Ultimate Resource On Tesla, Elon Musk And Bitcoin
A filing with U.S. regulators confirms that Tesla is on board for Bitcoin payments in future. Ultimate Resource On Tesla, Elon Musk And Bitcoin
Bitcoin (BTC) jumped by almost $3,000 in minutes on Feb. 8 as reports emerged that Tesla had bought $1.5 billion worth of BTC.
Data from Cointelegraph Markets and TradingView tracked BTC/USD as a sudden spike to over $41,000 appeared as news of Tesla’s plans trickled in.
A filing with United States regulator the Securities and Exchange Commission (SEC) shows that the company plans to buy $1.5 worth of Bitcoin.
“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.
As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future,” it states.
“Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”
The move follows encouraging signs from CEO Elon Musk, the world’s richest man, who last week openly stated that he was a “supporter” of Bitcoin. Since then, however, signals have been mixed, after Musk removed Bitcoin from his Twitter biography but continued tweeting and promoting Dogecoin (DOGE).
Tesla Expects To Begin Accepting Bitcoin For Payment
Tesla is now able to hold Bitcoin in reserves, thus accepting Bitcoin as payment for its cars without necessarily converting it.
Elon Musk’s Tesla Motors is following in the footsteps of MicroStrategy and other companies by allocating part of its balance sheet to Bitcoin (BTC).
In Monday’s filing with the Securities and Exchange Commission, the company announced it had purchased an aggregate of $1.5 billion in Bitcoin, to be held as an investment and store of value for its excess cash. It is currently unknown what is the average purchase price and number of BTC the company acquired.
Tesla’s investment policy has been updated at an unspecified point in January 2021, which suggests that Tesla may be holding between 35,900 and about 45,500 BTC, corresponding to average prices of $42,000 and $33,000, respectively. Given Bitcoin’s price movement in the last few weeks, the 45,500 BTC estimate is likely closer to the true amount.
As part of the policy, Tesla expects to begin offering clients the ability to purchase its products in Bitcoin, the filing states. Unlike many other similar initiatives, the Bitcoin it receives will not necessarily be liquidated as soon as possible, thus possibly adding to its reserves.
In addition to Bitcoin, Tesla’s new investment policy allows for the purchase of gold bullion and gold exchange-traded funds, or ETFs. Famous “gold bug” and Bitcoin skeptic Peter Schiff appears to have taken meager consolation from this fact, suggesting that Tesla’s BTC investment is already being sold off as the market reacts to the news.
The purchase follows Elon Musk’s entry into the world of cryptocurrency. From only holding about 0.25 BTC a friend had sent, Musk warmed up to cryptocurrencies and Bitcoin as the 2021 bull run unfolded.
After earlier calling himself “CEO of Dogecoin,” he has dedicated some tweets to the meme-inspired coin. This triggered some criticism by prominent Bitcoin fans, who saw it as irresponsible. Nonetheless, it appears that Musk’s opening to Bitcoin carries far more tangible consequences than a Twitter bio change.
Tesla Discloses $1.5 Billion Purchase of Bitcoin In Latest SEC Filing
Tesla has purchased $1.5 billion in bitcoin, according to its latest SEC filing on Monday. The electric car company made the purchase sometime since January 2021, though the filing doesn’t say what price the company locked into.
From The SEC Filing:
In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.
Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
Did you catch that last part? Elon Musk and Tesla clearly have big ideas for being able to accept bitcoin as a payment for a new car. But one of the main reasons that bitcoin hasn’t been adopted as a widespread currency is because the price fluctuates so wildly. Would you spend any cryptocurrency to buy, say, a loaf of bread, if you could buy two loaves of bread for the same cryptocurrency tomorrow?
Telsa’s disclosure acknowledges just how volatile cryptocurrencies like bitcoin can be, and that’s precisely why it needed to make a disclosure about it to financial regulators in the first place:
The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable.
Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed.
Musk is a big believer in bitcoin, though he’s been pumping the joke cryptocurrency dogecoin over the past week for some reason. Will Musk go back to pumping bitcoin now that we know one of his companies depends on it? Almost certainly.
But you never can tell with Musk. Sometimes he’s just doing things for the joke. It might seem like $1.5 billion is nothing to joke about, but in this case, it’s not Musk’s money. And as the world’s second wealthiest man, he could stand to lose a billion here and there even if it was his cash. Or coins, as it were.
Tesla Allocates 7.7% Of Gross Cash To Bitcoin
Breaking down Tesla’s Bitcoin purchase reveals the emergence of a new corporate whale.
Tesla (TSLA) sent shockwaves across the financial markets Monday after a United States Securities and Exchange Commission filing confirmed that the electric vehicle maker has added Bitcoin (BTC) to its balance sheet.
Tesla’s latest Form 10-K filing for the fiscal year ended Dec. 31, 2020 shows a $1.5 billion allocation to Bitcoin. As Bitwise researcher David Lawant points out, Tesla’s BItcoin exposure represents roughly 7.7% of its gross cash position.
According to the most recent 10K filing, @Tesla had cash & equivalents of $19.4 billion (gross), or $98 billion (net of debt and finance leases).
— David Lawant (@dlawant) February 8, 2021
He derives those figures from Tesla’s cash and equivalents, which netted a gross of $19.4 billion by the end of 2020, or $9.8 billion net of debt and finance leases.
Tesla’s Bitcoin purchase puts it near the top of the corporate treasuries list. Only one other company – MicroStrategy – has purchased more of the digital asset as part of its strategic reserves.
News of Tesla’s participation in the Bitcoin market sent prices soaring on Monday. As Cointelegraph reported, the BTC price hit a high near $45,000, easily surpassing its previous peak. Bitcoin’s market cap exceeded $800 billion for the first time.
In addition to adding BTC to its balance sheet, Tesla plans to accept the digital asset as a mode of payment. What’s more, the BTC it receives will not be liquidated for cash but added to its balance sheet.
Tesla is spearheading Bitcoin adoption at a crucial time in the bull market. Given Elon Musk’s propensity to move markets, Tesla’s newfound Bitcoin exposure could hasten retail adoption in the short term.
Bitcoin has also piqued the interest of large corporations. Microstrategy’s Bitcoin-buying webinar last week registered over 1,400 signups.
Major Exchanges Struggle As Bitcoin Pumps On $1.5B Tesla Investment
As usual, when Bitcoin pumps and traders need stable exchanges more than ever, some are almost guaranteed to go down.
Service outages have been reported at major cryptocurrency exchanges on Feb. 8, following the news that Tesla invested $1.5 billion in Bitcoin (BTC).
As Cointelegraph reported earlier, news of Tesla’s sizeable investment broke after the discovery of a filing with the U.S. Securities and Exchange Commission. This caused Bitcoin price to jump $3,000 in a matter of minutes, eventually claiming a newall-time high of $44,850.
Problems were reported at a number of exchanges, including Binance, whose CEO CZ tweeted that a traffic influx was causing temporary delays while auto-scaling caught up, and that Tesla CEO Elon Musk was to blame.
Many Kraken users took to Twitter to complain that the site was also down, although there was no official confirmation of this from the exchange itself.
What a surprise! Theres a spike in volume and @krakenfx is down! Thank god I barely use you anymore, for new comes to crypto world, avoid them at all costs!
— Crypto Carl (@CryptoCarl_) February 8, 2021
The reported outages are just the latest in a seemingly never-ending cycle of issues to occur at major exchanges when traffic volume spikes, causing some in the crypto community to cry “foul play”.
Despite assurances from the exchanges that past issues have been addressed, platforms continue to crash on a regular basis during high-traffic periods such as price pumps; the time when most investors want their service to be at its most stable.
Aside from news of Tesla’s $1.5 billion Bitcoin investment, the report filed with the SEC also suggested that Tesla would start to accept Bitcoin as payment for its cars. As the company can now hold reserves in Bitcoin, it would not need to immediately liquidate tokens acquired in this manner.
Bitcoin Goes Into Ludicrous Mode As It Briefly Flippens Tesla
The crypto asset overtook Tesla Motors in market capitalization following an announcement that the car manufacturer had invested in Bitcoin.
Earlier this morning, Tesla Motors announced that it had allocated part of its balance sheet to Bitcoin. Not even two hours have passed, and the crypto asset’s market cap briefly exceeded that of the car manufacturer itself.
For a short time today, Bitcoin (BTC) held a market cap of $807,869,728,188 according to data from AssetDash, surpassing Tesla’s at $807,829,441,685. Bitcoin held the 7th spot on the list following the announcement, with both Tesla and BTC sitting comfortably above Facebook’s market cap, $765 billion at the time.
The major flippening occurred this morning as news broke Tesla had purchased an aggregate of $1.5 billion in Bitcoin, to be held as an investment and store of value for its excess cash. Following the announcement, the price of BTC surged to a new all-time high of more than $44,000 before retreating to $43,202. Tesla’s stock price rose by more than 2% as markets opened, and is $871.43 at the time of publication.
Bloomberg Intelligence strategist Mike McGlone recently predicted that this Tesla investment may be the catalyst needed to push Bitcoin’s market cap past $1 trillion for the first time. The total cryptocurrency market capitalization hit this value early last month as the price of BTC, Ether (ETH), and many altcoins surged.
Ex-OCC Chief Brooks Calls Tesla’s Bitcoin Buy A Bit ‘Scary’ For Rest Of World
Brooks said the U.S. money supply will have risen 40% over the last 12 months once the most recent round of stimulus is done.
The debasing of global currencies is why companies like Tesla (TSLA) and MicroStrategy (MSTR) are investing in bitcoin and that should be troubling for the rest of the world, former acting U.S. Comptroller of the Currency Brian Brooks said Monday on CoinDesk TV.
* “For people who are invested in bitcoin it’s exciting news,” said Brooks, who left the OCC last month. “For people who are looking at the rest of the world it’s actually a little bit [of] scary news.”
* Brooks was responding, in part, to Tesla’s announcement Monday it has invested $1.5 billion in bitcoin and would be looking to acquire more digital assets. That news sent the price of bitcoin to a new all-time high.
* The former acting comptroller noted the U.S. money supply has risen 25% since the start of the pandemic and will be up 40% compared with a year ago once the most recent round of stimulus is done in the next few days.
* “That’s crazy, right?” Brooks asked. “The way inflation works is the more of asset you have the less valuable it is. That would explain why a lot of institutions want to have bitcoin sitting in their treasury because it’s a lot more stable source of value over the long haul, potentially.’
* Brooks declined to say what his next career move will be, only he hopes to be in the space for a long time to come.
Crypto Comes To S&P 500 Via Tesla’s $1.5 Billion Bitcoin Bet
When Tesla Inc. joined the S&P 500, people balked. Wasn’t that a lot of volatility to embed in the world’s most important stock index? Turns out they had only part of the picture.
Founder Elon Musk opened a new chapter in the saga of his electric-vehicle maker with a disclosure Monday that Tesla invested $1.5 billion in Bitcoin and intends to begin accepting the cryptocurrency as a form of payment. The move comes less than two months after the company was added to the S&P 500 in the index’s largest-ever inclusion.
For anyone who worried Tesla’s high price and share turbulence was an issue for passive investors, this is something new to consider. Tesla is one of the S&P 500’s biggest members with a weighting of almost 2%, meaning at least a dollop of the roughly $11.2 trillion of money tracking the benchmark is now exposed to a cryptocurrency known for its wild swings.
“It’s absolutely a fascinating story to think S&P 500 investors now are investors in Bitcoin,” Phil Toews, chief executive officer of asset manager Toews Corp. “Just absolutely mind-blowing.”
Tesla isn’t the first to make a foray into cryptocurrencies — other companies have made similar investments. MicroStrategy Inc., a software firm, has spent about $3 billion on Bitcoin, while Square Inc., headed by longtime crypto advocate Jack Dorsey, announced that it converted about $50 million of its assets into the coin as of the second quarter of 2020.
But those companies aren’t members of the S&P 500, limiting the number of mom-and-pop equity investors who were exposed to Bitcoin.
Tesla has surged 460% over the past year and more than doubled since the S&P Dow Jones Indices said in November that the vehicle maker would be added to the index the following month. The announcement spurred warnings over what impact Tesla’s entry would have on the S&P 500, with the likes of Research Affiliates founder Rob Arnott cautioning that benchmark overseers tend to “buy high and sell low.”
While Tesla’s Bitcoin purchase indirectly exposes S&P 500 investors to crypto, at least one knowledgeable observer doubts it would’ve kept the carmaker out of the storied index.
“The index is designed to measure the U.S. equity market, not to judge or second-guess management decisions on cash management or strategy,” David Blitzer, who headed the S&P Dow Jones Indices selection committee until 2019, said in an interview. “The index methodology doesn’t provide for dropping a company based on a management decision except in extreme cases such as an impending bankruptcy.”
Ray McConville, an S&P Dow Jones spokesman, declined to comment on Musk’s move.
Bitcoin, coming off a 300% gain in 2020, has added 50% this year. It hit an all-time high of $44,795 on Monday following Tesla’s news. Its price has been sensitive to Musk’s proclamations on cryptocurrencies in recent weeks — it surged at the end of January, for instance, after Musk changed his Twitter profile to “#bitcoin” with an emoji, which he later took down.
He again sent waves through the cryptosphere a few days later when he declared on social audio app Clubhouse that he was a supporter of the largest digital asset.
In December, Musk inquired on Twitter about converting “large transactions” of the electric-car maker’s balance sheet into the coin. MicroStrategy CEO Michael Saylor urged him to make the move, writing that he’d be doing his investors a “favor,” and adding that other S&P 500 firms would follow his lead.
Many analysts argue against such a tactic, often citing Bitcoin’s volatility as well as its vulnerability to hacks and fraud. The token has posted an average daily move of 5.2% this year, according to data compiled by Bloomberg. That compares with swings of 0.8% for the price of gold, which is sometimes compared with digital assets.
To JJ Kinahan, chief market strategist at TD Ameritrade, Tesla’s move could mean heightened volatility for the index overall.
“You can buy any blue-chip company and they probably have some other things going on” that investors might not be aware of, he said by phone. “Now it’s just a matter of do you believe that many of these companies are becoming more volatile than you’re comfortable with?”
Elon Musk’s Embrace Moves Bitcoin Even Further Into The Mainstream
Tesla’s $1.5 billion investment in the digital currency is boosting prices, but using the volatile crypto asset could prove a challenge for consumers.
Tesla Inc.’s $1.5 billion splash on Bitcoin and its plan to accept the digital currency as payment is shooting crypto prices to record highs Monday. But fans have a question for Elon Musk: What took him so long?
The world’s richest person and Tesla chief has long been a cryptocurrency supporter. Just last Thursday he sent Bitcoin alternative Dogecoin to the stratosphere when he tweeted an illustration of himself thrusting its canine mascot to the sky.
The Tesla-Bitcoin Singularity Is Here At Last
Elon Musk’s preoccupation with crypto has now been taken to its logical conclusion. It is as disconcerting as it is inevitable.
Tesla bought Bitcoin. It feels as if that sentence should properly begin with “Imagine if …” and a wry chuckle. But no. Imagine no longer.
Tesla Inc.’s annual report disclosed the electric-car maker updated its investment policy last month and then bought $1.5 billion of the crypto. That news added roughly $5,000, or 14%, to said crypto on Monday morning, sending it to an all-time high. Tesla’s own stock rose about 3%, adding roughly $11 billion in market cap, because — well, probably because of this. I don’t know.
On the face of it, a change in investment policy that simply by its disclosure adds hundreds of millions of dollars in value to a company’s portfolio 1 — and billions to the company’s market cap — in a sort-of virtual virtuous circle seems like a winning change. Ordinarily, such things lie forgotten in the 10-K.
Yet it’s hard to shake the feeling that it is just inadvisable to be (forgive me) crossing the memes like this. It’s as if the earth has shifted a billionth of a degree on its axis or we are approaching some singularity in the capital markets with Lovecraftian overtones.
Tesla’s explanation for the move is relatively straightforward: “To further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.” Fair enough. You may have noticed cash doesn’t earn very much these days.
(Tesla’s current stock price may reflect that issue to some degree.) Also, companies routinely diversify their cash holdings, especially if they operate in multiple countries.
Bitcoin is anything but routine, though. New, stateless, volatile, subject to cybertheft and potential government regulation, it is a currency only if you squint really hard and can jump through the hoops of actually using it. Tesla’s comment that it expects to begin accepting Bitcoin as payment in the near future is irrelevant; doing that doesn’t require hoarding it ahead of time.
On the other hand, the casual reference to Tesla taking Bitcoin as payment down the road is like digital catnip, helping to boost the value of that $1.5 billion bet. And it is a bet.
Tesla is speculating with $1.5 billion of the roughly $19 billion it had on the balance sheet at the end of December, $12 billion of which was raised from selling more equity into last year’s frenzied rally. If confirmation were needed that Tesla announced several at-the-market offerings in 2020 simply because it could, it’s hard to think of one that is more resounding.
The move raises the usual questions about Tesla’s governance. Apart from the speculative nature of it, the fact that CEO Elon Musk has been tweeting heavily about cryptocurrencies of late should ring alarm bells in whatever passes for Tesla’s boardroom.
Not necessarily because anything untoward has happened, but it’s fair to say Musk has some history to live down when it comes to the tweeting. Giving authorities any reason to scrutinize Tesla is inadvisable. One has to wonder what a regulator might make of this tweet from just a month before the “updated” investment policy was approved.
I guess you could argue having a currency that is only “almost as bs” as fiat money helps to diversify Tesla’s exposure on the bs axis, leading to a lower weighted average of bs ratio or some such. I’m not a corporate treasurer.
One way in which the foray into crypto certainly helped on Monday was taking the spotlight off some less exciting news. Tesla was recently summoned by Chinese regulators to answer complaints about quality and safety issues with its cars. China is crucial for Tesla because, as the 10-K also revealed, revenue in this growth company’s home market in the fourth quarter was still lower than two years previously.
Having witnessed Gamestonk, we surely all knew that this Venn diagram eclipse of the most speculative car company in the world and the most speculative “currency” in the world was coming. Tesla sells stock because it can and then uses some of the proceeds to buy Bitcoin because it can. It’s as simple, and disconcerting, as that.
Crypto Stocks Rally With Tesla Pushing Bitcoin Above $44,000
Cryptocurrency-exposed stocks soared on Monday along with Bitcoin, which extended a weekend rally after Tesla Inc. said it invested $1.5 billion in the currency and will start accepting it as a form of payment.
MicroStrategy Inc. jumped as much as 19% to the highest since 2000; Marathon Patent Group Inc. climbed as much as 34% to the highest since November 2017; Riot Blockchain Inc. surged as much as 33%; Bit Digital Inc. climbed as much as 25%; Ebang International Holdings Inc. added as much as 9.9%; and Silvergate Capital Corp. rose as much as 24% to a record.
In London, Argo Blockchain Plc rose as much as 23% and On-Line Blockchain Plc surged as much as 27%.
PayPal Holdings Inc. added as much as 4.9%, also hitting a fresh record. Shares of the payments platform have gained nearly 40% since it said in October that it would allow customers to buy, hold and sell cryptocurrencies directly from their PayPal account, marking a big step forward for the industry. PayPal climbed further last week after earnings shed light on its crypto initiatives.
Square Inc,. which is led by Bitcoin advocate Jack Dorsey and which put $50 million in Bitcoin on a crypto “empowerment bet” in October, gained as much as 9.9% to a fresh record.
Dogecoin, the once tongue-in-cheek cryptocurrency, hit a record on Monday as well, after Tesla Chief Executive Elon Musk, rapper Snoop Dogg and Kiss bassist Gene Simmons all tweeted about it. Tesla shares gained as much as 3%.
Elon Musk’s SpaceX Advances Goal of Becoming Trusted, Long-Term Military Launch Provider
Pentagon chooses rocket company to share multiyear award with incumbent contractor.
Elon Musk’s SpaceX has vaulted into an elite tier of military suppliers, winning a multibillion-dollar contract that makes it one of the Pentagon’s two primary satellite-launch providers through most of the decade.
In a significant boost to Mr. Musk’s closely held Southern California company, the Air Force on Friday said SpaceX will split an estimated nearly three dozen launches through 2027 with United Launch Alliance, a joint venture between Boeing Co. and Lockheed Martin Corp. Until a few years ago, ULA had a virtual monopoly on such business, which focuses on the highest-priority military and intelligence payloads.
Space Exploration Technologies Corp., the formal name of Mr. Musk’s company, is slated to conduct 40% of the missions, achieving a long-cherished goal of breaking into the ranks of the Pentagon’s most trusted corporate partners.
The Boeing-Lockheed joint venture is slated to carry out the rest of the launches. Initial awards for each company exceeded $300 million, though industry estimates of the eventual combined contract value range from more than $4 billion to about $6 billion.
Blue Origin Federation LLC, run by Amazon.com Inc. founder Jeff Bezos, made a big push to snare some of the launches, stressing the strength of its technology and financial commitment to improve it further. The fourth bidder was Northrop Grumman Corp.
Industry officials said the announcement appears to give SpaceX a long-term advantage over Blue Origin to become the dominant new entrant in the lucrative market for launching big U.S. national-security payloads over coming decades.
Both companies consider government launches strategically important for their future prospects, and the military plans to reopen competition for later missions.
With Pentagon spending on space programs, particularly classified projects, projected to continue climbing for years, competition between SpaceX and Blue Origin is likely to ramp up, even as ULA seeks to stay in the lead.
Friday’s announcement, however, amounts to a potentially important SpaceX coup in an already simmering rivalry. Messrs. Musk and Bezos have traded satirical barbs on social media in the past, sometimes playing down or poking fun at each other’s space accomplishments.
But publicly and privately, industry officials said, both men have emphasized their determination—regardless of the extent of government financial support—to develop larger and more powerful rockets capable of accelerating human exploration and ultimately establishing settlements deep in the solar system.
But at this point SpaceX, which Pentagon brass considered an upstart outsider as recently as six years ago, has positioned itself to become a mainstay for blasting the heaviest and most expensive American military and spy satellites into space.
“This is a huge win, highlighting how far they have come in both the commercial and military launch markets,” said George Torres, a veteran industry official and author of books on space history. “They have clearly earned their stripes.”
ULA’s ability to secure the majority of launches “is more important for the overall industry,” Mr. Torres added, because its heavy reliance on existing hardware will end up bolstering other major Pentagon suppliers.
The closely watched decision wasn’t a surprise to some industry insiders, because the Pentagon previously signaled it intended to place a premium on the record of the bidders. SpaceX’s family of Falcon boosters has successfully launched earlier Air Force missions.
ULA has a long history of military contracts for its highly reliable Delta IV and Atlas V boosters, and it is currently developing a new rocket called Vulcan-Centaur.
Blue Origin’s New Glenn rocket lacks that pedigree, though the company is supplying the same engines for use on ULA’s next-generation Vulcan design.
ULA’s current rockets use Russian-built engines, long a source of concern among lawmakers and military officials, and the Boeing-Lockheed joint venture faces strict congressional deadlines for switching to alternate rockets using domestic engines. Northrop Grumman also offered a brand-new booster.
Amid the heightened competition, SpaceX and Blue Origin over the years filed separate lawsuits challenging different aspects of Pentagon contracting policies, and have lobbied Capitol Hill to snare federal development dollars.
Led by billionaire entrepreneurs willing to invest heavily to turn their space ambitions into reality, the two companies also are facing off against each other to supply hardware for the National Aeronautics and Space Administration’s Artemis program, which aims to return U.S. astronauts to the moon. NASA is expected to make a decision later this year.
Taken together, Pentagon and NASA choices are expected to be the most consequential moves establishing the direction of U.S. rocket companies since the late 1990s.
Recently, Mr. Musk’s business endeavors have soared. SpaceX succeeded in launching and docking with the International Space Station the first commercially developed capsule carrying astronauts.
The crew returned safely in a pinpoint splashdown, prompting praise from high-level government officials and space aficionados.
Electric-car maker Tesla Inc. has delivered four consecutive quarters of profit for the first time in its history, another milestone for Mr. Musk, who is the company’s chief executive.
Friday’s space announcement caps extensive industry and congressional debate over whether the Pentagon should support three major launch providers to shore up the country’s aerospace industrial base and ensure maximum flexibility for the Pentagon to launch high-priority payloads.
Air Force Lt. Gen. John Thompson decisively answered that question in a release to media, calling the designation of two winners a landmark decision balancing and promoting competition, innovation and a robust industrial base.
Blue Origin vowed to continue developing its rocket to serve existing commercial customers, sign new civilian launch contracts and compete for future national-security launches. “We remain confident New Glenn will play a critical role for the national security community in the future,” the company said.
One of Blue Origin’s challenges, according to industry officials, will be to demonstrate it has mastered the process of reusing launchers multiple times. Pioneered by SpaceX, such reusability has been widely accepted by commercial and government customers alike as a cost-saving feature.
Without additional government funding or clear-cut commercial prospects, industry officials question whether Northrop Grumman will aggressively pursue further development of its OmegA rocket. The company didn’t have any immediate comment.
The awards cap years of Pentagon analyses of the launch industry, combined with efforts to fine-tune contracting arrangements aimed at maintaining healthy providers but weaning ULA off its longstanding reliance on Russian-built engines.
Will Roper, the assistant Air Force secretary in charge of acquisitions, told reporters launch prices were expected to come down as the strategy plays out.
In a press release, the service said it already has benefited from some $7 billion in savings since 2013 due to enhanced contractor competition. That is around the time SpaceX started complaining about being locked out of launch competitions.
When Elon Musk Shops For Groceries
Here’s how much items would cost if he paid the same share of his wealth as the median U.S. family.
Here is something Elon Musk does not do: He does not compare prices of apples in the supermarket. Because when you’re worth almost $200 billion, the difference between cheap apples and expensive apples is beyond meaningless.
We’re talking about a guy whose wealth rose $13.6 billion in a single day. According to Bloomberg’s Rich list, the chief executive officer of electric-vehicle maker Tesla Inc. is now the world’s wealthiest person, with a net worth of $194.8 billion, surpassing Jeffrey Bezos of Amazon.com Inc.
But as a thought experiment, imagine that Musk had to pay for stuff in proportion to his wealth. His net worth is approximately 1.6 million times that of the median American family, which was $121,700 in 2019, according to the Federal Reserve’s Survey of Consumer Finances. So anything costing the median family $1 would cost him $1.6 million.
Let’s say he goes to Whole Foods, which is owned by Amazon. Organic Honeycrisp apples are going for $3.99 a pound. Musk puts his pound of Honeycrisps on the conveyor belt in the checkout line.
The cashier says, “That’ll be $6.4 million.” Ouch. He could have bought a pound of organic Fuji apples instead and saved more than $2 million.
One large Hass avocado: That’ll be $2.4 million, please.
These organic strawberries look scrumptious, but $11 million a pound? That’s crazy!
Four pounds of beef ribeye steak come to almost $100 million. By now, Musk is getting steamed at fellow gazillionaire Bezos, muttering, “No wonder they call this place Whole Paycheck.”
The windfall from such a pricing system would go to Amazon rather than the Internal Revenue Service. The closest you could get to something like this with the tax code, in concept anyway, would be a cash-flow tax.
The government adds up your income, subtracts the money you put into savings, calls the remainder consumption, and taxes it at a progressive rate: The more you consume, the higher rate per dollar of consumption. The Congressional Research Service included the cash-flow tax in a 2016 review of options (PDF).
A cash-flow tax rate would never be set at 1.6 million times the value of the good, but even a much lower tax would be enough to take a bite out of billionaires’ effective wealth. And it could be simpler to implement than a wealth tax, because income and savings are easier to measure than wealth.
Wouldn’t billionaires be able to dodge it by saving rather than consuming most of their income? Yes, and they surely would.
But as Boston University economist Laurence Kotlikoff likes to point out, wealth is useful only when it’s consumed, either by this generation or a future one. So over the long run, a permanent 25% tax on consumption has exactly the same effect on a rich family as a one-time 25% tax on its wealth.
How Do You Like Them Apples, Elon?
Tesla’s $1.5B Bitcoin Purchase Leaves Treasury Experts Scratching Heads
Some treasury experts are finding it difficult to understand why Tesla recently bought $1.5 billion worth of Bitcoin — the best performing asset of the last decade.
Corporate treasury commentators are criticizing Tesla’s $1.5 billion Bitcoin splurge, echoing the well-worn rhetoric of BTC’s volatility.
Speaking to Financial Times, Jerry Klein, managing director at New York-based investment management firm Treasury Partners said that there was no use case for plowing corporate cash into Bitcoin.
Another critic quoted by FT, Campbell Harvey of Duke University in Durham North Carolina, called Tesla’s Bitcoin acquisition “unusual” and “risky” adding that it will not serve as a hedge against market uncertainties.
Critics of Tesla’s Bitcoin purchase say the move potentially puts shareholders at risk given the volatility of Bitcoin. Some point to historical crashes like the 2018 bear market and the 50% dump that occurred on Black Thursday in March 2020.
However, these arguments seem to leave out Bitcoin’s established “no look-back price trajectory” wherein each crash does not revert to a price level before the previous all-time high.
Also, Bitcoin’s parabolic bounce from its lows does not appear in these anti-BTC arguments. For instance, the Black Thursday crash of 2020 was followed by an almost eight-fold increase by the end of the year.
Since August 2020, business intelligence firm MicroStrategy has been acquiring Bitcoin and has spent about $1.1 billion in buying 71,079BTC. At the current price, the company’s Bitcoin stash is valued at almost $3.3 billion — a 200% gain on its investments.
Bitcoin was the best performing asset of the last decade, gaining almost 9,000,000% and far outstripping all other asset classes. Indeed, as of the time of writing, only Bitcoin bought above the $47,000 price level is currently at a loss.
Speaking to CNBC, MicroStrategy CEO and Bitcoin bull Michael Saylor countered the volatility rhetoric, saying holding cash reserves amounted to a stable loss of 75% of their shareholder value over the last decade whereas investing in BTC offered a volatile appreciation that doubled every six months. According to Saylor:
“Companies that are converting their dollars into Bitcoin are taking a non-performing asset [cash] and they are turning it into the best performing asset. Bitcoin has been appreciating at something like 230% year after year for a decade […] I’d rather have a volatile appreciation at 230% a year than a stable depreciation at a rate of 15 to 20% a year.”
The billions of dollars in economic stimulus packages by major economies are also expected to exert further downward pressure on fiat currencies.
Apart from the backlash over Tesla’s Bitcoin investment, these corporate treasury critics also said that other companies will not be lining up to follow Tesla’s lead.
However, Tesla is only the latest in an expanding cast of public companies holding Bitcoin on their balance sheets. As previously reported by Cointelegraph, 1,400 firms signed up for MicroStrategy’s Bitcoin-buying bootcamp.
Indeed, Apple bull RBC Capital Markets recently clamored for the iPhone maker to follow Tesla’s example in buying Bitcoin. RBC even called on Apple to go a step further by creating a Bitcoin exchange.
The largest cryptocurrency by market capitalization is currently up almost 60% year-to-date.
Stablecoin Flows Hint At $50K Bitcoin After Tesla Pump Liquidates $500M In BTC Shorts
Around $500 million worth of positions were liquidated within hours as the Tesla news caused Bitcoin to spike over $46,000.
Bitcoin (BTC) has extended its rally over $46,000 on Feb. 9, a day after a U.S. Securities and Exchange Commission (SEC) filing revealed that Tesla bought $1.5 billion worth of BTC. The price of Bitcoin immediately soared from around $39,000 to $45,000 across major exchanges on Feb. 8 after the news began to spread.
Mass Bitcoin Liquidation
As the Bitcoin price initially rallied to $45,000, it caused $500 million worth of short positions to get liquidated.
The term liquidation in the Bitcoin futures market refers to when the price of BTC moves quickly in a short period beyond the liquidation prices of futures contracts.
For instance, if a trader borrows 10 times the base capital and trades a $100,000 Bitcoin position with $10,000, the position would get liquidated after a 10% price movement.
According to the data from Bybt.com, $1.34 billion worth of futures positions in the futures market were liquidated in the past 24 hours.
This indicates two trends; first, the derivatives market was extremely overcrowded with short-sellers. When the Tesla news broke, it caused a massive short squeeze, liquidating hundreds of millions of dollars worth of positions in several hours.
Second, it shows that many investors did not anticipate Tesla to actually invest in Bitcoin even after Musk changed his bio to “Bitcoin” on Jan. 29, 2021.
What Happens Next?
Meanwhile, cryptocurrency traders are cautious due to the extremely high funding rates across major futures exchanges.
Funding rates increase when the majority of the market are buying or longing Bitcoin. When the funding rates are overly high, the market is vulnerable to a long squeeze, which can cause an intense short-term drop.
Nevertheless, a cryptocurrency trader known as “Loma” says that the market is not overconfident just yet. He said that when a point comes where traders are overly confident and do not expect a major drop, that is when a correction is likely to occur. He said:
“I want us to get to that point where people start talking about how it’s impossible for us to retrace 70-90% before I think of closing my spot $BTC positions. I remember feeling like there’s no way $BTC goes back below $10k in 2018. We went to ~$3,500. Never say never.”
Meanwhile, CryptoQuant CEO, Ki Young Ju, emphasized that there is newfound buyer demand as stablecoin inflows into exchanges were spotted. In the near term, this would likely act as a catalyst for Bitcoin. He wrote:
“You can call me crazy, but I think we’ll see 50k soon. Just got another stablecoins deposit signal.”
Elon Musk’s decision to invest $1.5 billion of Tesla Inc.’s cash in bitcoin is financial dynamite that unites two speculative bubbles. There’s plenty to suggest the move is inadvisable. Though small in the context of Tesla’s $830 billion market value, this is still a material portion of Tesla’s $19.4 billion cash reserves to park in such a volatile asset.
Tesla wouldn’t be the first car company to operate as a quasi hedge fund. For a time Porsche made tons of money trading derivatives, almost bankrupting itself in the process. Owning cryptocurrency sits badly with Musk’s green ethos: Some Bitcoins are mined with renewable power but the industry still leaves a sizeable carbon footprint.
Musk’s purchase has boosted Bitcoin’s price by almost 20% so in one sense he’s won already. Unfortunately his bet won’t improve Tesla’s reported earnings or boost the value of its cash reserves. That’s because cryptocurrencies — despite the name — aren’t classified as cash or equivalents for accounting purposes.
Nor are they considered a financial investment under current accounting rules. Instead they’re deemed an intangible asset whose value is reported at cost in corporate accounts and must be written down if the price declines. The value cannot be written up again until they’re sold. This is a significant disadvantage and might discourage other corporate treasurers from following Musk’s lead.
It’s also not entirely fair, whatever you think about Musk gambling with Tesla’s money. Shouldn’t accounting standards be updated for the crypto era?
Here’s The Relevant Bit From Tesla’s 10-k:
Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale.
As we currently intend to hold these assets long-term, these charges may negatively impact our profitability in the periods in which such impairments occur even if the overall market values of these assets increase.
In plain English, if the price of Bitcoin price suddenly fell by, say, a third compared to the Tesla’s cost acquiring it — pretty plausible in the context of Bitcoin’s historic volatility — then the carmaker’s GAAP earnings would be short $500 million during that quarter. Tesla will book no corresponding gain if the price rises again. The volatility of Tesla’s earnings could increase even more if customers start paying for their cars in Bitcoin, as Musk will soon allow, and the company elects not to convert it immediately into U.S. dollars.
This isn’t just a Tesla problem. Business analytics company MicroStrategy Inc. had invested a whopping $1.1 billion in Bitcoin as of Dec. 31. It even decided to make Bitcoin its primary treasury reserve asset, and so far the decision has paid off: Its holdings have almost trebled in value.
But because Bitcoin’s price has fluctuated, MicroStrategy has already needed to book a total of $71 million of impairments, including $26.5 million in the fourth quarter.
The accounting treatment is weird because if you can buy a Tesla with Bitcoin then it’s clearly serving as a medium of exchange, albeit a volatile one that’s not state-backed. Foreign currencies can be volatile too — just ask Argentina.
There’s also a clearly observable market price for Bitcoin as it’s traded on exchanges. In view of tentative efforts by airlines to accept cryptocurrencies as payment, industry body IATA has argued that these tokens should be “treated as cash if they function as cash.”
Analysts will doubtless adjust Tesla’s reported financials to reflect the current value of its Bitcoin holdings but it’s an inelegant and less transparent approach.
Unfortunately, the standard setters don’t appear to be in a rush to embrace the crypto revolution. The Financial Accounting Standards Board, whose job is to oversee Generally Accepted Accounting Principles (GAAP), voted unanimously not to add cryptocurrencies to its technical agenda in October.
One can understand the reluctance. Accounting rules were created before cryptocurrencies were invented. The bean counters don’t want to be blamed if companies get their fingers burned.
Still, with interest rates at zero, I doubt Tesla will be the last tech company to try to earn a better return on its cash holdings. Anyone who does so is taking a massive financial risk but they should be allowed to record the value of their Bitcoin at the current market price. Anything else gives investors an incomplete picture.
A Brief History Of Elon Musk’s Devotion To The Crypto Cause
Bitcoin surged to a record on Tuesday above $48,000 after Tesla Inc. announced a $1.5 billion investment. That capped Elon Musk’s years-long flirtation with cryptocurrencies, which has mostly played out in Twitter memes — some of them market-moving.
Tesla’s decision to accept Bitcoin as payment for its electric cars may help bring the virtual currency into the mainstream of global finance.
Yet its famed volatility has led to warnings from regulators that investors could be wiped out.
Here are some choice moments in the Tesla chief executive officer’s enthusiasm for all things crypto.
For many observers it started when a blog post shared on digital-currency sites suggests Musk is Satoshi Nakamoto, the mysterious cryptocurrency founder. The billionaire rejects the claim and says he forgot where he put his Bitcoin.
Musk’s Twitter page is among a handful of accounts that were apparently hacked to promote a crypto scam. Investors were duped into giving away at least $120,000 worth of Bitcoin, said to be spirited away into other accounts by the hackers. A 17-year-old Florida high school graduate and two others were charged by U.S. authorities in relation to the alleged hack.
The billionaire tweets that month, “Excuse me, I only sell Doge!” That’s seen as a reference to Dogecoin, a cryptocurrency started as a joke in 2013 that features a Shiba Inu dog as a mascot.
Musk asks about converting “large transactions” of Tesla’s balance sheet into Bitcoin during a Twitter conversation with Michael Saylor, CEO of MicroStrategy Inc. “Are such large transactions even possible?” Musk tweeted at the time.
Dogecoin becomes a retail-trader obsession thanks in part to a Musk tweet showing a “Dogue” magazine cover. Though no explanation was given, many users take that as another reference to Dogecoin.
January 29, 2021
Musk adds “#bitcoin” to his Twitter profile page, without an explanation. Within minutes, Bitcoin jumps as much as 15%, surging above $38,000, amid speculation that he might be a Bitcoin investor.
Feb. 1, 2021
Speaking on the social audio app Clubhouse, Musk declares he’s a Bitcoin supporter. “Bitcoin is a good thing,” he said, adding that he was “late to the party” and should have bought the cryptocurrency eight years ago.
Feb. 4, 2021
Musk breaks his self-imposed Twitter hiatus and sends a series of tweets about Dogecoin. “No highs, no lows, only Doge,” he posted.
Feb. 8, 2021
Dogecoin briefly touches a record after Musk as well as fellow celebrities Snoop Dogg and Gene Simmons tweet about it.
Feb. 8, 2021
Tesla announces a $1.5 billion investment in Bitcoin and a plan to accept digital currency as payment for electric cars. Bitcoin’s price gains more than 20% from its level before the announcement.
Dogecoin’s market value now sits at about $10 billion, making it the 10th biggest among cryptocurrencies, according to CoinMarketCap.
Lawyers Warn Elon Musk’s Bitcoin Pumping Tweets Could Attract SEC’s Ire
Elon Musk’s rampant Twitter activity could get him into hot water with the SEC according to lawyers.
Legal advisors have warned that Tesla chief executive Elon Musk could come under scrutiny from the U.S. Security and Exchange Commission over his social media activity around Bitcoin.
On Monday, Feb. 8 Tesla announced in an SEC filing that it had purchased $1.5 billion worth of Bitcoin and will soon start accepting BTC payments. Shortly afterwards, prices of the asset skyrocketed to a new all-time high of a little over $48,000.
Partner at Linklaters and former branch chief of the SEC’s division of enforcement, Doug Davison, told the UK’s Telegraph newspaper:
“It would not be surprising—given the focus on the chief executive’s Tweets, Bitcoin pricing and recent dramatic market moves—for the SEC to ask questions about the facts and circumstances here,”
Former vice president of the European Central Bank, Vitor Constâncio, echoed the sentiment concluding that the “SEC will look into this,”
It was not disclosed when Tesla had made this investment. In December, Musk said that Tesla could buy bitcoin, and this was followed by many statements that he supported bitcoin. Bitcoin kept going up & Tesla investment has appreciated. The SEC will look into this 5/
— Vitor Constâncio (@VMRConstancio) February 8, 2021
The SEC and the Commodity Futures Trading Commission have the ability to investigate should they suspect market manipulation.
Musk has been very vocal on Twitter shilling Bitcoin and DOGE on numerous occasions which contributed to Bitcoin activity on the social media platform spiking to its highest levels. DOGE spiked to new all time highs following Musk’s endorsement.
There is little doubt that Tesla’s public foray into Bitcoin, and Musk’s influential tweets to his 46.5 million followers, have contributed to this latest price spike.
He is still currently shilling Dogecoin with this recent tweet late on Feb. 10 stating he is buying the asset. DOGE spiked 13% following that particular tweet a few hours ago.
Bought some Dogecoin for lil X, so he can be a toddler hodler
— Elon Musk (@elonmusk) February 10, 2021
Musk is no stranger to Twitter controversy; he has been previously accused of posting misinformation on the platform regarding Covid-19 and the closure of one of his factories.
In another incident he suggested that Tesla stock price was too high, resulting in a subsequent price slide. The SEC sued Musk for fraud, charging the Tesla chief with making “false and misleading tweets,” but he settled with the regulator soon after.
Youngest HODLer Ever? Elon Musk Buys DOGE For His 9-Month-Old Son
“Toddler HODLer” may soon become a new meme in the crypto space.
Elon Musk’s child with Canadian musician Claire Elise Boucher, or Grimes, may now be one of the youngest public crypto users on record.
In a tweet today from the Tesla CEO, Musk said his 9-month-old son is now the proud — or maybe just fussy — owner of some Dogecoin (DOGE), referring to him as a “toddler HODLer.” The boy, born last May, is named X Æ A-Xii — pronounced “ex ash eh twelve” — with the last two syllables an homage to Lockheed’s A-12 aircraft.
Bought some Dogecoin for lil X, so he can be a toddler hodler
— Elon Musk (@elonmusk) February 10, 2021
Musk’s recent tweets have likely fueled the price of DOGE since January. The token started 2021 at roughly $0.005 but has since risen more than 1,400% to reach $0.0758 at time of publication. Many of the Tesla CEO’s memes and bullish opinions of DOGE have preceded a price surge.
However, the world’s second richest man is not the only billionaire who seemingly thinks the token has potential. Dallas Mavericks owner Mark Cuban said on Monday that DOGE is the “best entertainment bang for your buck available” on the crypto market and doesn’t think it’s a “bad look” for investors to consider it.
With cryptocurrencies becoming more prominently featured in the news, there are many people under 18 years old interested in how they can legally own Bitcoin (BTC), Ether (ETH), or any number of altcoins. Though it’s illegal for many minors to hold cryptocurrencies on exchanges, parents like Musk can often gift their children digital assets. Cuban has also purchased his 11-year-old son Jake $5 worth of DOGE.
Elon Musk’s Other, Not-So-Secret Battery Could Help Texas
A charged-up electric vehicle that isn’t on the road is a potential power source.
Elon Musk is secretly building a giant battery in Texas. Ultimately, though, it’s the other part of Tesla Inc. that could have a bigger impact there.
The scoop on Tesla’s hush-hush project near Houston, courtesy of my colleagues at Bloomberg News, landed soon after February’s ice-induced blackouts across Texas. Tesla’s effort is part of a small but growing stationary energy-storage capability in the state.
Bloomberg NEF counts less than 500 megawatt-hours of capacity currently installed but more than 2,000 announced or in progress. With the right chemistry and configuration, batteries can send power to the grid rapidly — which is relevant in light of February’s debacle.
Power grids run at a certain frequency. There is very little tolerance for deviating from that; a little too high or low and you risk serious damage to generating plants and other equipment.
There was a crucial period of about 15 minutes in the early hours of February 15 where the Texas grid faced outright collapse. Frequency plunged as power plants tripped offline even as demand from freezing Texans was soaring.
This can create a self-reinforcing vortex: As plants switch off for whatever reason, frequency drops, causing other plants to automatically switch off to protect themselves, making the grid even less stable.
This is why the grid operator instituted ever bigger blackouts to rebalance supply and demand and prevent an uncontrolled shutdown.
Grid-scale batteries, with enough juice for a few hours, cannot replace power plants for an extended blackout like the one Texas had. At a large enough scale, however, they might have helped to stabilize the grid. The reasons for why specific plants continued to trip offline in the early hours of that Monday are unknown as yet.
Potential causes include lack of fuel, frozen equipment — and automatic shutoff as grid frequency dropped. Batteries might have helped with the latter, stabilizing frequency long enough to prevent automatic shutoffs and thereby avoiding some cutoffs to consumers.
Joshua Rhodes, a research associate at the University of Texas at Austin’s Webber Energy Group, raises an intriguing additional possibility. “ERCOT shed a bunch of load so that they could maintain a reserve” of generation capacity during the crisis, he told me.
In theory, if that spare capacity had been charging batteries at scale, it could have been switched into meeting power demand along with batteries discharging onto the grid. “You could have sort of a double boost,” he says.
In this crisis, when generation outages peaked at 48 gigawatts early on February 16, the sheer scale of the challenge means more stationary storage may only have alleviated things at the margin.
Texas’ wealth of wind and solar power potential means projects such as Musk’s secret battery will proliferate, crisis or no, as they help with intermittency.
But as the state weighs the costs of different ways of strengthening its grid, it should remember that other, far bigger operation Tesla runs: electric vehicles.
A charged-up electric vehicle that isn’t on the road is a potential power source. A 60 kilowatt-hour car battery — as you might find in some Tesla Model 3s or Nissan Leafs — could power the average home in Texas for a couple of days.
Put enough of them together, however, and you’re talking a potentially huge resource backing up the entire grid.
I’ve adapted some parameters laid out in a recent report on vehicle-to-grid, or V2G, technology by Bloomberg NEF’s Ryan Fisher and Nelson Nsitem 1 . Imagine there are 26 million passenger vehicles in Texas by 2030, and 10% of those are electrified.
Assume a quarter of those have 7 kilowatt V2G chargers installed, and half are plugged in at any one time.
This equates to 2.3 gigawatts of capacity. That’s equivalent to the entire installed and announced storage projects in Texas today.
As the fleet expands, potential capacity rises to staggering levels. At a quarter of all vehicles being electric and a quarter of those having the right chargers, it’s 5.7 gigawatts.
At half and half, it’s 23 gigawatts, equivalent to a third of the state’s peak demand during the freeze.
Tapping into any of this is easier said than done in a grid designed around large plants pushing power down to consumers rather than the other way around (disclosure: my wife runs a start-up developing distributed virtual power plants).
V2G chargers can run to more than $4,000 apiece today, although like all this hardware the price will fall with rising installations.
Bloomberg NEF’s Fisher also points to the complications of different charging standards and the limitations around vehicle manufacturer warranties on batteries, which largely preclude the extra charging and discharging cycles needed for V2G participation.
Against that, he notes modifying warranties could open up an extra suite of services for auto companies to sell customers beyond a metal box on four wheels. Shifting the incentives for all involved is as important as technological breakthroughs in making such possibilities real.
The way to think about this is as an option Texas could choose to exercise. Electric vehicles will become more common over time for reasons entirely unrelated to grid stability. Yet with the right incentives, they can perform that role too — a massive resource hiding in plain sight.
Musk’s SpaceX Gets Low-Level Satellite Orbits Amazon Opposed
* FCC Grants Spacex Permission To Consolidate Its Fleet
* Amazon Says Agency Restrictions On Spacex Address Concerns
Elon Musk’s SpaceX won permission for lower orbits from the Federal Communications Commission, which rejected claims from rivals such as Amazon.com’s Kuiper Systems that the change would increase the risk for collisions in space.
The FCC, in an order adopted on a 4-0 vote, said lower flights would improve the speed and reduce signal lag for SpaceX’s internet-from-space service. It told SpaceX to tightly control the altitude of satellites closest to those planned by Project Kuiper.
“Our action will allow SpaceX to implement safety-focused changes to the deployment of its satellite constellation to deliver broadband service throughout the United States, including to those who live in areas underserved or unserved by terrestrial systems,” the FCC said in the order, released Tuesday.
The new trajectory “should result in lower collision risk” in part because atmospheric drag slows satellites at lower altitudes, leaving them to plunge out of orbit, the FCC said. Its order lets SpaceX reduce planned altitudes for some satellites by roughly half.
Friction over the SpaceX plan for its constellation of 4,408 satellites reflects the intense race under way as companies compete to offer broadband service from near space. Amazon in 2020 won FCC permission for 3,236 of its Kuiper satellites and has yet to launch any. Viasat Inc., Telesat Canada and OneWeb also plan fleets.
SpaceX Sends 60 More Satellites Into Orbit
SpaceX asked to fly 2,824 Starlink satellites in the lower orbit, where the company already has permission to operate 1,584 spacecraft. The requested change would leave all the satellites at an altitude of roughly 540 to 570 kilometers (335 to 354 miles). The zone is just below that assigned to Project Kuiper.
Amazon in a statement called the FCC decision “a positive outcome that places clear conditions on SpaceX.” Those include the mandate to remain below Kuiper spacecraft, and another to accept radio interference from Kuiper to which SpaceX is vulnerable due to operating at a lower altitude.
“These conditions address our primary concerns,” Amazon said.
The satellites are to operate in low-Earth orbits, a range that now plays host to 2,612 operating satellites, according to the Union of Concerned Scientists.
SpaceX is ahead of its competitors. It said it had 1,320 satellites in orbit on April 6, and launched another 60 the following day.
A lower orbit allows quicker internet service because the signal doesn’t travel as far. The change would, for example, let SpaceX provide broadband to rural areas “that is on par with service previously only available in urban areas,” the company said in an FCC filing.
Elon Musk’s War On Regulators
The Tesla and SpaceX chief courts conflict with an alphabet soup of government agencies—and generally gets away with it.
He’s become one of the world’s most successful entrepreneurs by reinventing industries from electric cars to rockets. Along the way, he’s also rewritten the rules of engagement with U.S. regulators.
Elon Musk has emerged a winner in a series of run-ins with a range of regulatory agencies that have watched as he sidestepped rules or ignored enforcement attempts. He has overmatched an alphabet-soup of agencies that oversee financial markets and safety in the workplace, on highways and in space flight.
Most chief executives try to avoid regulators—or at least stay in their good graces. Many accused of overstepping have paid fines or agreed to make improvements.
Mr. Musk, revered by some investors for his iconoclastic approach, has taken a different tack on his way to becoming one of the richest men in the world, not letting regulations hinder his goals to revolutionize transportation with Tesla Inc.’s electric cars or colonize Mars using SpaceX rockets.
Federal agencies say he’s breaking the rules and endangering people. Mr. Musk says they’re holding back progress.
The National Transportation Safety Board determined that Tesla and a key regulator, the National Highway Traffic Safety Administration, are failing to implement the NTSB’s recommendations to prevent misuse of the company’s advanced driver-assistance system. Both agencies are investigating a recent fatal crash involving a Tesla in Texas.
The Federal Aviation Administration criticized SpaceX for launching a rocket in December without a proper FAA license. Mr. Musk ridiculed the FAA space division in a tweet as “fundamentally broken.”
Mr. Musk stands out even when measured against other Silicon Valley titans, who have long bridled at regulators. Rather than engaging in a give-and-take with government authorities, Mr. Musk’s default response includes making public, sometimes crude, remarks via Twitter disparaging them.
After the Securities and Exchange Commission asked for information on whether Tesla was monitoring Mr. Musk’s public messages—as required under an amendment to a 2018 consent decree—the billionaire last summer tweeted an apparent reference to a sex act: “SEC, three letter acronym, middle word is Elon’s.”
When asked to comment on the specifics of this article, Mr. Musk replied with a “poop” emoji. Asked to elaborate, Mr. Musk declined to provide any input on his interactions with federal agencies or his view toward regulation.
In a tweet Tuesday, Mr. Musk said he agrees with regulators “99.9% of the time.” He added that when they disagree, it “is almost always due to new technologies that past regulations didn’t anticipate.”
Tesla and SpaceX didn’t respond to requests for comment.
NHTSA said it is “closely evaluating potential next steps to ensure that drivers have access to the most effective measures to ensure their safety, including the understanding that they are fully responsible for the operation of the vehicle.”
An FAA spokesman said SpaceX has taken “corrective actions” that enhance public safety since the December launch. An SEC spokesman declined to comment.
Rather than encouraging Mr. Musk to conform, some shareholders revel in his behavior. Mr. Musk’s fans “see him as a freedom fighter and they cheer him on,” says Nathan Weiss, an independent research analyst who has long followed Tesla.
Space Exploration Technologies Corp., or SpaceX, has already designed rockets that are successfully in service taking cargo and people to space. Just last week, a SpaceX rocket brought four astronauts to the space station, for the first time employing a pre-used capsule and rocket.
Earlier this month,NASA awarded SpaceX a $2.89 billion contract to build a lunar lander for moon missions.
SpaceX has run into conflict with regulators as it tests its new large rocket, the Starship, a reusable transportation system that can carry crew and cargo to Mars, according to the company’s website.
Tensions built as a Dec. 9 launch date approached. Reflecting the reality that early test flights often go awry, Mr. Musk tweeted on Dec. 7 that the launch had just a one-in-three chance of complete success. For the FAA, the acid test was whether a possible explosion would pose a threat to surrounding communities.
Atmospheric conditions such as temperature, wind direction and clouds can affect the distance shock waves travel in an explosion, space aviation experts say.
The FAA calculated that the launch might exceed its threshold for risk of injuries to the public. SpaceX presented the FAA with its own risk analysis.
The FAA rejected SpaceX’s analysis and declined to waive the agency’s own safety criteria, according to an FAA spokesman.
SpaceX launched the rocket anyway. The vehicle, dubbed SN8, soared miles into the air before returning to the launchpad nearly seven minutes later, exploding into a fireball on impact. No one was hurt and there were no reports of property damage.
After the FAA delayed a January test launch, Mr. Musk accused the agency of holding back progress and argued that its regulations were outdated. “Their rules are meant for a handful of expendable launches per year from a few government facilities,” he tweeted on Jan. 28. “Under those rules, humanity will never get to Mars.”
On March 12, FAA Administrator Stephen Dickson called Mr. Musk to remonstrate, stressing that he is required to follow FAA rules, the FAA spokesman said.
According to FAA briefings before three congressional panels, SpaceX has changed its prelaunch procedures to avoid a repeat of another unlicensed launch. It is now required to have an FAA inspector on site, rather than observing remotely, during launches, the FAA said.
On March 21, after hearing input from commercial space companies including SpaceX, the FAA streamlined its licensing requirements.
Since the December flight, three other SpaceX Starship rockets launched under FAA license in Boca Chica. Each exploded upon returning to the launch pad.
The National Labor Relations Board ruled in March that Tesla had violated U.S. labor law by hindering unionization and ordered Mr. Musk to delete a tweet discouraging employees from unionizing. Tesla this month appealed the decision, saying the NLRB’s ruling was “contrary to law.”
Mr. Musk’s tweet remains online. The NLRB declined to comment.
Tesla rebuffed inspections from state Occupational Safety and Health Administration officials seeking access to its Gigafactory in Nevada, where the company manufactures battery packs for its cars with partner Panasonic Corp.
The auto maker stymied Nevada OSHA for nearly three months in 2019 as the agency attempted to fully inspect the battery factory, one of the area’s largest workplaces with around 7,800 employees, according to records and correspondence reviewed by The Wall Street Journal.
After an employee lost a finger and another suffered lacerations on the same day, the agency ordered Tesla to obtain an outside assessment of its machinery. Tesla missed a deadline to provide a copy to OSHA, and Jess Lankford, the state agency’s chief administrative officer, ordered a comprehensive inspection in March 2019.
OSHA inspectors wrote they were unable to recommend citations for nine potential hazards they observed while initially attempting to inspect the plant, because Tesla refused to allow them to interview employees to ascertain whether the company had known about the issues.
Upon their return the next day, the inspectors weren’t allowed to continue their work, according to their reports. Tesla lawyer Yesenia Villaseñor said the agency lacked a legal justification for the inspection and it was “on hold” until that issue was resolved, according to inspector reports and email correspondence.
When asked to sign a form stating that Tesla was denying entry, company representatives refused, one inspector noted in his report.
A Nevada OSHA spokeswoman said most employers don’t interact like Tesla, and instead grant access to inspectors when asked. Employers are legally required to comply with OSHA requests for inspections, interviews and documents, she said. The Reno Gazette-Journal first cited Nevada OSHA’s inspection difficulties.
Mr. Lankford declined to comment beyond OSHA’s statement. Ms. Villaseñor didn’t respond to requests for comment.
After a series of standoffs over the next few weeks, Nevada OSHA obtained an administrative warrant from a judge on May 20 to perform a comprehensive inspection.
The next morning, an agency supervisor brought the warrant and a sheriff’s deputy along to inspect the plant, according to the sheriff’s body camera footage reviewed by the Journal.
As they waited for a Tesla representative to meet them at the gate, the deputy said he was sympathetic to the OSHA inspectors, the camera footage shows.
“They’re difficult—they’re the same way with us,” the deputy said.
Despite the warrant, a Tesla manager again denied entry.
Tesla met with state political officials including the Nevada attorney general, according to Ray Fierro, a former official with Nevada’s Department of Business and Industry, who attended the meeting.
Officials agreed to let Tesla limit the scope of the inspection while reporting to the judge that OSHA had the cooperation it needed, Mr. Fierro said.
The inspections later yielded three citations, two for refusing to provide documents like injury records and one for an unsafe fall hazard. Again, inspectors noted that Tesla didn’t allow interviews of employees that might have led to other citations.
OSHA still hasn’t performed a comprehensive inspection of the plant, the spokeswoman said.
One of the higher-profile issues facing Tesla today involves its advanced-driver assistance features. Dubbed Autopilot, the system has drawn repeated regulatory scrutiny after being linked to a series of accidents.
In some ways, this reflects an emerging area of safety oversight that lacks clear regulatory rules, according to Kris Poland, the NTSB’s deputy director of highway safety, who gave credit to Tesla engineers for sharing data and technical expertise when requested.
After a fatal 2016 crash in Florida, the NTSB found that the company’s technology contributed to the accident by allowing the driver to go long periods without his hands on the wheel. (NHTSA, for its part, said Tesla had tried to design a system that would keep drivers from misusing Autopilot.)
The NTSB urged six auto makers to clamp down on how drivers could use their driver-assistance systems. Every company but Tesla responded in a way that satisfied the agency, outlining steps they took to reduce misuse of the systems.
By not preventing Autopilot from being used in situations it wasn’t designed for, Tesla created “a system designed to fail because of the foreseeable misuse of the system,” the NTSB said.
This month, after the fatal Texas crash, local authorities said they found two men in the vehicle, but neither was in the driver’s seat.
The crash left questions about whether or how the vehicle could have been operating without anyone behind the wheel.
A Tesla executive said Monday that someone likely was in the driver’s seat at the time of the crash; the incident remains under investigation. Mr. Musk has tweeted that early data indicated that Autopilot wasn’t enabled.
After a 2018 crash that was being investigated by the NTSB, Tesla published initial data on the accident and said on its website that drivers with its Autopilot hardware were 3.7 times less likely to be involved in fatal crashes. Auto safety experts and statisticians have questioned Tesla’s claims.
After the post, NTSB Chairman Robert Sumwalt called Mr. Musk asking the company to stop divulging information about the investigation, according to an NTSB letter to Tesla. When Tesla again shared information publicly, Mr. Sumwalt told Mr. Musk he was revoking Tesla’s status as a partner in the investigation.
Mr. Musk hung up on him, Mr. Sumwalt said later in a speech. Responding to criticism, Tesla said the company chose to withdraw from the investigation and that the agency was “more concerned with press headlines than actually promoting safety.”
Elon Musk’s Mars Ambition Could Be The Riskiest Human Quest Ever
More than half a century after Neil Armstrong took mankind’s giant leap on the moon, another space race is heating up. This time, the promising new frontier for Earthlings is Mars, the planet next door.
A spate of robotic missions to the red planet, including NASA’s Perseverance rover this year and China’s Zhurong this month, have led to the inevitable question:
When can humans follow? Unmanned missions over the decades have beamed a trove of information, including the presence of water ice on Mars, fueling expectations a human landing is possible. But how soon? And, are we ready?
NASA wants to send astronauts to Mars, perhaps at some point in the 2030s. The United Arab Emirates — which now has a spacecraft orbiting the planet — is promoting a 100-year plan to create a colony there.
While China has said sending humans to Mars is its long-term goal, those eager for a taste of Martian life can visit a simulation site in the Gobi desert for now.
The most ambitious of them all is billionaire Elon Musk. The founder of Space Exploration Technologies Corp. wants to send humans this decade, saying in an interview last year that he was confident a crewed mission could take place in 2026.
Many scientists, however, warn of too many unanswered questions confronting deep-space travel. Musk has also acknowledged the risks, saying “it’s tough sledding over there.”
“Honestly, a bunch of people probably will die at the beginning,” the tycoon said in an interview with X Prize Foundation founder Peter Diamandis.
Here Are Some Of The Biggest Challenges, From Surviving Cosmic Radiation And Dust Storms To Producing Oxygen And Water:
So Far Away
The Apollo astronauts could fly to the moon in just a few days, but a trip to Mars would take anywhere between six to nine months.
With the distance between Mars and Earth varying between 35 million miles and 249 million miles due to their elliptical orbits, there’s only a small window available when the two are ideally aligned for space travel. That makes logistics much trickier.
With lunar exploration, “there’s always the prospect of rescue or provisioning or supply from Earth or from a midway space station,” said Alice Gorman, an associate professor at Flinders University in Adelaide and a member of the advisory council of the Space Industry Association of Australia. “That’s not going to be the case for Mars.”
A long flight would expose humans to one of space travel’s biggest terrors: solar flares. The most powerful type of explosion in the solar system, a flare is the equivalent of 100 million hydrogen bombs.
The Earth’s magnetic field can shield astronauts in orbit, but a deep-space traveler hit by such radiation would not be able to survive more than a few days.
“It’s a very gruesome way to die,” said Lewis Dartnell, a professor and specialist in astrobiology in the Department of Life Sciences at the University of Westminster in London. He does research linked to life on Mars.
The Apollo program didn’t address this issue, choosing instead to take the chance that the few days of a lunar mission wouldn’t coincide with a solar event. It would be a different story for multi-month trips to Mars.
Water tanks onboard the spacecraft could act as shields if positioned properly, said Dartnell, so in the event of a flare, travelers could retreat to the spacecraft’s version of a panic room surrounded by water tanks.
The problem is detecting activity on the Sun, especially on the side not facing the Earth. “How can we make our space weather prediction good enough that we can give the crew notice?” he said. “We don’t have established capacity to observe the Sun from different angles for tracking solar storms.”
Radiation isn’t just a problem en route. Mars has a much thinner atmosphere than Earth and doesn’t have a global magnetic shield, so humans on the planet’s surface would be at risk of exposure to solar and cosmic radiation.
Moreover, the surface itself is largely dust, and massive storms can create dust clouds that block out the Sun, said Nilton Renno, a professor at the University of Michigan whose research interests include astrobiology.
During such a storm, “it’s almost like midnight on the surface of Mars for two months,” Renno said. “If you are there with solar panels for power, you very likely don’t survive. You don’t have enough energy to keep things warm enough.”
One solution would be for humans to use that dust to protect themselves, lining shelters with sandbags filled with Martian soil that could block out radiation, said Joseph Michalski, an associate professor who explores the habitability of Mars at the University of Hong Kong.
Humans could also return to their cave-dwelling roots by finding temporary shelter in some of the planet’s many lava tubes, large caverns from ancient times when Mars had volcanic activity.
Food, Water And Oxygen
In “The Martian” — the 2015 Hollywood blockbuster — Matt Damon’s stranded astronaut grew potatoes by fertilizing the planet’s soil with his own feces. Elisabeth Hausrath, an associate professor at the University of Nevada, Las Vegas, has more modest farming ambitions.
For the past year and a half, NASA has been supporting her research into growing snow algae, a type that’s common in the Nevada desert and other high-altitude, low-nutrient environments on Earth, in conditions mimicking those of Mars.
“They’ve been growing great,” she said. The idea is that the algae could grow in greenhouses made of flexible material similar to that of a space suit. Growing algae in such conditions could not only create a source of food but also produce oxygen. The research is still in its early stages.
Scientists also still need to resolve how humans could get enough water to survive on Mars. The planet does have some sub-surface ice that could be water sources and a future Mars mission will need to use radar to map its distribution, said Victoria Hamilton, a planetary geologist at the Southwest Research Institute in Boulder, Colorado.
“Once you know where the ice is, those are locations where you might send humans,” she said.
Getting Back Home
Unless everyone signs up for a one-way trip, humans traveling to Mars will need to take a rocket back to Earth. Figuring out how to get fuel to power that spacecraft back into space is the biggest technological hurdle would-be Mars explorers face, said Michalski.
“It’s not the case that we would bring the rocket fuel with us,” he said. “It’s just too heavy.”
One solution might be to use the resources on the planet to make fuel by first electrically separating water from sub-surface ice and hydrated rocks, then combining the hydrogen and oxygen to make rocket fuel, said Michalski.
Sooner or later, optimists believe, scientists will solve these problems.
“Today it’s definitely a place where we can’t live,” said Adnan AlRais, Mars 2117 program manager for the UAE’s Mohammed Bin Rashid Space Center. “But as we develop science and technologies, the answer might be different in 50 to 100 years from now.”
Elon Musk Files Trademark Paperwork For Tesla Restaurant Concept
After tweeting for years about opening a diner or convenience store, Musk took a small step toward bringing Tesla food service closer to reality.
Move over, In-N-Out Burger. Elon Musk, chief executive officer of Tesla Inc., is one step closer to opening a diner.
On May 27, Tesla filed applications with the U.S. Patent and Trademark Office to use its “T” logo design and two other iterations of its “Tesla” stylized logo for use in the food industry.
All three applications are for “restaurant services, pop-up restaurant services, self-service restaurant services, take-out restaurant services.”
They are filed under a provision of trademark law indicating that Tesla intends to use the mark but has not yet done so. If the application is approved, the registration will not take effect until it is used.
The prolific Musk has talked about opening a diner in southern California for years. In 2018, he tweeted about planning to put an “old-school drive-in, roller skates & rock restaurant at one of the new Tesla Supercharger locations in LA” shortly after J.B. Straubel, Tesla’s chief technology officer, told attendees at a restaurant convention that Tesla has “already been working with restaurants” on the concept for convenience stores and food centers at its charging stations.
Musk seemed to confirm progress on the idea in April, when he tweeted: “Major new Supercharger station coming to Santa Monica soon! Hoping to have 50’s diner & 100 best movie clips playing too.
Thanks Santa Monica city!” He had previously tweeted enthusiasm for offering popcorn there, along with “an outdoor screen that plays a highlight reel of the best scenes in movie history.”
The diner-convenience store angle may be why Tesla has applied for a food-based trademark, which is not standard procedure for most restaurants.
Trademarks are generally set forth for brands planning to start a franchise or go national. It’s a move that indicates plans for big growth, says Steven Kamali, a hospitality investor.
“Sophisticated investors often secure intellectual property by filing for a trademark,” said Kamali, who founded Hospitality House, a food and beverage agency, and The Chef Agency, an executive search firm for the food industry. “It helps deter others from impeding on their mark and ultimately competing with them. It also signals that they anticipate large-scale growth with the proposed brand and concept.”
Major new Supercharger station coming to Santa Monica soon! Hoping to have 50’s diner & 100 best movie clips playing too. Thanks Santa Monica city!
— Elon Musk (@elonmusk) April 2, 2021
Musk’s brother Kimball owns the Kitchen Restaurant Group, which operates restaurants in states including Colorado, Illinois, and Tennessee. Kimball Musk, who also leads several nonprofit “learning gardens,” was on the board of Chipotle Mexican Grill from 2013 to 2019. And Tesla Tequila sold out almost immediately when it launched in 2020.
Indeed, Elon Musk first revealed plans to launch a tequila in 2018 after registering for the “Teslaquila” trademark.
Still, California road trippers will have to be patient. Even with trademark approval, the process for getting the correct permits takes months—especially in Santa Monica, says Josiah Citrin, the founder of Citrin Hospitality, which includes Citrin and Melisse restaurants.
“If it’s not an existing restaurant—and it probably isn’t, [if] it’s part of a big charging station—you have to get a [conditional] use permit, which can take six to nine months, depending on the location,” Citrin said. “Even if it is an existing restaurant, it takes at least 12 to 14 weeks to get permits before you can even start building.”
Hans Röckenwagner, the chef and CEO of Röckenwagner Bakery Group, put it more bluntly: “For as futuristic and fast as the Tesla is, the exact opposite could be said for the [restaurant] process in Santa Monica. See you in a year—if you’re lucky—Elon.”
A representative for Tesla did not respond to a request for comment.
Elon Musk Doubles Down On Artificial Intelligence At Tesla Amid Scrutiny of Autopilot
The electric-car maker plans to build a humanoid robot that can perform repetitive tasks.
Elon Musk doubled down on Tesla Inc.’s embrace of artificial intelligence after a week of intensifying scrutiny of the advanced driver-assistance features sold by the electric-vehicle maker.
Mr. Musk, Tesla’s chief executive, said Tesla would build a robot in a human form that could perform repetitive tasks, with a prototype likely to be ready next year.
It would draw on some of the technology Tesla has developed for vehicles, he said Thursday during an event in Palo Alto, Calif., around artificial intelligence, or technology designed to mimic the way humans think.
Tesla, which has delivered far fewer vehicles than more established rivals, has risen to become the world’s most valuable car maker as investors bet in part on the potential of its technology.
“Tesla is much more than an electric-car company,” Mr. Musk said.
The deployment of such robots could fundamentally change the economy, potentially alleviating labor shortages, he said. “In the future, physical work will be a choice,” Mr. Musk said, adding that long-term, such a robot could make it necessary to provide a universal basic income, or a stipend to people without strings attached.
Mr. Musk, who was accompanied on stage by a human dressed as a robot, often uses such settings to drum up interest in Tesla products, though his bold predictions haven’t always come to pass.
Two years ago at an event about automation, he projected that more than a million Tesla vehicles would be able to operate without a driver by the middle of 2020, positioning the company to launch a robot taxi service.
That hasn’t happened, though the company has made progress with some of its software.
“Generalized self-driving is a hard problem, as it requires solving a large part of real-world AI. Didn’t expect it to be so hard, but the difficulty is obvious in retrospect,” Mr. Musk said on Twitter last month.
Artificial intelligence, or AI, is at the heart of Tesla’s efforts to develop more advanced driver-assistance features and, eventually, fully autonomous vehicles.
Andrej Karpathy, senior director of artificial intelligence at Tesla, and other company engineers delivered a highly technical peek under the hood of the company’s driver-assistance system.
Tesla’s Autopilot relies on sensors to help drivers with steering, maintaining a safe distance from other vehicles on the highway and other tasks.
The system has come under a microscope in recent days. The National Highway Traffic Safety Administration, which regulates auto safety, this week said that it was investigating Autopilot in the wake of 11 crashes since January 2018 involving Teslas at scenes to which emergency vehicles had responded.
Such probes can but don’t always result in recalls.
Two U.S. senators have also asked the Federal Trade Commission to investigate whether Tesla has been deceptive in its marketing of Autopilot and an upgraded suite of driver-assistance features it calls Full Self-Driving.
Tesla hasn’t responded to requests for comment about the auto safety probe or the lawmakers’ letter and didn’t explicitly address the concerns at the event. Tesla has long said that Autopilot makes driving safer. Mr. Musk said on Twitter in April: “Tesla with Autopilot engaged now approaching 10 times lower chance of accident than average vehicle.”
Tesla has approached the challenge of developing autonomous vehicles differently than some other companies, increasingly relying on cameras to inform its vehicles about what is going on around them. Rival Waymo, the autonomous-driving arm of Google parent Alphabet Inc., collects data from many kinds of sensors.
That mix, Waymo Co-CEO Dmitri Dolgov said in a Thursday blog post, “can reason more intelligently about the world.” Tesla didn’t respond to a request for comment on Waymo’s blog.
The companies’ strategies for getting autonomous vehicles into daily use also differ. Waymo has been using safety monitors as it validates its software, whereas Tesla has released driver-assistance features to the public as it works toward full autonomy.
Mr. Musk indicated that the company may introduce its pickup truck later than initially expected. He previously said that if Tesla got lucky, it would be able to deliver a few of the vehicles by the end of 2021. On Thursday, he said Tesla likely would debut new hardware in the so-called Cybertruck in about a year.
The Tesla event takes place amid booming demand at companies more broadly for AI expertise as businesses look to automate processes to become more efficient and to offer new services.
Recruitment for AI positions has been rising across tech. Job postings this year are up roughly 41% from the year-ago period, according to CompTIA, the Computing Technology Industry Association.
Mr. Musk at the event encouraged people interested in working on AI applicable to real-world problems to join or consider joining Tesla.
Artificial intelligence has been a particular area of interest for Mr. Musk, who frequently talks about leveraging the technology to make cars autonomous. He also has warned of the risks posed by AI, describing it as an existential threat that could threaten jobs and even cause a war.
“It is the biggest risk that we face as a civilization,” he said of AI in 2017. He voiced concerns about AI at Thursday’s event, too.
Such warnings have sparked criticism. In a Twitter post last year, Facebook Inc.’s head of AI, Jerome Pesenti, questioned Mr. Musk’s understanding of the technology. “We are nowhere near matching human intelligence,” Mr. Pesenti said.
Mr. Musk replied: “Facebook sucks.”
The new Tesla Bot—to be roughly 5 feet 8 inches tall, weighing 125 pounds and able to lift 150 pounds—is “intended to be friendly of course and navigate through a world built for humans,” Mr. Musk said. Humans, he said, would be able to outrun it.
Elon Musk’s Boring Co. Nears Deal To Build Tunnel In Florida
The project would transport Tesla-riding passengers about 2.5 miles to the Fort Lauderdale beach from downtown.
A deadline for other companies to submit proposals to compete with a proposed Boring Co. project in Fort Lauderdale, Florida, passed on Monday, leaving Elon Musk’s tunneling business in position to start exclusive negotiations with city officials.
Fort Lauderdale’s city manager and attorney will now seek the approval of commissioners to negotiate a comprehensive or interim agreement with Boring Co., city spokeswoman Ashley Doussard said.
“Along with negotiating an agreement with Boring, there will be a significant amount of technical and engineering and regulatory work that will need to be done,” she said. “Speculating on a timeline would not be possible at this point.”
The proposed tunnel — actually a pair of tunnels, one for each direction — would extend from downtown to the beach, a distance of about 2.5 miles (4 kilometers) each way.
Passengers would get rides in dedicated Teslas, as they do in existing Boring Co. tunnels in Las Vegas. Once automated-driving technology advances enough to handle it, the cars will be driverless, officials from Las Vegas and Boring Co. have said.
A representative for the tunneling company didn’t immediately respond to a request for comment.
“This represents an innovative and unprecedented approach to addressing traffic congestion and transit needs,” Fort Lauderdale Mayor Dean Trantalis said in a tweet in June.
Dubbed Las Olas Loop, the project would help beachgoers avoid severely clogged roads above ground. The loop would represent Boring Co.’s first commercial undertaking outside of Nevada and poses significant challenges that would be new for its engineers, such as tunneling under water.
Two other groups submitted proposals, Doussard said, but an initial review determined they didn’t meet requirements of Florida’s laws on public-private partnerships.
In early July, city commissioners voted 4-1 to accept the Boring Co.’s initial proposal for the project. The plan is exempt from public disclosure until the commission makes a decision on whether to move forward with it.
Elon Musk’s Push To Expand Tesla’s Driver Assistance To Cities Rankles A Top Safety Authority
Tesla plans to expand access to Full Self-Driving system and defends its tech; safety official says more work is needed.
Tesla Inc. is readying a major upgrade of its driver-assistance software, but the top federal crash investigator says the move might be premature.
Chief Executive Elon Musk last week said drivers would soon be able to request an enhanced version of what Tesla calls its “Full Self-Driving Capability.” The upgrade is expected to add a feature intended to help vehicles navigate cities, expanding the suite of driver-assistance tools that had been designed mainly for highways.
Despite its name, Full Self-Driving doesn’t make cars fully autonomous, and Tesla instructs drivers to remain alert, with their hands on the wheel.
Jennifer Homendy, the new head of the National Transportation Safety Board, said Tesla shouldn’t roll out the city-driving tool before addressing what the agency views as safety deficiencies in the company’s technology.
The NTSB, which investigates crashes and issues safety recommendations though it has no regulatory authority, has urged Tesla to clamp down on how drivers are able to use the company’s driver-assistance tools.
“Basic safety issues have to be addressed before they’re then expanding it to other city streets and other areas,” she said in an interview. Ms. Homendy also expressed concern about how Tesla software is tested on public roadways.
Ms. Homendy called Tesla’s use of the term Full Self-Driving “misleading and irresponsible,” adding that people pay more attention to marketing than to warnings in car manuals or on a company’s website. In Tesla’s case, she said, “It has clearly misled numerous people to misuse and abuse technology.”
Mr. Musk has said Tesla’s advanced driver-assistance features prevent crashes and make driving safer. He has expressed mixed views about the Full Self-Driving system in recent months.
“We need to make full self-driving work in order for it to be a compelling value proposition. Otherwise people are, you know, kind of betting on the future,” he said in July, responding to a question about customer interest in subscribing to Tesla’s Full Self-Driving package.
Tesla didn’t respond to requests for comment.
Some safety advocates and transportation officials have raised concerns that drivers may be overestimating the capabilities of advanced driver-assistance systems such as Tesla’s.
“We’re consistently hearing that it’s definitely a work in progress, so it’s just how do we make sure the public understands its limitations?” Reema Griffith, executive director of the Washington State Transportation Commission, told The Wall Street Journal.
Mark Kopko, director of the office of transformational technology at the Pennsylvania Department of Transportation, in an interview expressed similar concerns about driver education and called for additional federal guidance.
Tesla’s urban-driving aid so far has only been available to a relatively small circle of employees and customers for testing purposes.
The company began releasing a pilot version late last year, according to company correspondence with the California Department of Motor Vehicles, and has been expanding access. The program included about 2,000 Tesla owners as of March, Mr. Musk said.
Tesla plans to monitor the driving patterns of the customers who request the enhanced system, Mr. Musk said last week in a tweet, and grant access after seven days of good behavior. Those who aren’t careful will have their access revoked, he said. It wasn’t immediately clear which countries the city-driving feature would be available in.
“2000 beta users operating for almost a year with no accidents. Needs to stay that way,” Mr. Musk said.
The company began deploying advanced driver-assistance software, dubbed Autopilot, to vehicles in 2015 to help with tasks such as steering and adjusting to the flow of traffic on the highway. It has augmented that system over the years, with the goal of eventually enabling its vehicles to operate autonomously.
Tesla’s new city-driving tool is part of its Full Self-Driving package. Tesla sells the suite for $10,000 or a monthly subscription that costs up to $199. Other features in the Full Self-Driving bundle are already publicly available, including tools that help vehicles change lanes on the highway and slow down at stop signs.
New Street Research estimated in July that roughly 360,000 people had purchased the Full Self-Driving system, covering about one-fifth of the Tesla fleet at the time.
Investors’ belief in the promise of Tesla’s automation technology has helped to transform the company into the world’s most valuable auto maker, with a market capitalization of around $750 billion, more than five times that of Volkswagen AG . Last year, Volkswagen delivered more than 18 times as many vehicles as Tesla.
Morgan Stanley, which has a $900 price target for Tesla’s stock, assigned about 28% of that value to a group of services that includes automated driving. The stock closed Friday at $759.49.
Mr. Musk said this month that “investors are giving us significant credit for achieving self-driving, given that Tesla’s valuation/production is very high compared to other auto makers.”
Tesla’s technology has faced increasing scrutiny. The National Highway Traffic Safety Administration, the country’s auto-safety regulator, launched a probe last month after a spate of crashes in which Teslas that had been operating with Autopilot engaged ran into one or more parked emergency vehicles such as police cars.
NHTSA has requested a trove of data from Tesla and other auto makers as it seeks to compare advanced driver-assistance systems. The agency also recently began requiring auto makers to report serious crashes involving such features.
Meanwhile, the California DMV is reviewing whether Tesla violated a state regulation that bars companies from falsely advertising vehicles as autonomous. Democratic lawmakers have asked the Federal Trade Commission to investigate whether Tesla has used deceptive marketing practices.
Ms. Homendy of the NTSB said those with regulatory power should be moving more aggressively to issue appropriate regulations. “Doing investigations after the fact, that’s a tombstone mentality,” she said. “You can proactively address potential future crashes and future deaths by taking action, by issuing regulations, performance standards aimed at saving lives.”
A NHTSA spokeswoman said the agency was taking steps that were necessary precursors to any new regulatory action.
Ken McElhaney Jr., a 61-year-old retired insurance agent, bought Tesla’s upgraded driver-assistance system last year, hoping it would make it easier to travel cross-country as he got older. Mr. McElhaney, who lives in Mobile, Ala., and drives a Model 3 car, said he knew the system was a “work in progress” when he bought it—and that was part of the appeal.
“It’s a little bit like going to a restaurant on a soft opening,” he said. “It’s kind of fun to be in early, but you understand they’re still working out the kinks.”
Tesla Starts Judging Owners It Charged $10,000 For Self-Driving
The wait is almost over for some Tesla Inc. customers to get access to driver-assistance technology the company has marketed in controversial ways — as long as they’re on their best behavior.
Chief Executive Officer Elon Musk has said that on Friday, the electric-car maker will roll out an updated version of its Full Self-Driving beta software, which until now has only been available to roughly 2,000 people.
Those with access to this ever-updating software — a mix of Tesla employees and fervent Musk fans — have for almost a year been honing a system the company has charged as much as $10,000 for customers to use sometime in the future. Tesla says the system, often referred to as FSD, is designed to someday handle both short- and long-distance trips without driver intervention.
It’s unclear how broad the wider release will be because of a curveball Musk threw earlier this month. The CEO tweeted that the download button customers will see Friday will request car owners’ permission for Tesla to assess their driving behavior for seven days. If the company deems the behavior good, it will grant access to FSD beta.
The expanded access and surprise condition are the latest twist and turn involving FSD and Autopilot, the driver-assistance system that’s divided Tesla watchers for years. Musk’s fostering of the perception Tesla is a self-driving leader has helped make it the world’s most valuable automaker by far.
But others have taken issue with what they see as a reckless and misleading approach to deploying technology that isn’t ready. The U.S. National Highway Traffic Safety Administration recently opened its second defect investigation into Autopilot since 2016.
“This is another example of Tesla marching to its own drum. It’s like, damn the torpedoes, full speed ahead,” Gene Munster, a co-founder of investing firm Loup Ventures, said by phone. “Setting aside some of the regulatory concerns and pushback, Tesla is determined to move forward on its own agenda.”
NHTSA started probing Autopilot in August after almost a dozen collisions at crash scenes involving first-responder vehicles. The regulator — which has the authority to deem cars defective and order recalls — is assessing the technologies and methods Tesla uses to monitor, assist and enforce drivers’ engagement when using Autopilot.
It’s also looking into the system’s detection of objects and events on the road, and how it responds.
Musk first announced his plan to sell FSD in October 2016, a few months after he told a tech conference he considered autonomous driving to be “basically a solved problem.”
In April 2019, he predicted that roughly a year later, Tesla’s technology would advance to the point that drivers wouldn’t need to pay attention.
In March of this year, however, Musk announced Tesla had revoked FSD beta from drivers that didn’t pay enough attention to the road.
The new head of the other investigator of auto crashes in the U.S., the National Transportation Safety Board, has taken umbrage with this sort of mixed messaging.
“Whether it’s Tesla or anyone else, it is incumbent on these manufacturers to be honest in what their technology does and does not do,” Jennifer Homendy told Bloomberg News in her first interview after she was sworn in last month.
Homendy has since called Tesla’s use of the term Full Self-Driving “misleading and irresponsible,” and expressed concern to the Wall Street Journal about FSD’s readiness to be used by more drivers on public roads.
“For investors, it’s terrifying,” said Taylor Ogan, the CEO of Boston-based hedge fund Snow Bull Capital, who has closely watched videos of FSD beta testers at times demonstrating the software’s shortcomings. “It’s like the CEO of a drug company broadening the test pool of the experimental drug that the FDA is investigating for potentially hurting people.”
Tara Goddard, an urban planning professor at Texas A&M University who’s researching how auto-safety tech and automation is being marketed to consumers, questions whether Tesla’s seven-day evaluation of drivers’ behavior goes far enough to screen out unsafe users.
She pointed to a Tesla enthusiast’s recent blog post giving car owners pointers on how the company is likely to judge their driving.
“People are already saying, here’s how you game the system to make sure you can opt in and use it how you want,” Goddard said. “I just worry that we’re going to see an uptick in this being used in places where it’s really not ready to be used — and not by professional drivers.”
Musk tweeted late Friday that the FSD beta request button will still go live Friday night, though the software update itself has been pushed back to Saturday.
Crypto Is Impossible To Destroy, Says Tesla CEO Elon Musk
The decentralized nature of cryptocurrencies may be a challenge for the Chinese government, Elon Musk suggested.
As global regulators continue to scrutinize the cryptocurrency industry, Tesla CEO Elon Musk has expressed support for crypto, calling it indestructible.
“It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement,” Musk said at the Code Conference in California, CNBC reported Tuesday.
According to the Tesla CEO, the decentralized nature of cryptocurrencies may be a challenge for the Chinese government, which announced a new war on crypto last Friday.
“I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralized government,” Musk noted, adding, “They don’t like that.” He also suggested that the latest Chinese crackdown on crypto is likely to have something to do with the country’s “significant electricity generation issues.”
“Part of it may actually be due to electricity shortages in many parts of China. A lot of South China right now is having random power outages because the power demand is higher than expected […] Crypto mining might be playing a role in that,” he said.
Despite Musk not considering himself as a “massive cryptocurrency expert,” the tech mogul stressed regulators should not be trying to slow down cryptocurrency adoption. When asked whether the United States government should be involved in regulating crypto, Musk responded:
“I would say, ‘Do nothing.’”
Musk has emerged as a significant crypto price influencer on Twitter, with many experts linking his posts to massive price movements for tokens such as Shiba Inu (SHIB), Dogecoin (DOGE), as well as Bitcoin (BTC). The Tesla CEO was widely criticized in the crypto community after suspending Tesla’s BTC payments option over presumed environmental concerns about Bitcoin mining in May 2021.
Musk previously caused massive optimism on the crypto market by announcing a $1.5-billion Bitcoin purchase in February.
Tesla Seen Set For Delivery Record, Beating Supply-Chain Turmoil
Tesla Inc. is expected to report record deliveries of roughly 224,000 vehicles in the most recent quarter, another milestone for Chief Executive Officer Elon Musk and his trailblazing electric-car brand.
Deliveries are one of the most closely watched metrics at Tesla: They underpin the company’s financial results and are widely seen as a barometer of consumer demand for electric vehicles amid a global shift away from the internal combustion engine.
Twelve analysts surveyed by Bloomberg expect Tesla to report 223,677 deliveries in the third quarter. The company sent its own consensus figure, 221,952, to investors.
Tesla delivered a record 201,250 vehicles in the second quarter. The carmaker typically counts sales until midnight on the last day of the three-month period, the latest of which ended Thursday. It could announce production and delivery figures as soon as Friday.
A strong figure would show that Tesla is holding up well as it and other automakers face global supply-chain turmoil. That could provide a boost to the shares which, despite a recent upswing, have largely languished this year.
A global chip shortage and congestion at ports have weighed on automakers as the world grapples with the Covid-19 pandemic. In September, Musk sent an email to employees urging everyone to “go super hardcore” to “ensure a decent Q3 delivery number.”
“We think Q3 will be TSLA’s strongest quarter ever, and we are increasing our 2021 estimates accordingly,” Alexander Potter of Piper Sandler Co. said in a note Wednesday. He projected that Tesla would deliver 233,000 vehicles in the quarter.
Tesla makes the Model S, X, 3 and Y at its factory in Fremont, California. It also produces the Model 3 and Y at its newer, leaner factory near Shanghai, which makes cars for China and Europe. The output from the Asia facility will be crucial to both the delivery figure and the company’s gross margins.
Tesla’s stock missed out on the first-half rally for megacap technology companies, putting its year-to-date performance behind that of the broader S&P 500 and the tech-heavy Nasdaq 100 Index.
Tesla Delaying Wider Release of FSD Beta by One Week, Musk Says
Tesla Inc. will hold off on rolling out a beta version of its so-called Full Self-Driving system to more customers by a week to align with a delayed software update, Chief Executive Officer Elon Musk said.
The carmaker will expand access to what it refers to as FSD beta when it releases version 10.2 of the software, Musk wrote Friday on Twitter. He announced earlier in the week that this will take place on Oct. 8.
Tesla has for almost a year allowed roughly 2,000 people to beta-test features the company has charged customers as much as $10,000 to be able to use sometime in the future. The company has said that while FSD is designed to someday handle trips without driver intervention, it’s not yet capable of rendering Tesla cars autonomous.
A week ago, Tesla released a button to customers allowing them to request to participate in the beta-testing program. They must agree to let the company assess their driving behavior for seven days and acknowledge they’re responsible for remaining alert and keeping their hands on the wheel.
Elon Musk Will Become A Trillionaire With SpaceX, Morgan Stanley Says
Elon Musk has already become the world’s richest person on the ascendancy of Tesla Inc. But it will be SpaceX, rather than the hyped electric-car maker, that lifts him to trillionaire status, according to a Morgan Stanley analyst.
The private space-exploration company “is challenging any preconceived notion of what was possible and the time frame possible, in terms of rockets, launch vehicles and supporting infrastructure,” Morgan Stanley’s Adam Jonas wrote Tuesday in a note titled, “SpaceX Escape Velocity … Who Can Catch Them?”
SpaceX currently makes up less than 17% of Musk’s $241.4 billion net worth, according to the Bloomberg Billionaires Index.
And that’s after the company was valued at $100 billion in a secondary share sale earlier this month.
Jonas, who has a $200 billion bull-case valuation for SpaceX, wrote that he views it as multiple companies in one, encompassing space infrastructure, Earth observation, deep-space exploration and other industries.
Its Starlink satellite-communications business is the biggest contributor to his valuation estimate.
Musk as the world’s first trillionaire has been posited before — but largely due to Tesla’s predicted share performance. Tesla’s red-hot run that kicked off last year sent Musk’s net worth soaring, and the surge hasn’t really abated. On Monday alone, it boosted its founder’s net worth by $6.6 billion.
Musk is calculated to own about half of SpaceX, so the rocket company still has a ways to go before it can single-handedly lift its founder into four-commas orbit.
Elon Musk’s Wealth Is Soaring Past A Quarter Trillion Dollars
He’s leaving the second-richest person in the world, Jeff Bezos, in the dust.
Last week, Morgan Stanley predicted that Elon Musk would be the world’s first trillionaire. Interestingly, the firm sees SpaceX, not Tesla, as the company that really puts him over the top.
Of course, Tesla itself is doing wildly well these days. And while it might seem unfathomable that anyone could be a trillionaire, Elon is over a quarter of the way there.
Our TV colleague in Hong Kong David Ingles made this chart, showing Elon’s net worth topping a quarter of a trillion dollars. And he’s leaving the #2 richest, Jeff Bezos, in the dust.
Just needs to quadruple from here, and he’ll officially be a trillionaire.
Elon Musk Warns Of ‘Strong Inflationary Pressure’ As Tesla Mulls Bitcoin Payments
The world’s richest man, whose net worth hit a quarter of a trillion dollars this week, is also unsure whether inflation will ever calm down.
The world faces “strong inflationary pressure” in the short term, and it may persist, warns the world’s richest man.
In a debate about inflation, some of the best-known names in Bitcoin (BTC) voiced unanimous doubts about the state of global monetary policy.
Future Of Inflation Great Unknown, Says Musk
As even the United States Federal Reserve admits that inflation may be here to stay, the topic has become especially pertinent for Bitcoiners, given the cryptocurrency’s intrinsically deflationary characteristics.
For Elon Musk, who remains cool when it comes to Bitcoin as a “magic pill” for fiat currency’s ills, inflation is no less of an issue. With over $250 billion in net assets as of this week, potential exposure to devaluating currencies is more of a potential problem than ever.
“I don’t know about long-term, but short-term we are seeing strong inflationary pressure,” he said in a Twitter debate with Ark Invest CEO Cathie Wood and MicroStrategy CEO Michael Saylor.
All were commenting on a previous tweet from Twitter CEO Jack Dorsey, who described inflation as “happening” and apt to “change everything.”
Wood, also a firm BTC supporter, noted that monetary velocity, on the contrary, had been slowing since the 2008 global financial crisis, disguising some of the devaluation impact.
Regardless, when all types of products are taken into account, the true cost of dollar printing far outstrips government claims about how inconsequential inflation really is.
“Inflation is a vector, and it is clearly evident in an array of products, services, & assets not currently measured by CPI or PCE,” Saylor wrote.
“#Bitcoin is the most practical solution for a consumer, investor, or corporation seeking inflation protection over the long term.”
Bitcoin May Yet Return To Tesla
Musk’s Tesla passed $1,000 per share for the first time this week, helping spur a dramatic increase in his net worth.
In a filing with the U.S. Securities and Exchange Commission, meanwhile, the company left the door open to accepting Bitcoin for its products in the future.
“During the nine months ended September 30, 2021, we purchased an aggregate of $1.50 billion in bitcoin. In addition, during the three months ended March 31, 2021, we accepted bitcoin as a payment for sales of certain of our products in specified regions, subject to applicable laws, and suspended this practice in May 2021,” the 10-Q document reads.
“We may in the future restart the practice of transacting in cryptocurrencies (‘digital assets’) for our products and services.”
Elon Musk Offloads $1.1B In Tesla stock
The eccentric billionaire polled his Twitter followers but already had the sale planned due to tax obligations.
Tesla CEO Elon Musk has offloaded more than $1 billion worth of shares, according to recent financial filings.
Filings submitted on Thursday to the United States Securities and Exchange Commission confirm the sale of more than 934,000 Tesla shares worth around $1.1 billion.
Musk sold the shares at an average price of around $1,170, locking in almost 180% in gains in prices over the past year. It is just the third time Musk has sold company stock since Tesla went public on the Nasdaq in 2010, and it is his largest transaction.
The filings show that Musk planned to sell the stock as part of his tax obligations back in September. He polled his 63 million followers on the weekend, asking whether he should sell 10% of his Tesla holdings.
Of the 3.5 million respondents, almost 58% said yes. However, the Tesla CEO has sold less than 1% in this sale and still holds more than 170 million shares.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Elon Musk (@elonmusk) November 6, 2021
In response to the poll, he noted, “I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”
In the days following the poll, Tesla stock (TSLA) slumped 16% to dip below $1,000 briefly on Wednesday. TSLA had hit an all-time high of $1,230 on Nov. 4, and it is currently around 11% down from that peak.
There has been speculation — hopium, really — in crypto circles that he may put some of that cash into digital assets. Mr. Whale asked his 357,000 followers: “Which cryptocurrency should he buy to make himself the first-ever trillionaire?”
MicroStrategy CEO Michael Saylor suggested he buy more Bitcoin (BTC) following the Twitter poll but before the news emerged about this sale:
“If the goal is diversification, an alternate strategy to consider is converting the $TSLA balance sheet to a Bitcoin Standard and purchasing $25 billion in $BTC. That would deliver diversification, inflation protection & more upside for all investors in a tax efficient manner.”
The Tesla And SpaceX CEO Challenged The Head Of The UN World Food Program In A Twitter Exchange
Elon Musk hit back at a suggestion that he and other billionaires should “step up now” to help solve world hunger, pointing the finger instead at a prominent global food program.
Musk lashed out after David Beasley, director of the United Nations World Food Program, told CNN that just a sliver of Musk’s and other billionaires’ wealth could help solve world hunger. “$6 billion to help 42 million people that are literally going to die if we don’t reach them. It’s not complicated,” Beasley told CNN.
Musk responded on Twitter: “If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.”
If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.
— Elon Musk (@elonmusk) October 31, 2021
Musk added, “Please publish your current & proposed spending in detail so people can see exactly where money goes. Sunlight is a wonderful thing.”
Beasley later clarified that he didn’t say $6 billion would solve world hunger altogether — “but it WILL prevent geopolitical instability, mass migration and save 42 million people on the brink of starvation.”
Though Musk seemed to be calling for more transparency around the UN World Food Program, which was awarded the Nobel Peace Prize in 2020, he and his companies aren’t known for being particularly communicative. Tesla shut its press office in 2020, and Musk’s charitable foundation interfaces with the public through a barely-there website.
Beasley pointed out in his CNN interview that while billionaires like Musk have seen their fortunes swell to new heights during the pandemic, daily life has worsened for the world’s poorest people. Musk’s personal net worth is currently around $289 billion. It jumped by $36 billion in a single day last week following Hertz’s, announcement that it would buy 100,000 Tesla vehicles.
Meanwhile, an estimated 155 million people were pushed into acute food insecurity in 2020, meaning that a person’s inability to consume enough food puts their life or livelihood in danger, according to UNWFP. The number of people facing acute food insecurity hit a five-year high in 2020, and the global hunger crisis is growing more dire as climate change eats away at humans’ ability to grow and catch their own food, UNWFP noted in a separate report.
Musk signed the Giving Pledge, a public promise to give away at least half his wealth in his lifetime or when he dies, in 2012. Compared to some of his wealthy peers, he has been relatively quiet about his philanthropy until this year. Musk announced a $100 million prize aimed at helping to solve climate change, and he has made several other donations in 2021, including a $1 million contribution to a Texas food bank, Vox reported.
Musk sometimes announces his philanthropic activities on Twitter, including a September message about a $50 million donation for children’s cancer research.
Ben Soskis, an expert on the history of philanthropy and a research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, said Musk has distinguished himself from his ultra-wealthy counterparts in at least two ways.
“After insisting on right to give privately, Musk is developing a public philanthropic persona unlike any we’ve seen from a mega-donor: it lacks coherent framing principle (other than interplanetary ambition) & seems focused as much on trolling as winning praise, defining mission,” Soskis tweeted.
Elon’s Texas Empire
From a sprawling factory outside Austin to a property-buying binge on the Gulf Coast, Musk is making an imprint in a state that has long welcomed eccentric outsiders.
On the outskirts of Austin, Texas, near the banks of the Colorado River, Tesla Inc.’s new auto plant is close to completion. The massive factory, known as Giga Texas, spans 8 million square feet and sits on a roughly 1,700-acre plot.
Some 350 miles away, where the Rio Grande empties into the Gulf of Mexico, SpaceX is building Starship, a rocket designed to take people to the Moon and Mars. SpaceX and its real-estate arm have bought up more than 250 nearby properties, from vacant lots and a gun range to small bungalows owned by snowbirds and retirees. Some employees—including Musk himself—have been living in the houses.
These colossal projects are flagships in Elon Musk’s growing Texas empire, which will soon include Tesla’s new Austin headquarters. The electric-vehicle maker is slated to leave its home base in Palo Alto, California.
Silicon Valley may be the epicenter of startup culture and venture capital. But Texas has business-friendly lawmakers, cheap and abundant land and natural resources crucial to manufacturing-heavy businesses, all of which are critical for Tesla and SpaceX.
Texas also does not collect a state income tax or a capital-gains tax on individuals. Musk, the richest man in the world with a net worth of more than $340 billion, relocated his Musk Foundation from California to Texas last December.
“The center of the free-market economy is in Texas,” said Glenn Hamer, the CEO of the Texas Association of Business. Hamer moved to Austin just nine months ago, after leading the Arizona Chamber of Commerce for 14 years.
“Musk is talking about launching rockets to Mars, and there’s not a lot of pushback for that type of activity here. It’s a cliché, but in Texas there really is a sense that the sky’s the limit.”
A self-proclaimed barbecue fan who has taken to wearing a black bandanna around his neck, South African-born Musk is just the type of swashbuckling, eccentric newcomer that Texas has long embraced.
He said in December that he relocated to the state full time from Los Angeles. But he hasn’t been universally welcomed, drawing criticism from some residents and environmentalists.
Musk has had a toehold in Texas for almost two decades. In 2003, SpaceX bought land in McGregor, Texas, because it needed vast space to regularly test rocket engines.
These days, the path to Mars goes through McGregor: all rocket engines and thrusters, including the new methane-fueled Raptor engines, are tested there. Nearly 600 people work at the now 4,300-acre McGregor facility, which is located around 100 miles southwest of Dallas, and a Raptor production plant will add another 400 to the local workforce.
Musk’s companies span multiple industries that have deep or growing roots in the state. The auto sector increasingly sees Texas as the Detroit of the South, while NASA’s Johnson Space Center in Houston was founded six decades ago.
Musk is not building his presence quietly. He wants to rebrand the community surrounding SpaceX’s Boca Chica launch site “Starbase”; signs bearing the name are already visible on company-owned property.
Tesla recently opened a splashy 30,000-square-foot showroom and service center in Austin, adding to its presence in the state capital.
Ad Astra—the private school that Musk founded—is now registered in Texas, and the billionaire has joked about making a foray into higher education with a science and technology institute, perhaps signaling budding interest in the idea.
All of his businesses—including the Boring Company, his underground tunneling venture, and Neuralink, the machine-brain interface company—are hiring in Texas. SpaceX is seeking a “Spaceport Mixologist” to handcraft cocktails. Neuralink needs an animal care specialist and a licensed veterinary technician.
Tesla’s new factory, which will make the Model Y and the forthcoming Cybertruck, needs scores of production associates and engineers. Musk has said Tesla will hire about 10,000 workers for Giga Texas through 2022.
Musk’s companies have become a beacon of the local economy. The nose of a SpaceX rocket will be displayed at the new terminal of the Brownsville South Padre Island International Airport, welcoming tourists to the southern tip of the “Texas Space Coast.”
Musk has no shortage of detractors in the border town, but others have made him a mascot. One downtown Brownsville business has been painted with a mural featuring Musk’s image and the words “Boca Chica to Mars.”
Republican-led Texas, now home to nearly 30 million people, is gaining two additional Congressional seats as a result of the latest census, more than any other state.
Its growing political clout can be seen in everything from new laws banning abortion and restricting voting rights to the state’s decision to sue the Biden administration over a vaccine mandate.
The red-hot politics haven’t stopped the flood of transplants from Los Angeles, Silicon Valley, Florida and elsewhere.
It is not a coincidence that Musk has gravitated to the epicenter of the American energy economy. Manufacturing cars and trucks requires a lot of electricity and natural gas, and launching rockets depends on a steady supply of fuel.
Tesla has a solar division and sells batteries to homeowners and leading utilities, while SpaceX is getting into the natural gas game.
A Tesla subsidiary registered as Gambit Energy Storage LLC has built a 100-megawatt battery energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston.
Utility-scale batteries are needed to store the electricity produced by wind and solar, but they can also become lucrative opportunities.
By storing excess electricity when prices and demand are low, battery owners can sell it back to the grid when prices are high.
Meanwhile, liquified natural gas, or LNG, is of strategic importance for Musk because it is an affordable rocket fuel.
Delivery trucks belonging to Houston-based LNG company Stabilis Solutions have been seen at Starbase. SpaceX plans to build a gas-treatment plant, a power plant, a small-scale LNG plant and related storage tanks in Boca Chica, a draft environmental assessment from the Federal Aviation Administration shows.
Musk is a big fan of vertical integration, and SpaceX formed its own drilling company, Lone Star Mineral Development LLC, in August 2020. The company has yet to drill any wells or produce any natural gas.
Musk’s dizzying array of activities in the Lone Star State are not without controversy. Austin is already being convulsed by gentrification, and Tesla’s new factory, on the city’s East Side, will likely exacerbate the housing crunch.
SpaceX’s expansion plans require FAA approval but are already making neighbors uneasy. Property taxes are going up, and public beaches are regularly closed for SpaceX launches.
Environmentalists and scientists have also sounded alarms about the potential impact of SpaceX’s activities. Biologists are fearful that rocket debris is damaging fragile ecosystems and disturbing nesting for the threatened piping plover, a small species of shorebird.
In a public comment filed with the U.S. Army Corps of Engineers, one biologist suggested that rocket launches could deafen birds, making them easier targets for predators.
A coalition of 11 environmental groups signed a Nov. 1 public letter asking the FAA to scrutinize SpaceX’s proposed expansion in the area.
The groups warn that the SpaceX launch site is adjacent to an ecologically unique region that includes a national wildlife refuge, tidal flats for several bird species and beaches that are used by nesting sea turtles.
“Sea turtles and hatchlings present near the site at the time of engine ignition could be injured or killed by the rocket heat plume,” reads the letter.
The relocation of Tesla’s headquarters to Texas is not unexpected: Musk expressed enormous frustration with California public-health officials during the early days of the coronavirus pandemic, blasting shutdown orders as “fascist” on a Tesla earnings call.
But the decision hints that Musk is just getting started. Ray Perryman, an economist in Waco, Texas, notes that Musk’s impact goes well beyond his company’s own employees. Manufacturing operations—whether for cars or rockets—often draw suppliers to the region and, in turn, more people.
Perryman expects the creation of about 50,000 jobs—and more than $3.6 billion in annual gross state product.
“Texas has had its share of characters over the years, and many have been larger-than-life, wealthy risk-takers who came from elsewhere,” said Perryman. “There’s still a wildcatting mentality here, and there’s still a mystique about Texas that Elon Musk fits well.”
Bitcoin Hodler Elon Musk Should Sell $23B Of Tesla Stock, Twitter Survey Concludes
With just hours to go, the results of a survey Musk says he will “abide by” demand that he sell 10% of his TSLA holdings.
Bitcoin (BTC) fan, Tesla CEO and world’s richest man Elon Musk said he will sell 10% of Tesla stock (TSLA) — if Twitter tells him to.
In a Twitter survey on Nov. 6, Musk entered the debate on United States tax policy by offering to test it with a sale currently worth $23 billion.
Twitter Tells Musk To Sell TSLA
U.S. Treasury Secretary Janet Yellen caused a stir this year by arguing that the government should tax unrealized gains as part of a plan targeting “exceptionally rich” taxpayers.
Bitcoin proponents immediately turned out against the proposal, as it implies calculations that are all but impossible to apply to cryptocurrency, aside from moral concerns.
Musk, whose portfolio includes Bitcoin, Ether (ETH) and Dogecoin (DOGE), avoided direct criticism, instead promising to sell 10% of his Tesla stock if the survey results told him to.
“I will abide by the results of this poll, whichever way it goes,” he wrote.
He added that he receives no “cash salary or bonus from anywhere” and the sale would thus amount to his only taxable event.
At the time of writing Sunday, 57% of the survey’s 3.2 million respondents had said that he should go ahead with the sale — 19.3 million TSLA shares at $1,222 each, as per Friday’s closing price, a total of $23,582,600,000.
A Timely Sell-Off?
As Cointelegraph reported, recent gains in both Tesla stock and the company’s $1.5-billion BTC holdings pushed Musk’s net worth over a quarter of a trillion dollars.
In October, he warned over inflation, which he sees persisting beyond the short term.
Economic decisions from the world’s richest man have previously unsettled Bitcoin markets, notably when Tesla halted Bitcoin payments for its vehicles over the cryptocurrency’s environmental credentials.
As Cointelegraph noted, documents shows that the door remains open for the decision to be reversed.
Elon Musk Sells Additional Tesla Stock Worth More Than $1.2 Billion
The sales were disclosed in a regulatory filing late Friday and came on top of roughly $5.6 billion in stock disposals earlier in the week.
Elon Musk sold roughly $6.9 billion worth of Tesla Inc. stock this week in one of the largest-ever stock disposals by a chief executive over a several-day period.
The Tesla CEO reported selling 1.2 million shares on Friday, worth more than $1.2 billion, according to a regulatory filing made public late Friday. Those sales came on top of more than $5.6 billion worth of stock sales earlier this week.
Mr. Musk took to Twitter this past weekend, pledging to unload 10% of his stock in the electric-vehicle company he runs. At that time, he owned roughly 170 million shares.
To make good on his Twitter pledge, Mr. Musk likely would need to sell more than 10 million additional shares, following his sales Friday and based on his total holdings as of last weekend. The precise number depends on how he defines his ownership stake.
Tesla didn’t respond to a request for comment.
Mr. Musk—the world’s richest person, according to the Bloomberg Billionaires Index—remains Tesla’s largest investor by far, even after the stock sales that have been disclosed in regulatory filings.
This week’s sales by Mr. Musk rank among the largest-ever by a chief executive over a few days, according to research firm Equilar Inc.
Amazon.com Inc. founder Jeff Bezos earlier this year—before relinquishing his CEO title—sold 2 million shares in his company over little more than a week for proceeds of roughly $6.6 billion, according to Equilar.
Tesla shares fell 2.83% to $1,033.42 on Friday. Tesla shares have slumped in the wake of Mr. Musk’s Saturday poll, declining by about 15% this week. Despite that decline, Tesla stock is trading near record highs, with the company valued at more than $1 trillion.
Mr. Musk, who exercised just over 2 million stock options on Monday, faces an August 2022 deadline to exercise more than 20 million additional options or let them expire worthless.
Further stock sales could go a long way toward paying a massive tax bill that Mr. Musk could owe upon exercising those vested options. The difference between the value of Tesla’s stock when Mr. Musk exercises his options and the exercise price of $6.24 will be taxable income.
Mr. Musk reported selling more than 900,000 shares on Monday, worth a total of roughly $1.1 billion, to cover tax withholding obligations.
Monday’s option exercise and sales were made under a preset trading plan Mr. Musk established on Sept. 14, according to regulatory filings, almost two months before he raised the idea of a sale on Twitter.
Such trading arrangements, called 10b5-1 plans, are designed to enable company insiders to sell based on a set schedule, price triggers or other factors without running afoul of insider-trading rules.
The filings disclosing Mr. Musk’s subsequent sales of more than 4 million shares from Tuesday through Friday don’t include the same footnotes about preset trading plans and tax withholding obligations.
Tesla investors may need to brace for more turmoil in the stock, said Ben Silverman, director of research at InsiderScore, which tracks executive-trading data.
“I don’t think the volume of Musk’s transactions will create volatility. I think volatility comes from the interpretation of his actions and his own words,” Mr. Silverman said.
Mr. Musk has long been reluctant to sell Tesla stock. Selling shares could weaken his control over the company.
Unlike Meta Platforms Inc., formerly Facebook Inc., and Google parent Alphabet Inc., Tesla lacks a dual-class of stock ownership that gives founders supervoting power over common shareholders. Mr. Musk sold nearly $600 million worth of stock in 2016 to pay taxes, Equilar data show.
In a Nov. 6 tweet, Mr. Musk framed the idea of a share sale in terms of a continuing debate about how some of America’s wealthiest individuals should be taxed.
Mr. Musk doesn’t accept a cash salary from Tesla. In a tweet last Saturday, he said that “the only way for me to pay taxes personally is to sell stock.”
The options expiring in August are part of a 2012 pay package. Since then, Mr. Musk has secured additional options.
Exercising them could trigger volatility down the road. Mr. Musk’s next major deadline to exercise a large number of options looms in 2028, according to a Tesla regulatory filing, though he faces 2023 deadlines to exercise some vested options.
Elon Musk’s Tax Bill On Stock Options Fell Along With Tesla’s Share Price
Sliding stock price lowers CEO’s tax bill by about $480 million from peak but also limits deductions the EV maker can take.
Elon Musk already faces a federal tax bill topping $3.5 billion on exercising Tesla Inc. stock options. It would have been bigger if the company’s share price hadn’t fallen after he tweeted about selling stock.
The stock fluctuations have financial consequences for the U.S. government, Mr. Musk and Tesla. When the share price goes down, it not only reduces how much tax the Tesla chief executive owes the U.S. government in the short term, it also lowers his total potential tax payments linked to those shares if he sells them in the future.
Any such later sales also may not be taxed by California because Mr. Musk moved his residence to Texas last year.
At the same time, exercising the options at a lower stock price could weigh on the company he controls. The tax deductions that Tesla can claim for that part of Mr. Musk’s compensation package are effectively reduced if he exercises options at lower share prices.
The electric-vehicle maker’s chief executive initiated a wave of exercising Tesla options and selling shares on Nov. 8. Mr. Musk exercised more than two million additional stock options Tuesday, according to regulatory filings, meaning he has now turned roughly 8.5 million options into shares this month.
He’s sold about $4 billion worth of those shares to cover tax withholding along with about $6 billion of other shares.
Mr. Musk made the moves while arguing with lawmakers over tax policy and after conducting a Twitter poll about whether he should liquidate 10% of his stockholdings in Tesla, a plan Twitter users backed.
Tesla’s stock slumped more than 15% in the week following the Twitter poll, a period that also included the market debut of electric-vehicle rival Rivian Automotive Inc.
The stock-price declines had a significant impact on the tax he owes, lowering it by more than $480 million from its recent all-time peak, an analysis by The Wall Street Journal of Mr. Musk’s and Tesla’s securities disclosures shows.
The tax figures are estimates; his actual bills may vary.
On Sept. 14, weeks before his first public comments about selling or his Twitter poll, Mr. Musk had authorized a plan under which he would exercise at least some of his nearly 23 million vested stock options set to expire worthless in August 2022.
The day he set the plan, Tesla shares closed at $744.49. At that price, exercising the options would have cost him $290.50 in federal taxes per share.
A day earlier, congressional Democrats had proposed raising tax rates that, if enacted, would mean options exercised in 2022 at that day’s price would cost Mr. Musk $331.84 each.
Mr. Musk, the world’s richest person on paper—with a net worth of more than $300 billion, according to the Bloomberg Billionaires Index—doesn’t take a cash salary from Tesla and has at times described himself as cash-poor. Before November, he rarely sold Tesla stock. In September, he publicly signaled that he would face what he called a huge tax bill on exercising options.
Tesla’s shares have risen sharply since September. The company posted strong quarterly results, and rental-car company Hertz Global Holdings Inc. said it had ordered 100,000 Teslas, sending the valuation of Mr. Musk’s company above $1 trillion.
On Nov. 4, before Mr. Musk exercised an option under the plan or disclosed its existence, Tesla stock hit an all-time closing high of $1,229.91 a share.
At that price, Mr. Musk could expect a federal tax bill of about $481.51 for each option he exercised and even more in 2022 under the stiffer Democratic social spending and climate bill that passed the House Nov. 19.
Mr. Musk had reported exercising roughly 6.4 million options through Monday, and his average federal tax cost per share was about $421.59. That is higher than it would have been in September but more than 12%, or $382 million, below the early November highs.
Because he is selling newly obtained shares to pay the taxes, he generally ends up with the same number of shares regardless of the price, just at a lower cost basis and with less cash owed to the government than when the price was higher.
The options exercised Tuesday have an average federal tax cost per share of about $433.95.
Neither Mr. Musk nor the electric-vehicle company responded to requests for comment. They haven’t disclosed the details of the preset trading plan. Such plans can prompt sales or purchases at specific dates or share prices.
As Mr. Musk continues to exercise his options, his tax bill shrinks if Tesla’s share price falls, but the company fares worse—it gets smaller tax deductions for Mr. Musk’s compensation at lower share prices.
For every $1 million that Mr. Musk’s option-exercise income goes down, he saves $370,000 in federal income taxes, and Tesla loses $210,000 worth of deductions.
That tension can be lessened when the fortunes of a company and its largest shareholder are intertwined if they are trying to get the lowest combined tax bill.
“You can see there may be an incentive in combination for the parties to lowball the value, that Tesla only gets a 21% deduction and Musk is picking it up at 37%,” said Steve Rosenthal, senior fellow at the Tax Policy Center in Washington. “Every dollar lower saves, collectively, 16 cents for the two parties.”
Mr. Musk, in a Nov. 13 tweet, pointed to his sales of Tesla stock that he had held for a longer time than the ones just obtained by options.
He owes more in capital-gains tax than he would have if he had instead sold his newly obtained shares. “A careful observer would note that [this is]… closer to tax maximization than minimization,” he wrote.
Mr. Musk’s tax for exercising his options is calculated on the difference between the price he has to pay to exercise the option, the so-called strike price, and the value of the shares when the option is exercised.
The options that expire in August cost $6.24 to exercise and the difference between that and the actual share price is taxed as ordinary income.
That is a 37% top tax rate plus 2.35% in Medicare taxes and likely more in California taxes because he lived and worked there during part of the time he held the options.
Even for a long-term holder of Tesla stock, as Mr. Musk has been, there are other reasons a near-term share dip around the time of exercising options benefits him as he increases his holdings.
If Mr. Musk thinks Tesla is a good long-run investment above current prices, his incentive is to spend as little money as possible to secure more shares.
Unlike a typical stock sale where the executive ends up with more cash after taxes if the share price is higher, these transactions are different. They typically require him to spend cash or surrender shares and leave him with shares, but not cash.
Beyond that, future gains above the exercise price are taxed as capital gains. If held for more than a year and then sold, that means a 23.8% rate under current law or a 31.8% rate under the Democratic plan, both lower than ordinary income tax. Those gains also would likely not be taxed in California, because Mr. Musk moved to Texas last year.
If Mr. Musk, 50 years old, holds those shares until his death, he wouldn’t pay any income tax, a policy he labeled “questionable.”
His heirs would receive the shares and would owe income taxes only when they sell and then only on the further appreciation after his death. Estate taxes may apply.
“Probable capital allocation skill of heirs is lower than original creator,” he tweeted this month, “so I am in favor of an estate tax.”
Musk Sells More Tesla Stock After Clarifying He’s ‘Almost Done’
Elon Musk sold a further $928.6 million of Tesla Inc. shares, moving closer to his target of reducing his stake in the electric-auto maker by 10%.
The sale of 934,091 shares came after Musk wrote on Twitter he is “almost done” trimming his stake in Tesla, clarifying an earlier comment in an interview with a satirical website that he’d already reached his target.
“I sold stock that should roughly make my total Tesla share sale roughly 10%,” the world’s richest person told Babylon Bee in an interview that also addressed his wealth, taxes and priorities. He also clarified on social media that more sales are coming under a pre-programmed plan.
When the 10b preprogrammed sales complete. There are still a few tranches left, but almost done.
— Elon Musk (@elonmusk) December 22, 2021
Musk’s earlier comments helped propel Tesla stock to its best day since Nov. 1. The shares rose 7.5% to $1,008.87 in New York on Wednesday and the company’s value climbed back above $1 trillion.
Musk has been offloading Tesla stock since asking his Twitter followers in November whether he should sell some of his stake. It’s unclear whether the poll had any actual bearing on his plans.
The chief executive officer said months earlier he was likely to exercise a big block of stock options toward the end of the year, and he set up a trading plan to sell shares before his tweet.
Late Sunday, he said in a Tweet that he would pay more than $11 billion in taxes this year, hitting back at criticism from a number of lawmakers like Senator Elizabeth Warren who called Musk a “freeloader” on social media. Warren and other leading Democrats claim billionaires like Musk are avoiding paying taxes.
“I don’t have any offshore accounts, I don’t have any tax shelters,” Musk said, adding that he could do his taxes himself in just a few hours. “Everything is extremely transparent.”
The latest sale takes the total to 14.7 million shares for about $15.4 billion. He’ll need to dispose of about 17 million shares to offload 10% of his stake, assuming his pledge excludes exercisable options.
Tesla has declined 18% since a peak on Nov. 4, just prior to Musk’s Twitter poll, to which the majority of respondents answered “yes.”
Musk, 50, is the world’s richest person, atop the Bloomberg Billionaires Index with a fortune of $260.9 billion.
“I’m not sure it’s all that productive or interesting” to focus on wealth, Musk told Babylon Bee. “Essentially all of my net worth is just in SpaceX and Tesla stock, these two companies I helped create and have run now almost 20 years that have done a lot of useful things.”
Elon Musk Exercises Final Batch of Tesla Stock Options Behind CEO’s Recent Share Dealings
The billionaire has now exercised more than 22 million options that were due to expire in August 2022.
Elon Musk has exercised the final batch of a package of vested Tesla Inc. TSLA -1.46% stock options that have underpinned several weeks of share dealings by the chief executive.
Mr. Musk on Tuesday converted more than 1.5 million options due to expire in August 2022 into stock and sold more than 934,000 shares to cover associated taxes, according to regulatory filings.
The Tesla boss has now exercised more than 22.8 million stock options since the transactions began last month. That total represents all of the vested options that would have expired next year, which Mr. Musk earned under a 2012 compensation package.
The transactions have boosted Mr. Musk’s holding in Tesla from around 170.5 million shares to more than 177 million shares.
The combined share sales over the past few weeks have reached a value of more than $16 billion. The sales mostly are linked to a scheduled investment plan Mr. Musk set in September, according to disclosures.
After setting the investment plan, Mr. Musk last month polled Twitter users about whether he should sell 10% of his Tesla stock; people on the social-media platform that voted endorsed the idea of a sale. The chief executive began exercising Tesla stock options and selling shares in the company on Nov. 8.
Mr. Musk has sold around 15.7 million shares since then. How many shares constitute fulfilling his 10% pledge depends on how Mr. Musk defines his ownership stake.
Mr. Musk, who is compensated by Tesla in stock awards and doesn’t accept a cash salary from the company, last week said on Twitter that “there are still a few tranches left, but almost done.”
Tesla didn’t immediately respond to a request for comment about whether Mr. Musk planned to sell more of the company’s stock in the coming weeks.
Mr. Musk has a net worth of around $279 billion, making him the richest person on the Bloomberg Billionaires Index. He also has sold some stock in recent weeks not related to the stock options.
Mr. Musk said he would pay more than $11 billion in taxes this year. He has verbally sparred with some Democrat lawmakers over taxes, including Sen. Elizabeth Warren (D., Mass.), who called on the billionaire to pay more. Mr. Musk responded by saying that he will pay more taxes than any American in history this year.
Mr. Musk is likely to have future rounds of such trading activity under a blockbuster 2018 compensation plan approved by shareholders. Mr. Musk has already secured additional stock options under that program.
Tesla’s shares slumped after Mr. Musk began his transactions last month. The stock, which closed down 0.5% on Tuesday at $1,088.47, is down more than 10% from the day Mr. Musk took the Twitter poll.
How To Boost The Price Of Your Tesla? Drive It Off The Lot
Used models can sell for more than new ones. But parting with a used Tesla comes with side-effects: marital tension, a sense of loss.
The Tesla Pimp has never seen such demand.
Ali Heniche makes his living buying luxury vehicles in Europe and flipping them to dealers to be resold. Pre-pandemic, Tesla owners were happy to take what they could get for their cars.
Now, Mr. Heniche, who is based in Milan, Italy, says demand is so charged he regularly faces bidding wars. Some prospective sellers have so many offers they have taken to organizing them in Excel spreadsheets. Those looking to sell lightly used Model 3s can expect to pocket upward of $4,500 in profit, he said.
“I’ve never seen anything like this before,” said Mr. Heniche, 26, who has been selling cars for about eight years. He got his nickname, Tesla Pimp, from one of his suppliers.
The car market has taken a sharp turn: Some used cars, including lightly used Teslas, cost more than new ones. People can’t get certain new models because of parts shortages and other supply-chain bottlenecks. That’s driving up prices of used vehicles—and upending the adage that cars lose value the minute you drive off the lot.
Wait times for new Teslas in the U.S. range from weeks for the Model S Plaid sedan to roughly a year for one configuration of the Model X sport-utility vehicle.
One-year-old Model Ys, one of Tesla’s most-popular models, sold for an average of more than $65,000 in December, some $2,100 more than commonly configured new versions of the compact sport-utility vehicle, according to U.S. sales data provided by J.D. Power.
Tesla, which didn’t respond to a request for comment, is an extreme example of the turbocharged market for used vehicles.
“It’s shocking,” Jim Farley, chief executive of Ford Motor Co., said of the used-car market in a recent interview.
Lightly used versions of other models, such as the Toyota RAV4 and Kia Telluride, are also regularly selling above sticker prices, according to car-shopping website Edmunds.com.
The appetite for used Teslas has driven some owners to a fork in the road. Michael McKee paid more than $48,200 for his new Tesla Model 3 car which he picked up last March. Within seven months, a dealer was offering more than $50,000 to buy it from him.
Mr. McKee, a 42-year-old project manager, wasn’t looking to sell the car. But, with hopes of retiring early, he was on the lookout for opportunities to pad savings. A dealer eventually offered around $55,600 for the car, which had some 21,500 miles on it. “I just couldn’t pass it up,” he said.
Mr. McKee, who now drives a 2015 Hyundai Sonata, said he lost more than just a comfortable ride when he parted with his Tesla. The car was also his on-ramp to a tightknit group of Tesla fans. “If you ever saw someone driving a Tesla where I’m at, you’d wave. You’d park next to them in a parking lot,” he said. His current ride, he said, is “just a boring old car.”
When Amit Malhotra, a 48-year-old entrepreneur, went to get the bumper on his 2018 Model 3 fixed last fall, his mechanic suggested he see what the local Texas dealership would give him for the car.
“This is one of your quintessential he went out to get bread and sold my Tesla” stories, said his wife, Radhika Malhotra, a 48-year-old mother of two.
Ms. Malhotra said she remembers getting her husband’s call: “Hey, can I sell this car now? We’re getting a fantastic deal.” The answer to her was obvious. “No…You can’t just go out and literally sell our car,” she told him.
She demanded her husband right then order a replacement Model Y and deliver the proof before going through with the sale.
Their new Tesla is set to be delivered this summer.
Waiting has been tough for Ms. Malhotra, who loved how her Tesla’s driver-assistance system served almost as a backup driver.
“In the beginning, honestly it was like someone coming off a sugar addiction,” she said.
Juan Miranda, a 39-year-old mechanical test engineer in San Diego, didn’t want to wait until July to secure his family’s second Model Y. So in December, he tried to shell out roughly $71,600 for a used one with nearly 10,000 miles—several thousand dollars more than he paid earlier in the year for a new Model Y with more bells and whistles.
But Tesla, which operates a market for used versions of its cars, would only hold the vehicle for three days, said Mr. Miranda. He had sold Tesla stock to buy the vehicle and couldn’t get the cash together that quickly. By the time he was ready, the car was gone and Tesla didn’t have others available that fit his criteria.
“A couple of times I found one, I clicked ‘buy now’ and then it was gone,” said Mr. Miranda, who spent weeks searching for another Model Y. “I’d call them and they’d be like ‘oh yeah that one got snatched up’ and I was like ‘dammit.’ ”
As the hunt dragged on, he grew exasperated. “This is ridiculous. Can someone just sell me a used Model Y?” he fumed, before finally settling for buying a used Tesla Model 3.
The used-car market is forecast to remain hot before softening toward the end of 2022, when supply-chain bottlenecks are expected to ease, said Ivan Drury, an analyst for Edmunds.com.
Teslas have long retained their value relatively well. That’s in part because the company invested in battery capacity and electronics early on, enabling it to upgrade older vehicles in a way traditional car makers couldn’t, said Mark Wakefield, a managing director at consulting firm AlixPartners LLP.
Shane Andrews waited 18 months or more for her family’s Teslas in the past and didn’t want to do that again. She signed on with a car-leasing company, Autonomy, that launched late last year in Southern California and she is leasing a Model 3. “We really needed something quickly,” said Dr. Andrews, who wanted another car so that she could give her daughter, then about to turn 16, one of the family’s older vehicles.
For Mr. McKee, who still regrets selling his Model 3 to pad savings, the love affair with Tesla isn’t over. One day, in retirement, he aims to again own a Tesla.
Tesla Warns of Possible California Suit Over Race Harassment
* Electric Carmaker Received Notice From Fair-Employment Agency
* Company Has Faced Discrimination Complaints From Plant Workers
Tesla Inc. said a California agency informed the electric automaker that it has grounds for a civil complaint, following an investigation into racial harassment.
The California Department of Fair Employment and Housing issued a so-called notice of cause finding and mandatory dispute resolution to Tesla on Jan. 3, the company said Monday in a regulatory filing. The investigation involved “undisclosed allegations of race discrimination and harassment at unspecified Tesla locations.”
Tesla has faced numerous complaints and lawsuits from former workers at its auto plant in Fremont, California, about racial discrimination and sexual harassment in recent years. Many complaints never make it to court because Tesla’s full-time employees sign agreements requiring workplace disputes to be handled in closed-door arbitration.
In October, one former worker was awarded $137 million by a federal jury in San Francisco — the largest such verdict of its kind. Tesla is now appealing the size of the award.
“It’s a very positive development that the DFEH has made this finding and is willing to pursue a civil case if they can’t reach a resolution with Tesla,” said Larry Organ, a Bay Area civil rights attorney who represents several former Black employees and contract workers.
Tesla’s acting general counsel didn’t respond to a request for comment. The California fair-employment agency also didn’t respond.
The California DFEH filed a lawsuit against video game developer Activision Blizzard Inc. in July for promoting a culture of “constant sexual harassment.” The department also reached a settlement with Riot Games over sexual harassment and discrimination claims.
Since 2014, workers have filed over 100 complaints with the DFEH alleging discrimination at Tesla on the basis of race, age, gender, disability, medical leave, pregnancy, sexual orientation or national origin, according to a synopsis provided by the agency after a California Public Records Act request. The state shares jurisdiction with the federal Equal Employment Opportunity Commission over such cases.
A notice of cause finding from the DFEH signals that the agency believes an employer has violated the California Fair Employment and Housing Act, said Catherine Fisk, a law professor at University of California, Berkeley. “It is a warning that the agency intends to sue the company unless the matter can be settled out of court.”
Tesla Held $2B Of Bitcoin As Of Late 2021, SEC Filing Reveals
Tesla recorded $101 million of impairment losses on Bitcoin in 2021, with the carrying value accounting for $1.26 billion.
Elon Musk’s electric vehicle maker Tesla was holding about $2 billion worth of Bitcoin (BTC) by the end of 2021, according to official records.
The “fair market value” of BTC held by Tesla as of December 31, 2021, was $1.99 billion, the company said on Friday in its annual filing with the United States Securities and Exchange Commission.
The filing reads that Tesla sold a portion of its BTC holdings in March 2021, with realized gains of $128 million. The company previously announced a historic $1.5 billion BTC purchase last February.
According to the filing, Tesla recorded $101 million of impairment losses on Bitcoin in 2021. “Gains are presented net of impairment losses in restructuring and other in the consolidated statement of operations. As of December 31, 2021, the carrying value of our digital assets held was $1.26 billion, which reflects cumulative impairments of $101 million,” the filing notes.
As previously reported by Cointelegraph, Tesla sold a portion of its BTC holdings in the first quarter of 2021, generating net proceeds of $272 million. The company was still holding on to BTC despite Tesla dropping Bitcoin payments support over environmental concerns in May 2021.
According to data from Bitcoin Treasuries, Tesla currently holds about 43,200 BTC, which makes the company the second-largest identified Bitcoin investor after Michael Saylor’s MicroStrategy, amassing a total of 125,000 BTC as of Jan. 31.
SEC Subpoenas Tesla Seeking Information Linked To Elon Musk Settlement
Regulator’s probe revives scrutiny of Musk tweet claiming he had secured funding to potentially take the EV maker private.
The Securities and Exchange Commission has subpoenaed Tesla Inc. TSLA -2.21% for information about compliance with a court-ordered settlement requiring certain of Elon Musk’s tweets be preapproved.
Tesla said in a regulatory filing made public Monday that the SEC had sought information on “governance processes around compliance” with a settlement related to Mr. Musk’s 2018 tweet claiming to have secured funding to potentially take the electric-vehicle maker private.
Mr. Musk paid $20 million to settle an SEC enforcement action alleging that he committed fraud by tweeting about a potential buyout. The SEC also insisted on an unusual ongoing requirement: a Tesla lawyer would review his social media posts and certain other public statements. He also agreed to relinquish his role as company chairman, while remaining chief executive.
Tesla said in the securities filing that the SEC issued the subpoena—typically a sign of a formal investigation—on Nov. 16. Tesla didn’t respond to a request for comment. The SEC declined to comment.
Disclosure of the subpoena revives scrutiny of Mr. Musk’s use of social media, which the SEC has tried for years to rein in.
The agency told Tesla in 2020 that the chief executive’s use of Twitter had twice violated the preapproval policy, The Wall Street Journal reported last year. Of concern were tweets including a May 1, 2020 post in which Mr. Musk said, “Tesla’s stock price is too high imo,” using an abbreviation for “in my opinion.” Tesla’s shares fell after that tweet.
Tesla disagreed with the SEC, telling the agency that Mr. Musk’s messages weren’t within the scope of the agreement. The SEC never went back to court to ask a judge to intervene.
The SEC’s ongoing friction with Mr. Musk shows the risk “of being overly creative” with an enforcement settlement, said Marc Fagel, a former head of the agency’s San Francisco office. The agency could have sought Mr. Musk’s removal as CEO when it resolved the civil fraud case, but didn’t pursue that punishment.
“The SEC chose some novel middle ground with a monitoring requirement, and I think what is going on shows the hazard in that,” Mr. Fagel said.
The SEC has a few options if it believes Mr. Musk or Tesla violated the earlier settlement. Regulators could ask a federal judge to tear up the settlement, and they could renew their civil fraud lawsuit against him and the company.
Alternatively, the SEC could focus a new investigation on whether Tesla didn’t oversee Mr. Musk’s tweets as it told shareholders it would, Mr. Fagel said.
Mr. Musk has sometimes been combative with regulators and the SEC in particular. After the SEC sought information about whether Tesla was monitoring his public messages, the Tesla CEO in July 2020 tweeted an apparent reference to a sex act: “SEC, three letter acronym, middle word is Elon’s.”
And Tesla last year asked law firm Cooley LLP to fire an associate it had hired from the SEC or else lose Tesla’s business, the Journal reported last month. Cooley declined to do so.
Tesla also said Monday that a California agency tasked with protecting civil rights told the company last month that, after an investigation into allegations of race discrimination and harassment at Tesla, it believes it has the grounds to file a lawsuit against the electric-vehicle maker.
The California Department of Fair Employment and Housing declined to comment. The agency says on its website that, before filing a lawsuit, it typically requires parties to go to mediation.
A federal jury found last year that Tesla had subjected a Black former employee to a racially hostile work environment, awarding him roughly $137 million in damages. Tesla has said that it doesn’t believe the verdict is justified and has asked for a new trial or for the damages to be reduced.
Tesla Recalls More Vehicles As US Safety Agency Increases Scrutiny
Tesla is recalling nearly 579,000 vehicles in the U.S. because a “Boombox” function can play sounds over an external speaker and obscure audible warnings for pedestrians.
It is the fourth Tesla recall made public in the last two weeks as U.S. safety regulators increase scrutiny of the nation’s largest electric vehicle maker. In two of the recalls, Tesla made decisions that violate federal motor vehicle safety standards, while the others are software errors.
The cars and SUVs have what Tesla calls a “Boombox” function that allows drivers to play sounds while the vehicles are moving, according to data on the the National Highway Traffic Safety Administration website Thursday. This violates federal safety standards that require pedestrian warning noises for electric cars, which make little noise when in motion, the agency says.
The problem will be repaired with an over-the-air software update that will disable “Boombox,” in drive, reverse or neutral, the agency said.
“The Boombox functionality allows a customer to play preset or custom sounds through the PWS (pedestrian warning system) external speaker when the vehicle is parked or in motion,” NHTSA says in documents posted on its website.
”While Boombox and the pedestrian alert sound are mutually exclusive sounds, sounds emitted using Boombox could be construed to obscure or prevent the PWS from complying” with safety standards, the agency wrote.
The recall covers certain 2020 through 2022 Tesla Model X, S, and Y vehicles, as well as 2017 through 2022 Model 3s, according to records.
A message was left Thursday seeking comment from Tesla, which has disbanded its media relations department. The company is not aware of any crashes or injuries due to the problem, NHTSA said.
Tesla enabled Boombox with a software update in December of 2020, NHTSA said in documents. The agency began seeking information from Tesla in January of 2021, and Tesla explained the feature and contended that it complied with U.S. safety standards. In September of 2021, NHTSA opened an investigation into the feature.
A month later, Tesla defended its rationale for determining that Boombox complied with safety standards. But on Jan. 29 of this year, the company decided to do a recall and disable Bombox in drive, neutral and reverse.
NHTSA said that in 2010, Congress required electric and hybrid vehicles to make pedestrian warning noises. The law required agency rules to stop manufactures from allowing anyone other than an automaker or dealer to “disable, alter, replace, or modify the pedestrian alert sound or set of sounds.”
Tuesday’s recall is the 15th done by Tesla since January 2021, according to NHTSA records. In addition, the safety agency has opened multiple investigations of Teslas.
Michael Brooks, acting executive director of the nonprofit Center for Auto Safety, said Tesla seems to be playing “cat and mouse” with NHTSA’s enforcement team by pushing safety limits. The company is taking resources from the agency, which is trying to deal with spiking highway death rates, he said.
Brooks called on NHTSA consider civil fines for Tesla due to it’s behavior because recalls, investigations, orders and other methods aren’t working. “They’re trying here, but at some point you have to kind of call Tesla out on its general strategy, which appears to be pushing the limits of the safety act,” Brooks said.
Last week, Tesla had to recall nearly 54,000 vehicles equipped with “Full Self-Driving” software that allowed the vehicles to run through stop signs at low speeds, without coming to a complete halt. Selected Tesla owners are “beta testing” the software on public roads, but the cars can’t drive themselves despite the name.
The company also had to recall over 800,000 vehicles because seat belt reminder chimes may not sound when the vehicles are started and the driver isn’t buckled up. And this week, nearly 27,000 vehicles were recalled because the cabin heating systems may not defrost the windshield quickly enough. All were to be fixed with online software updates.
Safety advocates and automated vehicle experts say Tesla is pushing the boundaries of safety to see what it can get away with, but now NHTSA is pushing back.
Also, after a NHTSA inquiry in December, Tesla disabled a function that let drivers play video games on center touch screens while the vehicles are moving.
In November, NHTSA said it was looking into a complaint from a California Tesla driver that the “Full Self-Driving” software caused a crash. The driver complained to the agency that a Model Y went into the wrong lane and was hit by another vehicle.
The SUV gave the driver an alert halfway through the turn, and the driver tried to turn the wheel to avoid other traffic, according to the complaint. But the car took control and “forced itself into the incorrect lane,” the driver reported. No one was hurt in the Nov. 3 crash.
NHTSA also is investigating why Teslas using the company’s less-sophisticated “Autopilot” partially automated driver-assist system have repeatedly crashed into emergency vehicles parked on roadways. The agency opened the investigation in August, citing 12 crashes in which Teslas on Autopilot hit parked police and fire vehicles. In the crashes under investigation, at least 17 people were hurt and one was killed.
Last week Tesla said in its earnings release that “Full Self-Driving” software is now being tested by owners in nearly 60,000 vehicles in the U.S. It was only about 2,000 in the third quarter. The software, which costs $12,000, will accelerate Tesla’s profitability, the company said.
N.Y. Pension Ramps Up Pressure On Tesla After Race-Bias Lawsuit
* The Fund Says Civil-Rights Violations Can Add Huge Costs
* Electric-Vehicle Maker Has Faced Racism-Related Complaints
New York state’s retirement plan is ratcheting up pressure on Tesla Inc., calling on the electric-car maker to disclose how much it spends on settling sexual harassment and racial discrimination complaints.
The New York State Common Retirement Fund, one of the country’s biggest public pension plans, filed its shareholder proposal last week following a high-profile racial discrimination case that resulted in a $137 million jury award and days before California took the extraordinary step of suing Tesla.
The resolution asks the automaker to publish how effective its measures are in ending bad conduct in the workplace.
“Recent developments further highlight the need for Tesla to address how the company is preventing harassment and discrimination against employees,” New York State Comptroller Thomas DiNapoli said in an emailed statement Monday. “This kind of alleged behavior should never be tolerated.”
California’s civil rights regulator sued Tesla last week for racial discrimination and harassment after finding widespread mistreatment of Black workers at its factory near San Francisco. The lawsuit adds to a number of complaints the company has faced in recent years from former workers about racism and sexual harassment.
The New York fund, which manages about $280 billion, stands out for publicly putting pressure on Tesla to change its ways. By contrast, the electric-vehicle company’s biggest shareholders — Vanguard Group Inc., BlackRock Inc. and State Street Corp.’s investing unit — declined to comment on alleged discrimination at Tesla, citing their long-standing policies of not discussing individual companies.
Officials at Austin, Texas-based Tesla haven’t responded to a request for comment.
While Tesla’s electric vehicles have played a pivotal role in the shift to cleaner fuels, most ESG investors have long avoided the stock because of the automaker’s shortcomings in corporate governance.
Other socially minded investors such as Calvert Research & Management and Trillium Asset Management own a nominal amount of shares so they can press the company to change its behavior. Officials at Calvert, which filed a diversity shareholder proposal with Tesla last year, and Trillium declined to comment.
More than a dozen other large Tesla shareholders, including Capital Group, Fidelity Investments, Baron Capital and the California Public Employees’ Retirement System, also declined to comment.
For real change to happen at Tesla, the company’s largest investors need to take action, said Dieter Waizenegger, executive director of SOC Investment Group, which filed resolutions during the last proxy-voting season asking Wall Street firms to perform racial equity audits.
Big shareholders should be insisting that the issues of discrimination and harassment are put on the agenda for meetings with Tesla in the next six months, Waizenegger said.
Edgar Hernandez, an assistant director at Service Employees International Union, which has successfully pressed companies to conduct independent civil rights audits, agreed. The more outspoken the largest investors are “the more there is an opportunity for change at the company such as updating and enforcing policies,” he said.
In the wake of protests against racial injustice that swept the U.S. in 2020, BlackRock, Vanguard and State Street Global Advisors have vowed to vote off board directors of companies that fail to address the lack of diversity in their ranks. The three firms backed a shareholder proposal last year that asked Tesla to publish a report on the racial and gender breakdown of its workforce.
Vanguard, Tesla’s biggest shareholder after Chief Executive Officer Elon Musk, said in an October report that it has interacted with Tesla at least annually over the past five years. The money manager said it discussed the automaker’s efforts to address diversity, equity and inclusion in its workforce during a meeting with the board chair last year.
Vanguard described Tesla’s inaugural diversity report in 2020 as a “promising start” and added that it wants the company to continue prioritizing “qualitative and quantitative disclosures on workforce diversity.”
In its Feb. 7 shareholder proposal, the New York pension asked Tesla to every year publish details such as how much it has paid in settlements related to harassment and discrimination, as well as specifics on the progress it’s made in reducing the time taken to settle complaints.
It also requested the company disclose how many pending cases it’s seeking to resolve either internally or through litigation. The state said civil rights violations can result in substantial costs.
The retirement plan has succeeded in the past in pressing Tesla for change. Four years ago, it filed a resolution asking the company to disclose its process for identifying and analyzing human-rights risks in its operations. Tesla agreed to produce a report.
Separately, the New York fund filed resolutions last month asking companies, including Amazon.com Inc. and Match Group Inc., to conduct independent racial audits of their businesses.
SEC Refuses To Distribute $40 Million In Fine Money To Shareholders From 2018 Elon Musk Tweet
‘The SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government.’
— Alex Spiro, attorney for Musk
Tesla tells federal judge that sec is harassing elon musk and the company.
Lawyers for the electric-car maker say the regulator hasn’t distributed a $40 million fine from a 2018 settlement to harmed shareholders.
Tesla Inc. accused U.S. regulators of harassing Chief Executive Elon Musk over his compliance with a 2018 regulatory settlement that sought to restrict his use of social media.
In a letter filed Thursday with a federal judge who oversaw that settlement, attorneys for the company charged that the Securities and Exchange Commission is conducting unfounded investigations of Mr. Musk and Tesla.
Earlier this month, the electric-car maker disclosed that regulators sent a subpoena last year that sought information showing how the company and its CEO complied with the terms of the deal.
The SEC hasn’t distributed $40 million in fine money to shareholders allegedly hurt by Mr. Musk’s 2018 tweets that he planned to take Tesla private, according to the letter. The SEC alleged that Mr. Musk’s statements weren’t truthful. The regulator’s 2018 lawsuit eventually led to an unusual agreement that Tesla lawyers would preclear certain of the CEO’s tweets and other public statements.
In December, U.S. District Judge Alison Nathan in Manhattan found that a company appointed to distribute money to shareholders hadn’t sent required status reports and quarterly accounting statements to the court about its efforts. The company, Rust Consulting Inc., told the judge in January that it was still working with the SEC on the distribution plan.
The SEC typically distributes 80% of the funds available in a case to shareholders within two years of the distribution plan being approved, according to the latest SEC annual report.
“The SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government,” attorney Alex Spiro wrote in the letter to Judge Nathan.
Mr. Musk frequently ridicules government officials despite his need to work with regulators who play a role overseeing both Tesla and SpaceX, the rocket company he founded. He has taken aim at the SEC, highway safety regulators and the Federal Aviation Administration, whose space division he has called “fundamentally broken.” Mr. Musk has also criticized public policies such as financial incentives to spur electric-vehicle adoption.
The SEC will have to respond to Tesla’s letter but “has every reason to keep pursuing him,” said Adam Pritchard, a law professor at the University of Michigan who specializes in securities regulation.
Regulators could ask Judge Nathan to find that Mr. Musk violated the agreement and seek sanctions until he complies, Mr. Pritchard said.
Judge Nathan previously declined to do that in 2019 when the SEC told her that Mr. Musk should be held in contempt over tweets that violated the rules. The judge told the two sides to “put their reasonableness pants on” and find a way to settle the dispute.
“At some point the court may say, ‘this was a mistake. We should not have done this because the parties are unable to agree on whether the terms of the order are being satisfied,’” Mr. Pritchard said. “The court cannot be in the business of supervising this officer of a public company on a day-to-day basis.”
An SEC spokesman declined to comment.
Mr. Musk landed in trouble in 2018 over a tweet that said he had “funding secured” to take Tesla private at $420 a share. The SEC alleged that Mr. Musk had never discussed such a going-private deal and that his statement, which caused Tesla’s stock to skyrocket, constituted fraud.
Mr. Musk and Tesla settled the SEC lawsuit by each agreeing to pay $20 million, and Mr. Musk stepped down as chairman in addition to agreeing to the Twitter policy. But he continued to antagonize the SEC, tweeting in July 2020: “SEC, three letter acronym, middle word is Elon’s.”
Mr. Spiro’s letter suggests that Tesla and Mr. Musk regret settling and agreeing to the social-media oversight policy, which Judge Nathan approved. The judge, not the SEC, should determine whether Mr. Musk and Tesla violated the policy or other terms of the settlement, according to Mr. Spiro.
The letter alleges there are serial investigations, including one instance of the SEC closing one probe only to open a new one at almost the same time.
Tesla Falls In Consumer Reports Ranking After Design Changes
* Reviewer Faults Revamps To Steering Wheel, Turn Signal
* Subaru Takes Top Spot As U.S. Automakers Fare Poorly
Tesla Inc. sank toward the bottom of Consumer Reports’ newest annual auto brand rankings, weighed down by poorly received design changes and reliability problems.
The electric-car maker placed No. 23 out of 32 brands on the 2021 list, down seven spots from the year before, Consumer Reports said Thursday. Tesla’s Model 3 was also beaten out as the “top pick” for 2022 in the electric-vehicle category by Ford Motor Co.’s Mustang Mach-E.
U.S. manufacturers fared poorly on the list, with none ranking in the top 10. At No. 11, General Motors Co.’s Buick was the best domestic brand, while GMC and Stellantis NV’s Jeep took the last spots. Subaru Corp. eclipsed Mazda Motor Corp. to take the 2021 crown, and Japanese automakers occupied four of the top five spots.
The new list is a blow to Tesla, which has been dogged by questions over build quality and reliability even as the company’s market value has soared to roughly $1 trillion. Chief Executive Officer Elon Musk has lamented the difficulty in getting all the details right while ramping up production.
The Austin, Texas-based company suffered in the rankings in part because of changes to its Model S sedan, Jake Fisher, senior director of automotive testing at Consumer Reports, said in an interview. Tesla switched its steering wheel to a yoke design that Fisher said is a “chore” and “just does not work very well.”
Also, the placement of the turn signal and horn buttons on the yoke can lead to errant presses, while a lack of traditional gear selector “makes driving frustrating,” he said. The Model X had similar design changes.
Tesla, which doesn’t have a public relations department, didn’t respond to an emailed request for comment.
The S and X models represent a small portion of Tesla’s overall output. Tesla delivered 24,980 Model S sedans and Model X SUVs in 2021, compared with 911,242 Model 3 sedans and Model Y SUVs. Consumer Reports considers road tests, reliability, customer satisfaction and safety, and Fisher said ratings are determined by averaging the score of each vehicle in a company’s lineup.
The Model 3 remains the only Tesla vehicle that Consumer Reports recommends, as the Model Y struggles with persistent reliability issues despite its popularity, Fisher said. “Everything from the rear hatch not closing, to trim pieces falling off, to electrical problems.”
Ford’s Mustang Mach-E unseated the Model 3 in the EV category, which Fisher said was in part because the sport utility vehicle is “a little bit easier to live with.” The Mach-E also has a driver monitoring system that uses eye tracking to make sure drivers are paying attention to the road when using Ford’s upcoming advanced driver assistance software, BlueCruise — something Tesla doesn’t have in place with its Autopilot system.
Nissan Motor Co.’s Sentra and Rogue Sport were Consumer Reports’ picks for best small car and subcompact SUV, while Subaru’s Forester was named best small SUV. Toyota Motor Corp.’s Prius and Prius Prime were Consumer Reports’ pick for best plug-in hybrid, and Honda’s Accord won best midsize sedan.
Hacker Shows Off A Way To Unlock Tesla Models, Start Cars
* Method To Exploit Smart Technology Tied To Bluetooth Protocol
* No Evidences Of Thieves Using Technique To Access Cars
Tesla Inc. customers might love the carmakers’ nifty keyless entry system, but one cybersecurity researcher has demonstrated how the same technology could allow thieves to drive off with certain models of the electric vehicles.
A hack effective on the Tesla Model 3 and Y cars would allow a thief to unlock a vehicle, start it and speed away, according to Sultan Qasim Khan, principal security consultant at the Manchester, UK-based security firm NCC Group.
By redirecting communications between a car owner’s mobile phone, or key fob, and the car, outsiders can fool the entry system into thinking the owner is located physically near the vehicle.
The hack, Khan said, isn’t specific to Tesla, though he demonstrated the technique to Bloomberg News on one of its car models. Rather, it’s the result of his tinkering with Tesla’s keyless entry system, which relies on what’s known as a Bluetooth Low Energy (BLE) protocol.
There’s no evidence that thieves have used the hack to improperly access Tesla vehicles. The carmaker didn’t respond to a request for comment. NCC provided details of its findings to its clients in a note on Sunday, an official there said.
Khan said he had disclosed the potential for attack to Tesla and that company officials didn’t deem the issue a significant risk. To fix it, the carmaker would need to alter its hardware and change its keyless entry system, Khan said.
The revelation comes after another security researcher, David Colombo, revealed a way of hijacking some functions on Tesla vehicles, such as opening and closing doors and controlling music volume.
BLE protocol was designed to conveniently link devices together over the internet, though it’s also emerged as method that hackers exploit to unlock smart technologies including house locks, cars, phones and laptops, Khan said. NCC Group said it was able to conduct the attack on several other carmakers and technology companies’ devices.
Kwikset Corp. Kevo smart locks that use keyless systems with iPhone or Android phones are impacted by the same issue, Khan said. Kwikset said that customers who use an iPhone to access the lock can switch on two-factor authentication in lock app. A spokesperson also added that the iPhone-operated locks have a 30-second timeout, helping protect against intrusion.
Kwikset will be updating its Android app in “summer,” the company said.
“The security of Kwikset’s products is of utmost importance and we partner with well-known security companies to evaluate our products and continue to work with them to ensure we are delivering the highest security possible for our consumers,” a spokesperson said.
A representative at Bluetooth SIG, the collective of companies that manages the technology said: “The Bluetooth Special Interest Group (SIG) prioritizes security and the specifications include a collection of features that provide product developers the tools they need to secure communications between Bluetooth devices.
“The SIG also provides educational resources to the developer community to help them implement the appropriate level of security within their Bluetooth products, as well as a vulnerability response program that works with the security research community to address vulnerabilities identified within Bluetooth specifications in a responsible manner.”
Khan has identified numerous vulnerabilities in NCC Group client products and is also the creator of Sniffle, the first open-source Bluetooth 5 sniffer. Sniffers can be used to track Bluetooth signals, helping identify devices. They are often used by government agencies that manage roadways to anonymously monitor drivers passing through urban areas.
A 2019 study by a British consumer group, Which, found that more than 200 car models were susceptible to keyless theft, using similar but slightly different attack methods such as spoofing wireless or radio signals.
In a demonstration to Bloomberg News, Khan conducted a so-called relay attack, in which a hacker uses two small hardware devices that forward communications. To unlock the car, Khan placed one relay device within roughly 15 yards of the Tesla owner’s smartphone or key fob and a second, plugged into his laptop, near to the car.
The technology utilized custom computer code that Khan had designed for Bluetooth development kits, which are sold online for less than $50.
The hardware needed, in addition to Khan’s custom software, costs roughly $100 altogether and can be easily bought online. Once the relays are set up, the hack takes just “ten seconds,” Khan said.
“An attacker could walk up to any home at night – if the owner’s phone is at home – with a Bluetooth passive entry car parked outside and use this attack to unlock and start the car,” he said.
“Once the device is in place near the fob or phone, the attacker can send commands from anywhere in the world,” Khan added.
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