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Westlake Legal Group > Electric and Hybrid Vehicles

Climate Change Could Blow Up the Economy. Banks Aren’t Ready.

Westlake Legal Group merlin_167625216_f9d54ac2-c793-4efe-be3d-4d4683e5610b-facebookJumbo Climate Change Could Blow Up the Economy. Banks Aren’t Ready. World Economic Forum Virtual Currency Villeroy de Galhau, Francois (1959- ) Subprime Mortgage Crisis Lagarde, Christine Inflation (Economics) Global Warming Frankfurt (Germany) Facebook Inc European Central Bank Electric and Hybrid Vehicles Davos (Switzerland) Basel (Switzerland) Banking and Financial Institutions Bank for International Settlements

FRANKFURT — Climate change has already been blamed for deadly bush fires in Australia, dying coral reefs, rising sea levels and ever more cataclysmic storms. Could it also cause the next financial crisis?

A report issued this week by an umbrella organization for the world’s central banks argued that the answer is yes, while warning that central bankers lack tools to deal with what it says could be one of the biggest economic dislocations of all time.

The book-length report, published by the Bank for International Settlements in Basel, Switzerland, signals what could be the overriding theme for central banks in the decade to come.

“Climate change poses unprecedented challenges to human societies, and our community of central banks and supervisors cannot consider itself immune to the risks ahead of us,” François Villeroy de Galhau, governor of the Banque de France, said in the report.

Central banks spent much of the last 10 years hauling their economies out of a deep financial crisis that began in 2008. They may well spend the next decade coping with the disruptive effects of climate change and technology, the report said.

The European Central Bank, which on Thursday concluded a two-day meeting in Frankfurt focusing on monetary policy, is beginning to grapple with those challenges. The bank did not make any changes in interest rates or its economic stimulus program on Thursday. Instead, other issues are coming to the fore.

Christine Lagarde, the central bank’s president, who took office late last year, has pledged to put climate change on the bank’s agenda, and it was a topic of discussion at the last monetary policy meeting, in December.

Members of the European Central Bank’s governing council argued “that there was a need to step up efforts to understand the economic consequences of climate change,” according to the bank’s official account of the discussion.

Global warming will play a big role in the European Central Bank’s strategic review, a broad reassessment of the way the bank tries to manage inflation. For example, when trying to influence market interest rates, the bank could decide to stop buying bonds of corporations considered big producers of greenhouse gases.

This new awareness of the financial consequences of a hotter earth comes as central banks are contending with another new challenge: technologies that threaten their monopoly on issuing money and their power to combat a financial crisis.

Unofficial digital currencies like Bitcoin or Facebook’s Libra, which is still in the planning stages, bypass central banks and could undermine their control of the monetary system. The obvious solution is for central banks to get into the digital currency business themselves.

On Wednesday, the central banks of Canada, Britain, Japan, Sweden and Switzerland said they were working together with the Bank for International Settlements to figure out what would happen if they did just that.

It’s complicated, though.

Like cash, people can use digital currencies to pay other people directly, without a bank in the middle. Unlike cash, digital currencies allow person-to-person transactions to take place online.

Such a system could be more efficient, but also risky, according to a report issued on Wednesday by the World Economic Forum, the organization that stages the annual conclave in Davos.

Commercial banks might become superfluous, and fail. Central banks would in effect become giant retail banks. But they have no experience dealing with millions of individual customers and could be overwhelmed. If a central bank collapsed, so would the monetary system.

Climate change also takes central banks into uncharted territory. Think the subprime crisis in 2008 was bad? Imagine a real estate crisis caused by rising sea levels and coastal flooding that renders thousands of square miles of land uninhabitable or useless for farming.

By some estimates, global gross domestic product could plunge by 25 percent because of the effects of climate change. Central banks have enough trouble dealing with mild recessions, and would not be powerful enough to combat an economic downturn of that scale.

“In the worst case scenario, central banks may have to intervene as climate rescuers of last resort or as some sort of collective insurer for climate damages,” according to the report, published by the Bank for International Settlements, a clearinghouse for the world’s major central banks.

It suggested some precautionary measures central banks could take.

Central banks, which often function as bank regulators, could require lenders to hold more capital if they hold assets vulnerable to the economic effects of a shift to renewable energy. An example might be a bank that has lent a lot of money to fossil fuel companies, or to the Saudi government.

The auto industry already illustrates how investors are moving their money away from companies seen as polluters and into companies seen as green, with disruptive effects on economies. Tesla’s value on the stock market is more than $100 billion, second only to Toyota among carmakers.

In this way, Tesla is being rewarded for producing emission-free electric vehicles. But the migration of capital away from the established manufacturers makes it difficult for them to invest in new technology, and threatens massive job losses and social and political upheaval.

Central banks need to coordinate their policies to deal with these new challenges, according to the Bank for International Settlements report. Unfortunately, coordination is not something that central banks are very good at right now.

“Climate change is a global problem that demands a global solution,” the paper said. But it added that “monetary policy seems, currently, to be difficult to coordinate between countries.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Climate Change Could Cause the Next Financial Meltdown

Westlake Legal Group merlin_167625216_f9d54ac2-c793-4efe-be3d-4d4683e5610b-facebookJumbo Climate Change Could Cause the Next Financial Meltdown World Economic Forum Virtual Currency Villeroy de Galhau, Francois (1959- ) Subprime Mortgage Crisis Lagarde, Christine Inflation (Economics) Global Warming Frankfurt (Germany) Facebook Inc European Central Bank Electric and Hybrid Vehicles Davos (Switzerland) Basel (Switzerland) Banking and Financial Institutions Bank for International Settlements

FRANKFURT — Climate change has already been blamed for deadly bush fires in Australia, dying coral reefs, rising sea levels and ever more cataclysmic storms. Could it also cause the next financial crisis?

A report issued this week by an umbrella organization for the world’s central banks argued that the answer is yes, while warning that central bankers lack tools to deal with what it says could be one of the biggest economic dislocations of all time.

The book-length report, published by the Bank for International Settlements in Basel, Switzerland, signals what could be the overriding theme for central banks in the decade to come.

“Climate change poses unprecedented challenges to human societies, and our community of central banks and supervisors cannot consider itself immune to the risks ahead of us,” François Villeroy de Galhau, governor of the Banque de France, said in the report.

Central banks spent much of the last 10 years hauling their economies out of a deep financial crisis that began in 2008. They may well spend the next decade coping with the disruptive effects of climate change and technology, the report said.

The European Central Bank, which on Thursday concluded a two-day meeting in Frankfurt focusing on monetary policy, is beginning to grapple with those challenges. The bank did not make any changes in interest rates or its economic stimulus program on Thursday. Instead, other issues are coming to the fore.

Christine Lagarde, the central bank’s president, who took office late last year, has pledged to put climate change on the bank’s agenda, and it was a topic of discussion at the last monetary policy meeting, in December.

Members of the European Central Bank’s governing council argued “that there was a need to step up efforts to understand the economic consequences of climate change,” according to the bank’s official account of the discussion.

Global warming will play a big role in the European Central Bank’s strategic review, a broad reassessment of the way the bank tries to manage inflation. For example, when trying to influence market interest rates, the bank could decide to stop buying bonds of corporations considered big producers of greenhouse gases.

This new awareness of the financial consequences of a hotter earth comes as central banks are contending with another new challenge: technologies that threaten their monopoly on issuing money and their power to combat a financial crisis.

Unofficial digital currencies like Bitcoin or Facebook’s Libra, which is still in the planning stages, bypass central banks and could undermine their control of the monetary system. The obvious solution is for central banks to get into the digital currency business themselves.

On Wednesday, the central banks of Canada, Britain, Japan, Sweden and Switzerland said they were working together with the Bank for International Settlements to figure out what would happen if they did just that.

It’s complicated, though.

Like cash, people can use digital currencies to pay other people directly, without a bank in the middle. Unlike cash, digital currencies allow person-to-person transactions to take place online.

Such a system could be more efficient, but also risky, according to a report issued on Wednesday by the World Economic Forum, the organization that stages the annual conclave in Davos.

Commercial banks might become superfluous, and fail. Central banks would in effect become giant retail banks. But they have no experience dealing with millions of individual customers and could be overwhelmed. If a central bank collapsed, so would the monetary system.

Climate change also takes central banks into uncharted territory. Think the subprime crisis in 2008 was bad? Imagine a real estate crisis caused by rising sea levels and coastal flooding that renders thousands of square miles of land uninhabitable or useless for farming.

By some estimates, global gross domestic product could plunge by 25 percent because of the effects of climate change. Central banks have enough trouble dealing with mild recessions, and would not be powerful enough to combat an economic downturn of that scale.

“In the worst case scenario, central banks may have to intervene as climate rescuers of last resort or as some sort of collective insurer for climate damages,” according to the report, published by the Bank for International Settlements, a clearinghouse for the world’s major central banks.

It suggested some precautionary measures central banks could take.

Central banks, which often function as bank regulators, could require lenders to hold more capital if they hold assets vulnerable to the economic effects of a shift to renewable energy. An example might be a bank that has lent a lot of money to fossil fuel companies, or to the Saudi government.

The auto industry already illustrates how investors are moving their money away from companies seen as polluters and into companies seen as green, with disruptive effects on economies. Tesla’s value on the stock market is more than $100 billion, second only to Toyota among carmakers.

In this way, Tesla is being rewarded for producing emission-free electric vehicles. But the migration of capital away from the established manufacturers makes it difficult for them to invest in new technology, and threatens massive job losses and social and political upheaval.

Central banks need to coordinate their policies to deal with these new challenges, according to the Bank for International Settlements report. Unfortunately, coordination is not something that central banks are very good at right now.

“Climate change is a global problem that demands a global solution,” the paper said. But it added that “monetary policy seems, currently, to be difficult to coordinate between countries.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Climate Change Could Cause the Next Financial Meltdown

Westlake Legal Group merlin_167625216_f9d54ac2-c793-4efe-be3d-4d4683e5610b-facebookJumbo Climate Change Could Cause the Next Financial Meltdown World Economic Forum Virtual Currency Villeroy de Galhau, Francois (1959- ) Subprime Mortgage Crisis Lagarde, Christine Inflation (Economics) Global Warming Frankfurt (Germany) Facebook Inc European Central Bank Electric and Hybrid Vehicles Davos (Switzerland) Basel (Switzerland) Banking and Financial Institutions Bank for International Settlements

FRANKFURT — Climate change has already been blamed for deadly bush fires in Australia, dying coral reefs, rising sea levels and ever more cataclysmic storms. Could it also cause the next financial crisis?

A report issued this week by an umbrella organization for the world’s central banks argued that the answer is yes, while warning that central bankers lack tools to deal with what it says could be one of the biggest economic dislocations of all time.

The book-length report, published by the Bank for International Settlements in Basel, Switzerland, signals what could be the overriding theme for central banks in the decade to come.

“Climate change poses unprecedented challenges to human societies, and our community of central banks and supervisors cannot consider itself immune to the risks ahead of us,” François Villeroy de Galhau, governor of the Banque de France, said in the report.

Central banks spent much of the last 10 years hauling their economies out of a deep financial crisis that began in 2008. They may well spend the next decade coping with the disruptive effects of climate change and technology, the report said.

The European Central Bank, which on Thursday concluded a two-day meeting in Frankfurt focusing on monetary policy, is beginning to grapple with those challenges. The bank did not make any changes in interest rates or its economic stimulus program on Thursday. Instead, other issues are coming to the fore.

Christine Lagarde, the central bank’s president, who took office late last year, has pledged to put climate change on the bank’s agenda, and it was a topic of discussion at the last monetary policy meeting, in December.

Members of the European Central Bank’s governing council argued “that there was a need to step up efforts to understand the economic consequences of climate change,” according to the bank’s official account of the discussion.

Global warming will play a big role in the European Central Bank’s strategic review, a broad reassessment of the way the bank tries to manage inflation. For example, when trying to influence market interest rates, the bank could decide to stop buying bonds of corporations considered big producers of greenhouse gases.

This new awareness of the financial consequences of a hotter earth comes as central banks are contending with another new challenge: technologies that threaten their monopoly on issuing money and their power to combat a financial crisis.

Unofficial digital currencies like Bitcoin or Facebook’s Libra, which is still in the planning stages, bypass central banks and could undermine their control of the monetary system. The obvious solution is for central banks to get into the digital currency business themselves.

On Wednesday, the central banks of Canada, Britain, Japan, Sweden and Switzerland said they were working together with the Bank for International Settlements to figure out what would happen if they did just that.

It’s complicated, though.

Like cash, people can use digital currencies to pay other people directly, without a bank in the middle. Unlike cash, digital currencies allow person-to-person transactions to take place online.

Such a system could be more efficient, but also risky, according to a report issued on Wednesday by the World Economic Forum, the organization that stages the annual conclave in Davos.

Commercial banks might become superfluous, and fail. Central banks would in effect become giant retail banks. But they have no experience dealing with millions of individual customers and could be overwhelmed. If a central bank collapsed, so would the monetary system.

Climate change also takes central banks into uncharted territory. Think the subprime crisis in 2008 was bad? Imagine a real estate crisis caused by rising sea levels and coastal flooding that renders thousands of square miles of land uninhabitable or useless for farming.

By some estimates, global gross domestic product could plunge by 25 percent because of the effects of climate change. Central banks have enough trouble dealing with mild recessions, and would not be powerful enough to combat an economic downturn of that scale.

“In the worst case scenario, central banks may have to intervene as climate rescuers of last resort or as some sort of collective insurer for climate damages,” according to the report, published by the Bank for International Settlements, a clearinghouse for the world’s major central banks.

It suggested some precautionary measures central banks could take.

Central banks, which often function as bank regulators, could require lenders to hold more capital if they hold assets vulnerable to the economic effects of a shift to renewable energy. An example might be a bank that has lent a lot of money to fossil fuel companies, or to the Saudi government.

The auto industry already illustrates how investors are moving their money away from companies seen as polluters and into companies seen as green, with disruptive effects on economies. Tesla’s value on the stock market is more than $100 billion, second only to Toyota among carmakers.

In this way, Tesla is being rewarded for producing emission-free electric vehicles. But the migration of capital away from the established manufacturers makes it difficult for them to invest in new technology, and threatens massive job losses and social and political upheaval.

Central banks need to coordinate their policies to deal with these new challenges, according to the Bank for International Settlements report. Unfortunately, coordination is not something that central banks are very good at right now.

“Climate change is a global problem that demands a global solution,” the paper said. But it added that “monetary policy seems, currently, to be difficult to coordinate between countries.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tesla Value Hits $100 Billion. Will Elon Musk Get a Big Bonus?

Westlake Legal Group 00tesla-facebookJumbo Tesla Value Hits $100 Billion. Will Elon Musk Get a Big Bonus? Tesla Motors Inc Stocks and Bonds Musk, Elon Executive Compensation Electric and Hybrid Vehicles Bonuses Automobiles

Tesla’s share price hit a record high on Wednesday, surpassing a threshold that could ultimately unlock hundreds of millions of dollars in bonus compensation for its chief executive, Elon Musk.

The award is contingent on a $100 billion market capitalization for Tesla — the milestone reached Wednesday — over a sustained period. The stock closed at $569.56 per share, giving the company a valuation just shy of $103 billion.

If the market capitalization remains above $100 billion on average over a six-month period, including at least 30 consecutive days, Mr. Musk will have the option to buy about 1.69 million shares at about $350 each — a payout worth more than $370 million before taxes at the current stock price.

Forbes and Bloomberg estimate Mr. Musk’s current net worth at about $32 billion, about half of it composed of Tesla shares.

Tesla’s gain of more than 4 percent in Wednesday’s trading extended a recent surge in which its share price has more than doubled in three months. Along the way, Tesla’s market value surpassed that of General Motors and Ford Motor combined, reflecting a faith among some investors in the company’s ability to disrupt the automotive industry.

At the same time, the stock is also one of the biggest targets of short-sellers, ranking alongside much larger companies like Apple and Microsoft in interest from investors who hope to profit from what they see as an inevitable decline in the share price. According to S3 Partners, a financial technology and data firm, the number of Tesla shares shorted has hovered around 26 million or 27 million — about 20 percent of the shares available for trading — for some time.

“The amount is just telling you that the soap opera continues,” said Bob Sloan, the founder of S3 Partners. “The company’s stock has doubled, and the doubters are still the doubters.”

Tesla’s stock started surging in October when the company reported an unexpected profit for the third quarter after recording a $1.1 billion loss in the first half of 2019 as it struggled to produce and deliver its Model 3 sedan. Earlier, in September 2018, Mr. Musk had agreed to step down as chairman in a settlement with the Securities and Exchange Commission after it had accused him of misleading investors with a claim on Twitter about having “funding secured” to take the company private.

Even with that settlement, Tesla remains under regulatory scrutiny. Last week, the National Highway Traffic Safety Administration said that it was considering a request to investigate claims that some Tesla vehicles have accelerated on their own. The company dismissed the claims as “completely false” in a blog post. The author of the request, Brian Sparks, acknowledged in an interview with CNBC that he was shorting Tesla’s stock.

The highway safety agency is also investigating at least 14 crashes involving Tesla vehicles in which Autopilot, its driver-assistance system, is believed to have been engaged. The National Transportation Safety Board is meeting next month to look into one such crash in Mountain View, Calif., in 2018.

Despite its difficulties, the company has become a force in its industry, said Colin Rusch, an analyst at Oppenheimer.

“We’re looking at a company that we think has a very sturdy and insightful strategy in terms of the narrowness of the focus on the technology and really looking at disrupting the industry in a way that consumers find compelling,” he said.

Mr. Rusch is one of several Tesla analysts who increased their target price for the company’s stock this month, reflecting growing faith on Wall Street that the company can manage a global expansion and steal market share from established automakers that have been slow to develop and sell electric vehicles.

The company has shown that it can learn quickly from its mistakes and has displayed “larger ambition” than its peers, Mr. Rusch said in a research note. It also benefits from a large fleet of vehicles on the road collecting data that could be used to train future autonomous driving systems.

In a CNBC interview on Wednesday, President Trump reflected the enthusiasm that many investors have for Mr. Musk, comparing him to Thomas Edison and describing him as “one of our great geniuses.”

Tesla managed a difficult transition last year as it ramped up production of the Model 3, which accounted for more than 80 percent of the cars it produced and delivered in the fourth quarter of 2019. This month, Tesla began delivering cars built at a new Shanghai factory. The company plans to start deliveries this year of the Model Y, a sport utility vehicle that Mr. Musk has said could become the company’s most popular offering.

The bonus that Mr. Musk stands to receive for his stewardship of the company is part of a unique compensation plan Tesla laid out two years ago that includes 12 components. Under its terms, Mr. Musk, who does not take a salary, would be allowed to buy just over 20 million shares of Tesla stock at a deep discount as the company meets a mix of revenue, profit and valuation targets.

“It’s certainly a very unusual compensation plan,” said Ken Bertsch, the executive director of the Council of Institutional Investors, which represents pension funds, endowments and other investors.

The council’s members are divided on the plan, he said. Proponents say it wisely provides an incentive to Mr. Musk, whose leadership they view as crucial to Tesla’s success. Opponents say it overemphasizes his role and could lead to decisions aimed at increasing Tesla’s market capitalization, such as making acquisitions, even if they don’t make sense for the company.

Should Tesla achieve all of the goals laid out in the compensation plan, including reaching a $650 billion market capitalization — or roughly double Walmart’s valuation today — Mr. Musk could receive up to $55 billion in compensation, a number that could change if the company issues more stock.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tesla Reports Record Output as Elon Musk Achieves Goal

Westlake Legal Group 03tesla-facebookJumbo Tesla Reports Record Output as Elon Musk Achieves Goal Tesla Motors Inc Musk, Elon Factories and Manufacturing Electric and Hybrid Vehicles Company Reports

Tesla on Friday said that it had produced over 100,000 vehicles and delivered even more in the fourth quarter of 2019, meeting a goal it had laid out to investors and ending the year on stronger footing than it began.

In a statement, the electric-vehicle maker said it delivered 112,000 cars in the final three months of last year and produced a record 104,891, showing healthy demand as it continues to focus on global growth.

“When you deliver more cars than you produce, you get into your bank more cash than you spent,” said Pierre Ferragu, an analyst with New Street Research. He said that would enable Tesla to continue its expansion, including its manufacturing presence in China, where cars are beginning to roll off a Shanghai assembly line.

Mr. Ferragu estimated that Tesla delivered about 60,000 vehicles in North America and 52,000 internationally in the fourth quarter. The company did not provide a breakdown.

Friday’s figures put Tesla’s total deliveries for 2019 at 367,500, which the company said was 50 percent more than in 2018. It had forecast deliveries of 360,000 to 400,000 for the year, and analysts say that the company could deliver as many as half a million vehicles in 2020.

The news caps a volatile year for Tesla, which turned a corner in the second half of 2019 after the strain of a $1.1 billion loss in the first half. After falling as low as $177 in June, the company’s stock price started to soar in late October, when Tesla reported a third-quarter profit. The stock closed Thursday at $430.26 and rose more than 3 percent after the announcement Friday, briefly reaching a new high, even as the overall market declined.

The share price last week surpassed a milestone of $420. It was at that price that Tesla’s chief executive, Elon Musk, said in 2018 that he had “funding secured” to take the company private. The deal turned out to be less solid than Mr. Musk had made it seem, attracting the scrutiny of federal regulators and resulting in his stepping down as chairman.

Expectations for the year ahead are mixed. Some analysts predict Tesla’s stock will rise above $500 because of increasing interest in electric vehicles and the company’s strong recent performance. Others say the company is greatly overvalued.

By most accounts, however, Tesla underwent a difficult yet successful evolution in the last year as it ramped up production and sales of its less-expensive Model 3, shifting away from its larger and lower-volume Model X and Model S.

“Those transitions are usually never seamless, never easy,” said Jed Dorsheimer, an analyst with Canaccord Genuity. “They’re bumpy and they can be ugly. But the company executed pretty well.” He expects Tesla’s stock to reach $515 as demand accelerates for electric vehicles.

The Model 3 accounted for more than 80 percent of the cars produced and delivered by Tesla in the fourth quarter, according to the figures released Friday.

Tesla this week announced the first deliveries of the nearly 1,000 cars it has produced so far at its Shanghai factory, less than a year after breaking ground. Until now, Tesla output had been limited to its assembly line in Fremont, Calif. The company said it had demonstrated an ability to produce more than 3,000 vehicles per week at the Shanghai plant.

Such news has heartened optimistic analysts like Mr. Ferragu and Mr. Dorsheimer, but others are more skeptical about the year ahead for Tesla.

While the company has been a leading maker of electric vehicles, it faces growing competition from established carmakers and start-ups alike, said Craig Irwin, an analyst with Roth Capital Partners.

“Yeah, they’re the innovator,” he said. “Yeah, they’re aggressively out there first on the technology, and they’ve done a superb job. But others will be in that market, too. It’s not just going to be exclusively for Tesla.”

To Mr. Irwin, the company’s stock is “egregiously” overvalued because many investors still treat Tesla as a company defined by aggressive growth even though it has matured into something different.

“Now it needs to be treated like an automotive company,” he said.

Tesla had also benefited in recent years from a federal tax credit on electric vehicles that effectively lowered the cost of its vehicles by as much as $7,500. But the credit began phasing out after Tesla sold 200,000 qualifying cars and was fully eliminated at the end of last year.

That may be an advantage for Tesla rivals that are able to offer the credit. But analysts do not expect the loss of the tax credit to have a major long-term effect on sales for Tesla, a well-known brand at a time when demand for electric vehicles is rising.

In addition to its global expansion, Tesla plans to begin deliveries of its all-electric, midsize sport utility vehicle, the Model Y, in the fall. Thanks to a significant overlap in components with the Model 3, the company should be able to save on production costs for the Model Y, analysts said, though some question whether the new S.U.V. will eat into demand for the Model 3.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Electric Cars Threaten the Heart of Germany’s Economy

ÖHRINGEN, Germany — Öhringen lies deep in automaking country, homeland of Germany’s biggest industry and a source of national pride. And by most appearances, life is pretty good.

The unemployment rate in Öhringen is a mere 2.3 percent. Restaurants, nursing homes and kindergartens are begging for workers. The city government is using bulging tax receipts to build a new secondary school and a hospital.

But just outside Öhringen’s tidy old quarter, dominated by the steeple of a 15th-century stone church, there are signs that the economic upswing that has nourished this idyll is beginning to falter.

A factory that makes air filters is closing, putting 240 people out of work. The plant, owned by Mahle, an auto parts manufacturer based in nearby Stuttgart, is a victim of forces that are reshaping the auto industry and threatening the foundation of the German economy.

ImageWestlake Legal Group merlin_166082250_8e671913-edb9-490d-8597-b441a48c80cb-articleLarge Electric Cars Threaten the Heart of Germany’s Economy Ohringen, Germany Labor and Jobs International Trade and World Market Germany Factories and Manufacturing Electric and Hybrid Vehicles Economic Conditions and Trends Batteries

A Mahle factory in Öhringen, Germany, that makes air filters for the auto industry is closing. Credit…Felix Schmitt for The New York Times

Global car sales are declining at the same time that companies are pouring billions of dollars into new technologies like autonomous driving and electric cars, which are easier to assemble and require fewer workers and fewer parts.

Carmakers, including Daimler and Volkswagen’s Audi division, as well as suppliers like Continental and Bosch, have announced tens of thousands of job cuts in recent weeks. German auto production will be at a 22-year low in 2019 and 2020, according to calculations by Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen.

Workers are feeling the brunt, and not just in Germany. The upheaval in auto technology was an undercurrent in the United Automobile Workers’ recent strike against General Motors, with G.M. aiming for flexibility in staffing levels as it devotes more resources to electric vehicles.

“For Mahle — and for the industry as a whole — the technological transformation is a monumental task,” said Jörg Stratmann, the company’s chief executive. It means, he said in a statement, “cutting our costs and making tough decisions.”

There is a gnawing feeling that something more fundamental is going on in Germany’s powerful auto industry, which employs 835,000 people, than just another economic cycle.

The growing popularity of electric vehicles could force a shift in the balance of power in the global car business that would have long-term consequences for Germany.

So far, sales of electric cars make up a small share of the overall auto market, but they are growing fast. In October, battery-powered cars and hybrids accounted for almost 10 percent of new car registrations in Europe, according to JATO, a market research firm; figures from another firm, LMC Automotive, put the share at less than 4 percent in the United States. Sales of those cars in Europe were up 40 percent from a year earlier in an otherwise stagnant market.

If the trend continues, it spells trouble for the hundreds of suppliers that make parts for internal combustion engines. The Mahle factory in Öhringen makes equipment that controls the flow of air in diesel and gasoline motors.

“There is a transition toward more electric vehicles that have far fewer components and are easier to manufacture,” Bernhard Mattes, the president of the German Association of the Automotive Industry, said in an interview in Berlin. “Therefore, we can expect less employment.”

Mr. Mattes, former head of Ford’s operations in Germany, quoted studies estimating that a shift to electric cars could cost 70,000 jobs in Germany by 2030. Some estimates are higher.

The effect of those cuts may be felt most acutely in communities like Öhringen, where the local economy revolves around small and midsize manufacturers, often serving the auto industry. Audi, Porsche and Daimler all have factories within a 40-mile radius.

Faced with flat or declining sales in their major markets, the big automakers are expected to pass much of the pain on to suppliers. The carmakers will demand lower prices and begin taking over work that they would have previously delegated to contractors.

Thilo Michler, the mayor of Öhringen, said the local economy was diverse enough to survive the closing of the Mahle plant. The city, with about 25,000 residents, is also the home of other midsize companies such as Huber Packaging, the world’s largest manufacturer of five-liter beer kegs.

“Mahle is painful, but it’s manageable,” Mr. Michler said.

Unemployment is so low that most Mahle workers will probably find new jobs by the time the plant ceases operations by the end of 2020. But they will have trouble finding work that pays as well, and may have to accept temporary contracts that offer little job security, said Rüdiger Bresien, an official of the IG Metall union who represents workers in the area.

Mr. Bresien said job losses from upheaval in the car industry were bigger than they seemed, with companies quietly letting go of workers on temporary contracts.

“In a lot of firms, we see that temp work is going down a lot,” Mr. Bresien said. “But you don’t hear so much about that.”

He said he worried that frustrated workers would be drawn to the far-right, anti-immigrant Alternative for Germany party. In elections for the European Parliament in May, the populist party scored 10 percent of the vote in the state of Baden-Württemberg, which includes Öhringen.

“There is always a risk that people ask, ‘Who’s at fault?’ and ‘Who’s going to help me?’” Mr. Bresien said.

The gently rolling countryside around Öhringen is dotted with factories carrying the logos of companies that may not be household names but often dominate their niche markets. Such companies are a big reason for Germany’s economic success.

Just down the autobahn, for example, is Ziehl-Abegg, a maker of industrial fans that has more than 4,000 employees worldwide.

Owned by a grandson of the inventor who founded the company in 1910, Ziehl-Abegg has achieved soaring sales over the last decade. But this year, sales were flat, reflecting a broader decline in German industrial production.

Germany narrowly avoided recession this year, but German factory output has been declining since the beginning of 2018. The trade war has hit even companies like Ziehl-Abegg that are not dependent solely on the auto industry. More than three-quarters of Ziehl-Abegg’s products are exported.

Ziehl-Abegg is among companies trying to adjust to the shift in automotive technology by using its expertise in electric motors. The company sells a propulsion unit for buses that embeds the electric drive inside the wheel. Ziehl-Abegg says the so-called axle-drive module saves energy because there is no need for a gearbox, which reduces friction.

But the axle drive also illustrates the danger that electric technology presents to the German auto industry. More than a century of expertise in internal combustion engines and transmissions could become irrelevant. German car companies typically build their own motors, but almost all of Europe’s battery cells, which account for a large share of an electric car’s cost, are imported from Asia.

The risk for the established German carmakers is that they will cling too long to old technologies and be overrun by new companies that focus exclusively on electric vehicles. Those include Tesla, which has announced plans to build a factory in Berlin, and Eurabus, a company in Berlin that makes battery-powered buses.

Ziehl-Abegg’s axle-drive module is being used by companies that make sightseeing buses, airport shuttles and other specialized vehicles. But Ralf Arnold, managing director of Ziehl-Abegg’s automotive division, said it had been difficult to win over major bus makers like Daimler or MAN, a unit of Volkswagen.

“What’s still missing is one of the big players,” Mr. Arnold said at Ziehl-Abegg’s headquarters in Kupferzell, about 12 miles east of Öhringen. “They are very cautious. They live in their own world.”

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Tesla Stock Hits Elon Musk’s Magic Number: $420

Westlake Legal Group 23tesla4-facebookJumbo Tesla Stock Hits Elon Musk’s Magic Number: $420 Tesla Motors Inc Stocks and Bonds Prices (Fares, Fees and Rates) Musk, Elon Electric and Hybrid Vehicles

Back in August 2018, Elon Musk casually announced on Twitter that he planned to take Tesla private at a price of $420 a share, a 20 percent premium at the time. He added that he had “funding secured.”

The announcement turned out to be much less secure than Mr. Musk had suggested, and it landed him in hot water with securities regulators, who asserted that he had misled investors. For more than a year after that, troubles seemed to mount for Mr. Musk and his electric-car company — including distribution challenges, a sales slump, quarterly losses, a liquidity scare and more legal problems for Mr. Musk.

All of that weighed heavily on Tesla’s share price, which fell as low as $177 in June.

But in recent months the company has seemed to turn a corner. Rising sales lifted Tesla to a profit in the third quarter, it unveiled a fourth car for its model line, and it completed a factory in China, a market of vast potential growth.

On Monday, its stock reached a milestone, rising to an intraday high of $422, exceeding the price that Mr. Musk once appeared to offer. Even though Tesla shares ended the day slightly below $420, they are up more than 60 percent in two months.

“It’s pretty dramatic how sentiment has shifted about the company’s outlook,” said Mike Ramsey, a Gartner analyst.

Tesla’s fortunes have risen as Mr. Musk has presented a more measured presence on Twitter this year, refraining from clashing as often as he did in the past with short-sellers — investors betting against Tesla’s stock — and other detractors online.

And Mr. Musk scored a legal victory this month when a jury in federal court in Los Angeles cleared him in a defamation case brought by a British man whom Mr. Musk had referred to as a “pedo guy.”

“It removes a major issue that was hanging over the company that could be really damaging to the brand,” Mr. Ramsey said. “Now he’s off the hook.”

Tesla did not respond to requests for comment.

Mr. Musk hasn’t eliminated all irreverence from his Twitter feed. After the stock passed the $420 mark on Monday, he tweeted, “Whoa … the stock is so high lol,” apparently a reference to the association between the number 420 and marijuana use.

Right after Mr. Musk proposed taking Tesla private at $420 a share, he appeared to take a puff of a marijuana cigarette during a podcast interview, one of the actions that had raised concerns about his behavior among investors and his own board members.

Tesla still faces plenty of challenges. Sales of its most profitable cars, the Model S luxury sedan and Model X sport utility vehicle, have plunged. It is spending heavily to ramp up production in China, build a plant in Germany and finish development of two new vehicles — a roomier version of its Model 3 sedan called the Model Y and a wedge-shaped pickup known as the Cybertruck.

On Jan. 1, Tesla will have exhausted the federal tax credit available to its buyers, effectively making its cars slightly more expensive just as more competing models are arriving on the market.

Mr. Musk has also promised to have a million self-driving cars on the road by summer, while other industry executives have concluded that autonomous vehicles are still several years away from widespread use.

Nevertheless, cost-cutting and continuing increases in sales of its most affordable car, the Model 3, have put the company into the black. It reported income of $143 million for the third quarter, when many analysts had expected a loss. It sold 97,000 cars in the period, helped by rising sales overseas.

Tesla needs to sell 105,000 cars this quarter to reach sales of 360,000 cars for the year. It had forecast 360,000 to 400,000.

The new factory outside Shanghai should help Tesla continue its growth streak. China is the world’s largest market for electric cars, but Tesla has been held back because import duties make its vehicles more expensive there. The new plant will produce the Model 3. The car will be eligible for incentives offered by the Chinese government aimed at encouraging purchases of locally made electric cars.

At the same time, Mr. Musk’s more measured presence on social media has eased concerns about the company’s decision making, Mr. Ramsey said.

“I have always felt the only thing that could truly derail Tesla was Elon going off the rails with his behavior,” he said. “And he has been more professional.”

In October, Mr. Musk said the Model Y would be available in the summer and probably outpace the Model 3 in sales. Last month, he unveiled the Cybertruck, although production probably won’t start for at least two years.

Tesla may be beaten in the race to offer an electric truck by another start-up automaker, Rivian Motors. On Monday, Rivian said it had raised $1.3 billion from investors including the fund manager T. Rowe Price, Amazon and Ford Motor. Earlier this year, Rivian announced three other rounds of funding totaling more than $1.5 billion.

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G.M. Venture to Create Ohio Battery Plant and 1,100 Jobs

Westlake Legal Group merlin_153751902_853e8dcd-0a34-417e-ab01-bb8d871ae744-facebookJumbo G.M. Venture to Create Ohio Battery Plant and 1,100 Jobs Lordstown (Ohio) LG Chem Ltd Labor and Jobs General Motors Factories and Manufacturing Electric and Hybrid Vehicles Batteries

After idling its car plant in Lordstown, Ohio, this year, General Motors promised that it would bring jobs back to the once-mighty manufacturing region.

On Thursday, its plans began to take a shape: It will build a factory to make electric-vehicle batteries along with a South Korean partner, LG Chem.

The companies said they planned to invest a total of $2.3 billion in a joint venture that would produce battery cells. G.M. and LG Chem would have equal stakes in the business.

Executives said the venture would set up a plant in the Lordstown area that would create more than 1,100 jobs. Groundbreaking is expected in the middle of next year.

“We think as we do this in a joint fashion it is going to accelerate our ability to win in the electric vehicle space,” G.M.’s chief executive, Mary T. Barra, said at a news conference. “I absolutely believe this is a critical point, with LG Chem and G.M. working together to drive affordability.”

The cost of battery packs is one of the major challenges of luring mainstream consumers to electric vehicles. Tesla, the leading seller of electric cars, makes its own battery packs in a joint venture with Panasonic at a giant factory in Nevada. Even with the economies of scale of that plant, however, most Tesla cars still sell for $10,000 or more above the average new-car price of about $35,000. And Tesla has yet to show it can make money consistently.

“It’s not at all clear there is going to be much demand for E.V.s, at least in North America,” said Sam Abuelsamid, an analyst at Navigant Research. “There’s probably going to be more demand in Europe and China, but if they can get the cost down to parity with internal combustion vehicles, then there may be potential.”

LG Chem is a major supplier of lithium-ion batteries to the auto industry and other sectors, with clients including Volvo. A financial filing in South Korea indicated that its investment in the joint venture would occur over four years.

G.M. is making a major push into electric vehicles, including 20 battery-powered models by 2023. It aims to sell one million such vehicles globally by 2026. Ms. Barra said G.M. expected to introduce a new Chevrolet electric car next year and an electric truck in 2021.

Its current model, the Chevrolet Bolt, is a compact car that has attracted modest interest from car buyers. G.M. sells roughly 1,500 Bolts a month in the United States, compared with the 30,000 cars Tesla tends to sell monthly around the world.

Other traditional automakers are also looking to expand their electric vehicle offerings. In November, Ford Motor unveiled an electric sport utility vehicle styled to resemble its Mustang sports car. Called the Mustang Mach E, it will be assembled at a plant in Mexico, with battery packs from a factory in Poland. Ford is planning to introduce more than a dozen electric models over the next five years, including a battery-powered version of its popular F-150 pickup truck.

Ms. Barra said G.M. was working to offer electric vehicles to help combat climate change. “G.M. believes in the science of global warming,” she said.

G.M. had repeatedly announced its intent to set up a battery-making plant with a partner that would bring back jobs to the Lordstown area, where it abandoned production in March.

The shutdown of the Lordstown plant, which most recently made the Chevrolet Cruze, was traumatic to Ohio’s Mahoning Valley, between Cleveland and Pittsburgh. President Trump, who promised to increase factory jobs and has called on automakers to move production from Mexico to the United States, has heaped criticism on G.M. for closing the plant.

Ms. Barra said on Thursday that G.M. had informed the White House of its battery-plant plans.

Peter Navarro, the director of Mr. Trump’s Office of Trade and Manufacturing Policy, said G.M.’s announcement would help create an ecosystem of electric-vehicle manufacturing in the region.

“We expect that plant will not only do very well but grow in size over time so that it becomes a useful anchor of employment in Lordstown,” he said.

While many Lordstown workers accepted jobs at other G.M. plants, the factory’s fate hovered over rancorous contract talks with the United Automobile Workers union. The contract impasse resulted in a 40-day nationwide walkout in the fall, the longest against G.M. in almost half a century.

The union’s settlement allowed the company to close the plant permanently, but G.M. committed investing in other American factories. The jobs foreseen at the battery plant are far fewer than the 3,000 that the G.M. assembly plant once employed.

Earlier accounts said the pay at the battery plant was likely to be about $17 an hour, well below the $31 that many assembly workers made in Lordstown. Ms. Barra said wages at the battery plant would be around the same levels U.A.W. workers earned at component plants, which tend to fall between $10 and $15 an hour, below the top union wage of $32 an hour.

“We have to be competitive,” she said. “But these will be very good paying jobs.”

After the Lordstown plant was idled, G.M. reached an agreement to sell it to a start-up, Lordstown Motors, which plans to produce electric pickup trucks. Lordstown Motors has said it expects to hire about 400 workers next year at wages comparable to what U.A.W. members make at major auto companies.

Su-Hyun Lee contributed reporting.

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Tesla’s Winding Road to Berlin

GRÜNHEIDE, Germany — The visitors from Palo Alto, Calif., were shown how Berlin, a hive of tech start-ups that likens itself to Silicon Valley, is just a short commute away.

They were promised building permits in four weeks rather than the customary 11 months.

And they were taken aloft in a 44-year-old Russian biplane for a leisurely tour of the site.

And it worked. Elon Musk, the chief executive of Tesla, decided to build the carmaker’s first major European factory in Grünheide, a village just outside Berlin and surrounded by undeveloped tracts.

Mr. Musk made the announcement during seemingly impromptu remarks at an automotive awards ceremony in Berlin last week.

But the decision was months in the making, involving an elaborate courtship by local officials eager to attract not only the jobs that Tesla would bring — an estimated 2,000 to 3,000 within two years and eventually as many as 7,000 — but also the prestige. Somehow, the officials managed to keep the negotiations secret until Mr. Musk sprang the news.

A lot of things could still go wrong. Tesla, which has opposed unionization at its plant in Fremont, Calif., may chafe at German labor laws that give workers a say in management and limit overtime. Environmental groups may object to manufacturing on land near a nature preserve. The notoriously unpredictable Mr. Musk could change his mind.

Still, the decision was hugely significant for Germany, where cars are the biggest export and the backbone of the economy.

The news has temporarily quieted rising alarm that the German auto industry faces serious disruption from a transition to battery-powered cars like those made by Tesla.

A recent government study concluded that the switch to electric vehicles could cost Germany 114,000 jobs by 2035 and shave 0.6 percent from its gross domestic product. That is because electric cars have fewer moving parts and are simpler to make.

Grünheide’s mayor, Arne Christiani, pointing out the factory site on a land-use plan in his office.Credit…Andreas Meichsner for The New York Times A vehicle charging station in Grünheide. Tesla’s Model 3 is the best-selling battery-powered car in Europe.Credit…Andreas Meichsner for The New York Times

In addition, battery cells are made almost exclusively outside Germany and must be imported. German suppliers of parts for internal combustion engines, like pistons, ignition systems or emissions control equipment, face declines in sales.

Tesla’s assembly plant would offset some of the job losses, and the company also plans to build batteries in Germany.

Based in Palo Alto, Tesla has already been taking market share from the German manufacturers BMW, Volkswagen and Daimler, the maker of Mercedes-Benz cars. The Tesla Model 3 has become best-selling battery-powered car in Europe, a segment that is small but growing fast.

With Tesla near Berlin, the established German carmakers “will have a better view of what Tesla is doing,” said Felipe Munoz, a senior analyst at the market research firm JATO Dynamics. “They will need to accelerate their electrification plans.”

Tesla did not respond this week to requests for comment, but Mr. Musk indicated that one attraction of Germany was its automaking tradition and deep pool of engineering expertise. That could be a reason he did not choose a country like Poland or the Czech Republic, where labor costs are much lower.

Tesla is ahead of the German carmakers in designing electric cars that people want to buy, but Daimler, BMW and Volkswagen can teach it a lot about how to churn out cars by the millions. While Tesla has had well-documented problems scaling up its manufacturing, Volkswagen has just begun mass producing an electric hatchback in Zwickau that will undercut the Model 3 on price.

“Some of the best cars in the world are made in Germany,” Mr. Musk said while appearing at an industry event in Berlin last week alongside Herbert Diess, the chief executive of Volkswagen. “Everyone knows that German engineering is outstanding, for sure.”

The state of Brandenburg, which includes Grünheide and was once part of East Germany, was a long shot to win the Tesla plant. The center of gravity of the German auto industry is in the southern states of Bavaria, home of BMW, and Baden-Württemberg, home of Daimler. Brandenburg, on the other hand, is known by some as the home of Berlin’s new airport, whose construction has been plagued by technical problems and cost overruns and is seven years behind schedule.

The local effort to persuade Tesla officials was led by Jörg Steinbach, the economics minister of Brandenburg and a member of the left-leaning Social Democratic Party. He set out to prove that the sometimes ponderous state bureaucracy could move at Silicon Valley speed, and he was the one who promised the expedited permits.

Mr. Steinbach also chartered the Antonov biplane to sell executives on the virtues of the proposed factory site. (The plane seats up to 12 people, and Antonovs are maneuverable enough to be used as crop dusters.) It helped that the site had already been approved for a factory that BMW decided to build in Leipzig instead.

ImageWestlake Legal Group merlin_164684256_103d9292-cc4b-4a4d-8229-b1f7588b7e7c-articleLarge Tesla’s Winding Road to Berlin Tesla Motors Inc Musk, Elon Factories and Manufacturing Electric and Hybrid Vehicles Berlin (Germany) Automobiles

Mr. Christiani, on the Tesla site, said local officials hoped the factory would lure working-age people back from the cities.Credit…Andreas Meichsner for The New York Times

Arne Christiani, the mayor of Grünheide, said officials had strained to be helpful because they hoped the factory would lure back working-age people who had left for the cities. He joked that Teslas could be rolling off the assembly line sooner than planes begin taking off from Berlin’s much-delayed new airport.

“We’ve been making bets on what happens first,” he said.

There was a tense moment when, during a conference call between German officials and Tesla executives, it emerged that Mr. Musk was under the impression that the site was in Berlin proper.

“I told him, ‘Well, not quite,’” Mr. Steinbach recalled. “‘It’s actually in Brandenburg.’”

Since the fall of the Berlin Wall 30 years ago, Berlin has spawned a thriving arts and start-up scene. It was obviously important to Mr. Musk to be there, Mr. Steinbach said, noting that the plant would be called Gigafactory Berlin in the Greater Berlin Region.

On Nov. 12, Mr. Musk met with the team from Brandenburg in the Hotel Adlon, which once stood in the shadow of the Berlin Wall and is freighted with history. Tesla and the local officials signed a one-and-a-half page letter of intent. Hours later, Mr. Musk delivered the news while receiving a Golden Steering Wheel award from the Bild newspaper.

“I actually have an announcement, which I think will be hopefully well received,” Mr. Musk said from the stage. “We’ve decided to put the Tesla Gigafactory Europe in the Berlin area.” The audience gasped and applauded.

Questions remain, particularly about how Tesla’s high-intensity, 24/7 work ethic will adapt to Germany, where factory managers are expected to consult with employee representatives before making major decisions.

“The labor laws are distinctly different here,” said Olivier Höbel, head of the IG Metall union in Berlin, Brandenburg and Saxony, which represents autoworkers.

But he added, “We are very happy about the decision.” The union will work with Tesla, he said, “to create the perfect climate that the project becomes a full success.”

Christopher F. Schuetze reported from Grünheide, and Jack Ewing from Frankfurt.

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Tesla Reports Profit for Quarter, Sending Shares Soaring

Westlake Legal Group 23tesla2-facebookJumbo Tesla Reports Profit for Quarter, Sending Shares Soaring Tesla Motors Inc Tax Credits, Deductions and Exemptions Musk, Elon Electric and Hybrid Vehicles Company Reports Automobiles

Tesla surprised Wall Street on Wednesday by reporting $143 million in net income in the third quarter as cost reductions more than offset a slight decline in revenue.

The electric-car maker said it had earnings of $1.86 per share on an adjusted basis. Revenue was $6.3 billion in the quarter.

Analysts had expected a loss of 46 cents per share and revenue of $6.4 billion, according to FactSet.

“Investors will love the results,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry.

The news sent Tesla’s shares up 17 percent after the close of regular trading.

Tesla said it removed “substantial cost” from its operations.

“Operating expenses are at the lowest level since Model 3 production started,” the company said in a statement. “This year our focus has been on cost control and preparing for our next phase of growth.”

Tesla said capital expenditures totaled $385 million in the quarter. That was more than the $250 million spent in the second quarter, but down from $510 million in the third quarter a year ago.

At the same time, it said its cash on hand grew to $5.3 billion, an increase of $383 million.

The company said that construction of its Shanghai factory was ahead of schedule and that trial production had started there. Its next vehicle, the Model Y, a roomier version of the Model 3, is now expected to be in production by next summer. Previously, Tesla had said that car would not arrive until late next year.

Tesla reported this month that it delivered 97,000 cars in the third quarter, up from 95,000 in the second quarter. But the sales gain reflected demand for its least expensive offering, the Model 3.

The most affordable version of the Model 3 sells for $39,500. The Model S luxury sedan and Model X sport utility vehicle sell for $80,000 and up, but their sales have fallen as Model 3 production has increased. In the third quarter, Model S and X sales totaled 17,400 vehicles, compared to Model 3 sales of 79,600.

Before the earnings report on Wednesday, Tesla’s stock closed at $255, down about 18 percent since the beginning of the year, although Tesla still has a market value of $46 billion, about $10 billion more than Ford Motor.

Tesla has forecast it will sell 360,000 to 400,000 cars this year, and to reach the bottom of that range it will need fourth-quarter sales of 105,000 vehicles.

Automakers typically see strong sales in the year’s final three months, and Tesla could benefit if consumers in the United States rush to take advantage of the $1,875 federal tax credit available to buyers of Tesla vehicles. The tax credit will cease at the end of the year.

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