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A rough week for Elon Musk was capped Friday when institutional shareholders in Tesla admonished the company’s board of directors to rein in an “over-committed” CEO in an open letter.

The letter follows the midair explosion of the SpaceX Starship rocket in its first test flight Thursday and a first-quarter Tesla earnings report Wednesday that saw net income decrease more than 20% from the prior year on narrowing margins. The report sent Tesla shares down almost 10% Thursday and erased nearly $13 billion from Musk’s net worth, according to the Bloomberg Billionaires’ Index.

Musk also waded into controversy with Twitter again, eliminating verified status from the accounts of most nonpaying subscribers and eliminating markings for government officials and accounts, raising the specter of impostors running rampant on the platform.

What the letter says

The Tesla investors, who say their holdings amount to more than $1.5 billion, want the board to bring in more independent members and work harder to solve issues at the company that can pose “substantial legal, operational, and reputational risks” to the electric vehicle maker, “jeopardizing its long-term value.”

The investors are particularly concerned with Musk and Tesla’s handling of human rights and workers’ rights. Their letter recounts many lawsuits in which Tesla has been sued over racial discrimination, union-busting, wage theft, sexual harassment and unsafe working conditions.

“Tesla appears to be embracing a broader culture of being ‘above the law,'” they wrote, adding that Tesla now faces criminal probes by the U.S. Department of Justice, the National Highway Traffic Safety Administration and California’s Department of Motor Vehicles over its Autopilot technology and claims about self-driving.

“Instead of working to address problems with regulators, CEO Musk has made derogatory tweets and comments, fueling tensions,” they wrote.

The open letter to Tesla’s board comes after Tesla shares have declined more than 15% over the past month.

Nia Impact Capital’s Kristin Hull told CNBC the letter is meant as a “call to action” and she is hoping that Tesla Chair Robyn Denholm will take the time to write a meaningful reply, at a minimum. “We want to see the board take their job seriously — we don’t see them doing a good job at being Elon Musk’s boss.”

Eroding margins, exploding rockets

While shares of Tesla were ticking higher in early trading Friday, the company’s first-quarter earnings update this week revealed ballooning inventory levels and eroding profit margins.

According to the company’s investor presentation for the first three months of 2023, Tesla owes vendors $7.32 billion, and holds $14.38 billion in inventory after ramping up production in its factories and implementing price cuts through the first quarter.

While Tesla raised prices on Model S and X vehicles in some markets Friday, those models represent a minor slice of overall sales and production for Tesla today. The modest price hikes were also accompanied by an incentive — three years of free Supercharging on the company’s electric vehicle charging network.

Tesla’s stock price slide has a direct effect on Musk, whose personal wealth is mostly derived from his Tesla holdings, as he lost approximately $13 billion of his on-paper net worth the day after Tesla’s first-quarter earnings.

Also on Thursday, Musk’s U.S. defense contractor, SpaceX, launched its Starship Super Heavy vehicle in an orbital test flight from its Boca Chica, Texas, facility.

As CNBC previously reported, the rocket made it off the launch pad — a triumph of sorts — but it also exploded, resulting in the Federal Aviation Administration grounding the program for the time being until further evaluation.

Before the explosion, local environmental and indigenous rights groups protested the launch, anticipating harms to wildlife, people’s health and property.

CNBC reached out to the Texas regional office of the U.S. Fish and Wildlife Service and the FAA for more details. A spokesperson for the FWS said the agency is now gathering information about any impacts from the explosion to habitat and wildlife in the area, and the FAA did not immediately respond to a request for comment.

Meanwhile, Musk continues to make controversial moves with Twitter, the social media platform he bought last year for $44 billion, selling billions of dollars worth of Tesla stock to help fund the purchase.

This week, Twitter removed verified status from public figures and government accounts, including President Joe Biden, the pope, and even transit agencies, including San Francisco’s BART.

Musk-led Twitter also removed “government-funded” and “China state-affiliated” labels from the Twitter accounts of a myriad of global media organizations. The labels implied government involvement in editorial decisions by those outlets. Most notably, Reuters first reported, Twitter dropped the “China state-affiliated media” label from the accounts of Xinhua News, and from the accounts of journalists associated with those publications.

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Apple’s market share slides in China as iPhone shipments decline, analyst Kuo says

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Apple's market share slides in China as iPhone shipments decline, analyst Kuo says

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Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.

“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.

Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.

“These two models could face shipping momentum challenges unless their design is modified,” he wrote.

Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.

There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”

Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.

Apple did not immediately respond to CNBC’s request for comment.

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Amazon to halt some of its DEI programs: Internal memo

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Amazon to halt some of its DEI programs: Internal memo

Amazon said it is halting some of its diversity and inclusion initiatives, joining a growing list of major corporations that have made similar moves in the face of increasing public and legal scrutiny.

In a Dec. 16 internal note to staffers that was obtained by CNBC, Candi Castleberry, Amazon’s VP of inclusive experiences and technology, said the company was in the process of “winding down outdated programs and materials” as part of a broader review of hundreds of initiatives.

“Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture,” Castleberry wrote in the note, which was first reported by Bloomberg.

Castleberry’s memo doesn’t say which programs the company is dropping as a result of its review. The company typically releases annual data on the racial and gender makeup of its workforce, and it also operates Black, LGBTQ+, indigenous and veteran employee resource groups, among others.

In 2020, Amazon set a goal of doubling the number of Black employees in vice president and director roles. It announced the same goal in 2021 and also pledged to hire 30% more Black employees for product manager, engineer and other corporate roles.

Meta on Friday made a similar retreat from its diversity, equity and inclusion initiatives. The social media company said it’s ending its approach of considering qualified candidates from underrepresented groups for open roles and its equity and inclusion training programs. The decision drew backlash from Meta employees, including one staffer who wrote, “If you don’t stand by your principles when things get difficult, they aren’t values. They’re hobbies.”

Other companies, including McDonald’s, Walmart and Ford, have also made changes to their DEI initiatives in recent months. Rising conservative backlash and the Supreme Court’s ruling against affirmative action in 2023 spurred many corporations to alter or discontinue their DEI programs.

Amazon, which is the nation’s second-largest private employer behind Walmart, also recently made changes to its “Our Positions” webpage, which lays out the company’s stance on a variety of policy issues. Previously, there were separate sections dedicated to “Equity for Black people,” “Diversity, equity and inclusion” and “LGBTQ+ rights,” according to records from the Internet Archive’s Wayback Machine.

The current webpage has streamlined those sections into a single paragraph. The section says that Amazon believes in creating a diverse and inclusive company and that inequitable treatment of anyone is unacceptable. The Information earlier reported the changes.

Amazon spokesperson Kelly Nantel told CNBC in a statement: “We update this page from time to time to ensure that it reflects updates we’ve made to various programs and positions.”

Read the full memo from Amazon’s Castleberry:

Team,

As we head toward the end of the year, I want to give another update on the work we’ve been doing around representation and inclusion.

As a large, global company that operates in different countries and industries, we serve hundreds of millions of customers from a range of backgrounds and globally diverse communities. To serve them effectively, we need millions of employees and partners that reflect our customers and communities. We strive to be representative of those customers and build a culture that’s inclusive for everyone.

In the last few years we took a new approach, reviewing hundreds of programs across the company, using science to evaluate their effectiveness, impact, and ROI — identifying the ones we believed should continue. Each one of these addresses a specific disparity, and is designed to end when that disparity is eliminated. In parallel, we worked to unify employee groups together under one umbrella, and build programs that are open to all. Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture. You can read more about this on our Together at Amazon page on A to Z.

This approach — where we move away from programs that were separate from our existing processes, and instead integrating our work into existing processes so they become durable — is the evolution to “built in” and “born inclusive,” instead of “bolted on.” As part of this evolution, we’ve been winding down outdated programs and materials, and we’re aiming to complete that by the end of 2024. We also know there will always be individuals or teams who continue to do well-intentioned things that don’t align with our company-wide approach, and we might not always see those right away. But we’ll keep at it.

We’ll continue to share ongoing updates, and appreciate your hard work in driving this progress. We believe this is important work, so we’ll keep investing in programs that help us reflect those audiences, help employees grow, thrive, and connect, and we remain dedicated to delivering inclusive experiences for customers, employees, and communities around the world.

#InThisTogether,

Candi

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Tesla recalling 239,000 vehicles in U.S. over rearview camera failures

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Tesla recalling 239,000 vehicles in U.S. over rearview camera failures

New Tesla Model 3 vehicles on a truck at a logistics drop zone in Seattle, Washington, on Aug. 22, 2024.

M. Scott Brauer | Bloomberg | Getty Images

Tesla is voluntarily recalling about 239,000 of its electric vehicles in the U.S. to fix an issue that can cause its rearview cameras to fail, the company disclosed in filings posted Friday to the National Highway Traffic Safety Administration’s website.

“A rearview camera that does not display an image reduces the driver’s rear view, increasing the risk of a crash,” Tesla wrote in a letter to the regulator. The recall applies to Tesla’s 2024-2025 Model 3 and Model S sedans, and to its 2023-2025 Model X and Model Y SUVs.

The company also said in the acknowledgement letter that it has already “released an over-the-air (OTA) software update, free of charge” that can fix some of the vehicles’ camera issues.

In 2024, Tesla issued 16 recalls in the U.S. that applied to 5.14 million of its EVs, according to NHTSA data. The recall remedies included a mix of over-the-air software updates and parts replacements. More than 40% of last year’s recalls pertained to issues with the newest vehicle in the company’s lineup, the Cybertruck, an angular steel pickup that Tesla began delivering to customers in late 2023.

Regarding the latest recall, the company said it had received 887 warranty claims and dozens of field reports but told the NHTSA that it was not aware of any injurious, fatal or other collisions resulting from the rearview camera failures.

Other customers with vehicles that “experienced a circuit board failure or stress that may lead to a circuit board failure,” which cause the backup camera failures, can have their vehicles’ computers replaced by Tesla, free of charge, the company said.

Tesla did not immediately respond to CNBC’s request for comment.

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