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Jim Cramer sees Tesla under pressure as EV competition heats up

Electric vehicle maker Tesla is cutting prices in the United States and throughout Europe again, according to listings on the company’s website on Thursday night in the U.S.

Tesla did not respond to a request for comment on what motivated it to slash prices this week.

However, the move in the U.S. may help Tesla qualify for more federal EV tax credits, and stoke sales volume here and abroad, after competition and interest rates increased.

In Europe, Tesla cut prices on its Model 3 and Model Y vehicles in Austria, France, Germany, the Netherlands, Norway, Switzerland and the U.K.

The Tesla Model Y (left) and Model 3 electric cars at the company’s official launch event in Bangkok on Dec. 7, 2022. The Model 3 is the company’s entry-level sedan. The Model Y is categorized by some as an SUV and others as a crossover.

Lillian Suwanrumpha | Afp | Getty Images

Reuters reported that in Germany, Tesla cut prices on the Model 3 and the Model Y from 1% to around 17%, depending on the configuration. Tesla’s Model 3 was the bestselling electric vehicle in Germany in December 2022, followed by the Model Y. The company beat out Volkswagen and its popular electric vehicle the ID.4 in Germany.

Tesla’s Model 3 at its discounted price is comparable to Volkswagen’s entry level electric car, the ID.3.

According to the independent EV industry researcher, TroyTeslike, the price of a new Tesla Model 3 in the U.S. has dropped between 6% and 14%, depending on configuration, and the cost of the Model Y dropped about 19%, also depending on configuration.

The Model 3 is Tesla’s entry-level sedan. The Model Y is categorized by some as a sport utility vehicle and others as a crossover. The company also lowered prices of its more expensive, Model S sedan and falcon-wing SUV Model X vehicles in the U.S.

Generally, EVs qualify for tax credits in the U.S., depending on what form factor or category they fall into, their efficiency and range (meaning the number of miles they can travel on a fully charged battery) as well as the manufacturers’ suggested retail price.

The U.S. government has delayed setting new rules about sourcing of raw materials and battery components to qualify automakers for a $7,500 clean vehicle tax credit until at least the end of March 2023.

This means that Tesla — and other EV makers — can buy parts and critical minerals from suppliers around the world for now, and still qualify for some EV subsidies. Those seeking to qualify for federal subsidies do need to complete final vehicle assembly of their electric cars in North America under current, interim rules.

The latest round of discounts by Tesla may set the company up to reap the benefits of EV tax credits in both the near and longer term. But it also risks upsetting customers who just agreed to take delivery of new electric cars from Tesla before the end of 2022 at higher prices.

Earlier this month, Tesla angered customers in China by slashing prices on its Model 3 and Model Y cars there after many had agreed to take delivery at higher prices before Dec. 31. Some of the customers staged protests and demanded rebates, but so far, Tesla has not relented, according to a Reuters report.

In late December, Tesla discounted its Model 3 and Model Y cars by about $7,500 to entice customers to take deliveries before the end of the fourth quarter. Tesla also offered some U.S. customers 10,000 miles’ worth of free charging (at Tesla Supercharging stations) if they agreed to take delivery before the year’s end.

Despite the discounts, in the fourth quarter of 2022, Tesla reported deliveries of 405,278 vehicles and production of 439,701 vehicles. The company had been telling shareholders to expect 50% in annual vehicle delivery growth over a multiyear horizon but fell shy of that annual goal and analysts’ expectations in the fourth quarter.

Tesla now operates its first U.S. vehicle assembly plant in Fremont, California, a newer one in Austin, Texas, its first overseas factory in Shanghai, and a newer one in Gruenheide, Germany.

The company’s production capacity should be much higher in 2023 than in previous years with those factories, but bearish analysts have voiced concerns over a possible “demand cliff.”

Tesla is now facing more competition, higher interest rates and slower consumer spending than in recent years, Bernstein analysts wrote in a note on Jan. 12.

They said, “We believe that many investors underestimate the magnitude of the demand challenges Tesla is facing.” However, the firm has had an “underperform” rating and price target of $150 on shares of Tesla after the company’s share price declined in recent months.

CEO Elon Musk sold billions of dollars’ worth of his Tesla shares last year, in part to finance a leveraged buyout of Twitter for around $44 billion. Since he took over Twitter and appointed himself CEO in late October, Musk has been splitting time, and sharing some resources, between the social media business and his electric car company.

Tesla plans to report its 2022 fourth-quarter results on Jan. 25, 2023, and should share its new outlook for the year ahead then.

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Samsung aims to catch up to Chinese rivals for thin foldable phones as Apple said to enter the fray

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Samsung aims to catch up to Chinese rivals for thin foldable phones as Apple said to enter the fray

Samsung launched the Galaxy Z Fold6 at its Galaxy Unpacked event in Paris. The tech giant said the foldable device is thinner and lighter than its predecessor.

Arjun Kharpal | CNBC

Samsung will unveil a thinner version of its flagship foldable smartphone at a launch likely set to take place next month, as it battles Chinese rivals to deliver the slimmest devices to the market.

Folding phones, which have a single screen that can fold in half, came in focus when Samsung first launched such a device in 2019. But Chinese players, in particular Honor and Oppo, have since aggressively released foldables that are thinner and lighter than Samsung’s offerings.

Why are slim foldables important?

“With foldables, thinness has become more critical than ever because people aren’t prepared to accept the compromise for a thicker and heavier phone to get the real estate that a folding phone can deliver,” Ben Wood, chief analyst at CCS Insight, told CNBC on Thursday.

Honor, Oppo and other Chinese players have used their slim designs to differentiate themselves from Samsung.

Let’s look at a comparison: Samsung’s last foldable from 2024, the Galaxy Z Fold6, is 12.1 millimeter ~(0.48 inches) thick when folded and weighs 239 grams (8.43 oz). Oppo’s Find N5, which was released earlier this year, is 8.93 millimeters thick when closed and weighs 229 grams. The Honor Magic V3, which was launched last year, is 9.2 millimeters when folded and weighs 226 grams.

“Samsung needs to step up” in foldables, Wood said.

And that’s what the South Korean tech giant is planning to do at its upcoming launch, which is likely to take place next month.

“The newest Galaxy Z series is the thinnest, lightest and most advanced foldable yet – meticulously crafted and built to last,” Samsung said in a preview blog post about the phone earlier this month.

But the competition is not letting up. Honor is planning a launch on July 2 in China for its latest folding phone, the Magic V5.

“The interesting thing for Samsung, if they can approach the thinness that Honor has achieved it is will be a significant step up from predecessor, it will be a tangible step up in design,” Wood said.

Despite these advances by way of foldables, the market for the devices has not been as exciting as many had hoped.

CCS Insight said that foldables will account for just 2% of the overall smartphone market this year. Thinner phones may be one way to address the sluggish market, but consumer preferences would also need to change.

“There is a chance that by delivering much thinner foldables that are more akin to the traditional monoblock phone, it will provide an opportunity to turn consumer heads and get them to revisit the idea of having a folding device,” Wood said.

“However, I would caution foldables do remain problematic because in many cases consumers struggle to see why they need a folding device.”

Although the market remains small for foldables compared to traditional smartphones, noted analyst Ming-Chi Kuo of TF International Securities on Wednesday said Apple  — which has been notably absent from this product line-up — plans to make a folding iPhone starting next year.

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Google looks likely to lose appeal against record $4.7 billion EU fine

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Google looks likely to lose appeal against record .7 billion EU fine

Cheng Xin | Getty Images

Google suffered a setback Thursday after an advisor to the European Union’s top court recommended it dismiss the tech giant’s appeal against a record 4.1-billion-euro ($4.7 billion) antitrust fine.

Juliane Kokott, advocate general at the European Court of Justice, advised the court to throw out Google’s appeal and confirm the fine, which was reduced in 2022 to 4.125 billion euros from 4.34 billion euros previously by the EU’s General Court.

“In her Opinion delivered today, Advocate General Kokott proposes that the Court of Justice dismiss Google’s appeal and, therefore, uphold the judgment of the General Court,” the Luxembourg-based ECJ said in a press release Thursday.

The fine relates to a long-running antitrust case surrounding Google’s Android operating system.

In 2018, the European Commission slapped Google with the record-breaking penalty on the grounds that it abused Android’s mobile dominance to give unfair advantage to its own apps via pre-installation deals with smartphone makers. The Commission is the executive body of the EU.

Google said it was “disappointed” with the ECJ advocate general’s verdict, adding it “would discourage investment in open platforms and harm Android users, partners and app developers.”

“Android has created more choice for everyone and supports thousands of successful businesses in Europe and around the world,” a spokesperson for the company told CNBC via email.

Though the advocate general’s proposal is non-binding, judges tend to follow four out of five such non-binding opinions. The ECJ is expected to deliver a final ruling in the coming months.

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SpaceX’s Starship explodes during routine test in Texas

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SpaceX's Starship explodes during routine test in Texas

A SpaceX Starship is seen in Boca Chica, Texas in 2023.

Patrick T. Fallon | Afp | Getty Images

A SpaceX Starship rocket on Wednesday exploded at the Starbase facility in Texas during routine testing in preparation for a launch flight, according to local authorities and live stream footage.

The rocket “experienced a major anomaly while on a test stand at Starbase” at 11 p.m. local time, SpaceX said on social media, noting “a safety clear area around the site was maintained throughout the operation and all personnel are safe and accounted for.”

Local authorities said that Starship “suffered a catastrophic failure and exploded,” with no injuries reported at the time of writing and an investigation is now underway. Live stream footage of Starbase showed the rocket burst into flame, shooting a large fireball into the sky.

Another Starship launch was expected to take place by the end of this month.

It’s been a tempestuous ride for Elon Musk’s mammoth Starship, after three flight launch attempts devolved in fiery glory and air-traffic stopping debris this year to date. Notably, the rocket model has taken off successfully in previous instances, but its vast scale — standing 120 meters (394 feet) tall when factoring in the Super Heavy booster — has raised concerns over its overall reliability and requirements for orbital refueling once in flight.

Yet Musk has clinched his hopes on Starship as the key vehicle for both NASA’s third and fourth Artemis missions — part of a broader plan to return humans to the Moon — due to take place over 2027-2028. The rocket is also set to play a role in launching the Starlab private space station in the transition to commercial space orbiting labs once the International Space Station retires after 2030.

Critically, Starship is also central to Musk’s — and former ally U.S. President Donald Trump’s — broader ambitions to colonize Mars. The rocket is set to ferry Optimus robots to the red planet by the end of 2026, with Musk in March saying, “If those landings go well, then human landings may start as soon as 2029, although 2031 is more likely.”

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