(Reuters) - Tesla Inc on Wednesday beat analysts’ estimates for second-quarter revenue, helped by better-than-expected vehicle deliveries despite disruptions caused by the coronavirus crisis.
Revenue fell to $6.04 billion from $6.35 billion a year earlier. Analysts had expected revenue of $5.37 billion, according to IBES data from Refinitiv.
Electric car maker Tesla Inc. has picked the Austin, Texas, area as the site for its largest auto assembly plant employing at least 5,000 workers.
The new factory will build Tesla’s upcoming Cybertruck pickup and will be a second U.S. manufacturing site for the Model Y small SUV, largely for distribution to the East Coast.
Tesla will build on a 2,100-acre (85-hectacre) site in Travis County near Austin and will get more than $60 million in tax breaks from the county and a local school district over the next decade. Work on the plant, which will be over 4 million square feet, is already underway, Tesla CEO Elon Musk said.
He did not put a number on how many vehicles the facility would produce. “Long term, a lot,” Musk said.
The company has pledged to invest $1.1 billion and said it will pay a minimum wage of $15 per hour to employees and provide health insurance, paid leave and other benefits.
The area that’s home to the University of Texas at Austin and tech companies such as Dell Inc. was a candidate for the plant all along, but Tulsa, Oklahoma, emerged in mid-May as another possibility.
Tesla doesn’t have a lot of time to get the factory running if it wants to meet target production dates. The company says on its website that the Cybertruck will be available starting late next year. Tesla has often missed promised production dates in the past.
Musk has reportedly been happy with Texas, where his SpaceX rocket company has operations in Brownsville and in McGregor north of Austin.
The new factory will be Tesla’s biggest so far, although it may not employ as many workers as the 10,000 at its factory in Fremont, California. The electric car maker has said it wants the new factory to be in the center of the country and closer to eastern markets.
The Fremont factory currently is Tesla’s only U.S. assembly plant. It has a second U.S. factory in Reno, Nevada, where it builds batteries for its vehicles and employs about 6,500 people. Tesla also has a factory in Shanghai and another one under construction in Germany.
Musk has been unhappy with California, where earlier this year he flouted local orders to stay closed to help stem the spread of the novel coronavirus. Musk has threatened to move the company’s headquarters out of Palo Alto and all future vehicles out of the plant in Fremont, a reworked factory that once was run jointly by Toyota and General Motors.
Republican Texas Gov. Greg Abbott has not allowed cities and counties to impose local orders that would close businesses as the virus began surging to record levels this summer. The state did not give Tesla any additional financial incentives, Abbott spokesman John Wittman said.
“Tesla is one of the most exciting and innovative companies in the world, and we are proud to welcome its team to the State of Texas,” Abbott said in a statement.
Texas has no corporate or individual income taxes. It also touts the region’s young workforce as one of the most educated in the country. Nearly 47% of adults have at least a bachelor’s degree, pushing Austin into the top 10 among large metro areas, the site says. But at present, Tesla can’t legally sell its vehicles in Texas. A state law requires cars to be sold through franchised dealers, not company stores like Tesla operates.
Tulsa put up a good fight, but may have been used to win better terms from Texas. Oklahoma boasts about its low tax rates and cost of living, particularly low utility costs. Musk even visited the Tulsa site earlier this month.
Oklahoma hasn’t had an auto manufacturer in the state since General Motors shuttered its Oklahoma City facility in 2005, but Tulsa is home to an American Airlines maintenance facility that employs about 5,200 workers.
Associated Press writer Paul J. Weber in Austin, Texas, contributed to this report.
LONDON (Reuters) - The European Union will propose “quick fixes” to liberalise its capital markets rules in coming days, which it says are aimed at encouraging investment in companies hurt by the coronavirus crisis, EU documents showed on Wednesday.
The package will include looser rules on the funding of broker research into small and medium sized companies and the lifting of restrictions on trading energy derivatives.
Though the immediate impetus is the coronavirus crisis, many of the changes are expected to be permanent, with more changes expected as the EU aims to build a Capital Markets Union and compete with post-Brexit London as a finance hub.
The changes also mirror a string of quick fixes in banking rules to ensure the continued flow of credit to companies and households hit by lockdowns.
“EU member states have been severely affected by the economic crisis resulting from the COVID-19 pandemic,” the draft documents seen by Reuters say. “This calls for a quick reaction to support capital markets participants.”
One fix to the EU’s securities law known as MiFID II seeks to reverse the decline in broker research on small and medium sized companies used by investors such as asset managers.
The cost of such research must be “unbundled” or set out separately from other fees brokers charge investors, a requirement that has been blamed for the decline in coverage.
“The Commission therefore expects that an exemption from the unbundling rule for small and mid-cap companies should result in an increase of research coverage for those companies,” the document said, adding this would cover companies with a market capitalisation of under 1 billion euros.
The EU executive will also propose “unbundling” for fixed income instruments, the documents said. Disclosure and documentation requirements will also be eased in some cases.
Widespread curbs or position limits on trading commodities will be largely restricted to agricultural derivatives, to foster “nascent euro-denominated markets” in energy derivatives, a sector largely denominated in dollars at present.
There are also proposals to suspend “best execution” reports, which show investors if they are getting value for money from brokers, as these are not being read, the EU document said.
Reporting by Huw Jones; Editing by Peter Graff