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ACCC opposes TPG and Vodafone Australia merger

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Image: Asha McLean/ZDNet

The Australian Competition and Consumer Commission (ACCC) has opposed the merger between TPG and Vodafone Australia.

The decision initially appeared in a short statement on the consumer watchdog’s site.

“This information was inadvertently published online on our mergers register briefly this afternoon,” the Commission said.

The ACCC later on Wednesday updated its announcement, saying it believed the merger would substantially lessen competition, and that TPG had the commercial incentive to roll out a mobile network.

“TPG is the best prospect Australia has for a new mobile network operator to enter the market, and this is likely the last chance we have for stronger competition in the supply of mobile services,” ACCC chair Rod Sims said.

“Wherever possible, market structures should be settled by the competitive process, not by a merger which results in a market structure that would be subject to little challenge in the future. This is particularly the case in concentrated sectors, such as mobile services in Australia.”

In explaining its decision, the ACCC pointed to Australia’s concentrated mobile services market, with the three network operators, Telstra, Optus, and Vodafone, boasting over 87% share. Similarly, it said the fixed broadband market is concentrated, with Telstra, TPG, and Optus having approximately 85% share.

Sims noted that TPG has the fibre assets, transmission network, spectrum, and customer base to move into mobile, while Vodafone had moved into fixed broadband.

“TPG is also facing reducing margins in fixed home broadband due to the NBN rollout. Further, there is the growing take-up of mobile broadband services in place of fixed home broadband services which is expected to increase especially after the rollout of 5G technology,” Sims added.

“After thorough examination, we have concluded that, if this proposed merger does not proceed, there is a real chance TPG will roll out a mobile network.”

However in January, TPG made the decision to abandon its mobile network build in Australia, and cop a AU$230 million accounting hit as a result.

TPG said the decision was made due to the Australian government’s ban on Huawei 5G equipment. The telco said it had purchased equipment for 1,500 sites, as well as 900 fully or partially completed small cell sites. The company has already racked up AU$100 million in costs, with a further AU$30 million to come.

“It is extremely disappointing that the clear strategy the company had to become a mobile network operator at the forefront of 5G has been undone by factors outside of TPG’s control,” Executive Chairman David Teoh said at the time.

“Over the past two years a huge amount of time and resource [sic] has been invested in creating and delivering on a strategy that would have positioned TPG very favourably to exploit the opportunities that the advent of 5G will present.”

On the accounting side, the largest individual cost will be the reduction in value of its unused spectrum licences by AU$92 million, with the telco saying this was due to licences having a finite duration.

“Having ceased its mobile network rollout, the group now has no business plan or strategy for using its spectrum licences on a standalone basis and, accordingly, the carrying value of these licences is required to be reassessed,” the company said.

The ACCC’s decision on the merger had previously been delayed due to a lack of information from the parties.

In December, the ACCC said in a statement of issues that it had concerns over the proposed merger.

“Our preliminary view is that TPG is currently on track to become the fourth mobile network operator in Australia, and as such it’s likely to be an aggressive competitor,” Sims said at the time.

“We therefore have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition.

“If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances. Our preliminary view is the merged TPG-Vodafone would not have the incentive to operate in the same way.”

The ACCC said at the time it would also look into whether removing Vodafone as a fixed broadband competitor would impact competition.

TPG and Vodafone Australia announced in August the deal that proposed to create a new entity worth AU$15 billion that would use the TPG moniker.

Updated 5.05 pm AEST 8 May 2019: Added further comments from the ACCC.  

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Tesla Q2 2021: Deliveries break 200,000, Bitcoin bites and Semi pushed to 2022

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Tesla delivered over 200,000 vehicles in Q2 2021, with the electric car company announcing a 98-percent rise in revenue year on year. It’s not all good news, though, with the Tesla Semi having been pushed back to 2022, and a Bitcoin-related impairment hitting the balance sheet.

For the three month period, Tesla saw revenue of $11.958 billion, and earnings of $1.45 per share (non-GAAP). Operating margin was 11-percent.

Tesla produced 2,340 Model S and Model X, and delivered 1,890 of the EVs. The bulk, though, was over with the more affordable Model 3 and Model Y. There, Tesla built 204,080 and delivered 199,360.

That increase in Model 3 and Model Y shipments did, however, have an impact on vehicle average selling price. That declined by 2-percent, year on year, as Model S and Model X deliveries were lower for the latest quarter. “Production ramp of Model S progressed over the course of Q2,” Tesla says, “and we expect it will continue to increase throughout the rest of the year.”

85 megawatts of solar were deployed, and 1,274 MWh of power storage.

As for the downs of the quarter, one notable hit was a $23 million “Bitcoin-related impairment” recorded. Tesla had announced back in February 2021 that it was buying $1.5 billion worth of the cryptocurrency; the following month, it revealed it would allow EV shoppers to pay for their new car with Bitcoin. Come May, however, Elon Musk ended that, amid concerns at the ecological impact of cryptocurrency mining.

The other disappointment is news on the Tesla Semi. Production of the electric haulage has been pushed back, Tesla confirmed today, as the automaker focuses on building its first Model Y at the Berlin and Austin factories later this year.

“To better focus on these factories, and due to the limited availability of battery cells and global supply chain challenges, we have shifted the launch of the Semi truck program to 2022,” Tesla said.

For the Tesla Cybertruck, meanwhile, there’s really just a single mention of the upcoming electric pickup. “We are all making progress on the industrialization of Cybertruck,” the automaker says, “which is currently planned for Austin production subsequent to Model Y.”

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Lucid Motors goes public, grabs $4.4 billion and loses its last excuse

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Lucid Motors has gone public, listing as $LCID on the NASDAQ and raising $4.4 billion as it heads into the final countdown for producing and selling its Air all-electric luxury sedan. It’s been a tumultuous journey for the automaker from its founding in 2007 to here, and the clock is ticking for Lucid to prove it really can disrupt the EV status-quo as it has long claimed it will.

We first saw the Lucid Air back in late 2016, and since then the automaker’s claims haven’t exactly been coy. Certain configurations will offer 500+ miles of EPA range on a charge, Lucid has said, with performance as rapid as 0-60 mph in 2.5 seconds.

Still, like many would-be auto industry disruptors, Lucid has had to battle to make the whole thing make sense financially. Production of the Air was pushed back, though now the company says it should begin that in the second half of 2021. It’ll use the new merger with SPAC Churchill Capital Corp IV – and the funds it raises – to help pay for that.

There are, Lucid says, currently over 11,000 reservations for the various configurations of Air it plans to build. All of its Air Dream Edition models – which will be manufactured first – have been reserved; subsequent trims, including the Grand Touring, Touring, and most affordable Pure, will follow, though it won’t be until 2022 at the earliest before the cheapest Air arrives.

Part of Lucid’s challenge, of course, is raising its profile amid the increasingly crowded electric luxury segment. With Tesla dominating mindshare, and established brands like Mercedes-Benz preparing to weigh in with all-electric heavyweights such as the new EQS, speed and range aren’t going to be sufficient in themselves to distinguish models like the Lucid Air.

The automaker’s strategy there is to put the Air where people can’t miss it. Three new “Lucid Dream Ahead” boxes have been placed around well-trafficked spots in New York City, for example; they’ll be uncovered to reveal an Air sedan in each. Unable to count on Tesla’s “we don’t pay for advertising” model, Lucid is putting ads on CNBC, in newspapers, and on the Times Square digital billboards.

The reality is that, at $131,500 for an Air Grand Touring, the Air will go head to head with some strong competition. Mercedes hasn’t confirmed pricing for the 2022 EQS arriving in the near year, but says to expect it to be roughly on a par with the S-Class. Meanwhile, a more powerful Tesla Model S Plaid is $129,990.

Despite that, the automaker is looking ahead to how it can best spend its new windfall. “Lucid will add 2.7 million square feet of additional space at our greenfield factory in Arizona,” CEO Peter Rawlinson said today. “This will allow us to add a separate line for our Project Gravity electric SUV even as we accelerate its development.”

The short-term question, as customer car production nears, is just how many of the reservation holders convert their refundable deposit into an actual order. We’ll find that out later in the year, when Lucid opens the order books officially.

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2021 Toyota RAV4 Prime Review

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It’s probably fair to say that Toyota put hybrids on the map. The Prius defined the category, came to resemble every stereotype of a “green” car (and, for that matter, of your next Uber or Lyft), and for many has been a first taste of electrification. What’s odd, then, is that it’s taken until now – and the 2021 Toyota RAV4 Prime – for the automaker to get around to making a compelling plug-in hybrid.

The nomenclature can be tricky, so first a quick recap. The original Prius – and indeed most models of Prius since – have been a hybrid in that they pair a gas engine with an electric motor, and a small battery. As you slow down, instead of wasting all that energy heating up and wearing away the brake pads, the hybrid drivetrain converts it into electricity; hit the accelerator, and it uses it to give you a little extra jolt of speed.

It’s a great way to nudge up your miles-per-gallon numbers, without demanding owners do anything as unusual as plug their car into a charger. The downside is that the electric-only range is tiny: maybe about a mile, if you have a light right foot. For more than that, you’ll need at least a plug-in hybrid, or PHEV.

That way you get not only a bigger battery – meaning more electric-only range, before the gas engine kicks in – but the ability to charge it externally. For most people that means while they’re at home or at work, but you can also plug PHEVs into public chargers. They’re a reassuring stepping-stone to full electric because, even if you don’t have time or access to a charger, you can simply fill up the gas tank for more range.

Toyota has flirted with PHEVs, but it’s only with the 2021 RAV4 Prime where it feels like it truly took the category seriously. Maybe that’s because the RAV4 is such an important model in the automaker’s line-up: the best-seller of out of its whole range, in fact, in the first half of 2021. If you’re going to wear the RAV4 nameplate, then, you need to live up to the billing.

Here, Toyota pairs a 2.5-liter four-cylinder gas engine with two electric motors, and an 18.1 kWh battery pack under the trunk floor. Now EVs with batteries capable of anything close to a decent range tend to be on the heavy side, and the RAV4 Prime is no different at around 4,300 pounds, but it still manages to be Toyota’s second most potent model on sale right now.

Sure, a Supra will best it, but 302 horsepower is plenty for a compact SUV. The two-door coupe can’t drive 42 miles on electric power alone, either, or accommodate a family of five and their luggage. Toyota claims a 0-60 mph time of 5.7 seconds, which is positively perky.

Exactly how much of that perkiness you get depends on which drive mode you’re in. Auto mode blends the gas and electric powers as the RAV4 Prime sees fit; you’ll know when the fossil fuels are being burned, because the four-cylinder grunts a little noisily into life. EV mode avoids that happening until the battery is depleted, though sacrifices performance in the process. If you want maximum power, you’ll need to be in Auto.

Finally, there’s a mode where the gas engine stays active more, so as to charge up the battery while you’re driving. It’s definitely not the most efficient way to do that, mind. Instead, you’re going to want to plug the crossover in.

As standard, the RAV4 Prime comes with a 3.3 kW onboard charger. Plug the PHEV into a regular, 120V outlet – such as with the Level 1 charger Toyota supplies – and you’re looking at 12 hours for a full charge. With a Level 2 240V charger, that dips to 4.5 hours. Optional on the fancier 2021 RAV4 Prime XSE trim is a 6.6 kW onboard charger, as part of the Premium package. That trims the 240V Level 2 charge time to 2.5 hours.

42 miles of EV-only range may not sound like a lot, but it’s more than the average American drives in a day. With a full tank of gas to play with, the EPA says you could do a whopping 600 miles before needing to stop: the SUV is rated for 94 MPGe, or 38 mpg on gasoline only.

Sadly, you don’t get DC fast charging support, so don’t expect faster top-ups at higher powered public chargers. That’s not an unusual sacrifice for PHEVs, mind, where the ability to fill up a gas tank generally offsets the absence of fast charging.

On the road, the RAV4 Prime falls victim to the same shortcoming many plug-in hybrids suffer. In a straight line it’s definitely speedy, the dual-motor all-wheel drive setup launching you forward with all the instantaneous torque that we’ve come to love electric vehicles for. The eagerness with which it surges away from stop signs and lights makes it a pleasing tool for urban jaunts.

Cornering, though, is not the Toyota’s forte. Not that, quite frankly, anybody looked to the RAV4 for its handling prowess. The suspension is clearly tuned in an attempt to offset the battery heft, and the result is body roll in the corners and some dive when you brake on the harder side. The steering is precise but not quick. Fine for cruising, then, but this doesn’t really put the “Sport” in SUV.

The “Utility,” however, is another matter. Toyota’s cunning packaging not only hides the battery, but cuts only a little into cargo space in the process. With the rear bench up, you’re looking at 33.5 cu-ft; drop it down, that expands to almost 70 cu-ft. Both the entry RAV4 Prime SE at $38,250, and the nicer XSE at $41,575, get a power liftgate.

As for the rest of the cabin, Toyota’s current curse of “sensibly dour” continues. It’s not that the RAV4 Prime’s dashboard feels cheap, or even that it’s lacking in features, it just seems a little too sober for its own good. Everything is laid out cleanly and sensibly, and there are some nice, soft-touch materials, I just wish it wasn’t so dark in there.

Dual-zone climate control is standard, along with heated front seats, a leather-trimmed steering wheel, and an 8-inch infotainment systems with 6-speaker audio, Apple CarPlay and Android Auto, and five USB ports spread around the cabin. Sadly Toyota’s new UI isn’t included, meaning the infotainment is serviceable but hardly aesthetically-delightful. The XSE gets a slightly bigger, 9-inch touchscreen, wireless phone charging, a foot-operated tailgate, along with SofTex seats rather than just fabric. Options include ventilated front seats, a heated steering wheel, heated rear seats, a 120V/1500W outlet in the trunk, navigation, and front and rear parking assistance.

Standard either way is Toyota Safety Sense 2.0, which bundles together adaptive cruise control, Lane Departure Alerts and Lane Tracing Assist, pre-collision braking with pedestrian detection, and auto high-beams. Blind spot alerts are included too, as is trailer sway control for when you’re taking advantage of the 2,500 pounds of towing capacity.

2021 Toyota RAV4 Prime Verdict

The RAV4 Prime’s wildcard is the US federal tax incentive. Though the PHEV is almost $10k more than the regular RAV4 Hybrid – which has much less electric-only range and no ability to plug it in to charge – it’s eligible for the full, $7,500 tax credit. Take advantage of other incentives at the state and local level, and you can quickly pare down that difference.

At that point, quite honestly, the 2021 RAV4 Prime becomes a no-brainer for the average crossover shopper. Would I love a little extra electric range? Sure, but Toyota’s 42 miles is readily achievable on the road, and its overall package of electrification without demanding too much in the way of cabin and cargo compromise is solid. A bigger battery would take up more space, add weight, and make the whole thing more expensive.

It’s hard to argue with the idea that the automotive world is headed toward full-electric. Not everyone, though, is quite ready for the transition, and I think there’s still absolutely a place for plug-in hybrids that acknowledge that fact. The 2021 Toyota RAV4 Prime is easy to live with and practical, and the fact that you can drive it on electric power alone only adds to the experience, rather than complicating it.

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