Elon Musk Delivers Tesla's First Model X SUVs in California
Tesla Launches New Model X SUV
- Model X `sets a new bar for automotive engineering,' Musk says
- Features include falcon-wing doors, `bio-attack defense mode'
Elon Musk handed over the first six Model X SUVs to owners in California Tuesday, as Tesla Motors Inc. reached a milestone of having two all-electric vehicles in production at the same time.
“The X really sets a new bar for automotive engineering,” Musk, the company’s chief executive officer, told reporters before the event. “It’s like a car from the future.”
Musk was candid about the challenges of equipping Model X with complex features, including “falcon-wing” doors that open vertically, independently operable second-row seats and an enormous front windshield. All were difficult to engineer and dependent, in part, on several components and suppliers. The CEO will own Model X No. 1; venture capitalist and Tesla board member Steve Jurvetson gets No. 2.
The Tesla Motors Model X SUV
Photographer: David Paul Morris/Bloomberg
“In retrospect, we would not have had so many features and functionality,” Musk said. “But this accrues to the benefit of the buyer. It didn’t need to do quite so many things, but now that it’s done, I think anyone who buys it is going to love it.”
The coming-out party for the long-awaited sport utility vehicle, originally slated to debut in 2013, drew more than a thousand people to a Tesla building in Fremont, California, a city between Oakland and San Jose that’s home to the company’s lone assembly plant. Musk took the stage before 9 p.m. California time and walked a rapt audience through the vehicle’s features. A Model X pulling an Airstream trailer demonstrated its 5,000-pound tow capacity. Grocery bags from Whole Foods and a stroller were pulled from the trunk.
Joining the Model S sedan in Tesla’s lineup, the Model X’s double-hinged doors open vertically. Other attributes include automatic emergency braking, an expansive front windshield that stretches up onto the roof, 17 audio speakers and a HEPA filter system fills the cabin with medical-grade air.
“If there was a bio-weapon attack, all you need to do is get in your car,” Musk said.
The Model X is crucial to the company’s efforts to stretch its manufacturing capabilities and broaden its customer base. Tesla designed its first SUV in part to appeal to families with children and female drivers, as women buy more than half of small SUVs in the U.S., according to J.D. Power & Associates.
Internal crash tests indicate that the Model X should earn 5-star safety ratings, according to the company. The SUV will also help fund Tesla’s work on the Model 3, a more affordable vehicle due in late 2017.
“The X doubles our addressable market and gives us cash flow to develop the Model 3,” Musk said.
The Model X was first revealed as a concept in February 2012 at a Los Angeles event featuring California Governor Jerry Brown. The company previously targeted for sales to begin the following year, then by the end of 2014.
The Tesla MotorsModel X SUV
Photographer: David Paul Morris/Bloomberg
The question now is if Tesla can increase production of the Model X fast enough to meet its lowered sales target of at least 50,000 units for 2015. Much of Tesla’s sales projections are back-weighted to the fourth quarter, raising the stakes for a smooth -- and steep -- rise in production.
The first Model Xs are limited-edition Founders Series that typically go to board members and close friends of the company. Those are followed by the Signature Series models, which are fully loaded, require a $40,000 deposit and start at $132,000. A lower-priced base Model X will be released at a later date.
The all-wheel-drive SUV can be ordered in either six- or seven-seat versions. While the two-passenger third-row seat folds down flat, the second-row seats tilt forward and move up but don’t fold flat. Customers who are eager to haul around surfboards, skis or pieces of plywood are likely to order the version with 6 seats.
The Signature Model X has a 90 kilowatt-hour battery that’s projected to have a range of roughly 250 miles (402 kilometers) per charge, a top speed of 155 miles per hour and a 0-to-60 miles per hour time of 3.8 seconds -- or 3.2 seconds with “Ludicrous” mode. The cost of Signature Model X is $132,000; Ludicrous mode is $10,000 extra. Tesla has not yet released details on what the price of the base version will be.
The interior of the Tesla Motors Model X SUV
Photographer: David Paul Morris/Bloomberg
Standard features include a forward-looking camera, radar and 360 degree sonar sensors to enable advanced autopilot features that Tesla will roll out to customers over time via over-the-air software updates.
Tesla aims to deliver 50,000 to 55,000 vehicles this year, compared with a previous target of 55,000, partly owing to production snags with the Model X’s complex middle-row seats. The Palo Alto, California-based company delivered 21,577 vehicles in the year’s first half, meaning it must sell 28,423 vehicles in the second half to meet the lower end of its forecast.
Deft Touch With iPhone Screens Made This Entrepreneur $7 Billion
Yeung Kin-man, right, receives a souvenir during the donation ceremony on Sept. 8.
Source: City University of Hong Kong
- Biel Crystal's Yeung Kin-man becomes Hong Kong's 10th richest
- China manufacturer makes glass covers for the iPhone, Galaxy
Every time you’ve swiped the screen on a new iPhone or entered keystrokes on your Galaxy, you may have helped make Yeung Kin-man very rich.
Yeung is the founder and chief executive of Hong Kong-based Biel Crystal Manufactory (HK) Ltd., one of the biggest suppliers of cover glass to Apple Inc. and Samsung Electronics Co., the world’s two leading smartphone manufacturers. His control of the closely held business and ability to fend off competitors such as publicly traded Lens Technology Co., has given Yeung a net worth of $7.2 billion, according to the Bloomberg Billionaires Index.
“In the field of cover glass, Biel has always been the market leader," said Terry Yu, a Shanghai-based analyst at IHS Technology. "Lens has been growing very quickly, but it’s still trailing behind Biel. In the short term, I can’t see any challengers to the two of them.”
Biel representatives didn’t respond to seven phone calls requesting an interview with Yeung. Press officials for Apple and Samsung declined to comment on their suppliers.
Protective Covers
Biel takes sheets of raw material supplied by glass manufacturers such as Corning Inc.-- the world’s largest supplier of raw materials for smartphone glass according to Yu -- and fashions them into protective covers. The business had $3.2 billion of revenue in 2013, Yeung said in a speech at the company’s 2014 Chinese New Year celebration. Sales increased the following year to about $4 billion, according to state-owned financial newspaper Securities Daily.
He owns Biel with Lam Wai Ying, according to corporate filings with the Hong Kong Companies Registry. The two are identified as husband and wife on a local government website for the Chinese city of Huizhou, where Biel has a factory. Yeung owns 51 percent of the business and Ying has 49 percent, according to the filings. The index credits the entire fortune to Yeung as Biel’s founder and chief executive officer, making him Hong Kong’s 10th-richest person.
Watches, Smartphones
Yeung entered the manufacturing business almost three decades ago supplying glass covers for watches. He began making smartphone cover glass after he noticed that the plastic screen on his mobile phone scratched easily, according to a report in Chutian Metropolis Daily earlier this year. That prompted him to recommend the use of glass to smartphone manufacturers, the newspaper said.
He started manufacturing the covers after receiving an order of 1 million screens for the Motorola Razr, according to the Hong Kong Economic Journal. He eventually produced 100 million units for the phone maker, the newspaper said. The company snagged Apple as a customer when the first-generation iPhone was released in 2007, according to the report.
Market Dominance
Operating out of factories in the southern Chinese cities of Shenzhen and Huizhou, Biel has become the biggest cover-glass maker in the industry, according to Claire Ohm, a spokeswoman at LG Display Co., a Seoul-based digital display product maker that’s also a customer. "A large portion of cover glass we use is largely supplied by this company," she said.
Named after the Swiss city famous for its watchmaking, Biel is the world’s biggest maker of cover glass for phones made by Apple and Samsung, according to IHS analyst Yu, who estimates the company fills more than half of the cover glass orders from the two smartphone makers. Zhu Jixiang, a Shanghai-based analyst at Capital Securities, also cites Biel as the biggest and sees that market dominance as a barrier to entry for new entrants.
"It’s hard to see a third party rise to become a competitor," Zhu said.
Biel is valued using 2014 revenue and the enterprise value-to-sales multiple for Lens. A liquidity discount of 30 percent is applied to account for the limited information about Biel’s financial results and the fact that only one peer company is used for comparison.
Competing Valuations
Way Kuo, president of the City University of Hong Kong, valued Biel at HK$110 billion ($14.2 billion) in a Sept. 23 South China Morning Post article about Yeung after the billionaire made a record $26 million donation to the school. Lens has a market capitalization of $6.4 billion and is controlled by Zhou Qunfei, China’s richest woman, who has a net worth of $5.6 billion, according to the index.
Peng Mengwu, Lens’s board secretary, said in an e-mail that it doesn’t consider Biel a competitor, adding that it serves “premium brand clients.”
Lens shares climbed 1.2 percent to 59.80 yuan at the close in Shenzhen.
To stay ahead, Yeung said in the Economic Journal interview that he’s always trying to innovate with new technology to make his glass covers fingerprint-proof and scratch-resistant. He was quoted in the Sept. 12 article that the company spends 5 percent of its total sales on research and development.
“We always try to create something new," Yeung was quoted as saying. "For instance, fingerprints often get caught all over the touchscreen. That’s why we invented a technology that is fingerprint-proof. To enhance scratch resistance, we developed sapphire glass.”
With the increased order volume, Biel has expanded to more than 1.2 million square meters of production space at its China manufacturing facilities, and employs more than 100,000 workers, the newspaper said.
Source: Getty Images
These Are the 10 Most Competitive Countries in the World
The Netherlands and India climbed nicely, Brazil tumbled, and the U.S. took some high marks.
Switzerland, Singapore, and the U.S. are once again taking the top spots in the latest edition of the World Economic Forum's Global Competitiveness Report, which combines 113 indicators that the WEF believes matter most for countries' productivity.
Here's a look at this year's top 10:
- Switzerland
- Singapore
- United States
- Germany
- Netherlands
- Japan
- Hong Kong
- Finland
- Sweden
- United Kingdom
In terms of movement, the top three remained in place, but there were some larger moves elsewhere on the full list of 140. The Netherlands was the biggest gainer in the top 10, moving up to No. 5, from No. 8 in the previous report. Brazil saw the biggest fall, tumbling 18 spots to No. 75 and taking the title of the worst performer among BRICS countries. However, India was a bright spot, climbing 16 places and coming in at No. 55.
Competitiveness is defined as "the set of institutions, policies, and factors that determine the level of productivity of an economy, which in turn sets the level of prosperity that the country can earn." These indicators include areas such as infrastructure, innovation, and the macroeconomic environment.
While the report says a majority of advanced economies have recovered from the financial crisis, there are some troubling signs of a new normal by which the global economy isn't growing as fast as it did historically.
If you compare productivity growth over the past 10 years to the prior decade, for instance, many of the dominant countries in the world have seen declines, with India and China being the exceptions.
When you break out the seven pillars that the WEF's competitiveness indicators are based on, you can see how far countries have to climb in order to match the best performers in each category.
Although the U.S. didn't take a single No. 1 spot, it had high marks in the areas such as innovation, at 4th place.
Here's a look at the full list:
Traders Flee Emerging Markets at Fastest Pace Since 2008
A man waits for clients to ride on his tricycle in Beijing.
Photographer: Fred Dufour/AFP via Getty Images
- Investors have sold $40 billion of assets in the third quarter
- Biggest outflow since fourth quarter of 2008, IIF data show
Investors have pulled $40 billion out of developing economies in the third quarter, fleeing emerging markets at the fastest pace since the height of the global financial crisis.
The quarterly outflow was the first since 2009 and the biggest since the final three months of 2008, when traders sold $105 billion of assets, according to the Institute of International Finance. The retreat came as data signaled faltering Chinese economic growth, commodity prices slumped and the Federal Reserve moved closer to an increase in the near-zero U.S. interest rates that have supported demand for riskier assets in developing nations.
About $19 billion of the selloff was equities, with the remaining $21 billion in debt, the IIF said in a report Tuesday. There were outflows in all three months this quarter.
The MSCI Emerging Markets stocks benchmark has declined 20 percent in the past three months, on track for the biggest retreat in four years. Local-currency developing-nation bonds have lost 6.6 percent in dollar terms in the third quarter, according to Bank of America Corp. indexes, the biggest retreat on a quarterly basis since 2011. Currencies from Brazil to South Africa have tumbled, sending a gauge of 20 foreign-exchange rates to a record low.
Severe Reaction
“The reaction we’re seeing is quite severe, but a lot of the damage has already probably taken place,” Brendan Ahern, managing director of Krane Fund Advisors LLC in New York, said by phone. “It’s the trifecta of slowing investment growth, declining commodity prices and the strong dollar.”
A recovery around the Fed’s meeting this month, when policy makers decided to hold off on their first borrowing-cost increase since 2006, provided only a short-lived boost to portfolio flows, with outflows resuming and dipping back into negative territory in the week of Sept. 21, according to the IIF. Concern about the timing of a Fed liftoff have probably added to recent market volatility, further weighing on emerging-markets flows, the industry group said.
Corporate debt of non-financial firms in emerging markets rose to more than $18 trillion in 2014 from $4 trillion in 2004, the International Monetary Fund said in a study also released Tuesday.
Corporate Distress
“The upward trend in recent years naturally raises concerns because many emerging-market financial crises have been preceded by rapid leverage growth,” the authors including Selim Elekdag wrote, which is part of a larger report to be released next month.
For much of the past 15 years, easy credit from the Fed and a robust Chinese economy combined to drive investment dollars into emerging markets and drive growth. Now, the withdrawal of loose monetary policies pose a key risk for the emerging-market corporate sector if the flow of capital reverses, according to the Washington-based lender.
“Emerging markets should be prepared for corporate distress and sporadic failures in the wake of monetary policy normalization in advanced economies, and where needed and feasible, should reform insolvency regimes,” the IMF report said.
Photographer: Mark Elias/Bloomberg
The Young People Who Got Screwed by a Strong Economy
Research shows the housing boom dimmed long-term career prospects for some workers.
When the housing market was hot, from the late 1990s to 2006, there were many good jobs that didn’t require a college education. For a certain kind of high school grad, paying tuition started looking like a dodgy proposition.
Then the boom went bust.
For one reason or another, the young construction workers and sales agents who skipped college to enter the workforce never went back, opening a schism between the boom-time workers and the college-going generation that came of age after the economy went splat.
That’s the story sketched out in a new working paper, published by National Bureau of Economic Research, from professors Kerwin Kofi Charles and Erik Hurst at the University of Chicago and Matthew Notowidigdo of Northwestern University. The three used Census Bureau, Department of Education, and Labor Department data to track what they call “college attainment” through the housing cycle.
They found that the annual increase in the share of young adults who attended at least some college, which had been steady since the early 1980s, slowed in the late '90s. The slowdown was more dramatic in markets whose home prices were growing fastest, and it was mostly confined to students attending two-year colleges.
From "Housing Booms and Busts, Labor Market Opportunities, and College Attendance," by Kerwin Kofi Charles, Erik Hurst, and Matthew J. Notowidigdo
That's logical enough. If a strong housing market creates jobs and boosts pay—for people building and selling new homes, as well as for retail clerks, waitresses, and nannies—matriculants pay a greater opportunity cost. It makes even more sense when the researchers drill down on which potential students were ditching class. The percentage of young adults with bachelor’s degrees actually ticked up in some cities, perhaps because the wealth accruing in hot housing markets made it easier for parents to finance their children’s education.
On the whole, however, workers lured away from college during the housing boom didn’t catch up during the bust. “Our evidence suggests that these cohorts have experienced a sort of ‘educational scarring,’ whereby their rates of attainment are permanently lower than would have been true had there been no boom,” the authors wrote. That cohort's lower productivity, the authors suggested, may have contributed to the slow pace of the overall economic recovery.
Millennials are often described as having been thwarted by the bad luck of having had to launch careers in a terrible job market. For some older members of the generation, however, the misfortune seems to have been getting started when the economy was good.
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