Connect with us

Business

Tesla drives toward $1 trillion club on record Hertz order

Published

on

October 25, 2021

By Subrat Patnaik, Sanjana Shivdas and David Shepardson

(Reuters) – Tesla Inc on Monday neared $1 trillion in market capitalization as the company founded by Elon Musk received its biggest-ever order — 100,000 electric rental cars for Hertz.

Tesla shares were up 7.5% at $978, hitting a new record high Monday, following the order. Shares were also buoyed by news of the company’s Model 3 becoming the first electric vehicle to top monthly sales of new cars in Europe.

Advertisement

The news from Hertz comes as Tesla is coping with a backlog of unfulfilled orders for its vehicles and continuing supply chain disruptions, but it does solidify the mainstream appeal of electric cars.

Interim Hertz Chief Executive Mark Fields told Reuters the order will primarily be Model 3 vehicles. Hertz customers can rent a Tesla starting in November and the company will have 3,000 chargers in 65 markets by the end of 2022, he added. By the end of 2023, Fields said his firm will have 4,000 chargers in 100 markets.

“We absolutely believe that this is going to be competitive advantage for us,” Fields said of the Tesla order, due to be delivered by the end of 2022. “We want to be a leader in mobility… Getting customers experience with electrified vehicles is an absolute priority for us.”

Hertz, which requires customers to refuel gasoline-powered rental cars on return or pay a fee, said for now customers will not have to return Teslas fully recharged.

Hertz has around 430,000 to 450,000 vehicles worldwide, Fields said. He said Hertz would work with other automakers producing electric vehicles.

Advertisement

Tesla would have to top $995.75 to become a company worth a trillion dollars, according to Reuters calculations based on its latest filing. The world’s most valuable carmaker will join an elite club that includes Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc

The world’s most valuable automaker delivered a record 241,300 electric cars globally in the third quarter, even as it warned that supply chain headwinds would pressure margins.

Tesla’s cheapest Model 3 sedan starts at about $44,000, making this order worth about $4.4 billion, if the entire order were for its mass-market sedan.

Fields declined to say how much Hertz was paying for the order. Tesla was not immediately available for comment.

With the current order, Hertz said EVs will make up more than 20% of its global fleet. Fields cited the rising number of EVs for sale and consumer interest in electrified vehicles.

Advertisement

“We want to be out there early and fast and take a leadership position,” Fields said.

Wedbush said in a note to investors that “Tesla getting an order of this magnitude highlights the broader EV adoption underway in our opinion as part of this oncoming green tidal wave now hitting the U.S.”

“It (the order) puts an exclamation point under guidance for 50%+ growth in deliveries,” Roth Capital analyst Craig Irwin said. “Another solid piece of evidence EVs are going mainstream.”

The car rental firm also said it was installing thousands of chargers throughout its network. Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the United States and Europe.

“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim Chief Executive Officer Mark Fields.

Advertisement

U.S. President Joe Biden has made it a priority to support the rollout of electric vehicles to combat climate change, but a lack of charging network infrastructure could remain a key hurdle to his ambitious plan.

Analysts at Morgan Stanley bumped their price target on Tesla by 33% as the brokerage expects the electric carmaker to keep posting higher volumes, reaching more than 8 million deliveries in 2030.

A Cox Automotive study said Americans are hesitant to buy EVs due to anxieties about the ranges of the vehicles and high price tags, as well as weak charging infrastructure.

Hertz had filed for bankruptcy protection last year as travel demand sank during the height of the pandemic and talks with creditors failed to provide relief.

It was rescued by a group of investors including Knighthead Capital Management, Certares Opportunities and Apollo Capital Management.

Advertisement

(Reporting by Subrat Patnaik and Sanjana Shivdas in Bengaluru and David Shepardson in Washington; Additonal reporting by Eva Mathews, Aniruddha Ghosh and Kannaki Deka; Editing by Shounak Dasgupta and Lisa Shumaker)

Continue Reading
Advertisement

Business

Deutsche Post CEO favourite to become Telekom chairman – sources

Published

on

December 5, 2021

BERLIN (Reuters) – Frank Appel, the chief executive of German logistics company Deutsche Post, is the favourite to become the next supervisory board chairman of Deutsche Telekom, two sources close to the matter told Reuters.

The sources said Deutsche Post’s supervisory board is due to meet on Wednesday and Deutsche Telekom’s board will meet a week later to discuss the matter.

Both companies declined to comment.

Advertisement

The Handelsblatt newspaper reported on Saturday that Appel would potentially be proposed for election at Deutsche Telekom’s annual meeting on April 7.

The term of office of Telekom chairman Ulrich Lehner, who has headed the Telekom supervisory body since 2008, ends at next year’s shareholder meeting. He had already confirmed that an external search for a successor was under way.

Appel’s predecessor at Deutsche Post, Klaus Zumwinkel, also served as supervisory board chairman of Telekom.

The German government holds stakes in both companies.

Appel, a former McKinsey consultant, has been with Deutsche Post since 2000. In 2002, he became a member of the board of management, and in 2008 he moved up to the post of CEO.

Advertisement

His contract runs until 2022 and a decision on his future at the Post had been expected soon. Some industry insiders have speculated that Appel could be ready to move on given that Deutsche Post has posted record results through the pandemic.

(Reporting by Matthias Inverardi and Nadine Schimroszik; Writing by Emma Thomasson; editing by David Evans)

Continue Reading

Business

Canadian employers, facing labor shortage, accommodate the unvaccinated

Published

on

December 5, 2021

By Julie Gordon and Steve Scherer

OTTAWA (Reuters) – Canada’s tight labor market is forcing many companies to offer regular COVID-19 testing over vaccine mandates, while others are reversing previously announced inoculation requirements even as Omicron variant cases rise.

Canadian Prime Minister Justin Trudeau’s government adopted one of the strictest inoculation policies in the world for civil servants and has already put more than 1,000 workers on unpaid leave, with thousands more at risk.

Advertisement

Airlines, police forces, school boards and even Canada’s Big Five banks https://www.reuters.com/world/americas/canadas-major-banks-require-employees-entering-premises-be-vaccinated-2021-08-20 have also pledged strict mandatory vaccine policies. But following through has proven less straightforward, especially as employers grapple with staffing shortages and workers demand exemptions.

Job vacancies in Canada have doubled so far this year, official data shows, and vaccine mandates can make filling those jobs harder, potentially putting upward pressure on wages. That could fuel inflation https://www.reuters.com/world/americas/canadas-annual-inflation-rate-hits-47-oct-highest-since-feb-2003-2021-11-17, already running at a near two-decade high.

“It’s already difficult to find staff, let alone putting in a vaccine mandate. You’d cut out potentially another 20%” of potential workers, said Dan Kelly, chief executive of the Canadian Federation of Independent Business.

There are pitfalls to employing the unvaccinated. Companies run a higher risk of COVID-19 outbreaks and many vaccinated employees are uncomfortable working with those who have not had the jab, said industry groups and marketing experts.

At Luda Foods, a Montreal-based soup and sauce maker, president Robert Eiser said he has 14 open jobs, no vaccine mandate and no plans to restrict new hires to the vaccinated.

Advertisement

“I don’t know that I want to reduce the (labor) pool, which is already quite low,” said Eiser. “We need to attract people to meet the demand. If we don’t, our competitors will.”

Data released on Friday underpinned Canada’s tight labor market, with a hefty 153,700 jobs https://www.reuters.com/markets/us/canada-posts-hefty-job-gains-outlook-clouded-by-omicron-variant-2021-12-03 added in November. It also showed a growing mismatch between available workers and unfilled jobs. And job postings are far above pre-pandemic levels. (Graphic: Canada job postings surge above pre-pandemic level Canada job postings surge above pre-pandemic level, https://graphics.reuters.com/HEALTH-CORONAVIRUS/CANADA2/klvyknzklvg/chart.png)

WALKING BACK

The province of Quebec backtracked on a vaccine mandates for healthcare workers last month, saying they could not afford to lose thousands of unvaccinated staff. Ontario, which was also eyeing a mandate, said it would not go ahead.

Toronto-Dominion Bank and Bank of Montreal have both softened their vaccine policy to allow regular testing for workers who missed their Oct. 31 inoculation deadline.

Advertisement

In Canada, 86% of adults are fully inoculated, though that drops under 80% among 18-40 year olds. At least 15 cases of the new Omicron https://www.reuters.com/markets/rates-bonds/canada-has-reported-total-11-cases-omicron-variant-health-official-2021-12-03 variant in Canada have been reported in the past week.

John Cappelli, vice president of onsite managed services in Canada for global recruitment firm Adecco, said half of his clients are mandating vaccines with the other half allowing regular testing for the unvaccinated.

But he expects the Omicron variant will prompt more workplaces to get strict on vaccination, even as they grapple with the tightest job market he’s seen in his 25-year career.

“We are now starting to see our first workplace (COVID-19) cases in five months,” he said.

The number of Canadian job postings on search website Indeed mentioning vaccine requirements has quadrupled since August. (Graphic: Canada job postings and vaccine mandates, https://graphics.reuters.com/HEALTH-CORONAVIRUS/CANADA3/byvrjqrlmve/chart.png)

Advertisement

In the hard-hit manufacturing sector, where 77% of firms say their top concern is attracting and retaining workers, vaccine mandates are more rare.

Dennis Darby, CEO of Canadian Manufacturers and Exporters, said most of Canada’s factories have operated safely throughout the pandemic. While CME encourages vaccination, “some companies are still using rapid testing if somebody doesn’t want to get vaccinated,” he added.

But companies risk a hit to their reputation if they are overt in efforts to tap into the unvaccinated as a labor pool, said Wojtek Dabrowski, managing partner at Provident Communications.

“If you go out and say, ‘We are intentionally seeking to hire unvaccinated people,’ many customers are equating that with you being anti-science and anti-safety,” said Dabrowski.

(Reporting by Julie Gordon and Steve Scherer in Ottawa, additional reporting by Rod Nickel in Winnipeg and Nichola Saminather in Toronto; Editing by Alistair Bell)

Advertisement

Continue Reading

Business

Israeli firm to sell HSBC Tower in New York for $855 million

Published

on

December 5, 2021

By Steven Scheer

JERUSALEM (Reuters) – Israel’s Property and Building Corp said on Sunday it agreed to sell the HSBC Tower building in midtown Manhattan for $855 million to New York-based real estate firm Innovo Property Group, recording a net loss of $45 million.

The Israeli company, which is 63% owned by Discount Investment Corp, said it had also sold property in Israel for 390 million shekels ($123 million).

Advertisement

Doron Cohen, chief executive of both Property and Building and Discount, said management was focusing on income-producing properties in Israel and that the amount it was receiving from both transactions would allow it to advance this policy.

“We are continuing the policy and examining the possibility of realising additional properties in the United States and in Israel,” Cohen said, noting the sale of the HSBC building came despite “gloomy” predictions over U.S. commercial real estate market.

He cited Tivoli Village, an upscale apartment complex in Las Vegas that opened this year, which may be put up for sale as part of the company’s efforts to boost liquidity and reduce debt.

Along with conglomerate Koor Industries, Property and Building, bought the 30-storey, 80,000 square metre HSBC Tower in 2009 for $353 million. In 2011, Property acquired Koor’s stake in the tower which has an occupancy of 99%, it said. HSBC had bought the building in the 1990s.

Property and Building said the value of the HSBC Tower in its books was $864 million as of Sept. 30. After costs, it said it would record a net loss of $45 million from the sale.

Advertisement

Completion of the sale is expected by April 1, 2022 subject to Innovo’s right to advance the date while also receiving options to postpone the completion twice for 30 days each.

Property said after the sale it will have a net cash flow of $343 million.

Its shares were 0.7% lower in afternoon trading in Tel Aviv.

($1 = 3.1605 shekels)

(Reporting by Steven Scheer;Editing by Elaine Hardcastle)

Advertisement

Continue Reading
Advertisement

Trending