Month: April 2023

Enlarge / A Seagate office building on October 26, 2022 in Fremont, California. (credit: Getty Images | Justin Sullivan )

Seagate yesterday agreed to pay a $300 million fine for selling hard disk drives to Huawei, settling US government officials' allegation that shipments to the Chinese company violated export controls imposed in 2020. The fine is "the largest standalone administrative penalty" ever issued by the US Department of Commerce's Bureau of Industry and Security (BIS), the agency said.

"Even after Huawei was placed on the Entity List for conduct inimical to our national security, and its competitors had stopped selling to them due to our foreign direct product rule, Seagate continued sending hard disk drives to Huawei," Assistant Secretary for Export Enforcement Matthew Axelrod said.

As part of the settlement, "Seagate admitted to the conduct set forth in the Proposed Charging Letter involving Seagate US and Seagate Singapore," the BIS said. Seagate violated the rule "by ordering or causing the reexport, export from abroad, or transfer (in-country)" of 7.4 million disk drives to Huawei without BIS authorization, the agency said.

Enlarge (credit: Getty Images)

Earlier this week, the IRS began enforcing the new clean vehicle tax credit rules. This program is an incentive of up to $7,500 for the purchase of a new battery-electric vehicle, plug-in hybrid EV (or hydrogen fuel cell EV), albeit with some conditions, including a requirement for a certain level of domestic content in those cars' battery packs. As a result, many previously qualifying vehicles lost their eligibility, but not all.

When the rules went into effect on April 18, 10 models qualified for the full $7,500 tax credit, and another seven were eligible for a $3,750 credit. The Volkswagen ID.4 was a notable omission from the list, which was puzzling at the time given that VW now builds its electric crossover in Chattanooga, Tennessee. Perhaps it was a day late with its paperwork to the IRS, because the ID.4 now appears on the US Environmental Protection Agency's official list of eligible vehicles.

"This is great news for consumers in the US because it expands the choice of truly affordable EVs," said Pablo Di Si, president and CEO of Volkswagen Group of America. "The ID.4 is already one of the lowest-priced electric SUVs on the market, and the $7,500 Federal Tax Credit makes it even more attainable. This shows that we made the right decision to localize production of the ID.4 in Tennessee and invest even further in battery production, components and innovation. Every ID.4 sold supports thousands of American jobs and helps advance our goal of a carbon-neutral future."

Enlarge / Could 2023 be the year we finally see these on the road? (credit: Tesla)

Tesla is selling plenty of electric vehicles these days, thanks in large part to a string of heavy price cuts this year. But those sales haven't translated to higher profits, according to Tesla's Q1 2023 financial results. In fact, net income dropped 24 percent year on year. Earnings per share fell by nearly as much, down 23 percent to $0.73 per share.

The seemingly never-ending price cuts did not help, but they weren't the only cause. Tesla says that many of its costs—raw materials, commodities, logistics, and warranties—have gone up, and trying to increase production of its new 4680 lithium-ion battery cell has not been cheap. It's also making less money from selling regulatory credits—just $564 million this quarter compared to $679 million this time last year. Free cash flow fell 80 percent from Q1 2022 to $441 million.

It wasn't all bad news for the automaker. Its automotive revenues grew 18 percent compared to Q1 2022, and total revenue increased by 24 percent to $23.3 billion. It was a good quarter for Tesla's battery storage and solar operations. These grew revenue by 148 percent year on year, deploying 40 MW of photovoltaics and 3.9 TWh of energy storage—a 360 percent increase compared to the 846 GWh of batteries it shipped in Q1 2022.