Biz Break: Tesla Motors expands in China, hits new stock high
Posted: 08/29/2014 02:10:02 PM PDT
Updated: 08/29/2014 02:47:24 PM PDT
Today: Tesla Motors signs a deal to build more than 400 new charging stations in China, and the company's stock makes another record-breaking drive. Also: Apple hits more new records despite reports that wearable offering won't appear until 2015.
The Lead: Tesla plans charging expansion in China
Tesla Motors announced a deal Friday with a wireless carrier that will nearly triple its number of charging stations in China, the world's largest auto market, and investors responded by again sending the Palo Alto electric-car maker's stock to record highs.
Tesla will install 400 charging stations across 120 cities as well as 20 of its supercharger stations, all at China Unicom retail outlets, Tesla spokeswoman Lis Jarvis-Shean confirmed in an email Friday.
'We have been working with China Unicom already -- China Unicom is our in-car 3G connectivity service provider of Tesla -- so we are deepening our cooperation with them,' Jarvis-Shean noted.
Tesla already has more than 200 charging stations in China, along with 13 superchargers, as it seeks to establish infrastructure in a critical market. China led the world with sales of 22 million automobiles in 2013, more than a quarter of the global market of 82.8 million, and the country has been seeking to encourage electric vehicles.
A Chinese state agency said Friday that the country will stop charging sales tax on sales of electric cars, adding to savings already provided by rebates from the government, which hopes electric and hybrid automobiles can help cut down on stultifying pollution in the country. An official with a Chinese electric-car manufacturer told the Wall Street Journal on Friday that the country is also considering a gasoline tax to fund more charging stations.
'While the government can't force consumers to buy electric vehicles, it can mandate the construction of charging stations,' BYD chairman Wang Chuanfu said.
Tesla has been building out its charging network in the U.S. and Europe quickly in the past two years. proclaiming it to be the fastest-growing charging network in the world. In China, CEO Elon Musk has said the company plans to spend several hundred million dollars on infrastructure to boost its chances of big sales in the country.
'My instructions to the team are to spend money as fast as they can spend it without wasting it,' Musk said in April while personally delivering the first eight Model S units to be sold in China.
Musk has predicted sales of about 5,000 Model S units in China this year, but admitted that was just a rough estimate. The company has not released any official sales numbers for the country thus far, but has spoken optimistically about its performance.
'Model S is off to a very encouraging start in China, especially considering that we are delivering cars only in the areas around Beijing, Shanghai, Shenzhen and recently Hangzhou, where we can assure customers of service coverage,' Musk and Chief Financial Officer Deepak Ahuja wrote to shareholders in a July letter detailing earnings.
Tesla was one of the fastest growing public companies in Silicon Valley last year, and its spiking share prices rose even faster: While sales grew 387 percent to more than $2 billion in 2013, Tesla's market cap jumped 492 percent. Gains have continued this year, with Tesla hitting a record share price of $272 before closing with a 2.2 percent gain at $269.70; the stock is now up more than 79 percent in 2014.
SV150 market report: Apple gains to yet another record high
Tesla isn't the only high-profile Silicon valley companies that seems to hit a record stock high daily: Apple increased to new all-time highs as well Friday, as Wall Street indexes closed out a strong month with gains.
Apple followed up Thursday's invitation to a mystery event in Cupertino and all-time stock highs with yet another increase, gaining 0.2 percent to $102.50. Expectations for a wearable debut soon after the Sept. 9 event took a hit, however, as Recode and the Financial Times reported that Apple will not offer its new gadget for sale until 2015. The device, which many expect to be a wristwatch-like device, would then not be available for the holiday shopping season, cutting into Apple's revenues in that important period. Seeking to cut into the revenues of a competitor, Apple made yet another attempt to ban Samsung products from being imported to the U.S., appealing a decision made earlier this week.
Oracle's appeal of a verdict in its big courtroom battle against competitor SAP didn't go its way, as the court decided it would not reinstitute a record $1.3 billion verdict in the Redwood City company's favor; the software giant's stock still gained 0.6 percent to $41.53. The biggest gain of the day in the SV150 belonged to Splunk, with the San Francisco big-data software company leaping 19.1 percent to $53.93 after revealing quarterly earnings that a host of analysts praised Friday. Omnivision, an Apple supplier that is being targeted for an acquisition, did not do as well after its earnings report, falling 0.2 percent to $27.11. Google gained 0.4 percent to $582.36 after revealing a secretive drone project late Thursday afternoon, but the Mountain View search giant may lose an important executive to the White House.
Up: Splunk, Workday, GoPro, Tesla, EA, Salesforce, Pandora, Applied Materials, Facebook, LinkedIn
Down: Ruckus Wireless, SanDisk, Intuit
The SV150 index of Silicon Valley's largest tech companies: Up 9.42, or 0.58 percent, to 1,628.83
The tech-heavy Nasdaq composite index: Up 22.58, or 0.5 percent, to 4,580.27
The blue chip Dow Jones industrial average: Up 18.88, or 0.11 percent, to 17,098.45
And the widely watched Standard & Poor's 500 index: Up 6.63, or 0.33 percent, to 2,003.37
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