll down for a spy shot!) and micromobility prepared for headwinds in Germany.
Before I ride off into the sunset for my vacation, one reminder for y’all. Don’t forget to reach out and email me at firstname.lastname@example.org to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.
Welcome back to micromobbin’, a regular feature in The Station by reporter Megan Rose Dickey. Before we get into her micromobility insights, a quick note that shared scooters are facing a fight in Germany that has prompted companies to unite over their “shared” cause. (Get it?)
Micromobility vehicles, first legalized in Germany last June, have flooded the marketplace and caused a backlash in cities like Berlin, where at least six apps, including Bird, Circ (now owned by Bird), Lime, Tier, Uber Jump and Voi operate. As the Financial Times first reported, amendments to the country’s Road Traffic Act would give individual cities the power to heavily restrict the areas in which e-scooters can be parked or ban them altogether.
Now back to Dickey’s micromobbin’.
Swiftmile, the startup that wants to become the gas station for electric micromobility vehicles, announced its move into advertising this week. Swiftmile already supplies cities and private operators with docks equipped to park and charge both scooters and e-bikes. Now, the company is starting to integrate digital displays that attach to its charging stations to provide public transit info, traffic alerts and, of course, ads.
“It adds tremendous value because it’s a massive market,” Swiftmile CEO Colin Roche told TechCrunch. “Tons of these corporations want to market to that group but you cannot do that on a scooter, nor should you. So there’s a massive audience that wants to market to that group but also cities like us because we’re bringing order to the chaos.”
Meanwhile, Bird unveiled more details about its loyalty program, called Frequent Flyer. It’s currently in the pilot phase, which means it’s only available in select markets. But the benefits for riding five times in 28 days include no start fees for rides between 5 a.m. to 10 a.m., Monday through Friday and the ability to reserve your Bird in advance for up to 30 minutes at no cost.
— Megan Rose Dickey
We don’t just hear things. We see things too. This week in a little bird — the place where we share insider news, not gossip — I’m going to share two spy shots of a production version of Lucid Motors’ upcoming Air electric vehicle. See below.
The photos of the production version of the Lucid Air were taken during an event hosted for some of the vehicle’s first reservation holders. (I wasn’t there, but luckily some readers of The Station were.) By the way, we also hear that reservations are in the “low four figures.”
You’ll notice that the production version of the Air is nearly identical to the beta version. Unfortunately, we don’t see the interior. But reports suggest it falls in the understated luxury category and without giant screens.
Lucid is preparing for one of the more important moments in its history as a company. The production version of Air will be unveiled in April at the New York Auto Show. In the run-up to the auto show, Lucid is revealing more information about the vehicle, including a recent video that suggested the vehicle had a real-world range of more than 400 miles. Lucid has hit that 400-mile range in simulated testing, but how it operates on the roads is what really matters.
What’s impressive, if those numbers bear out, is that it was accomplished with a 110-kWh battery pack. That’s an improvement from back in 2016 when Lucid said it would need a 130-kWh battery pack to achieve that range. In my past conversations with CEO Peter Rawlinson — and one wild ride with him behind the wheel of an early Air prototype in Vegas — it’s clear he is obsessed with battery efficiency. That apparently hasn’t waned.
Car and Driver, which was at this special event, noted in its report that Rawlinson has a goal to get to five miles per kilowatt-hour. Right now, Tesla can lay claim to the most efficient electric vehicle with the upcoming Model Y at a claimed 4.1 miles per kilowatt-hour.
It got a little prickly on Capitol Hill during a House panel hearing this week that aimed to tackle how best to regulate autonomous vehicles. Watch the hearing to see it all unfold. Here’s a handy link to it.
A quick history lesson: The SELF DRIVE ACT was unanimously passed in 2017 by the Republican-controlled House of Representatives. AV START, a complementary bill introduced in the Senate, failed to pass because Democrats said it didn’t go far enough to address safety and liability issues.
A bipartisan group revived efforts to come up with legislation that would address Democrat concerns and give auto manufacturers and AV developers greater freedom to deploy vehicles that lack controls like a steering wheel or pedals, which are currently required by federal law.
There was some level of public agreement between the traditional auto manufacturers and AAJ over the issue of accountability. But there is still a huge divide between organizations like the Consumer Technology Association and safety advocates and trial lawyers over the issue of forced arbitration.
Groups like the American Association for Justice, a group representing trial lawyers, want to ban forced arbitration in any autonomous vehicle bill.
Meanwhile, CTA president and CEO Gary Shapiro submitted testimony that was clearly opposed to limiting the use of arbitration. The CTA argues that arbitration reduces the cost of litigation and provides more timely remedies.
People who were in the room told me they were surprised by how unwavering Shapiro’s comments were, and suggested that it wasn’t in step with how some auto manufacturers view the issue.
Following the hearing, the House Energy and Commerce and Senate Commerce, Science and Transportation committees circulated seven sections to industry groups covering issues such as crash-data sharing and cybersecurity, according to reporting by Bloomberg Government. There was one missing provision. Any guesses? Yup, the provision dealing with forced arbitration. That has caused some Democrats to abandon the bill.
There are two ways for this bill to survive in this congressional session — by unanimous consent, meaning everyone agrees to it, or by being attached to another bill. The first option is highly unlikely. And the second is just as slim, as there are limited opportunities in the Senate to attach self-driving legislation to another bill.
Two items to mention that illustrate how the world of ride hailing continues to evolve.
First up is Uber. The company is piloting a new feature aimed at older adults that will let customers dial a 1-800 number and speak to an actual human being to hail a ride. The pilot is launching in Arizona, followed by other yet unnamed states. Sounds sort of familiar, doesn’t it?
It’s not quite like calling a taxi dispatcher, though. You’ll still need a phone that can receive SMS or text messages to get information on the driver and their ETA.
Now let’s jump over to Nigeria where new regulations in the country’s commercial center of Lagos are creating some chaos.
Lagos has started to restrict where shared motorcycles, called okadas, can operate. That is affecting motorcycle-taxi businesses like ORide, Max .ng and Gokada.
In a statement via email, ORide’s senior director of Operations, Olalere Ridwan, said the rules entail “a ban on commercial motorcycles…in the city’s core commercial and residential areas, including Victoria Island and Lagos Island.”
The motorcycle taxi limitations have also thrown off Lagos’s disorderly transit grid — overloading other mobility modes (such as mini-buses) and forcing more people to pound pavement and red-dirt to get to work, according to reporter Jake Bright.
I wanted to highlight one of our ONMs, otherwise known as original news manufacturers. Ba dum bump.
Freelancer Mark Harris is back with a scoop on Google’s short-lived Bookbot program and how its death sparked a new and still-in-stealth startup called Cartken.
Bookbot was a robot created within Google’s Area 120 incubator for experimental products. The plan was to pilot an autonomous robot in Mountain View that would pick up library books from users and bring them back to the library. Apparently, it was well received. But it was killed off far before its nine-month pilot was slated to end. Bookbot’s demise followed Google’s decision to scale back efforts to compete with Amazon in shopping.
But Bookbot appears to be back, albeit in a slicker form and with a broader use case than a library book shuttle. Engineers working on Bookbot as well as a logistics expert who was once in charge of operations at Google Express left the company to form Cartken in fall 2019.
Check out Harris’ deep dive into Bookbot, Google’s shift away from shopping and Cartken.
You might have heard or read here in this newsletter that TC Sessions: Mobility is returning for a second year on May 14 in San Jose — a day-long event brimming with the best and brightest engineers, policymakers, investors, entrepreneurs and innovators, all of whom are vying to be a part of this new age of transportation.
Now here’s my discount deal for you. To get 10% off tickets, including early-bird, use code AUTO. The early-bird sale ends April 9. Early-bird tickets are available now for $250 — that’s $100 savings before prices go up. Students can book a ticket for just $50. Book your tickets today.
So far, we’ve announced:
Expect more announcements each week leading up to the May 14th event.
Tesla has priced its secondary common stock offering at $767, a 4.6% discount from Thursday’s share price close, according to a securities filing Friday.
Tesla said in the filing it will sell 2.65 million shares at that discounted price to raise more than $2 billion. Lead underwriters Goldman Sachs and Morgan Stanley have the option to buy an additional 397,500 shares in the offering.
Tesla shares closed at $804 on Thursday. The share price opened lower Friday, jumped as high at $812.97 and has hovered around $802.
The automaker surprised Wall Street on Thursday when it announced plans to raise more than $2 billion through a common stock offering, despite signaling just two weeks ago that it would not seek to raise more cash.
CEO Elon Musk will purchase up to $10 million in shares in the offering, while Oracle co-founder and Tesla board member Larry Ellison will buy up to $1 million worth of Tesla shares, according to the securities filing.
Tesla said it will use the funds to strengthen its balance sheet and for general corporate purposes. In a separate filing Thursday that was posted prior to the stock offering notice, Tesla said capital expenditures could reach as high as $3.5 billion this year.
The stock offering conflicts with statements Musk and CFO Zach Kirkhorn made last month during Tesla’s fourth-quarter earnings call. An institutional investor asked that given the recent run in the share price, why not raise capital now and substantially accelerate the growth in production? At the time, Musk said the company was spending money sensibly and that there is no “artificial hold back on expenditures.”
At the time of Thursday’s announcement, Tesla shares had risen more than 35% since the January 29 earnings call, perhaps proving too tempting of an opportunity to ignore.
Tesla said Thursday it plans to raise more than $2 billion through a common stock offering and will use the funds to strengthen its balance sheet and for general corporate purposes, despite signaling just two weeks ago that it would not seek to raise more cash.
Tesla CEO Elon Musk will purchase up to $10 million in shares in the offering, while Oracle co-founder and Tesla board member Larry Ellison will buy up to $1 million worth of Tesla shares, according to the securities filing.
The automaker has also granted underwriters a 30-day option to purchase up to $300 million of additional common stock. If underwriters exercise that option, Tesla could raise as much as $2.3 billion.
The stock offering conflicts with statements Musk and CFO Zach Kirkhorn made last month during Tesla’s fourth-quarter earnings call. An institutional investor asked that given the recent run in the share price, why not raise capital now and substantially accelerate the growth in production? At the time, Musk said the company was spending money sensibly and that there is no “artificial hold back on expenditures.”
“We’re spending money I think efficiently and we’re not artificially limiting our progress,” Musk said dueing the January 29 call. “And then despite all that we are still generating positive cash. So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”
Kirkhorn added to Musk’s comments noting that the company had laid a good foundation and was not holding back on growth.
“We have two products, two vehicle products launching right now and that will consume much of the bandwidth of the company to stabilize those over the course of the year,” Kirkhorn said. “And then looking into next year, we have even more products launching, more factories. So we want to be smart about how we spend money and grow in a way that’s sustainable. So we don’t fall victim to the mistakes I think we made a year and a half or so ago.”
However, Tesla shares have risen more than 35% since the January 29 earnings call, perhaps proving too tempting of an opportunity to ignore.
This latest stock raise could prove critical to fund Tesla’s number of projects. A regulatory filing posted prior to the stock offering notice indicates Tesla’s capital expenditures could reach as high as $3.5 billion this year.
“Considering the expected pace of the manufacturing ramps for our products, construction and expansion of our factories, and pipeline of announced projects under development, and consistent with our current strategy of using partners to manufacture battery cells, as well as considering all other infrastructure growth, we currently expect our average annual capital expenditures in 2020 and the two succeeding fiscal years to be $2.5 billion to $3.5 billion,” Tesla said in its 10K filing, which was posted Thursday.
Tesla appears to be ramping up installations of its solar tile roofs in the San Francisco Bay area and will eventually roll out to Europe and China, according to CEO Elon Musk who in a series of tweets provided the first substantial update since the company launched the third iteration of its product in October.
The solar tile roof, which Tesla calls Solarglass, is being produced at the company’s factory in Buffalo, New York. Musk announced in one of the tweets plans to host a “company talk” in April at the Buffalo factory, an event that will include media and customer tours of the facility.
Tesla did not respond to a request for comment seeking more information about Solarglass, including how many installations have been made to date. We will update the article if Tesla responds.
Many Bay Area installations are ongoing now
— Elon Musk (@elonmusk) February 9, 2020
Europe & China timing will be announced soon
— Elon Musk (@elonmusk) February 10, 2020
Four months ago, Musk said the company would begin installations in the “coming weeks” and that it hopes to ramp production to as many as 1,000 new roofs per week.
Tesla’s solar roof tiles are designed to look like normal roof tiles when installed on a house, while doubling as solar panels to generate power. The company first unveiled the solar tiles in 2016 and has been tinkering with them ever since. Tesla has conducted trial installations with the first two generations of the solar tiles and opened up pre-orders in 2017.
In an earnings call last October, Musk suggested that the tiles were ready for a widespread deployment, noting that “version three is finally ready for the big time.”
The solar tile roof will initially be offered in textured black, but Musk reiterated Monday plans to offer other color and finish variants “hopefully later this year.”
Yes, but we want to focus on textured black first, then move into Earth tones & convolutions
— Elon Musk (@elonmusk) February 10, 2020
A pricing estimator on the Tesla website says a solar tile roof with 10 kW of solar on an average 2,000 square-foot home costs $42,500 before federal tax incentives. It also lists $33,950 as the price after an $8,550 federal tax incentive.
Shares of American electric car company Tesla are sharply higher again this morning, adding $122.40 (or 15.69 percent ) to their value before regular trading today. The gains come after Tesla has rapidly added value in recent days, including a nearly 20 percent gain yesterday during regular trading; shares of the company were worth around $560 a week ago. Today they are valued at around $900.
The company reported earnings on January 29th, last Wednesday, leading to a nice bump in the company’s value. That sort of post-earnings move is quite normal. However, its value appreciation since that event is a bit harder to understand.
Tesla’s financial health has improved in recent years. However, Tesla reported effectively zero year-over-year revenue growth, slimmer operating income, and modestly improved adjusted profit in Q4 2019, hardly the picture of a company that should quickly appreciate 60 percent in rapid fashion.
And yet here we are. Is it a short squeeze? Mere enthusiasm after a bullish analyst call? Is this battery news enough reason for Tesla to rally so sharply? The fact that it has a new car coming? Perhaps a combination of all of the above?
What matters is that Tesla shares are booming today, providing the company with implied access to capital that it could use to pay down debt. (Tesla has a little over $13.4 billion in debt, according to its financial documents.) And it says that the company’s rising revenue multiple isn’t that bonkers when you compare it to historical levels (implying that the company’s current valuation is not as wild as one might think, when compared to prior valuations the company has enjoyed).
Here’s YCharts data on the matter:
It’s aggressive, yes. But the rally is not as insane as I would have thought. You can fill in the blanks yourself, but Tesla is putting on a show and it’s annoyingly exciting.
Friday typically brings a bunch of new music releases, but this Friday’s new drops includes a new track from an unlikely source — Elon Musk . The SpaceX and Tesla CEO said earlier this week he had written a new song called “Don’t Doubt ur Vibe,” to be released on “Emo G Records,” but as usual it was hard to tell if Musk was being serious or just having his evening internet fun.
Turns out, he was serious, and we didn’t have to wait long to hear the track. The lyrics probably didn’t take him too long to write — the whole song consists of “Don’t doubt your vibe / because it’s true / don’t doubt your vibe / because it’s you” repeated over and over. Musk says he performed the lyrics, which are modified and distorted to an airy electronic, supernatural-sounding final product.
The track itself is backed by a pulsing, ambient kind of EDM arrangement, and all in all it’s not a bad representation of the genre. Listen for yourself and judge:
Musk also tweeted photos of himself in the studio actually recording the track, and shared that the process of putting together the song was maybe harder than he’d anticipated. In the midst of his music-making tweets, he also took time to educate some of his followers on why some of the more dire predictions floating around about the coronavirus are blown way out of proportion.
No word on whether there’s going to be a full album, but Musk’s timing with this drop actually makes a lot of sense when you consider how things have been going for him lately: Tesla stock skyrocketed on positive earnings reported yesterday; he beat a defamation accusation in court last month; his Starlink project is coming together; and SpaceX is making good progress on its commercial crew flight program, nailing its last major test flight before crewed missions earlier this month.
Internet services company Opera has come under a short-sell assault based on allegations of predatory lending practices by its fintech products in Africa.
Hindenburg Research issued a report claiming (among other things) that Opera’s finance products in Nigeria and Kenya have run afoul of prudent consumer practices and Google Play Store rules for lending apps.
Hindenburg — which is based in NYC and managed by financial analyst Nate Anderson — went on to suggest Opera’s U.S. listed stock was grossly overvalued.
That’s a primer on the key info, though there are several additional shades of the who, why, and where of this story to break down, before getting to what Opera and Hindenburg had to say.
A good start is Opera’s ownership and scope. Founded in Norway, the company is an internet services provider, largely centered around its Opera browser.
Two years later, Opera went public in an IPO on NASDAQ, where its shares currently trade.
Though Opera’s web platform isn’t widely used in the U.S. — where it has less than 1% of the browser market — it has been number-one in Africa, and more recently a distant second to Chrome, according to StatCounter.
On the back of its browser popularity, Opera went on an African venture-spree in 2019, introducing a suite of products and startup verticals in Nigeria and Kenya, with intent to scale more broadly across the continent.
In Nigeria these include motorcycle ride-hail service ORide and delivery app OFood.
Central to these services are Opera’s fintech apps: OPay in Nigeria and OKash and Opesa in Kenya — which offer payment and lending options.
Fintech focused VC and startups have been at the center of a decade long tech-boom in several core economies in Africa, namely Kenya and Nigeria.
In 2019 Opera led a wave of Chinese VC in African fintech, including $170 million in two rounds to its OPay payments service in Nigeria.
Opera’s fintech products in Africa (as well as Opera’s Cashbean in India) are at the core of Hindenburg Research’s brief and short-sell position.
The crux of the Hindenburg report is that due to the declining market-share of its browser business, Opera has pivoted to products generating revenue from predatory short-term loans in Africa and India at interest rates of 365 to 876%, so Hindenburg claims.
The firm’s reporting goes on to claim Opera’s payment products in Nigeria and Kenya are afoul of Google rules.
“Opera’s short-term loan business appears to be…in violation of the Google Play Store’s policies on short-term and misleading lending apps…we think this entire line of business is at risk of…being severely curtailed when Google notices and ultimately takes corrective action,” the report says.
Based on this, Hindenburg suggested Opera’s stock should trade at around $2.50, around a 70% discount to Opera’s $9 share-price before the report was released on January 16.
Hindenburg also disclosed the firm would short Opera.
Founder Nate Anderson confirmed to TechCrunch Hindenburg continues to hold short positions in Opera’s stock — which means the firm could benefit financially from declines in Opera’s share value. The company’s stock dropped some 18% the day the report was published.
On motivations for the brief, “Technology has catalyzed numerous positive changes in Africa, but we do not think this is one of them,” he said.
“This report identified issues relating to one company, but what we think will soon become apparent is that in the absence of effective local regulation, predatory lending is becoming pervasive across Africa and Asia…proliferated via mobile apps,” Anderson added.
While the bulk of Hindenburg’s critique was centered on Opera, Anderson also took aim at Google.
“Google has become the primary facilitator of these predatory lending apps by virtue of Android’s dominance in these markets. Ultimately, our hope is that Google steps up and addresses the bigger issue here,” he said.
TechCrunch has an open inquiry into Google on the matter. In the meantime, Opera’s apps in Nigeria and Kenya are still available on GooglePlay, according to Opera and a cursory browse of the site.
For its part, Opera issued a rebuttal to Hindenburg and offered some input to TechCrunch through a spokesperson.
In a company statement opera said, “We have carefully reviewed the report published by the short seller and the accusations it put forward, and our conclusion is very clear: the report contains unsubstantiated statements, numerous errors, and misleading conclusions regarding our business and events related to Opera.”
Opera added it had proper banking licenses in Kenyan or Nigeria. “We believe we are in compliance with all local regulations,” said a spokesperson.
TechCrunch asked Hindenburg’s Nate Anderson if the firm had contacted local regulators related to its allegations. “We reached out to the Kenyan DCI three times before publication and have not heard back,” he said.
As it pertains to Africa’s startup scene, there’ll be several things to follow surrounding the Opera, Hindenburg affair.
The first is how it may impact Opera’s business moves in Africa. The company is engaged in competition with other startups across payments, ride-hail, and several other verticals in Nigeria and Kenya. Being accused of predatory lending, depending on where things go (or don’t) with the Hindenburg allegations, could put a dent in brand-equity.
There’s also the open question of if/how Google and regulators in Kenya and Nigeria could respond. Contrary to some perceptions, fintech regulation isn’t non-existent in both countries, neither are regulators totally ineffective.
Kenya passed a new data-privacy law in November and Nigeria recently established guidelines for mobile-money banking licenses in the country, after a lengthy Central Bank review of best digital finance practices.
Nigerian regulators demonstrated they are no pushovers with foreign entities, when they slapped a $3.9 billion fine on MTN over a regulatory breach in 2015 and threatened to eject the South African mobile-operator from the country.
As for short-sellers in African tech, they are a relatively new thing, largely because there are so few startups that have gone on to IPO.
In 2019, Citron Research head and activist short-seller Andrew Left — notable for shorting Lyft and Tesla — took short positions in African e-commerce company Jumia, after dropping a report accusing the company of securities fraud. Jumia’s share-price plummeted over 50% and has only recently begun to recover.
As of Wednesday, there were signs Opera may be shaking off Hindenburg’s report — at least in the market — as the company’s shares had rebounded to $7.35.
Tesla reportedly reached a settlement with the State of Michigan regarding the sales and service of its vehicles. According to the AP, this settlement would end the automaker’s lawsuit against the state, which barred Tesla and others from selling vehicles directly to consumers. This would lead to consumers being able to purchase, take delivery and service Tesla vehicles within the State of Michigan.
Currently, Michigan law states consumers can only purchase vehicles through franchised dealerships and not directly from an automaker. Tesla, as an automaker, sells directly to consumers through dealerships it owns. As a result, consumers in Michigan had to jump through hoops to purchase a Tesla vehicle.
Currently, Tesla has a limited presence in the home state of America’s Big Three automakers. Shoppers have to visit a so-called showcase within an upscale mall located in a Detroit suburb. Representatives at this location cannot advise shoppers on vehicle pricing or buying options. What’s more, if a Tesla vehicle is purchased in Michigan, it must be obtained in a different state.
Tesla challenged Michigan’s stance in a 2016 lawsuit and this settlement would give consumers more freedom of choice by allowing Tesla to sell and service vehicles. Under the terms of this settlement, Tesla would sell vehicles through a subsidiary and deliver vehicles to consumers. However, these vehicles would be titled from a different state, forcing the new owners to retitle them for Michigan. Tesla will also be allowed to open service centers in Michigan.
Elon Musk seems happy with the report of the settlement.
— Elon Musk (@elonmusk) January 21, 2020
Tesla pushed back Monday against claims that its electric vehicles may suddenly accelerate on their own, calling a petition filed with federal safety regulators “completely false.”
Tesla also questions the validity of the petition, noting that it was submitted by a Tesla short-seller.
Last week, the National Highway Traffic and Safety Administration said it would review a defect petition that cited 127 consumer complaints of alleged unintended acceleration of Tesla electric vehicles that may have contributed to or caused 110 crashes and 52 injuries.
The petition, which was first reported by CNBC, was filed by Brian Sparks, an independent investor who is currently shorting Tesla’s stock. Sparks has hedged his bets and has been long Tesla in the past, according to the CNBC report.
At the time, Tesla didn’t respond to requests for comment. Now, in a blog post, the company said that it routinely reviews customer complaints of unintended acceleration with NHTSA.
“In every case we reviewed with them, the data proved the vehicle functioned properly,” Tesla wrote in a blog post on its website.
The automaker argued that its vehicles are designed to avoid unintended acceleration, noting that its system will default to cutting off motor torque if the two independent position sensors on its accelerator pedals register any error.
“We also use the Autopilot sensor suite to help distinguish potential pedal misapplications and cut torque to mitigate or prevent accidents when we’re confident the driver’s input was unintentional,” the company wrote.
Here is the complete response from Tesla:
This petition is completely false and was brought by a Tesla short-seller. We investigate every single incident where the driver alleges to us that their vehicle accelerated contrary to their input, and in every case where we had the vehicle’s data, we confirmed that the car operated as designed. In other words, the car accelerates if, and only if, the driver told it to do so, and it slows or stops when the driver applies the brake.
While accidents caused by a mistaken press of the accelerator pedal have been alleged for nearly every make/model of vehicle on the road, the accelerator pedals in Model S, X and 3 vehicles have two independent position sensors, and if there is any error, the system defaults to cut off motor torque. Likewise, applying the brake pedal simultaneously with the accelerator pedal will override the accelerator pedal input and cut off motor torque, and regardless of the torque, sustained braking will stop the car. Unique to Tesla, we also use the Autopilot sensor suite to help distinguish potential pedal misapplications and cut torque to mitigate or prevent accidents when we’re confident the driver’s input was unintentional. Each system is independent and records data, so we can examine exactly what happened.
We are transparent with NHTSA, and routinely review customer complaints of unintended acceleration with them. Over the past several years, we discussed with NHTSA the majority of the complaints alleged in the petition. In every case we reviewed with them, the data proved the vehicle functioned properly.
Shares of NIO, a China-based electric car manufacturer, are soaring this morning after the company’s Q3 2019 earnings beat investor expectations. NIO’s surprise win comes directly on the heels of Tesla, a competitor, announcing the delivery of its first cars made in China, NIO’s home market.
NIO went public on the New York Stock Exchange in 2018 for $6.26 per share. Its value has plunged as a public company, seeing its per-share price fall to as little as $1.19. Today, after its earnings report, NIO shares are up more than $1 apiece, to $3.47 per share as of the time of writing. That new price represents a gain of a touch less than 44% in today’s trading.
NIO managed to beat both revenue and profit expectations in the quarter. And, the company’s forecast for its next quarter’s car deliveries show a sharp rise in automotive deliveries.
According to Yahoo Finance, investors expected NIO to lose $0.34 per share in Q3 on an adjusted basis off revenue of $230.8 million. In fact, NIO reported $257.0 million in revenue leading to an adjusted $0.33 per share loss. NIO managed a top-and-bottom beat while growing its total revenues by 21.8% compared to the sequentially preceding quarter, and 25% compared to the year-ago period.
While NIO did beat expectations, it remains a company deep in its investment cycle. That’s a polite way of saying that it loses lots of money. For example, in its most recent quarter, NIO’s gross margin on selling automobiles came to -6.8%. That was a bit worse than its year-ago result of -4.3%, if better than what it managed earlier in Q2 2019.
NIO’s core business can’t even cover its cost of revenues, let alone the operating costs of the rest of the company. This means that the company is consuming cash, putting an end date on its ability to operate without more cash.
As NIO put it in its earnings letter (emphasis: TechCrunch):
The Company operates with continuous loss and negative equity. The Company’s cash balance is not adequate to provide the required working capital and liquidity for continuous operation in the next 12 months. The Company’s continuous operation, which has also constituted the basis of preparing the Company’s third quarter unaudited financial information, depends on the Company’s capability to obtain sufficient external equity or debt financing. The Company is currently working on several financing projects, the consummation of which is subject to certain uncertainties. The Company will announce any material developments or information subject to the requirements by applicable laws.
So, NIO needs more money. Luckily for it, with a newly risen share price the firm has a better shot at selling more of itself to raise the capital it needs to stay in business and grow.
And grow it intends, with a written expectation of delivering “over 8,000” vehicles in Q4 2019, which it notes is about two-thirds more than it managed in Q3 2019; so NIO is telling investors that its revenue will be sharply higher in the current period than it was in the preceding three-month period.
All good news for NIO, even if Musk and company are breathing down its neck. And good news for the 2018 IPO class.
Tesla will start making the first deliveries of its Shanghai-built Model 3 sedans on Monday, Bloomberg reports. The cars are rolling off the assembly line at the new Tesla Shanghai Gigafactory, which is operational but which will also be expanding in future thanks to a fresh $1.4 billion injection in local funding reported earlier this week.
The Shanghai gigafactory’s construction only began earlier this year, and its turnaround time in terms of construction and actually producing vehicles is impressive. The Model 3 vehicles built in China will provide a price break vs. imported vehicles, since cars made in-country enjoy exemption from a 10% tax applied to imported cars. Tesla Model 3s build in China will also get a government purchase incentive of as much as $3,600 per car, which should drive even higher sales.
Tesla’s Shanghai factory is its first manufacturing facility outside of the country, though there’s also a gigafactory in the works in Germany just outside of Berlin, and Tesla has teased plans for at least a fifth gigafactory with a location to be revealed later.
Tesla’s production capacity in Shanghai probably isn’t ver high-volume to begin with, although the company has said previously it was targeting a production rate of around 1,000 cars per week by year’s end, with potential to ramp up to around 3,000 cars per week. Tax breaks and incentives have helped demand for the Model 3 in China grow significantly in 2019, so any progress on production in-country is bound to help lift global vehicle sales.
Elon Musk spent some time over this past holiday week answering questions posed by fans on Twitter, and one addressed the growing catalog of entertainment options available in-car via the Tesla Theater software feature: Musk said that Disney+ will be “coming soon” to the list of available streaming services drivers can access in their cars. Tesla Theater was introduced in the V10 software update that went out in September via over-the-air-update, and added streaming media from Netflix and YouTube, as well as Tesla vehicle feature tutorials.
Tesla also issued a new software update that began rolling out just before Christmas, which included the addition of Twitch to Tesla Theater, as well as support for popular farming sim game Stardew Valley, the ability to set dashcam video clips to automatically save whenever you honk the horn, support for voice commands and much more.
Tesla has put a lot of effort into its continuous software updates for vehicles, which are available to all cars in the fleet regardless of generation and which really do add a lot of post-purchase value, especially when compared to the traditional automaker practice of gating new features and improvements to only current and recent model-year releases.
Tesla Theater’s streaming media options are only available when the car is in park and not driving, but it’s a feature that is more valuable to Tesla owners than you might think — especially when you consider that Tesla cars require time to charge at charging stations, meaning even at a high-speed Supercharger you’ll likely be looking at a wait of half-an-hour or more depending on how much you’re looking to charge up.
The Porsche Taycan Turbo, one of several variants of the German automaker’s first all-electric vehicles, has an EPA estimated range of 201 miles, according to government ratings posted Wednesday.
This is the first variant of the Taycan — Porsche’s first all-electric vehicle — to receive an estimated range from the EPA. The range, which indicates how far the vehicle can travel on a single charge, is far behind other competitors in the space, notably the Tesla Model S. But it also trails other high-end electric vehicles, including the Jaguar I-Pace and the Audi e-tron.
The biggest gulf is between the Taycan Turbo and the long-range version of the Model S, which has an EPA range of 373 miles. The performance version of the Model S has a range of 348 miles. It was also below the Jaguar I-Pace, an electric vehicle that launched in 2018. The EPA has given the Jaguar I-Pace an official estimated range of 234. However, the company recently said it was able to add another 12 miles of range to the vehicle through what it learned in the I-Pace racing series.
The European standard known as the WLTP placed the range of the Porsche Taycan Turbo at up to 279 miles.
Despite the lower EPA range estimate, Porsche said it’s not disappointed.
“We sought to build a true Porsche, balancing legendary performance our customers expect of our products with range sufficient to meet their everyday needs,” a Porsche spokesperson told TechCrunch. “The Taycan is a phenomenal car built to perform and drive as a Porsche should. We stand by that.”
Porsche introduced in September the Taycan Turbo S and Taycan Turbo — the more powerful and expensive versions of its all-electric four-door sports car with base prices of $185,000 and $150,900, respectively.
In October, the German automaker revealed a cheaper version called the Porsche Taycan 4S that is more than $80,000 cheaper than its leading model. All of the Taycans, including the 4S, are the same chassis and suspension, permanent magnet synchronous motors and other bits. However, this third version, which will offer a performance-battery-plus option, is a little lighter, cheaper and slightly slower than the high-end versions of the Taycan that were introduced earlier this year. Theoretically, the 4S should also have a higher range.
Porsche has always said it would have multiple versions of the Taycan. The 2020 Taycan Turbo will be among the first models to arrive in the United States.
While Porsche said it isn’t disputing the EPA range, the automaker did send an email to dealers Wednesday to share additional data that shows a far rosier picture.
Porsche asked AMCI Testing to conduct independent tests to evaluate the Taycan Turbo range, according to an email the automaker sent to dealers for Taycan customers. The independent automotive research firm came up with a range of 275 miles, a result that was calculated by averaging the vehicle’s performance over five test cycles.
Tesla has received 146,000 reservations to order the Tesla Cybertruck, pulling in some $14.6 million in deposits just two days after the company’s CEO Elon Musk unveiled the futuristic and angled vehicle.
Reservations require a $100 refundable deposit. How many of those deposits will convert to actual orders for the truck, which is currently priced between $39,900 and $69,900, is impossible to predict. And there will likely be plenty of speculation over the next two years. Production of the tri-motor variant of the cybertruck is expected to begin in late 2022, Tesla said.
Musk tweeted Saturday that 146,000 Cybertruck orders have been made so far. Of those, 41% picked the most expensive tri-motor option and 42% of future customers chose the dual motor version. The remaining 17% picked the cheapest single-motor model.
146k Cybertruck orders so far, with 42% choosing dual, 41% tri & 17% single motor
The Tesla Cybertruck, which Musk unveiled in dramatic fashion at the Tesla Design Center in Hawthorne, Calif., has been polarizing with skeptics heaping on the criticism and supporters pushing back in kind. Even Tesla fans at the Cybertruck event, which TechCrunch attended, seemed torn with some praising it and others wishing Musk had created something a bit more conventional.
The vehicle made of cold-rolled steel and features armored glass that cracked in one demonstration and an adaptive air suspension.
Tesla said it will offer three variants of the cybertruck. The cheapest version, a single motor and rear-wheel drive model, will cost $39,900, have a towing capacity of 7,500 pounds and more than 250 miles of range. The middle version will be a dual-motor all-wheel drive, have a towing capacity of more than 10,000 pounds and be able to travel more than 300 miles on a single charge. The dual motor AWD model is priced at $49,900.
The third version will have three electric motors and all-wheel drive, a towing capacity of 14,000 pounds and battery range of more than 500 miles. This version, known as “tri motor,” is priced at $69,900.