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Tesla braces for delayed delivery due to China plant shutdown

Tesla Inc. is expected to announce quarterly production and delivery figures this weekend that will likely be among the worst of the year – and break its multi-quarter streak of record-setting results – due largely to an extended shutdown of its factory in Shanghai.

The electric vehicle maker may have delivered more than 261,000 vehicles globally during the three months ended in June, according to nine analysts surveyed by Bloomberg, ending a two-year stretch of consecutive quarterly gains.

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Tesla handed over more than 310,000 vehicles in the first three months of the year, more than any previous quarter.

“We cut our second-quarter deliveries estimate by 65,000 to 245,000 units, reflecting a prolonged Covid 19-related shutdown and logistical challenges in the Shanghai factory,” wrote Emmanuel Rosner of Deutsche Bank in a research note to clients. “Recall that during the first-quarter call, CEO Elon Musk had provided directional guidance of sequentially flat deliveries for the quarter but the situation in China worsened subsequently,” only improving in early June.

Shares of Tesla rose 1.2 percent to close trading Friday at $681.79, but the stock is down about 35 percent so far this year.

Deliveries are one of the most closely watched metrics at Tesla. They underpin the Austin, Texas-based company’s financial results and are widely seen as a broad barometer of consumer demand for EVs amid a wider shift away from the internal combustion engine.

Many large automakers will announce US sales results Friday but Tesla, which reports global totals, hasn’t specified a release date.

Dan Levy, an analyst with Credit Suisse, reduced his delivery estimate for the period to 242,000 units. “In aggregate, we believe the Shanghai shutdown accounted for about 90,000 units of lost production in the second quarter,” Levy wrote in a note to clients.

Tesla makes the Model S, X, 3 and Y vehicles at its plant in Fremont, California. It also produces Models 3 and Y at a factory near Shanghai. The company has begun delivering the first Model Ys from its new plant near Berlin and held a “Cyber Rodeo” event for 15,000 people in April to celebrate a new factory in Austin.

‘Money Furnaces’

However, both Berlin and Austin have been slow to ramp up production, with Musk warning in a late May interview that both plants are “gigantic money furnaces.”

Analysts and investors are also worried that the price hikes automakers are imposing to combat soaring raw material costs will weigh on demand. Tesla had boosted its sticker prices by as much as $6,000 a car earlier this month, according to Electrek.

A stronger-than-expected delivery number could provide a boost to Tesla’s stock, which is down more than 35 percent this year amid wider market concerns about rising energy costs, inflation and a potential recession.

Musk shares many of those concerns and is in the process of laying off 10 percent of Tesla’s salaried work force while pushing others to return to the office.

Earlier this week, Tesla laid off roughly 200 people on its Autopilot team, mostly hourly employees who worked as data annotation specialists.

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‘Faster than Starlink:’ STC plans satellite internet for Saudi Arabia in 2023


The Saudi Telecommunication Company (STC) is looking to roll out high-speed satellite internet in 2023 that will eventually cover all corners of the Kingdom, according to a company executive.

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STC has already trialed the technology in the planned megacity of NEOM, STC General Manager of Business Development Saad al-Rabiah told Al Arabiya English.

“We’re looking now into moving to a larger scale this year, 2023,” al-Rabiah said during the LEAP conference in Riyadh.

The satellites STC is planning to use “have higher speed than, for example, Starlink, the one with Elon Musk,” al-Rabiah explained.

Whereas Starlink is focused on providing internet access to less developed countries, STC’s plan aims to provide high-speed internet to all areas of the Kingdom, which already has internet access for around 90 percent of its population.

Improved internet access will “elevate [the] living experience” of people in rural areas, according to al-Rabiah, allowing them to communicate with friends and family, and access better levels of education and healthcare.

“It will also help governments to make sure that spending is more efficient in rural areas,” as people will be able to access certain services online.

Other initiatives that STC is working on include its smart cities program, which tracks traffic flow and uses artificial intelligence technology to give authorities the necessary information to re-route traffic.

Drone technology employed by STC is scouting out possible locations for mining minerals in the country’s vast desert.

STC’s AI-equipped cameras and remote controlled cranes are unloading ships in Dammam port. Automating this process cuts makes it more efficient and cuts down on any potential accidents, al-Rabiah said.

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Turkey’s Ceyhan oil terminal, Iraq’s KRG pipeline halted after quake


A major earthquake that struck Turkey and Syria early on Monday has halted operations at Turkey’s oil terminal in Ceyhan and flows via Iraq’s northern oil export pipeline from Kirkuk.

Turkish pipeline operator BOTAS said there was no damage on main pipelines which carry crude oil from Iraq and Azerbaijan to Turkey. An emergency meeting will take place on the issue, the Tribeca shipping agency said.

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In a notice, Tribeca said ports in southeastern Turkey are affected by the quake and that delays in operations are reported.

Iraq’s Kurdistan Regional Government (KRG) has halted flows through the pipeline which runs from Iraq’s northern Kirkuk fields to Ceyhan, the region’s ministry of natural resources (MNR) said on Monday.

The KRG had been pumping 400,000 barrels per day (bpd) and Iraq’s federal government was pumping 75,000 bpd through the pipeline, an oil industry source told Reuters.

Oil exports will resume after a “careful inspection of the pipelines is finalized,” an MNR statement said.

Most upstream oil producers have several days of storage capacity, so KRG production should continue in the near term, the oil industry source added.

Azerbaijan

Regarding Azeri crude flows to Turkey, two sources said there was no damage at the Baku-Tbilisi-Ceyhan (BTC) terminal, but one of the sources added that inspections would take place over the next 1-2 days.

There is sufficient storage capacity in Ceyhan and in Baku, and flows could be reduced if needed, the second source said.

The eastern Mediterranean terminal of Ceyhan is some 155 km (96 miles) from the area of the quake’s epicentre.

The magnitude 7.8 quake struck southern Turkey and northwest Syria early on Monday, killing and injuring hundreds as buildings collapsed across the region.

State pipeline operator BOTAS said natural gas flows were halted to Gaziantep, Hatay and Kahramanmaras provinces and some other districts as a result of damage to a gas transmission line.

Residents in northern Iraqi provinces reported feeling a light tremor following the earthquake.

Read more: Another 7.5-magnitude earthquake hits southeast Turkey, felt in Lebanon

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Saudi Arabia says tech giants to invest more than $9 bln in Kingdom, says IT Minister


Saudi Arabia has attracted more than $9 billion in investments in future technologies, including by US giants Microsoft and Oracle Corp, which are building cloud regions in the Kingdom, a government minister said on Monday.

Saudi Minister of Communication and Information Technology Abdullah Alswaha said Microsoft will invest $2.1 billion in a global super-scaler cloud, while Oracle has committed $1.5 billion to build a new cloud region in Riyadh.

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“The investments… will enhance the Kingdom of Saudi Arabia’s position as the largest digital market in the Middle East and North Africa,” Alswaha said at LEAP, an international technology forum taking place in Riyadh.
Alswaha did not give details on the timeframe. Oracle told Reuters the investment will be made over several years.
The minister said China’s Huawei will also invest $400 million in cloud infrastructure for its services in Saudi Arabia and another cloud region in partnership with oil giant Aramco.
An additional $4.5 billion was invested in global and local assets across multiple sectors at the forum, Alswaha added.
Tonomus, a subsidiary of the $500 billion signature NEOM project, said last year it invested $1 billion in 2022 in AI, including a metaverse platform.
Increased demand for cloud computing has pushed technology companies such as Oracle, Microsoft, Amazon, and Alphabet’s Google to set up data centers across the world to speed up data transfer.

Read more: Second edition of LEAP technology conference opens in Saudi Arabia

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