The young electric upstart Tesla Motors has shown a clean pair of heels to its combustion-engined centenarian rival Ford.
Elon Musk’s 13-year-old battery powered-car company has posted an unexpected profit and said it expects to get through the rest of the year without raising cash.
Ford, meanwhile, founded in 1903, posted third-quarter profit that fell by more than half, buffeted by a slowing US market and higher spending for its premier pickup truck model.
Tesla’s profit, its first in eight quarters, boosted its shares as much as 5.3 per cent in early trading on Thursday after they had slumped 16 per cent this year.
Amid the good news was the company’s US$139 million gain from the sale of zero-emission-vehicle (ZEV) credits to other car-makers who need them to meet California’s clean air rules. In the previous quarter, Tesla said they “recognised an insignificant amount of ZEV credit revenue” and did not provide a number.
The credits of $139m were “well above” the $30m estimated by UBS, said Colin Langan of the Swiss bank, one of the few analysts to predict a profit. Still, Tesla’s “cash burn likely returns” in the fourth quarter and beyond with an expected spike in capital expenditure, he said.
Ben Kallo, a Robert W Baird analyst, said: “A capital raise may be done opportunistically to create a financial buffer.”
Tesla’s positive free cash flow of $176m in the quarter is helped by the fact that the company’s capital expenditures budget is heavily loaded to the fourth quarter. Tesla spent $759m in the first nine months of the year and plans to spend more than $1 billion in the fourth quarter.
Contrast
Tesla said it will deliver just over 25,000 cars in the fourth quarter, after a final third quarter delivery count of 24,821. That will bring Tesla to 79,033 vehicles for the year. Tesla says it will make 500,000 cars a year in 2018.
In stark contrast to Tesla’s good fortune, Ford has had a bit of a downturn.
Net income dropped to $957m from $2.19bn a year earlier, the old-timer said.
The plunge in profit came in a rare quarter when Ford had negative cash flow of $2bn. It is spending big on its aluminium-bodied Super Duty pickup and has ambitions to join the hip young things and transform itself into a mobility company that can take on tech interlopers such as Uber and Google. The chief executive Mark Fields has said profit would fall this year and in 2018, and investors pushed Ford shares down 16 per cent this year.
“We’re going to stay real focused on putting out a great product, running a responsible business and growing in emerging mobility areas,” Mr Fields said.
The earnings decline came as the car maker trimmed production amid slower growth in the US market. There were also glitches in the manufacturing roll out of the Ford new Super Duty, a highly profitable model.
“We have had some supplier issues,” said the chief financial officer Bob Shanks, without specifying the problems. “There’s never a perfect launch. These are very complicated vehicles with thousands of parts coming together.”
Ford’s fading fortunes also contrast with General Motors, which reported record third-quarter net income of $2.8bn on Tuesday, and Fiat Chrysler Automobiles, which had a 29 per cent increase in earnings in the quarter and raised its profit forecast for the year to at least $6.3bn.
Veteran
Ford’s US light-vehicle sales fell 6.7 per cent in the quarter to 632,123 from 677,163 a year earlier, according to researcher Autodata. To reduce rising inventory, the the car maker temporarily shut five plants this month. In July, Ford said it would reduce North American factory output by 10 per cent in the third quarter to 710,000 cars and trucks. Automotive revenue fell to $33.3bn.
But the veteran motor maker is not likely to expire just yet, analysts say.
“Over the next few years, Ford won’t report horrible numbers, but it’s not attractive for investors,” said David Whiston, an analyst for Morningstar in Chicago. “The move to aluminium on the F-150 truck is great from a technology and fuel economy point of view, but it seems like they’re not getting the profitability [Wall] Street had hoped for.”
And that is sure to give teenage Tesla something to crow about.
* Bloomberg
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Points about the fast fashion industry Celine Hajjar wants everyone to know
- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
- Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
- Fast fashion labour workers make 80 per cent less than the required salary to live
- 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
- Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
Company%C2%A0profile
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'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
Killing of Qassem Suleimani
COMPANY%20PROFILE
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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SPECS
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
If you go
The flights
Etihad (etihad.com) flies from Abu Dhabi to Luang Prabang via Bangkok, with a return flight from Chiang Rai via Bangkok for about Dh3,000, including taxes. Emirates and Thai Airways cover the same route, also via Bangkok in both directions, from about Dh2,700.
The cruise
The Gypsy by Mekong Kingdoms has two cruising options: a three-night, four-day trip upstream cruise or a two-night, three-day downstream journey, from US$5,940 (Dh21,814), including meals, selected drinks, excursions and transfers.
The hotels
Accommodation is available in Luang Prabang at the Avani, from $290 (Dh1,065) per night, and at Anantara Golden Triangle Elephant Camp and Resort from $1,080 (Dh3,967) per night, including meals, an activity and transfers.
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
more from Janine di Giovanni
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
UAE currency: the story behind the money in your pockets
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Representing%20UAE%20overseas
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The%20specs%3A%20Taycan%20Turbo%20GT
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The biog
From: Upper Egypt
Age: 78
Family: a daughter in Egypt; a son in Dubai and his wife, Nabila
Favourite Abu Dhabi activity: walking near to Emirates Palace
Favourite building in Abu Dhabi: Emirates Palace
Places to go for free coffee
- Cherish Cafe Dubai, Dubai Investment Park, are giving away free coffees all day.
- La Terrace, Four Points by Sheraton Bur Dubai, are serving their first 50 guests one coffee and four bite-sized cakes
- Wild & The Moon will be giving away a free espresso with every purchase on International Coffee Day
- Orange Wheels welcome parents are to sit, relax and enjoy goodies at ‘Café O’ along with a free coffee
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Company%20profile
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Killing of Qassem Suleimani