Tesla to cut salaries, furlough workers as COVID-19 shutdowns expected to last until May 4

Tesla will suspend production at its U.S. factories until at least May 4 due to the COVID-19 pandemic, prompting the company to cut pay for salaried employees between 10% and 30% and furlough workers, according to an internal email sent Tuesday night and viewed by TechCrunch.

Pay cuts for salaried employees — which ranges from 30% for vice presidents, 20% for director-level executives and 10% for the remaining workforce — is expected to be in place until the end of the second quarter, according to the email. The salary cuts and furloughs will begin April 13. Employees who cannot work from home and have not been assigned critical onsite positions will be furloughed until May 4, according to the email.

“While we are continuing to keep only minimum critical operations running, we expect to resume normal production at our U.S. facilities on May 4, barring any significant changes,” the email from Tesla’s human resources department head Valerie Workman. “Until that time, it is important we take action to ensure we remain on track to achieve our long-term plans.”

“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” the email read.

Furloughed employees will remain employees of Tesla without pay. They will their healthcare benefit. The email directs furloughed employees to apply for unemployment benefits.

Tesla said in the email to employees that it will also put any merit-based actions such as equity grants on hold.

Tesla operates a number of factories and facilities throughout the U.S., namely its main assembly plant in Fremont, Calif., its Nevada gigafactory that produces battery packs and electric motors for the Model 3 and its factory in Buffalo, New York, which makes solar products.

Tesla announced March 19 plans to suspend production at its Fremont and Buffalo factories. At the time, the company didn’t say when it expected to restart production. The production suspension at its Fremont factory was set to begin March 23, a week after a shelter in place order went into effect in Alameda County due to the COVID-19 pandemic.

Some basic operations that support Tesla’s charging infrastructure and what it describes as its “vehicle and energy services operations” has continued at the Fremont factory, which under normal circumstances employs more than 10,000 people. About 2,500 workers are still working at the plant.

Tesla said in March that it had enough liquidity to weather the shutdown caused by the COVID-19 pandemic. Its cash position at the end of the fourth quarter was $6.3 billion before its recent $2.3 billion capital raise.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” Tesla said.

The company had available credit lines worth about  $3 billion, including working capital lines for all regions as well as financing for the expansion of its Shanghai factory at the end of the fourth quarter of 2019.

Tesla CEO Elon Musk: New York gigafactory will reopen for ventilator production

Tesla CEO Elon Musk said Wednesday that the company’s factory in Buffalo, New York will open “as soon as humanly possible” to produce ventilators that are in short supply due to the spread of the COVID-19 pandemic.

His comments, which were made Wednesday via Twitter, follows previous statements by the CEO outlining plans to either donate ventilators or work to increase production of the critical piece of medical equipment needed for patients who are hospitalized with COVID-19, a respiratory disease caused by coronavirus. COVID-19 attacks the lungs and can cause acute respiratory distress syndrome and pneumonia. And since there is no clinically proven treatment yet, ventilators are relied upon to help people breathe and fight the disease. There are about 160,000 ventilators in the United States and another 12,700 in the National Strategic Supply, the NYT reported.

Last week, Tesla said in a statement it would suspend production at its Fremont, Calif. factory, where it assembles its electric vehicles, and its Buffalo, N.Y gigafactory, except for “those parts and supplies necessary for service, infrastructure and critical supply chains.”

It isn’t clear based on Musk’s statements when the Buffalo plant would reopen or how long it would take to convert a portion of its factory, which is used to produce solar panels. Musk didn’t say if this was part of a possible collaboration with Medtronic .

Medtronic CEO Omar Ishrak told CNBC on Wednesday that it is increasing capacity of its critical care ventilators and partnering with others such as Tesla. He said Medtronic is open sourcing one its lower end ventilators in less acute situations for others to, to make as quickly as they can. These lower end ventilators, which are easier to produce because there are fewer components, can be used as an intermediary step in critical care.

Tesla is one of several automakers, including GM, Ford and FCA that has pledged support to either donate supplies or offer resources to make more ventilators. Earlier this week, Ford said it is working with GE Healthcare to expand production capacity of a ventilator.

GM is working with Ventec Life Systems to help increase production of respiratory care products such as ventilators. Ventec will use GM’s logistics, purchasing and manufacturing expertise to build more ventilators. The companies did not provide further details such as when production might be able to ramp up or how many ventilators would be produced.

Tesla to temporarily shut down Fremont factory

Tesla will suspend production at its Fremont, Calif., factory beginning March 23, days after a shelter in-place order went into effect in Alameda County due to the COVID-19 pandemic and sparked a public tussle between the automaker and local officials over what was consider an “essential” business.

Tesla will also suspend operations at its factory in Buffalo, New York except for “those parts and supplies necessary for service, infrastructure and critical supply chains,” the company said in a statement.

Meanwhile, the company’s massive factory near Reno, Nevada is operational as usual. The Nevada gigafactory, as Tesla describes it, employs thousands of people who produce electric motors for the Model 3 and battery packs for its portfolio of electric vehicles.

Tesla believes it has enough liquidity to weather the shutdown caused by the COVID-19 pandemic. Its cash position at the end of the the fourth quarter was $6.3 billion before its recent $2.3 billion capital raise.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” Tesla said.

The company had available credit lines worth about  $3 billion, including working capital lines for all regions as well as financing for the expansion of its Shanghai factory at the end of the fourth quarter of 2019.

Here’s a portion of the statement:

In the past few days, we have met with local, state and federal officials.  We have followed and are continuing to follow all legal directions and safety guidelines with respect to the operations of our facilities, and have honored the Federal Government’s direction to continue operating.  Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers.

As such, we have decided to temporarily suspend production at our factory in Fremont, from end of day March 23, which will allow an orderly shutdown. Basic operations will continue in order to support our vehicle and energy service operations and charging infrastructure, as directed by the local, state and federal authorities. Our factory in New York will temporarily suspend production as well, except for those parts and supplies necessary for service, infrastructure and critical supply chains. Operations of our others facilities will continue, including Nevada and our service and Supercharging network.

Tesla also said that it will start “touchless deliveries” in many locations to allow customers to take delivery of their vehicle “in a seamless and safe way.”

The vehicles will be placed in a delivery parking lot. Customers will be able to unlock the vehicles using the Tesla app and then sign the remaining paperwork necessary to take ownership. Customers will need to return that paperwork to an on-site drop-off location prior to leaving.

County deems Tesla a ‘non-essential’ business during shelter-in-place order

Tesla is not an essential business according to the Alameda County Sheriff, a declaration that could force the automaker to shutter some of its operations in the county under a shelter in-place directive that was ordered  because of the global spread of COVID-19, a disease caused by coronavirus.

The county, which includes Fremont, where Tesla’s factory is located, issued Monday a shelter-in-place order that requires all nonessential businesses to close, including bars, gyms and in-dine restaurants. Takeout and delivery restaurants are still allowed.

Tesla kept the Fremont factory despite the order, claiming that part of the company’s operations fell under an exemption in the county’s order. Tesla CEO Elon Musk told employees in an email that the company would continue operations at the Fremont factory, where the automaker assembles the Model S, Model X, Model 3 and now Model Y electric vehicles. Musk did tell employees that should not feel obligated to come to work if they “feel the slightest bit ill or even uncomfortable,” according to an email first reported by Los Angeles Times and Bloomberg.

The email to Tesla factory employees came just a few days after Musk sent an email to workers at his other company SpaceX that seemed to downplay the COVID-19 pandemic.

Alameda County officials were determining whether Tesla was in fact able to claim that exemption. In a tweet Tuesday afternoon, the county sheriff said Tesla is not an essential business as defined in the Alameda County Health Order. “Tesla can maintain minimum basic operations per the Alameda County Health Order,” the sheriff said in the tweet, but did not elaborate what “minimum basic operations” meant or if it could still produce vehicles there.

TechCrunch was unable to reach Tesla for comment. We will update the story as we learn more.

Model Y deliveries begin: Here’s what is new in Tesla’s EV crossover

Tesla said Monday it has started delivering the Model Y crossover to customers in the U.S., hitting a milestone one year after unveiling the prototype and six months ahead of schedule.

Reports of deliveries started last week. The tweet from Tesla, which included a video of the Model Y being assembled and then hitting the road, made it official.

Tesla announced in January that production of the Model Y had started with plans to begin the first deliveries of the all-electric compact crossover by the end of the first quarter. Tesla CEO Elon Musk said at the time that the company would initially produce a limited volume of the Model Y.

When Musk unveiled last March a prototype of the Model Y, he predicted the vehicle would hit the marketplace in fall 2020. At the time of the unveiling, the Model Y looked strikingly similar to the Model 3. Now that Tesla has started deliveries and released the owner’s manual to the Model Y, it’s easier to spot how its different or the same as the Model 3.

Here are some of the important features and differences between the Model Y and Model 3.

Model Y size

The owner’s manual shows the Model Y is 187 inches long, 75.6 inches wide excluding the mirrors and 63.9 inches high. The wheel base is 113.8 inches long and the ground clearance is 6.6 inches.

The Model Y is bigger and higher than the Model 3. Here’s how it stacks up. The Model Y is 2 inches longer, 2.8 inches wider (excluding the mirrors) and 7.1 inches taller than the Model 3. The wheelbase of the Model Y is 0.6 inch longer and the ground clearance is 1.1 inch higher. The Model Y also has a 2.2 inch wider track (using base wheels) and about 1.4 inch more of a front overhang.

Moving to the inside of the Model Y, customers will find a tiny bit more headroom — less than an inch. There’s about 5 inches more legroom in the backseat and a little under an inch less legroom in the front seat compared to the Model 3.

The Model Y is, as expected, heavier than the Model 3 by nearly 350 pounds.

Cargo

The Model Y has been described as a crossover, and so one would expect it to have more storage and the ability to tow things. The Model Y has the cargo space — a total of 68 cubic feet in all. However, these vehicles are not equipped for towing, according to the manual.

To maximize cargo space, each second row seat back can be folded fully forward to lay flat. There are a couple of ways to fold the seats flat. One way is by pulling and holding the handle, push the corresponding seat back fully forward, according to the manual. It’s also possible to use a quick release button located on the left side of the rear trunk area to fold the seats down. A 12-volt charger is located in the trunk area as well.

There’s also an option to push down the center section of the second row to allow for long items such as skis.

Curiously, while there’s more total cargo space, the recommended cargo capacity, in terms of weight, is 35 pounds less than the Model 3.

Model Y range and price

The long-range Model Y has a range of 315 miles and has a base price of $52,990. The standard range Model 3 has a range of 250 miles and a base price of $39,990, the long range version can travel 322 miles on a single charge and is priced at $48,990.

A little helper for cold climates

One interesting feature is that the Model Y has heat pump, which the owner’s manual says is used to maximize efficiency. The manual notes that the air conditioning compressor and external fan may run and make noise even when the outside temperature is cold.

The upshot: the heat pump is a means to a better range in colder climates.

Easter eggs

Just like the Model 3, customers can expect a variety of easter eggs, hidden games and features in the infotainment system, including Arcade, Santa mode and Mars, which gives a map that shows a Model Y as a rover on the Martian landscape.

 

The Station: Lucid Motors spy shot and the birth of an AV startup

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.

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 be not be a newsletter Feb. 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 [email protected] to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.

Micromobbin’

the station scooter1a

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

A little bird

blinky cat bird green

We don’t just hear things. We see things too. This week in a little bird — the place where we shared 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 was 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.”

Lucid Air production reveal

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 the one 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.

And late Friday, Tesla CEO Elon Musk tweeted that the Tesla Model S now has an estimated EPA range is now above 390 miles or ~630 km.

Inside the beltway

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 since there are limited opportunities in the Senate to attach self-driving legislation to another bill.

Adventures in ride hailing

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 test 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 is 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.

Google’s axe sparks a spinoff

Google bookbot-cartken

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 the Google’s Area 120 incubator for experimental products. The plan was to pilot an autonomous robot in Mountain View that would pickup 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.

TC Sessions: Mobility savings

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. 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:

  • Shin-pei Tsay, director of policy, cities and transportation at Uber
  • Boris Sofman, who is leading Waymo’s autonomous trucking efforts
  • Nancy Sun, Ike Robotics chief engineer and co-founder
  • Trucks VC general partner Reilly Brennan
  • Porsche North America CEO Klaus Zellmer
  • Olaf Sakkers, general partner at Maniv Mobility

Expect more announcements each week leading up to the May 14th event.

The Station: Lucid Motors spy shot and the birth of an AV startup

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.

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 be not be a newsletter Feb. 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 [email protected] to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.

Micromobbin’

the station scooter1a

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

A little bird

blinky cat bird green

We don’t just hear things. We see things too. This week in a little bird — the place where we shared 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 was 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.”

Lucid Air production reveal

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 the one 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.

And late Friday, Tesla CEO Elon Musk tweeted that the Tesla Model S now has an estimated EPA range is now above 390 miles or ~630 km.

Inside the beltway

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 since there are limited opportunities in the Senate to attach self-driving legislation to another bill.

Adventures in ride hailing

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 test 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 is 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.

Google’s axe sparks a spinoff

Google bookbot-cartken

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 the Google’s Area 120 incubator for experimental products. The plan was to pilot an autonomous robot in Mountain View that would pickup 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.

TC Sessions: Mobility savings

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. 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:

  • Shin-pei Tsay, director of policy, cities and transportation at Uber
  • Boris Sofman, who is leading Waymo’s autonomous trucking efforts
  • Nancy Sun, Ike Robotics chief engineer and co-founder
  • Trucks VC general partner Reilly Brennan
  • Porsche North America CEO Klaus Zellmer
  • Olaf Sakkers, general partner at Maniv Mobility

Expect more announcements each week leading up to the May 14th event.

Tesla locks in stock surge with $2B offering at $767 per share

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 to begin deliveries of Model Y by end of first quarter

Tesla said Wednesday that production of the Model Y started this month with the first deliveries of the all-electric compact crossover to begin by the end of the first quarter as the company pushes to extend its profitability streak.

Production of the Model Y is at limited volume for now, CEO Elon Musk said during a call after earnings was released. Musk added that Tesla’s engineers have been able to increase the maximum EPA range of all-wheel drive version of the Model Y to to 315 miles. It was previously estimated at 280 miles.

Tesla reported Wednesday net income of $105 million, or 56 cents a diluted share, compared with $140 million, or $78 cents a share, in the same year-ago period. Tesla reported revenue of $7.38 billion, 17% higher than the third quarter, but just 1% higher than the $7.2 billion generated in the fourth quarter of 2018.

Tesla indicated in its fourth quarter report that it will turn to China and Model Y for revenue growth as deliveries of its higher profit margin Model X and Model S decrease. Tesla delivered 19,475 Model S and Model X in the fourth quarter, a 29% decline from the same period last year. Meanwhile, deliveries of Tesla’s cheaper Model 3 vehicle continued to climb. Tesla delivered 92,620 Model 3 vehicles in the fourth quarter, a 46% increase from the same period in 2018.

The Model Y is being produced at Tesla’s Fremont, Calif. factory, settling a long-running discussion within the company over where to build the upcoming vehicle. Tesla had also looked at producing the vehicle at its massive factory in Sparks, Nevada, where it currently builds battery packs and electric motors.

Tesla said it will ramp up production of the Model Y gradually as it adds machinery through mid-2020. Once these expansions are done, installed combined Model 3 and Model Y capacity should reach 500,000 units
per year, the company said.

Tesla intends to eventually produce the Model Y in China as well. The company’s Shanghai factory has capacity to produce 150,000 Model 3 vehicles. Tesla has broken ground on the the next phase of its Shanghai factory, which will produce the Model Y.

“Given the popularity of the SUV vehicle segment, we are planning for Model Y capacity to be at least equivalent to Model 3 capacity,” the company said.

Tesla calls claims of unintended acceleration in NHTSA petition “completely false”

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.