Tesla Model S’s fatal accident on Autopilot mode leads to a NHTSA preliminary investigation

After the closing bell Thursday, Tesla Motors Inc. (NASDAQ:TSLA) shares tumbled after the US National Highway Traffic Safety Administration (NHTSA) opened a preliminary investment on the automaker’s flagship sedan, the Model S. The decision was taken after a critical accident of the vehicle while its Autopilot mode was activated. Tesla stock closed the trading session up 0.99% at $212.98 on Thursday and during the extended trading hour, it slid as much as 3.20% to $205.45.

About 25,000 sedans with Autopilot systems will be investigated by NHTSA, which said that the accident happened in the 2015 production version of the vehicle with autonomous driving technology. Thus, the organization will examine the system’s performance and design. This is the initial step ahead of recalling the vehicles, if it thinks that they are unsafe.

Tesla responded to the news, claiming that this is “the first known fatality in just over 130 million miles where Autopilot was activated.” Typically, there is a casualty after 94 million miles in the US and after 60 million miles worldwide, its vehicles are far safer than other vehicles on the road.

The automaker informed the agency regarding the crash right after it happened. The NHTSA just wants to check whether or not the autonomous driving system worked properly. The vehicle was driving on a dual carriageway with Autopilot activated when a tractor trailer moved across the highway, perpendicular to the sedan. Both the driver and the autonomous system did not notice the trailer’s white side against a bright lit sky, therefore, the vehicle’s brakes were not applied.

Notably, since the technology is new and still in beta phase, the Autopilot is disabled by default and it needs “explicit acknowledgement” before it can be activated. Additionally, owners are advised to keep their hands on the steering while using the autonomous system so that they can regain control of the vehicle.

Moreover, whenever the Autopilot is enabled, the vehicle tells the owner to keep his hands on the steering and be ready to intervene. Tesla cars also frequently checks whether the driver’s hands are on the steering or not and gives audible and visual alerts if it doesn’t detect hands. It decelerates until the hands are detected. Tesla is gradually improving the system through software updates and it plans to create fully autonomous electric vehicles within two years.

The newly announced price by Starbucks Corporation will be applicable from July 12 onwards

Starbucks Corporation (NASDAQ:SBUX) has announced a change of prices for a select few beverages on its menu. On Friday, the company’s management announced the price hike as a solution to contracting margins and increased cost of ingredients that are used in the said concerned beverages. The said price change is reflective of the recent changes in macroeconomic situation and hints towards rapidly growing inflation and forex fluctuation.

In a narrative issued by the company, an apology was also included for wrongfully implementing the said price changes. According to reports, a large number of customers have complained about being charged more than they should have. The management was, however, quick to respond and has offered refund to all of the customers who might have been wronged as the price changes were wrongfully implemented in the company’s point of sale systems throughout US.

The detail of the price changes were not yet disclosed but the management did point towards a maximum hike of 30 cents per unit of select beverages and the same could have been overcharged owing to the said error. The management also assured that the concerned errors have now been rectified and the customer service department is more than willing to make things right by refunding the overcharged amount back to the customers.

Starbucks is among the largest chain of stores in the United States with a market capitalization of over $82.93 billion. The current moving average for the stock is 8.50 million shares and has a 52 week price range of $42.05 – $64.00. The stock currently trades at a price of $56.84 and has declined by 0.26% since the open of the market. The analyst opinion for the stock has 14 strong buy, 11 buy and 5 hold ratings.

Shares of the company are trading lower at $203.11 (12:27 EDT)

The Country Caller’s bearish stance on electric-car maker Tesla Motors Inc. (NASDAQ:TSLA) was worth it, as shares of the company are trading lower at $203.11 (12:27 EDT). In our article yesterday named “Hedge of The Day”, we did discuss on the possible risks of holding the $30 billion company’s stock. We also gave an alternate swap, while recommending taking a long position on the e-commerce giant Alibaba Group Holding Ltd (NASDAQ:BABA) stock.

Perhaps, investors seem to have realized by now that the stock prices were highly inflated. The twelve-year-old company may pose to be one of the strongest players on the innovation front, but its financial health is as weak as one can imagine. Despite itself not being able to show profits, its acquisition of a loss making company started to put questions in the minds of street analysts.

Elon Musk’s recent decision to opt for additional financing through equity or debt is what may have dissuaded investors lately. We have discussed that it is only a good pick for those investors who are aware about the recent developments in the company, as the stock movements are mainly based on sentiments rather than financial numbers.

The street’s high valuation of the company on innovational grounds itself poses a strong question. The company has been facing some challenges lately that include the SEC probe, lack of liquid resources, and lenders’ denial to lend the energy storage company. To face these challenges, a different approach is what’s needed. The focus should be on improving the present scenario than making the future safe.

The numbers should be given more weightage than any new products, since a technology is only sustainable as long as you have the financial strength to sustain it. Our thesis on the EV makers stock remains bearish.

Tesla’s German competition plans to enter Hong Kong with full force of EVs and hybrids, convincing the government for incentives

In July, The Country Caller said that Hong Kong is a “beacon city” for Tesla Motors Inc. (NASDAQ:TSLA) Model S and Supercharger, after Tesla CEO Elon Musk’s quote which said it is a “beacon city for electric cars.” While on-the-road EVs of the Chinese special administrative region have bumped up by 60 times since 2010, Tesla holds 80% of the market, according to South China Morning Post (SCMP).

The publication reported earlier this week that German automakers are gearing up to hurt the young EV maker’s dominance in Hong Kong, one of the world’s fasting growing EV markets. German Consul General Nikolaus Graf Lambsdorff told SCMP that German carmakers could provide new technologies in e-mobility (hybrid or EV).

He said: “In the end it should be the consumer that should decide who is successful in the market and who is not. But the government has to set the right framework. It’s happening. Maybe a bit slow, but Hong Kong is moving in the right direction.”

While pure EV such as the BMW i3, the Model S, Nissan LEAF and Volkswagen e-Golf get 100% waiver on first registration taxes up to the next year, BMW Group VP Kevin Coon wanted to see incentive on hybrids as well, as it would be “a good bridge” between ICE and zero-emission vehicles. He believes that subsidies on hybrids would present more choices for consumers.

Additionally, the European Chamber of Commerce Automotive Council to the city’s Environmental Protection Department has pushed for waivers for hybrids. Even Edwin Lee King-yan, VP of Charged Hong Kong, an EV advocacy, thinks that some incentives should be given to hybrid buyers as they are better than gasoline-powered cars due to the fact that they keep “zero tax” for ZEVs only.

Mr. Lee also questioned why German automakers are not going toward full electric vehicles, which clearly define the future. He added that range anxiety is not the main issue in Hong Kong anymore.

Bloomberg Intelligence Asia Automotive Research, Steve Man, does not expect Hong Kong to provide incentives on hybrids, as it focuses to promote wide range of ZEVs. However, he believes that the German behemoths’ brand equity should give them a competitive edge in the EV industry.

Mr. Man suggested that the German automakers would have to develop appealing financing plans to attract customers in Hong Kong and Tesla would have to lower vehicle prices to stay ahead of the German rivals. While reducing the base price of the Model S, Tesla is working on its first mass-market vehicle, the Model 3. Waivers on EV are set to end in March 2017, but the government is planning to extend them.

Tesla plans to renovate an 18,180 square foot facility for a new sales/service location in Jacksonville, FL

In 2QFY16 Shareholder Letter, Tesla Motors Inc (NASDAQ:TSLA) talked about strong expansion of its retail presences in the US, international and new markets. Following the announcement, we’ve covered a few new retail locations and Philips Highway in Jacksonville, FL is one of the new ones.

Jax Daily Record reported that plans to working on a new sales and service location along the highway, which is widely known for large number of service centers and franchise dealerships. The location will be the first store/sales service in the city, which already has a store at 4835 River City Drive Suite 105 in St. Johns Town Center. This store will be relocated to a larger location, the report said.

The electric vehicle (EV) maker submitted an application for a permit to revamp an 18,180 square foot facility at 7818 Philips Highway. It plans to spend about $250,000 in the construction of the Philip Highway Store and Service Center. Though, contactors have not been assigned.

Here’s how the location looks like for now:

The permit plan shows that Tesla will be operating a store, service center, and repair shop at the new facility. Service of an EV varies from the service of a fuel-driven vehicle, it explained. It also said that Tesla cars do not have internal combustion engine (ICE) as they are fully electric and its electric motors needs little or no maintenance.

Alameda-based MBH Architects will be designing the new Tesla felicity. The automaker has been its client since late 2012. It designed Tesla Century City Store in Los Angeles and a service center (without mentioning the location), according to its website.

Here’s a photo of the LA store:

The site plan of the new facility in Florida shows a 2,755 square foot store and a 16,248 square foot service center, which adds up the total area cover to more than what the permit says. It is located opposite Perimeter Commerce Park.

Tesla has nine Stores & Galleries in Florida, of which four of them include a service station as well. There are 14 Supercharger stations and 124 Designation Charging locations in the state. According to Supercharge.info, the company has obtained permits for stations in Naples, a Floridian city on the Gulf of Mexico.