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Tesla reports drop in auto sales, while Toyota sees US surge

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A suspected arson attack of power infrastructure impacted production at Tesla's German plant, one of the factors weighing on the company's first quarter sales
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Tesla reported sharply lower first-quarter auto sales on Tuesday amid an underwhelming demand outlook for electric vehicles, while legacy players including Toyota rode improved US inventories to higher sales. 

Elon Musk’s auto giant reported 386,810 global deliveries over the period, down 8.5 percent, reflecting in part a weak sales market in China, where it faces heavy competition from local electric vehicle (EV) makers. 

Tesla also cited the drag from an apparent arson attack on power lines in Germany that dented output at the company’s lone European factory.

Among other automakers, General Motors reported a slight dip in sales — while Toyota enjoyed a surge compared with a year-ago period, when it was constrained by severe inventory issues due to Covid-19 supply chain problems.

Analysts have been expecting about a six percent rise in overall sales in the quarter, reflecting a still strong labor market and an improved supply picture that has eased pricing pressures. 

However, market watchers caution that many consumers still feel the pinch from higher interest rates.

– Tesla’s ‘unmitigated disaster’ –

In explaining the drop, Tesla pointed to a hit from the production ramp-up of an updated Model 3 at its California factory and factory shutdowns due to shipping diversions caused by the Red Sea conflict, as well as the attack on Gigafactory Berlin.

Morningstar said the decline also “points to a slowdown in demand for Tesla’s vehicles, as the company’s competitors, particularly in China, may have cut prices more than Tesla to win consumers.”

Analysts have been girding for a tough first quarter for the high-flying Tesla, which has reportedly cut production in China the face of the rise of BYD and other Chinese automakers.

At the same time, an increase in EVs in other markets including the United States has led Tesla to enact price cuts, dimming the company’s profit outlook.

“While we were anticipating a bad 1Q, this was an unmitigated disaster,” said Wedbush analyst Dan Ives.

“We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

– ‘Mixed’ outlook for consumers –

Elsewhere, GM reported a 1.5 percent dip in first-quarter US deliveries, a slightly bigger decline than the 0.7 percent projected by Edmunds.com. 

But the US giant pointed to continued strong customer demand for its vehicles, with its incentives trending below the industry average.

While overall EV sales fell compared with the year-ago period, GM described its ramp-up as “on track,” with deliveries of its Equinox EV beginning to ship to dealers in the first half of 2024.

Targeted at middle- and working-class consumers, the Equinox is being closely watched as a barometer of mainstream US demand for EVs. 

The first available versions of the model will start at $43,295, with the lowest priced option around $35,000 available later in 2024, according to Chevy. The average EV was priced at $52,314 in February, according to Kelley Blue Book.

The Equinox will qualify for a federal $7,500 US tax credit, knocking that price off the vehicle.

At Toyota, US auto sales for the quarter jumped 20.3 percent to 565,098. The Japanese automaker scored broad-based gains across its nameplate and Lexus luxury brand, in a dynamic that had been expected by analysts due to the much-improved inventory situation.

Similarly, Honda, which also experienced vehicle shortages in the 2023 period, won a 17.3 percent increase in US quarterly sales to 333,824.

Cox Automotive Chief Economist Jonathan Smoke described the macro environment as “mixed,” noting that some potential car consumers may hold off on purchases if they expect the Federal Reserve to cut interest rates later this year.

“It’s not bleak, but it’s not trending positively for consumer spending to improve in the near term,” Smoke said on a conference call last week.

Tesla shares fell 4.6 percent in early-afternoon trading, while GM lost 0.9 percent and Toyota fell 0.9 percent.

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Quarter of UK 5 to 7-year-olds have smart phone: study

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A growing number of parents say smart phones should be kept out of the hands of small children
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Around a quarter of British children aged between five and seven-years-old now have a smart phone, a study by the UK communications regulator said on Friday.

The findings come as parents have started to push back against the trend for giving younger children access to the devices.

Research by the Ofcom authority found that 38 percent of children in the age group were using social media platforms such as TikTok, Instagram and Whatsapp despite rules requiring users to be at least 13.

The study also found that the number of the same age watching live-streamed content rose from 39 percent to around half.

Ofcom said parental concerns appeared to have increased considerably but “enforcement of rules appears to be diminishing”.

It said this could be due to a sense among adults of “resignation about their ability to intervene in their children’s online lives”.

Science Minister Michelle Donelan described the findings as “stark”.

Online safety legislation passed by parliament last October aims to crack down on harmful content, including online child sex abuse.

“Children as young as five should not be accessing social media,” Donelan said.

“Most platforms say they do not allow under-13s onto their sites and the (Online Safety) Act will ensure companies enforce these limits or they could face massive fines,” she added.

– ‘Massive pressure’ –

Under the new law tech companies could face fines of up to 10 percent of global revenue for rule breaches and bosses could be jailed.

The study follows a massive reaction from UK parents this year after one mother’s Instagram post when viral.

Daisy Greenwell posted that she was horrified to learn from another parent that her 11-year-old son had his own smart phone, as did a third of the boy’s class.

“This conversation has filled me with terror. I don’t want to give my child something that I know will damage her mental health and make her addicted,” she wrote.

“But I also know that the pressure to do so, if the rest of her class have one, will be massive,” she added.

Thousands of parents immediately got in contact to share their own fears that the devices could open them up to predators, online bullying, social pressure and harmful content. It resulted in the launch of the Parents United for a Smartphone Free Childhood campaign. 

US author Jonathan Haidt — whose recent book “The Anxious Generation” says smart phones have rewired children’s brains — has urged parents to act together on smart phone access for kids.

A child “breaks our heart” by telling us they are excluded from their peer group by being the only one without a phone, he said last month. Haidt advocates for no smart phones before the age of 14 or social media before 16.

“These things are hard to do as one parent. But if we all do it together — if even half of us do it together — then it becomes much easier for our kids,” he added.

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Olympic chief Bach says AI can be a game changer for athletes

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IOC president Thomas Bach delivers his keynote speech at the Olympic AI Agenda launch
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IOC president Thomas Bach said artificial intelligence can help identify talented athletes “in every corner of the world” as he unveiled the Olympic AI Agenda in London on Friday.

Bach, speaking at Olympic Park, which hosted the 2012 Games, said the Olympic movement needs to lead change as the global AI revolution gathers pace.

“Today we are making another step to ensure the uniqueness of the Olympic Games and the relevance of sport, and to do this, we have to be leaders of change, and not the object of change,” said the International Olympic Committee president.

The former fencing gold medallist said it was vital to have a “holistic” approach to create an “overall strategy for AI and sport”.

Bach, speaking less than 100 days before the start of the Paris Olympics, said “unlike other sectors of society, we in sport are not confronted with the existential question of whether AI will replace human beings”.

“In sport, the performances will always have to be delivered by the athletes,” he said. “The 100 metres will always have to be run by an athlete -– a human being. Therefore, we can concentrate on the potential of AI to support the athletes.

“AI can help to identify athletes and talent in every corner of the world. AI can provide more athletes with access to personalised training methods, superior sports equipment and more individualised programmes to stay fit and healthy.”

Bach said other advantages of AI included fairer judging, better safeguarding and improved spectator experience.

The Olympic AI Agenda comes from the IOC AI working group -– a high-level panel of global experts including AI pioneers and athletes, set up last year.

When asked about the potential negatives of AI, Bach was keen to emphasise the importance of free choice in sport.

“He and she, or the parents, must still have the free choice,” said the German. “So a guy who is then maybe identified as a great athlete in wrestling must still have the chance to play tennis and cannot be sorted out from these sports.”

– Vonn ‘jealous’ –

Former Olympic skiing champion Lindsey Vonn, who also spoke at the London event, told AFP she envied current athletes, who could use AI to enhance their training.

“I’m very jealous that I didn’t have any of this technology when I was racing because I just really feel that it’s going to enhance the athlete’s experience all around,” she said.

“Athletes can utilise AI in training to enhance their knowledge from training like, for example, skiing on the mountain but then also off the mountain in the gym recovery times,” added the American.

“The more we understand about your body, about the sport, about performance, the better you can adjust as an athlete.

Vonn, 39, also said AI would be a vital tool for talent identification, particularly in nations without the resources to scout talent.

“You can give them access to AI through a cell phone and you do a series of tests and they can identify ‘OK this athlete would be a great, a 40-metre dash sprinter, or this athlete would potentially be an amazing high jumper,” she said. 

“You have the ability then to find the talent and give them resources through things they already have like a cell phone.”

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Meta releases beefed-up AI models

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Meta founder and CEO Mark Zuckerberg contends freshly released Meta AI is the most intelligent digital assistant people can freely use
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Meta on Thursday introduced an improved AI assistant built on new versions of its open-source Llama large language model.

Meta AI is smarter and faster due to advances in the publicly available Llama 3, the tech titan said in a blog post.

“The bottom line is we believe Meta AI is now the most intelligent AI assistant that you can freely use,” Meta co-founder and chief executive Mark Zuckerberg said in a video on Instagram.

Being open source means that developers outside of Meta are free to customize Llama 3 as they wish and the company may then incorporate those improvements and insights in an updated version.

“We’re excited about the potential that generative AI technology can have for people who use Meta products and for the broader ecosystem,” Meta said.

“We also want to make sure we’re developing and releasing this technology in a way that anticipates and works to reduce risk.”

That effort includes incorporating protections in the way Meta designs and releases Llama models and being cautious when it adds generative AI features to Facebook, Instagram, WhatsApp, and Messenger, according to Meta.

“We’re also making Meta AI much easier to use across our apps. We built it into the search box right at the top of WhatsApp, Facebook, and Instagram messenger, so any time you have a question, you can just ask it right there,” said Zuckerberg in the video.

AI models, Meta’s included, have been known to occasionally go off the rails, giving inaccurate or bizarre responses in episodes referred to as “hallucinations.”

Examples shared on social media included Meta AI claiming to have a child in the New York City school system during an online forum conversation.

– Slow and steady –

Meta AI has been consistently updated and improved since its initial release last year, according to the company.

“Meta’s slower approach to building its AI has put the company behind in terms of consumer awareness and usage, but it still has time to catch up,” said Sonata Insights chief analyst Debra Aho Williamson.

“Its social media apps represent a massive user base that it can use to test AI experiences.”

By weaving AI into its family of apps, Meta will quickly get features powered by the technology to billions of people and benefit from seeing what users do with it.

Meta cited the example of refining the way its AI answers prompts regarding political or social issues to summarize relevant points about the topic instead of offering a single point of view.

Llama 3 has been tuned to better discern whether prompts are innocuous or out-of-bounds, according to Meta.

“Large language models tend to overgeneralize, and we don’t intend for it to refuse to answer prompts like ‘How do I kill a computer program?’ even though we don’t want it to respond to prompts like ‘How do I kill my neighbor?’,” Meta explained.

Meta said it lets users know when they are interacting with AI on its platform and puts visible markers on photorealistic images that were in fact generated by AI.

Beginning in May, Meta will start labeling video, audio, and images “Made with AI” when it detects or is told content is generated by the technology.

Llama 3, for now, is based in English but in the coming months Meta will release more capable models able to converse in multiple languages, the company said.

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