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(Bloomberg) —

Tesla reports first-quarter results after the market closes Wednesday. Yes, it’s on April 20, and “420” is both a marijuana reference and a key number in company lore.

Analysts surveyed by Bloomberg expect adjusted earnings of $2.27 a share and revenue of $17.92 billion. After the print, it’s the commentary during the earnings call that many investors pay close attention to.

Here are five things to listen for:

China

Everyone would like to hear Chief Executive Officer Elon Musk — or finance chief Zach Kirkhorn, if Musk isn’t on the call — talk about how much the Shanghai shutdown has crimped production, and how that impacts the outlook for the current quarter and rest of the year. A state media outlet in Shanghai reported Tuesday that about 8,000 workers have returned to Tesla’s Shanghai plant, which closed for about three weeks due to the Covid outbreak in the region. Tesla recently opened new factories near Berlin and Austin, Texas, but those will both take time to ramp up production, and China remains crucial to Tesla’s success.

Cybertruck

Scores of customers have put down refundable deposits for the Cybertruck. Musk told the crowd at his Cyber Rodeo in Texas last week that the truck is coming in 2023. Whether or not that happens, it’ll arrive later than the first electric trucks on the market. Rivian’s R1T went on sale in October, and Ford’s F-150 Lightning is coming later this month. This year is all about scaling new factories, but anticipation for the Cybertruck is high.

FSD

Tesla now has more than 100,000 drivers taking part in the beta-testing program for Full Self-Driving, a set of features that customers pay $12,000 for and are still required to actively supervise. Musk provided the new figure during an interview TED released on Sunday. With so many people now testing FSD, what will Tesla say — if anything — about recognizing deferred revenue? One analyst concluded after last quarter that the company may be losing faith in its ability to cash in anytime soon.

Mining

Musk tweeted earlier this month that prices of lithium, a major ingredient of electric-vehicle batteries, had reached “insane levels” and that Tesla “might actually have to get into the mining & refining directly at scale, unless costs improve.”

I read this as a warning shot to the mining industry: improve your costs, or we are coming for you. Tesla recently hired an exploration geologist from Rio Tinto, and the company has long preached the merits of vertical integration. A related question: Will Tesla acknowledge its nickel deal with Vale? Will Kirkhorn say anything about potential acquisitions?

Mobile Charger Uproar

Tesla no longer includes a mobile charging connector as a standard accessory with every car, a move many owners and fans have urged the company to reconsider. New customers who ordered vehicles after April 17 will have to pay $200 for a connector.

The company is now monetizing an accessory many people think of as essential, especially those without home charging and owners who frequently go on road trips to far-flung locations without a Tesla Supercharger in sight. Musk has cited low usage, but will we see more of these sorts of moves that are effectively shadow price hikes on top of more straightforward increases?

What else are you hoping to hear about during the call? Whether Musk is distracted by his interest in Twitter and might sell some of his Tesla shares to finance an acquisition? What about that stock split? Give me a shout: dhull12@bloomberg.net

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(Bloomberg) — Google and Meta Platforms Inc. moved on Wednesday to curtail the social media presence of Hong Kong’s sole chief executive candidate, an unusual move to comply with U.S. sanctions that thrust the American internet giants into the debate over a perceived erosion of freedoms in the city.

YouTube shut down the campaign channel of former policeman John Lee’s election campaign channel, citing sanctions Washington imposed on officials allegedly involved in quashing the pro-democracy movement that erupted in 2019. Lee, a staunch supporter of the China-extradition bill that sparked the protests in Hong Kong, was sanctioned in 2020 for his role in curtailing political freedoms under China’s national security law. 

Facebook, which said it has to abide by U.S. law, is also preventing Lee from using its payments services. “If we identify accounts maintained by or on behalf of people on the U.S. Government’s list of Specially Designated Nationals, we have a legal obligation to take certain action,” the company said in an emailed statement.

Alphabet Inc.’s YouTube has suspended or barred high-profile figures in the past, including former U.S. President Donald Trump, right-wing media personality Alex Jones and convicted sex offender R. Kelly. But it’s rare for the world’s most popular video platform to ban content from election candidates.

Like other social media platforms, Google and Facebook have come under fire in recent years for their handling of content during elections. YouTube’s action provoked an immediate backlash from officials in the city, a semi-autonomous former British colony that returned to China in 1997.

“I’m disappointed that some media have taken action based on the so-called reasons that I was sanctioned,” the 64-year-old Lee told reporters on Wednesday. “The unreasonable, so-called sanction that the U.S. government directed at me, for my efforts to maintain national security, is an act of bullying.”

The Looking-Glass World of Hong Kong Democracy: Matthew Brooker

At least one pro-Beijing lawmaker, Holden Chow, urged the city government to “deal with” the social media platform as the incidence demonstrated “serious interference” by foreign powers in Hong Kong elections. YouTube “flagrantly ignored the integrity of a fair and just election,” he said in a statement.

Yet while the twin moves undermined the Beijing-backed candidate’s ability to circulate campaign materials, they’re unlikely to affect the outcome. China has drawn widespread criticism for stage-managing the race in Hong Kong: Lee has already surpassed the threshold of support he needs to win, effectively confirming he’ll become the city’s next leader.

“Google complies with applicable U.S. sanctions laws and enforces related policies under its Terms of Service. After review and consistent with these policies, we terminated the Johnlee2022 YouTube channel,” said a spokesman for the company, which is based in California.

Hong Kong’s John Lee Surpasses Threshold To Win Leadership Race

The next chief executive will take office July 1, the halfway mark in Beijing’s 50-year pledge to preserve the city’s liberal financial and political systems, which has already been eroded substantially since the 2019 pro-democracy protests. No chief executive has so far managed to complete two full terms, as they struggle to satisfy both China’s demand for control and citizens’ expectations for greater freedoms. 

Hong Kong’s next leader will also face pressure to restore business confidence, address the city’s affordable housing crisis and craft a pandemic policy that both satisfies the international business community and shows loyalty to Beijing’s Covid Zero strategy.  

Enacting Hong Kong’s own security law, Article 23, will be one of his priorities if elected, Lee has said. The bill mandated under the city’s mini-constitution bans sedition and the theft of state secrets, but has been on ice since 2003 when it triggered mass street protests. Beijing has effectively quelled dissent by imposing its own national security law on the city in 2020.

(Updates with Facebook’s ban from the first paragraph)

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(Bloomberg) — South Africa’s governing African National Congress appointed Human Settlements Minister Mmamoloko Kubayi as head of economic transformation. Kubayi, 43, succeeds Enoch Godongwana, who relinquished the powerful party position after being appointed finance minister in August. A statement on Kubayi’s appointment will be issued later, ANC spokesman Pule Mabe said by phone on Tuesday. …

South Africa’s ANC Names New Head of Economic Transformation Read More »

(Bloomberg) — South Korean dystopian hit ‘Squid Game’ has helped make Asia a lone bright spot for Netflix Inc., which added more than 1 million subscribers in the region last quarter, even as the streaming service’s total audience declined for the first time in a decade.  ‘Squid Game,’ in which a group of indebted people …

‘Squid Game’ Helps Make Asia Lone Bright Spot for Netflix Read More »

(Bloomberg) — Losing customers for the first time in a decade, Netflix Inc. is throwing out all of its old rules. The streaming leader will introduce a cheaper, advertising-supported option for subscribers in the next couple years, and will start to crack down on people sharing their passwords even before that. Netflix also will curb …

Netflix Tumbles as 200,000 Users Exit for First Drop in Decade Read More »

(Bloomberg) —

The war in Ukraine is deepening European manufacturers’ supply-chain woes, eroding expectations for a recovery in the region’s car sales and spreading to industrial giants like Siemens Energy AG.

Passenger car registrations in Europe slumped 19% in March, the European Automobile Manufacturers’ Association said Wednesday. It was the ninth consecutive monthly decline amid production stops due to the war in Ukraine hitting local suppliers. 

“Parts shortages and production halts related to the Ukraine war are set to limit auto supply and delay an expected sales recovery,” Bloomberg Intelligence analyst Michael Dean wrote in a note. 

Car registrations are falling short of expectations after last year’s record low when a lack of semiconductors idled plants. The continuing slump points to a deepening supply-chain crisis for manufacturers. Volkswagen AG last week warned of more supply pain and unpredictable commodity price swings as major nickel, aluminum and steel producer Russia sees more pressure from sanctions. 

Turbine maker Siemens Energy AG on Wednesday said it’s being hit by an “aggravation of of existing supply chain constraints” that are weighing on revenue and profitability. Last month, BMW AG cut expected returns from automaking because of fallout from the invasion. 

So far European industrials have borne the brunt of war-worsened supply-chain shortages. Consumer-goods companies have also faced cost squeezes, but Heineken NV and Danone SA reported strong sales of beer and bottled water for the most recent quarter, benefiting from an easing of Covid restrictions in much of the world. 

Despite fresh lockdowns in China, L’Oreal SA also posted better-than-expected sales of cosmetics. Chemicals giant BASF SE last week reported a jump in profit after higher prices offset soaring energy costs. 

For carmakers, Russia’s invasion of Ukraine has disrupted local suppliers of wire harnesses, forcing VW and BMW to temporarily halt production. Carmakers have also started to again walk back expectations of improvements in semiconductor availability with bottlenecks now seen reaching well into next year. While demand continues to outstrip supply, record inflation in the euro region may begin to affect buying decisions, according to forecaster LMC Automotive.

Sales in Europe are expected to barely improve this year, with inflation likely to muffle underlying demand, LMC Automotive said in a report. The forecaster cut its estimate for growth in Western Europe to just 0.4%, expecting deliveries will total just 10.63 million, well below the 14 million mark that the industry was clearing pre-pandemic. Consumer prices in the euro area surged to a record 7.5% in March from a year ago, topping estimates and up from 5.9% in February. 

“The war will chip away at underlying demand as well, through higher‐for‐longer inflation and lower real incomes,” LMC said. “At least for now, demand is still outstripping supply.”

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(Bloomberg) — Renault SA’s car sales in Russia, its second-biggest market, sunk last month as the French automaker idled factories and lays plans to withdraw from the country.

Shipments of Lada vehicles produced by Renault’s Russian venture fell 56% in March compared with the same month last year, according to a statement Wednesday. That’s the ninth straight monthly decline for the brand that dates back to the Soviet era.

Sales of Ladas will probably continue to drop off due to sanctions over Russia’s invasion of Ukraine that have hindered trade and prevented the import of key parts needed for production. The vehicles are made by Renault’s AvtoVaz venture at two Russian factories, which have either been halted or operating at reduced capacity since the war started.

The Avtovaz business, which Renault majority owns, has made the French firm the most exposed automaker to the conflict. The manufacturer last month announced it was suspending production at its own plant in Moscow and assessing options for AvtoVaz. 

Overall, Renault car and commercial vehicle sales volumes in Russia dropped 64% in March compared with a worldwide sales slump of 25%.

Renault revised downward its financial outlook for this year on the Russia decision and is planning to write down the value of the business, which was evaluated at 2.2 billion euros ($2.4 billion), including goodwill, at the end of last year. 

Read: Renault Said to Explore AvtoVaz Ownership Transfer in Russia

Renault rose as much as 2.1% in early trading in Paris Wednesday. The company has lost about 28% of its market value since the start of the invasion. 

Avtovaz has blamed factory downtime on a lack of electronic components. Workers are on an extended vacation this week, the venture has said, with the intention of restarting operations. 

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(Bloomberg) — Goldman Sachs Group Inc. led a $51 million investment in Rapyuta Robotics Co., a maker of autonomous machines used in the logistics industry.

The Tokyo-based company has now raised $81 million in three funding rounds, according to a press release.

The capital is earmarked to develop warehouse robots, cloud robotics as well as for training, research and development. Logistics companies that have used Rapyuta’s robots have seen a doubling of productivity in their operations within five months, the company said.

“While the global logistics industry is rapidly expanding due to rising e-commerce demand, it faces a wave of digitization and a challenge of labor shortage,” said Stephanie Hui, global co-head of Growth Equity at Goldman Sachs Asset Management. “As the industry seeks for automation solutions to improve efficiency, we are optimistic about the growth of Rapyuta Robotics as a pioneer in cloud robotics platforms.”

Rapyuta’s next-generation cloud robotics platform, rapyuta.io, uses control and artificial intelligence technologies to improve the efficiency and safety of warehouse operations, enabling multiple robots to work together, according to the firm.

Goldman Sachs has targeted plowing at least $30 billion into Asian alternative assets over the next five years, betting on technology startups, real estate, consumer and renewable energy. 

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(Bloomberg) — Amazon.com Inc. struck deals to boost its access to renewable energy by almost a third as the company looks to get all of its power from green sources within a few years.

The retail giant will buy power from 3.5 gigawatts of new projects — mostly solar farms in the U.S. — to supply its offices, warehouses and data centers, it said in a statement. Amazon is seeking to bolster its standing as the world’s largest corporate green energy buyer as investors and consumers pressure big businesses to go greener, and has signed a number of deals in recent years.

Power purchase agreements are a key way to scale up green energy. Buyers can use them to reach corporate sustainability goals, while developers benefit by having stable demand for electricity that can help underpin financing agreements to build new projects. 

“There’s more competition in the marketplace for wind and solar deals,” said Nat Sahlstrom, head of global energy at Amazon Web Services. The cloud-computing unit’s data centers are a major contributor to Amazon’s electricity use. “That sends a strong signal to the market that there’s need for more renewable energy projects.”

The latest round of Amazon’s accords dwarfs the 2.3 gigawatts of green-power deals signed by companies globally in the three months through the end of March, according to data from BloombergNEF. Its target to power operations with renewables by 2025 is five years ahead of an earlier goal. Amazon was previously regarded as slow to address its contributions to climate change.

The deals announced Wednesday include 2.9 gigawatts of solar farms in the U.S., encompassing two projects that also have a combined 225 megawatts of batteries to store renewable power for when the sun isn’t shining. Amazon is also adding rooftop solar installations at eight sites to power operations of its warehouses in Australia, Canada, India, Japan and the United Arab Emirates. 

Terms of the power purchase agreements weren’t disclosed.

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(Bloomberg) — Just Eat Takeaway.com NV said it’s considering a partial or full sale of its Grubhub unit less than a year after buying it for $7.3 billion, in a reversal that highlights how the end of the pandemic has turned the food delivery industry from a hot property into a struggling sector.

The Amsterdam-based company said in a statement Wednesday it’s exploring strategic actions for the U.S. division, just as it’s losing an unusually high level of customers across its key markets. Months after the transaction closed in June, Chief Executive Officer Jitse Groen said the business would be an important part of industry consolidation. A transaction has yet to materialize.  

Just Eat isn’t the only pandemic darling changing course to cope with customers’ post-lockdown freedom. Netflix Inc. posted its first subscriber drop in a decade, prompting co-founder Reed Hastings to introduce advertising to the streaming service after years of saying he wouldn’t. Peloton Interactive Inc. will raise the price of a monthly subscription, which gives owners of its stationery bike access to virtual classes, for the first time in eight years in a bid to boost revenue.

However, Just Eat is facing deeper questions on its strategy. Groen has been touting a turnaround plan that featured activity on Grubhub as well as expansion into groceries and building out its own courier network. Shareholders have been lobbying for quicker action around its assets, and pushing the company for clarity on how it’s developing other parts of the business.

Pressure on the company intensified last week when investor Lucerne Capital Management said it planned to vote against the re-appointment of the food delivery company’s chief financial officer and supervisory board at the annual general meeting in early May.

In recent months Groen has said outside investment in Grubhub could be feasible, including from private equity or strategic partners. Bloomberg News reported in January the company was open to a sale of the division. 

The announcement that a sale is now a possibility meets difficult timing. Bernstein analyst William Woods said he “struggles to see a deal materializing” for Grubhub as it is complicated to identify a suitable suitor for a business that is declining, losing share and restrained by fee caps.

What Bloomberg Intelligence Says:

A worse-than-expected 1Q slowdown means even reaching Just Eat Takeaway.com’s lowered 2022 growth goal and return to positive adjusted Ebitda in 2023 requires stemming the number of clients lost after the lockdown boost and has added pressure to sell Grubhub and/or iFood to fund investment. Orders fell in 1Q, at 8% below consensus, on a sharp U.S. decline due to New York fee caps and weak office demand.

Just Eat Must Keep Clients If Grubhub Is Sold for Profit: React

Diana Gomes, BI consumer analyst

Key Insights

• Groen said on a media call the company has mandated bankers to examine options for Grubhub.
• Just Eat pared its projections for 2022 and now says gross transaction value will grow by mid-single digits percentage points year-on-year, down from an earlier estimate for a gain in the mid-teens percentage points.
• The company said orders on its platform rose less than expected at the start of this year, with total orders of 264.1 million in the first quarter, missing the 286.5 million orders expected by analysts in a Bloomberg survey.
• GTV in the first quarter was 7.2 billion euros ($7.8 billion), a 4% gain from the same period in the year prior driven by larger average transactions.
• Just Eat said it now expected a 2022 adjusted earnings margin in the range of -0.5% to -0.7%, a change from previous guidance of -0.6% to -0.8%, with long-term objectives unchanged.
• “Our priority for 2022 lies in enhancing profitability and strengthening our business. We expect profitability to gradually improve throughout the year, and to return to positive adjusted EBITDA in 2023,” Groen said in the statement
• North America was the chief laggard with a 5% drop in orders year-on-year. The U.K. and Ireland was flat while Northern Europe had a 4% gain in the same period.

Market Reaction

• Shares in Just Eat fluctuated after the report, and were 2.8% higher at 10:23 a.m. in Amsterdam. The stock has fallen around 47% in the year to Tuesday, compared with a 23% drop in the Stoxx Europe tech index.

Get More

• Pressure Builds on Just Eat’s Board After $16 Million Ski Trip
• Grubhub’s New Logo Too Similar to Kroger Brand’s, Judge Says 
• Delivery Hero Leads $24 Billion Sector Rout Amid Profit Woes 
• GrubHub, Uber Fail to Get Price-Fixing Lawsuit Dismissed 

(Adds analyst comment in eighth paragraph.)

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