Tesla’s Deliveries Rise 70 Percent Following Dubious Discounting Scheme

Tesla Motors’ steep third quarter discounts for Model S vehicles have apparently resulted in a 70 percent rise in the company’s deliveries.

The California-based electric automaker said Sunday that it delivered nearly 24,500 cars in the quarter, including 15,800 of Tesla’s Model S and 8,700 of the Model X, a sports utility vehicle. The increase in deliveries, of course, comes after Tesla offered an “aggressive” secretive discount program as a ploy to drive delivery numbers.

The ploy was used to dramatically reduce the luxury vehicle’s pricey cost, which usually retails at around $100,000. The delivery count, because of the reduction in cost of inventoried vehicles, rose 37 percent from the previous quarter.

Brad Erickson, an analyst with Pacific Crest Securities, said on Sept. 29 that he “detected aggressive Model S discounting at U.S. sales centers to maximize third-quarter deliveries.”

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New Report Sheds Light On Tesla’s Dirty Batteries

The high demand for the lithium ion batteries that power electric vehicles like those produced by Tesla Motors could potentially do more harm than good to the environment, according to a report Sunday from The Washington Post.

The electric vehicle automaker uses Panasonic batteries, which, according to the report, uses graphite derived from mines in China. The mines are raining graphite particles down on the residents of several villages in northeastern in the country.

Tesla told reporters its batteries do not include graphite from the Chinese company BTR, yet declined to identify its graphite source. Nearly 75 percent of the world’s graphite comes from the northeastern section of the China. The company’s refusal to explain where its graphite is produced could raise questions about the environmental soundness of its vehicles.

Panasonic, one of the largest manufacturers of Tesla’s lithium ion batteries, is forking over $1.6 billion to the cost of Tesla’s “gigafactory,” a massive factory meant to build the company’s lithium ion batteries. Tesla believes the Nevada-based plant will produce about 500,000 electric-car batteries annually.

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Musk’s Tweet Fails To Recognize That Tesla Has Crossed The Rubicon With The Inventory Model

While many commentators have expressed disbelief that a CEO is not aware of the Company’s discounting practices, let’s give Mr. Musk the benefit of doubt. It is not that difficult to see that this unfocussed CEO does not know what is going on in his Company. Life is too busy contemplating life on Mars and trying to force the wrongheaded acquisition of SolarCity (NASDAQ:SCTY).

However, if Mr. Musk did not know the sales practices at Tesla, it brings forth a whole different set of questions:

- How can a competent CEO not know the sales practices at his Company? If the argument is that Mr. Musk does not have the time, then we suggest that the Company’s board is once again asleep at the wheel.

- What was Mr. Musk expecting that his sales teams would do when he sent a company-wide email to push hard to get strong Q3 results ahead of capital raise?

- Does Mr. Musk not discuss sales and promotional strategies with his sales and finance teams?

- Is Mr. Musk not aware that Tesla builds spec cars (also called “inventory”) which are not build-to-suit?

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Implication of sabotage adds intrigue to SpaceX investigation

Elon Musk, SpaceX’s founder and chief executive, has called the failure “the most difficult and complex” the company has ever had. About a week after the explosion, he pleaded with the public to turn in video or audio recordings of the blast and said that the company has not ruled out sabotage as a factor.

“Particularly trying to understand the quieter bang sound a few seconds before the fireball goes off,” he wrote on Twitter. “May come from rocket or something else.”

Since then, SpaceX, which is leading the investigation with help from the Air Force, NASA and the Federal Aviation Administration, said it is narrowing down on the cause of the explosion, focusing on a breach in a second-stage helium system.

At a conference in Mexico this week, Musk said that finding out what went wrong is the company’s “absolute top priority,” but he said what caused the explosion is still unknown.

“We’ve eliminated all of the obvious possibilities for what occurred there,” he said. “So what remains are the less probable answers.”

He didn’t say what those might be.

The Air Force’s 45th Space Wing, which is helping SpaceX with the investigation, declined to comment because the investigation is ongoing.

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Lawmakers are fighting a space battle on Capitol Hill over SpaceX and its biggest competitor

Raising issues about SpaceX, its launch failures and anomalies, and its relationship with the US government is not a first for Coffman.

As a member of the House Armed Services strategic forces subcommittee (which oversees military spacecraft), he did so in 2014, and in 2015 on multiple occasions.

The senator faces a tough 2016 reelection campaign in his district — the home base of ULA.

Records show that, during his political career, Coffman has accepted at least $51,800 in campaign donations from Lockheed Martin and $21,000 from Boeing, and has publicly defended ULA.

In the 2016 election cycle, SpaceX contributed money to at least half of the 24 signers of the congressional letter that responded to (and contested) Coffman’s. Flores himself has taken at least $2,000, and cosigner Loretta Sanchez (D-CA) accepted at least $7,000 from SpaceX.

Flores also presides over district 17 in Texas, which is home to SpaceX’s 4,000-acre rocket development facility in the town of McGregor.

Samanthan Masunaga, a reporter for the Los Angeles Times, captured the relationship well in a story published in May 2016:

“Traditional launch providers see their market being threatened by nontraditional entrants,” said Loren Thompson, aerospace analyst with the Lexington Institute, an Arlington, Va., think tank. “Basically, this is competition between launch providers over market share and money that in the political process gets related to local interests.”

Business Insider contacted Rep. Coffman’s press secretary as well as ULA, Boeing, and Lockheed Martin about campaign funding and other issues related to this story, but we did not immediately receive a response. Representatives from Rep. Flores’ office and SpaceX also did not immediately provide a comment.

Despite the apparent turf-based lobbying war, Coffman and his colleagues are not alone in their critique of how government agencies permit SpaceX to internally lead their own mishap investigations — and, by extension, other rocket companies like Orbital ATK and ULA. (Both have chosen to lead their own investigations in recent years.)

In fact, a June 2016 audit by NASA’s Office of Inspector General (OIG) argues that internally led probes don’t meet the bar for being independent.

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California to Tesla: Don’t call it ‘Autopilot’

California regulators, it turns out, take a dim view of Tesla Motors’ Autopilot — not the self-steering system itself, but the name.

In draft regulations released late Friday, the state Department of Motor Vehicles said car companies should not use the terms “self-driving,” “automated” or “auto-pilot” in advertising unless their cars are capable of driving themselves without human passengers paying attention.

For Palo Alto’s Tesla, that could pose a problem.

The company’s Autopilot system, available in both the Model S electric sedan and Model X SUV, can steer on its own and change lanes. But the human driver is supposed to remain ready to take the wheel whenever needed.

The fatal crash in May of a Tesla driver who appeared to be watching a Harry Potter video while Autopilot drove his car made the need for that requirement clear.

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Business House Republicans cite concerns over SpaceX explosion

A group of 10 Republican members of Congress wrote Thursday that they are increasingly concerned about SpaceX’s ability to safely fly NASA astronauts and national security satellites after the company recently suffered its second rocket explosion in just over a year.

In a letter to the Air Force, NASA and the Federal Aviation Administration, the group said SpaceX should not be leading the investigation into its most recent failure, and that authority should be turned over to the federal government “to ensure that proper investigative engineering rigor is applied.”

Last year, an unmanned Falcon 9 rocket exploded a couple minutes after it launched a resupply mission to the International Space Station, destroying $118 million worth of cargo. Then, earlier this month, another Falcon 9 rocket blew up as it was being fueled ahead of an engine test. A $195 million commercial satellite sitting on top of the rocket was lost in the fireball.

“These failures could have spelled disaster, even loss of life, had critical national security payloads or NASA crew been aboard those rockets,” wrote the members, many of whom represent states where SpaceX’s chief competitor, the United Launch Alliance, has a strong presence.

SpaceX declined to comment. After the Sept. 1 explosion, SpaceX founder Elon Musk said on Twitter that the Dragon capsule would have been able to abort in time, ferrying the astronauts on board to safety.

The company has said it is narrowing down the cause of the explosion, pinpointing a breach in a second-stage helium system. Earlier this week, Musk said the investigation was “vexing and difficult.” He stressed that finding out what went wrong is the company’s “absolute top priority” but said what actually caused the explosion was still unknown.

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