By Nick Carey

BRIXWORTH, England (Reuters) – Mercedes-Benz has plugged its Formula One team into the engineering process to build vastly more efficient mass-market electric vehicles (EVs), slashing development times by a quarter or more as it jump starts efforts to keep pace with Tesla.

F1 technology has always eventually bled over into mass-market vehicles. But Mercedes’ F1 collaboration to build more efficient EVs faster is unprecedented because it embeds that racing mindset and technological expertise directly in product development.

After decades of leadership in combustion-engine technology, legacy carmakers like Mercedes have lagged Tesla in electric vehicles. Mercedes’ F1 team can help it get back in the race, said Steven Merkt, head of transportation solutions at TE Connectivity, a major autos supplier.

“Nobody feels the pressure more than Mercedes to be innovation leaders here,” Merkt said. “They’ve got to push it out or they’re no longer Mercedes.”

Last year, Mercedes unveiled its EQXX concept car, a super-efficient EV capable of a range of more than 1,200 km (745 miles), which was jointly developed with the German premium carmaker’s F1 team in England.

The EQXX took just 18 months to develop, leaning on the F1 team’s experience of working rapidly to squeeze efficiency from engines and electric motors, aerodynamics and rolling resistance, the company said.

“We have an edge here with Formula One that others don’t have,” Mercedes Chief Technology Officer Markus Schaefer said. “Tesla doesn’t have it. Other teams don’t have it.”

Tesla did not respond to a request for comment.

Speed is ever more important because newer entrants, above all Tesla, can develop or tweak models far more quickly than legacy carmakers. Fast-moving Chinese EV makers have cut development time to an average of 2.5 years and are launching innovative, cheaper models in Europe.

The need for speed is coupled with a push among carmakers to make EVs more efficient and thereby reduce costs – by lowering weight, improving range, and using less battery materials already in short supply. Suppliers say efficiency is now baked into some EV contracts as carmakers seek to make their vehicles more affordable.

“Efficiency is a key enabler to accelerate adoption of EVs globally,” Schaefer said.

Parts of what Mercedes learned from the EQXX will feature in a new EV platform that will go into production in 2024, including aerodynamic features, parts of the powertrain and the vehicle’s software system.

Schaefer said applying its F1 approach, Mercedes has cut new vehicle development time from an average of 58 months to go from the drawing board to mass production to “the low 40s”. For derivative models – similar models built using the same platform – the target is “the low 30s”.

The F1 engine team at Mercedes AMG High Performance Powertrains (HPP) in Brixworth in central England is now working on at least half a dozen new projects developing parts for mass-market Mercedes models – batteries, invertors and new generations of motors, Schaefer said.

‘READY FOR THE NEXT RACE’

HPP advanced technology director Adam Allsopp said he took the call from Mercedes headquarters in Stuttgart that kickstarted the EQXX project standing in a former cowshed while on holiday on the Isle of Wight in August 2020. It came with a clear, tough challenge – build an EV capable of driving 1,000 km on a single charge.

F1 fuel limits imposed in 2014 forced HPP to develop engines and cars that squeeze the most out of every drop and to “chase every single watt of loss” from two electric motors, Allsopp said.

“A fundamental part of who we are is always getting ready for the next race,” Allsopp said.

Applying that racing mindset, F1 engineers in Brixworth and nearby Brackley worked with a team in Stuttgart to produce the EQXX – using a flexible approach that allowed the team to move forward with development before the EV’s batteries were ready and then adapt plans when they were.

The EQXX featured a battery pack half the size of Mercedes’ flagship EQS SUV, compact electronics hardware and new operating system. Coupled with sleek aerodynamics, that allowed it to drive more than 1,200 km from Stuttgart to Silverstone in England on a single charge, spending 8.3 kilowatt hours (kWh) of energy per 100 km.

By comparison, Tesla says its long-range Model 3 spends 16 kWh per 100 km.

To maintain speed for bringing elements of the EQXX to mass production in 2024 on its new compact Mercedes Modular Architecture (MMA) vehicle platform, the German carmaker has developed a digital model of its plant in Rastatt – the same car will also be built in Hungary and China – to “simulate the assembly process,” and thus accelerate the physical changeover of the plant to build the new EVs, CTO Schaefer said.

Traditionally, carmakers have conducted “mid-life” upgrades on vehicle models after three or four years, but Schaefer said “updates to EVs will be way more frequent.”

‘NAME OF THE GAME’ IS EFFICIENCY

Others in the auto industry are also ramping up the race for speed and efficiency.

Ford Motor Co has announced plans to follow Mercedes with a return to F1 racing in 2026, providing “an incredibly cost-effective platform to innovate, share ideas and technologies,” CEO Jim Farley said in February.

And Volkswagen has said it aims to cut its time to market for new Chinese models from four years to closer to the Chinese 2.5-year average, partly by localizing more research and development.

Carmakers are so focused on efficiency some now include penalties for suppliers who fail to meet efficiency targets, said Liam Butterworth, CEO of supplier Dowlais, whose sideshafts are used in nine of the world’s top ten selling EVs.

OneD Battery Sciences adds silicon to EV battery anodes that cut weight, reduce cost and charge batteries faster. General Motors has invested in the Palo Alto, California-based company and is researching using the technology in the U.S. carmaker’s Ultium batteries, both companies said.

OneD CEO Vincent Pluvinage said that during the second quarter the company will announce more agreements with carmakers seeking cheaper, more efficient EVs. He declined to provide further details of the deals.

“Increasing performance and reducing costs is the name of the game,” Pluvinage said. “If you have a technology that works but you’re asking a premium, carmakers are no longer interested.”

So far, carmakers have added more batteries to vehicles to increase EV range, exacerbating a looming shortage of raw materials such as lithium and cobalt. But HPP’s Allsopp said making EVs more efficient allows carmakers to use smaller batteries, making them both greener and cheaper.

“Just throwing batteries at something is not an intelligent solution,” Allsopp said. “If you find clever ways to achieve the same range: it’s better for customers, carmakers and the planet.”

(Reporting By Nick Carey, editing by Ben Klayman and Daniel Flynn)

By Ron Bousso and Shadia Nasralla

LONDON (Reuters) – BP made a $5 billion profit in the first quarter of 2023, a rise on the previous three months on the back of stellar oil and gas trading, but its shares fell sharply as it slowed a share buyback programme.

The forecast-beating results from BP follow a strong showing by rivals including Exxon Mobil and Chevron last week as oil majors continue to benefit from energy prices that remain elevated despite some softening since the start of the year.

But BP’s shares closed more than 8% lower in London trading, their largest daily drop since March 2020, after it said it would repurchase shares worth $1.75 billion over the next three months, down from $2.75 billion in the previous three.

The smaller target is a result of a significant drop in operating cash flow to $7.6 billion during the quarter from $13.5 billion in the final quarter of 2022.

BP will still exceed its goal of using 60% of surplus cash to buy its own shares, but investors were disappointed and its forecast for lower oil and gas production in the second quarter also weighed on investor sentiment.

The lower share buyback “will more than offset the good operational performance as BP is the first international oil company…to cut buybacks this quarter,” Jefferies analysts said in a note.

The London-based company repurchased a total of $11.7 billion worth of shares in 2022.

EXCEPTIONAL TRADING

First-quarter underlying replacement cost profit, BP’s definition of net income, reached $4.96 billion, up from $4.8 billion in the fourth quarter of 2022 and above expectations of $4.3 billion in a company-provided survey of analysts.

The profit reflects “an exceptional gas marketing and trading result, a lower level of refinery turnaround activity and a very strong oil trading result”, BP said, noting a partial offset from lower oil and gas prices and refining margins.

Benchmark Brent crude oil prices averaged $81 per barrel in the first three months of the year, down 16% from a year earlier and 7% from the fourth-quarter.

BP had reported a $6.25 billion profit in the first quarter of 2022, on its way to a record $28 billion annual figure.

Its dividend remained unchanged at 6.61 cents per share after a 10% increase in February. BP had previously halved its payout in the wake of the pandemic.

Graphic: BP’s profit – https://www.reuters.com/graphics/BP-RESULTS/znpnbqkgepl/chart.png

WINDFALL TAX

BP said it expects oil and European gas prices to remain strong in the second quarter even as refining profit margins are expected to weaken due to lower diesel prices.

Fuel demand in Europe has been “a little bit” soft while consumption in China has been strong following the lifting of pandemic restrictions, BP Chief Financial Officer Murray Auchincloss told analysts on a call.

BP also said it expects to pay $1 billion under a UK windfall tax on the oil and gas sector between May 2022 and April 2023.

Graphic: BP’s operating cashflow – https://www.reuters.com/graphics/BP-CASHFLOW/zgpobykdkvd/chart.png

(Reporting by Ron Bousso and Shadia Nasralla; Editing by David Goodman, Kirsten Donovan and Alexander Smith)

By Bhanvi Satija and Raghav Mahobe

(Reuters) – Pfizer Inc on Tuesday reported higher-than-expected first-quarter revenue and profit, buoyed by demand for its COVID-19 products, and reaffirmed its 2023 earnings forecast as it banks on newer drugs to contribute to growth later this year.

The company has said it expects 2023 to be a low point for COVID product sales, before potentially returning to growth in 2024. But sales of both its vaccine and oral antiviral treatment came in above Wall Street estimates.

Pfizer still expects significantly lower sales of COVID products in the second quarter.

Wells Fargo analyst Mohit Bansal said it was a positive surprise that Pfizer did not lower its full-year COVID forecast.

Pfizer is pumping billions of dollars into research and acquisitions to mitigate an anticipated $17 billion hit to revenue by 2030 from patent expirations for top drugs, and a decline in demand for COVID products.

The company said it would become more balanced with allocating capital after a string of deals in the last two years once its recent $43 billion buyout of Seagen closes.

Graphic: Pfizer’s recent string of deals Pfizer’s recent string of deals – https://www.reuters.com/graphics/PFIZER-RESULTS/akpeqjaqbpr/chart.png

Pfizer said it remains on track to achieve its goal of 7% to 9% non-COVID revenue growth this year, driven by newer drugs.

“Given that a large number of launches are expected to occur in the third- and fourth-quarters of 2023, we anticipate that our non-COVID revenues will grow more quickly in the back half of the year,” Chief Financial Officer David Denton said on a call with analysts.

Citi analyst Andrew Baum said Pfizer’s non-COVID revenue missed expectations for the quarter.

The company is preparing to launch an RSV vaccine, an ulcerative colitis treatment and a hair loss drug by the end of this year, pending U.S. approval. 

COVID-19 vaccine sales plunged 77% to $3.06 billion in the quarter, but topped diminished estimates of $2.37 billion, according to Refinitiv data. 

Sales of antiviral Paxlovid nearly tripled to $4.07 billion, bolstered by demand in China. Analysts’ had estimated $3.13 billion for the quarter. 

Pfizer expects a 2023 profit of $3.25 to $3.45 per share and COVID products sales of about $21.5 billion.

Overall revenue for the first quarter fell 29% to $18.3 billion, but topped estimates of $16.59 billion.

Excluding items, the U.S. drugmaker’s profit of $1.23 per share topped Wall Street estimates by 25 cents.

Pfizer shares were down 0.9% – less than the broader market – at $38.84.

(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru and Michael Erman in New York; Editing by Sriraj Kalluvila and Bill Berkrot)

By Selena Li and Lawrence White

HONG KONG/LONDON (Reuters) – HSBC tripled its profit in the first quarter as rising interest rates boosted its income, beating analyst forecasts and helping the bank pay its first quarterly dividend since 2019.

The strong results reported by HSBC and Asian rival DBS on Tuesday underscore how aggressive policy tightening has lifted profit margins, even though it has also sparked banking sector turmoil in the U.S. and other markets.    On Monday, regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co, in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis and draw a line under the bank sector jitters.

With the rate cycle nearing a peak, the challenge for the likes of HSBC, Europe’s largest bank, will be to sustain its margins this year and beyond.

CEO Noel Quinn said on a call the results showed HSBC’s strengths in a rising rate environment, and played down the risks of further contagion after First Republic’s rescue.

“We do not believe there is a global banking crisis on the horizon. We do not see a negative impact on our business”.

HSBC posted a pretax profit of $12.9 billion for the quarter ended March, versus $4.2 billion a year earlier. The average estimate of 17 analysts compiled by the bank was $8.64 billion.

GRAPHIC: HSBC’s pretax profit triples in Q1 2023 https://www.reuters.com/graphics/HSBC-RESULTS/akpeqjogapr/chart.png

HSBC shares rose as high as 6% in London, the second best performer on the benchmark FTSE index.

The bank’s revenue “showed strength notably in non-interest income”, analysts from Jefferies said, with more than $1 billion from assets held for trading and global banking and HSBC’s markets unit, which saw a 20% revenue rise from a year ago.

HSBC’s headline profit was boosted by a reversal of a $2 billion impairment it took against the planned sale of its French business, reflecting that the deal may not go through.

It warned last month the disposal could be in jeopardy over regulatory capital concerns for the buyer. 

London-headquartered HSBC also reported a delay in the sale of its Canada business, a key part of its strategy to shrink in slow-growing Western markets where it lacks scale.

HSBC said the planned $10 billion sale, originally slated to be completed by the end of this year, will now only likely go through in the first quarter of 2024.

SHAREHOLDERS’ MEETING

HSBC has tried recently to accelerate its Asian pivot, in part to head off calls from its biggest shareholder, Ping An Insurance Group Co of China, to spin off the Asia unit to boost shareholder returns. 

Shareholders will vote at the bank’s annual meeting on May 5 on two resolutions filed by a Hong Kong investor and supported by Ping An, calling for higher dividends and a regular update on strategic proposals.

HSBC, which has opposed the resolutions, criticised the spin-off proposal again on Tuesday. Shareholder advisory firms Glass Lewis and Institutional Shareholder Services recommended that investors vote against the proposal, which needs 75% approval to pass.

Norway’s state investment fund, HSBC’s fourth biggest shareholder with a 3% stake, has also said it will vote in line with the bank, which announced a $0.10 per share dividend and flagged the first of a new buyback cycle of up to $2 billion.

HSBC reported deposits fell 0.6% to $1.6 trillion, excluding those it acquired by bailing out the UK arm of failed U.S. lender Silicon Valley Bank and the reclassification of French retail deposits. Quinn said the drop was “nothing significant”.

Big European banks have reported deposits falling as consumers, faced with a cost of living crisis, eat into savings and shop around for higher-paying products such as fixed-term deposits and investment funds. 

Despite the surging profit, HSBC did not raise its key performance target of a return on tangible equity of at least 12% from this year onwards, which analysts were anticipating.

HSBC’s results showed a strong overall performance but a failure to upgrade its outlook was overly cautious, Citi analysts said.

(Reporting by Selena Li in Hong Kong and Lawrence White in London; Editing by Muralikumar Anantharaman and Alexander Smith)

By Blake Brittain

(Reuters) -A U.S. judge in California on Monday declared a mistrial in Masimo Corp’s smartwatch trade secret lawsuit against Apple Inc after jurors failed to reach a unanimous verdict in the potential billion-dollar case.

A Masimo spokesperson said in a statement that the company was “disappointed that the jury was unable to reach a verdict” but intends to retry the case.

The jury in federal court in Santa Ana had been asked to determine whether Cupertino, California-based Apple misused confidential information from Masimo related to the use of light to measure biomarkers including heart rates and blood-oxygen levels.

The jury began deliberating on April 26 after a trial lasting about three weeks before U.S. District Judge James Selna.

Apple said in a statement that it “deeply respects intellectual property and innovation and does not take or use confidential information from other companies,” and will ask the court to dismiss remaining claims in the case.

Irvine, California-based Masimo and its spinoff Cercacor Laboratories Inc sued Apple in 2020, accusing it of stealing trade secrets and using them to create and sell several Apple Watch models.

The lawsuit claimed Masimo representatives met with Apple in 2013 about integrating its inventions into Apple products and that Apple subsequently hired away two executives – one from Masimo and one from Cercacor – and used their knowledge to copy the technology.

Masimo asked for more than $1.8 billion in damages, reduced from its initial request for $3.1 billion after the judge dismissed some of its trade-secret claims during trial.

Apple in a court filing called Masimo’s lawsuit a “maneuver to clear a path” for its own smartwatch. Apple sued Masimo in Delaware last year, accusing it of patent infringement.

Smartwatches, mobile devices worn on the wrist with an array of capabilities, are a lucrative market, with global sales worth tens of billions of dollars.

Masimo has also sued Apple at the U.S. International Trade Commission over Apple Watch imports that it said violated its patent rights. An ITC judge preliminarily ruled in favor of Masimo in January, which could lead to an import ban on infringing Apple Watches if the full commission affirms the decision.

Apple is facing another potential Apple Watch import ban in a separate patent fight with Mountain View, California-based medical device maker AliveCor Inc over heart-monitoring technology.

(Reporting by Blake Brittain and Stephen Nellis; Editing by Christopher Cushing)

By Andrea Shalal and Pete Schroeder

WASHINGTON (Reuters) – JPMorgan Chase & Co’s deal to buy First Republic Bank pushed the Biden administration into a corner, leaving officials scrambling to explain how their stance against mergers squared with allowing the largest U.S. bank to get even bigger.

At a White House event on small business on Monday, President Joe Biden hailed the sale of the troubled San Francisco-based lender, saying it would protect all depositors and avert a government bailout. He did not mention JPMorgan and underscored his call for stronger banking regulations.

Senator Elizabeth Warren, a Democrat and member of the Senate Banking Committee who has been pushing for tighter banking regulations, blasted the decision, sounding a theme that could hound Biden, who last week announced his bid to win another term in the White House and has struggled with low approval ratings.

“A poorly supervised bank was snapped up by an even bigger bank — ultimately taxpayers will be on the hook,” Warren tweeted.

White House press secretary Karine Jean-Pierre said JPMorgan’s acquisition of First Republic’s assets was necessary to ensure continued resilience of the banking system and came at no cost to taxpayers.

“No recent administration has done more to promote competition, address (the) concentration process across industries,” she told a White House briefing.

Jean-Pierre added that Biden administration officials valued the fact that community banks offer services to those who might not otherwise have banking access.

The deal for the failed lender comes amid increased discussion among U.S. regulators about tightening rules on bank mergers, with officials growing worried that consolidation could undermine financial stability and leave communities wanting for services.

Administration officials, mindful of the impact of a JPMorgan takeover on the banking sector, prodded smaller lenders to submit bids and worked hard to find a different solution, but the size of JPMorgan’s offer ultimately gave it an edge, according to sources familiar with the process.

Current law means the Federal Deposit Insurance Corp was legally bound to choose the offer that cost the least, said Aaron Klein, a former Treasury official and Senate staffer who helped craft the Dodd-Frank reform law passed in the wake of the global financial crisis.

In the end, the need to avert contagion in the banking sector trumped worries about JPMorgan’s becoming more powerful, former officials said.

“Too big to fail is obviously a worry, but right now you’ve got to put out the hottest fire first,” said Ben Harris, who left his post as Treasury assistant secretary for economic policy at the end of March and had served as chief economist to Biden when he was President Barack Obama’s vice president.

(Reporting by Andrea Shalal and Pete Schroeder; additional reporting by David Lawder, Sruthi Shankar, Chris Prentice and Douglas Gillison; Editing by Leslie Adler)

By Nupur Anand, Anirban Sen, David French and Isla Binnie

NEW YORK (Reuters) -On March 12, as several U.S. banks reeled from a crisis in confidence, JPMorgan Chase & Co put its might behind First Republic Bank, giving the troubled lender what two sources said was a $10 billion financing.

The JPMorgan facility did not stop depositors from fleeing the lender. But it turned out to be the start of a series of events – some details of which are reported here for the first time – that put JPMorgan and its chief executive, Jamie Dimon, in a pivotal role in one of the most extraordinary U.S. bank rescues of recent years.

JPMorgan bought First Republic on Monday in a government auction, culminating weeks of failed rescue attempts and aborted discussions involving some of the most powerful Wall Street executives and U.S. officials. The deal talks went down to the wire, according to two sources familiar with the situation. Four bidders, including JPMorgan, made it to the final rounds of the auction on Sunday night, one of the sources said.

JPMorgan did not know till about 1.15 a.m. in New York that it had won, even though final bids were initially due several hours prior. At one point late at night, as Dimon and other senior executives waited for the outcome of their bid, silence from Federal Deposit Insurance Corp (FDIC) made them think they had lost, one of the sources said.

The final deal, announced around 3:30 a.m., cements Dimon’s reputation as one of Wall Street’s most powerful bankers.

But the deal also raised fresh questions about the dangers of having banks that are too big to fail, the quality of regulatory oversight of the banking industry and the Biden administration’s resolve to keep corporations from becoming too powerful through deals.

Piper Sandler analysts said more than the finances, the deal was significant for JPMorgan as it solidifies the bank “as the go-to industry leader in times of turmoil.”

“The only worry we have is the at-present unknowable. JPM was already a hugely significant player that has now managed to make itself even more so at a time when ‘too-big-to-fail’ is still a political concern,” they wrote.

Dimon pushed back against any suggestion that his bank is getting too big.

“We have capabilities to serve our clients, who can be cities, schools, hospitals, governments; we bank the IMF, the World Bank,” the banker said in a conference call after the deal. “And anyone who thinks the United States should not have that can call me directly.”

The FDIC said earlier on Monday the resolution involved a “highly competitive bidding process,” and was the least costly alternative for its deposit insurance fund. 

BANKING CRISIS

First Republic was founded in 1985 by James “Jim” Herbert, son of a community banker in Ohio. The bank was bought by Merrill Lynch in 2007 right before the financial crisis. It became public again in 2010, after Merrill Lynch itself was bought by Bank of America Corp and the new owner decided to dispose of it.

First Republic’s attraction was its rich clients, and it gave them preferential rates on mortgages and loans. Its reliance on the rich also made it more vulnerable – it had a high level of uninsured deposits.

In early March, as a run on Silicon Valley Bank spooked depositors and investors, sending them into the arms of institutions they thought were safer, First Republic quickly became a target. It saw more than $100 billion fleeing in the first quarter, leaving it scrambling to raise money.

By the weekend of March 12, as regulators seized Silicon Valley Bank and Signature Bank and announced a series of emergency measures to shore up confidence in the system, First Republic said it had taken additional steps to access a total of $70 billion in funds, including from JPMorgan.

The assurance, however, failed to calm markets, and First Republic’s stock fell again the following day.

Reuters could not determine when, but at some point JPMorgan’s interest in First Republic grew to become more than its role as an adviser helping the bank bolster its finances. Part of its attraction: the lender’s roster of wealthy individuals which would add to JPMorgan’s own private banking franchise.

Prevailing wisdom at the time, however, suggested that regulators would not allow JPMorgan to buy another bank. JPMorgan holds more than 10% of the nation’s total bank deposits, and federal law prevents a large bank from an acquisition that would put it above that threshold. Acquisitions of failed banks can be exempted from the rule.

JPMorgan started a process internally, which looked at various options for First Republic, including an acquisition, according to a source familiar with the matter. The deal was internally code-named “Forest”, the source said.

The bank kept the teams separate, the source said. First Republic also had Lazard Ltd as an adviser.

TOP BIDDER

In March, a series of ideas were floated to save the bank. Dimon was among the power brokers that discussed a package by large banks to inject $30 billion in deposits. After that failed to improve confidence in the lender, Dimon was among bankers that met in Washington at a forum, where topics included aiming to work out details on what needed to be done. JPM proposed another idea that was briefly considered, of forming a consortium to buy the bank, two sources previously said.

A key hurdle to doing a private sector deal, however, was that there were billions of dollars of unrealized losses on First Republic’s books, and they would have to be funded if anyone bought the bank.

As weeks progressed, regulators came close at least once in late April to pulling the plug on the bank, one of the sources said. The situation became worse last week after its shares went into a free fall following earnings.

By Friday, the FDIC decided the bank had run out of time to find a private solution, a source previously told Reuters. Advised by Guggenheim Securities, the regulator reached out to various potential bidders, including banks and private equity firms, to solicit offers, two sources familiar with the situation said.

By late Sunday the race had narrowed to four bidders, one source said. Besides JPMorgan, PNC Financial Services Group, Citizens Financial Group Inc and Fifth Third Bancorp were also in the auction, sources have said.

The auction dragged out through the night as the FDIC’s advisors examined each bid on its merits, a source familiar with the matter said.

Each bidder put in bids for the whole bank as well as part of its assets, the source said, and the FDIC’s advisors were looking for the one which would cost the least to the depository insurance fund.

JPMorgan deployed more than 800 employees to do due diligence on the bank. While the partial bids from the three other banks held some attraction in finding a solution for First Republic, none could top JPMorgan’s pitch to buy the whole bank, one of the sources said.

(Reporting by Anirban Sen, Nupur Anand, Isla Binnie, David French, Saeed Azhar, Lananh Nguyen; Writing by Megan Davies; Editing by Paritosh Bansal and Stephen Coates)

By Akriti Sharma

(Reuters) -Tesla Inc has raised prices in a range of up to $290 in Canada, China, Japan and the United States, its website showed on Monday, after the company slashed prices of its top-selling vehicles since the start of the year.

The hike was the first on its two top-selling models at the same time in multiple markets, although prices across its lineup are much lower than in January, after a round of discounts. Shares rose nearly 2% in early trading.

Last month Chief Executive Elon Musk said the company would prioritize sales growth ahead of margins and look to profit later on its rollout of self-driving software for a larger fleet of vehicles.

Since January, Tesla has shifted to a real-time pricing model that is closer to airlines or ride-sharing from the fixed prices of the traditional auto industry model.

Musk has said the company is willing to sacrifice margin for sales volume but is also looking to move prices back higher, where it can, to match deliveries with output.

By Monday, Tesla’s website showed it had raised the starting price point by $250 on the base model Model Y and Model 3 in the United States.

Prices changed about the same amount in its second largest market of China, as well as in Canada and Japan, those websites showed.

It was the first time since January that Tesla has increased the price of its cheapest car, the Model 3, in the United States.

The entry-level, rear-wheel-drive Model 3 is still about 14% cheaper in the United States than at the start of the year. The long-range version of the Model Y remains about 24% cheaper in Tesla’s largest market.

Several analysts said the move reflected Tesla’s dynamic pricing strategy and was unlikely to undo the significant price cuts that sent the company’s gross margins to a two-year low in the first quarter.

“This doesn’t change much for the company. We would need to see several price increases for this to be an effective reversal (of the price cuts),” said Craig Irwin, analyst at Roth Capital.

In Canada, Tesla raised prices by C$300 ($222) for the performance versions of its Model 3 and Model Y. In Japan, prices for the entry-level Model 3 rose 37,000 yen ($269).

In China, Tesla raised the price of variants by 2,000 yuan ($289), the website showed.

Tesla started cutting sticker prices in China last year, kicking off a price war in the world’s largest market where it takes on a range of domestic electric car brands led by BYD Co Ltd.

($1=6.9110 Chinese yuan renminbi)

($1=137.5400 yen)

($1=0.9102 euros)

($1=C$1.3532)

(Reporting by Akriti Sharma and Samrhitha Arunasalam in Bengaluru; Writing by Kevin Krolicki; Editing by Nivedita Bhattacharjee, Clarence Fernandez and Dhanya Ann Thoppil)

By Joseph White

LOUISVILLE, Kentucky (Reuters) – Shutting down the assembly lines that build Super Duty pickup trucks at Ford Motor Co’s Kentucky Truck Plant is a multimillion-dollar action company managers try hard to avoid.

As part of a new approach to stamping out quality demons, Kentucky Truck Plant manager Joseph Closurdo said he stopped production for as long as three days earlier this year. The halts gave engineers and suppliers time to fix defective parts discovered as workers began building a new generation of Ford’s highly profitable heavy-duty pickups.

“We would shut the build down if we weren’t meeting one of the targets” for quality, Closurdo said on the plant floor last week.

Halting the assembly line rather than building trucks and fixing them later was just one element of a new approach to attacking quality problems that Ford is road-testing with the launch of the redesigned Super Duty trucks.

Ford’s Super Duty model line has been around since 1998. A successful launch for the latest generation is critical for Ford to hit profit targets for this year. The automaker will report first-quarter results on Tuesday afternoon after the close of New York stock market trading.

The Super Duty trucks, heavy-duty pickups designed to tow large trailers or handle rugged commercial tasks, now come in luxury versions that can sell for more than $100,000. The Super Duties are among the most profitable vehicles Ford sells, generating billions in annual profit, analysts estimate.  

Slashing the tax that quality problems levy on Ford’s profitability has become Job One for Chief Executive Jim Farley. Ford spent $4.17 billion on warranty claims last year, more than larger rival General Motors Co. A successful launch for the Super Duty line is critical for Ford to hit its profit targets for this year.

Ford executives bet that investing more to catch quality problems early will pay off in the long run.

“We set the standard to be better than the outgoing product. We did not start shipping until we saw consistent delivery on those targets,” Super Duty Chief Engineer Andrew Kernahan told Reuters. “It took us longer than was planned.”

TOUCHING EVERY BUTTON

Kentucky Truck added 300 quality inspectors, and more engineers to chase down the root causes of defects and design new digital tools for catching problems before trucks rolled off the end of the line.

Workers now use a camera to feed images of electrical connections to software that can determine whether the connectors are properly connected.

Around the plant, engineers built command centers with more big screens than many sports bars, all displaying data from different assembly stations. One command center, with 16 screens, is known as Claire’s Corner because it was designed by process engineering manager Claire Yarmak.

“The complexity of this vehicle is huge,” Yarmak said. New comfort features, such as a front seat that reclines to create a sleeping bed, create new opportunities for trouble. When a sensor hooked into Yarmak’s screens detected a defective sensor in the sleeper seat, the line stopped.

Instead of test-driving a small sample of trucks to check for squeaks, rattles or infotainment system glitches – problems that take down scores on external quality surveys – Kentucky Truck deployed workers to drive 28,000 of the first new-generation Super Duties along a 25-mile (40 km) route near the factory.

“If it’s got a button, touch it. Make sure it works,” said David Jones, a member of the test-driving team and a 34-year Ford veteran whose father also worked at Kentucky Truck.

Instead of building all the different versions of the Super Duty from the start, Kentucky Truck started with the simplest work trucks and worked up to models such as Tremor diesel that has more electronic features and luxury appointments and a price tag as high as $119,000.

Even more expensive King Ranch and Platinum Super Duty models are just going into production now, Closurdo said.

Kentucky Truck’s dual assembly lines are now running at close to full speed, cranking out a new Super Duty, as well as Lincoln Navigator and Ford Expedition SUVs, at a pace of roughly one a minute.

Lessons learned from the Super Duty launch process are being relayed to factories that will launch the next new Ford vehicles, including a redesigned Mustang, Closurdo said.

“It’s the benchmark,” he said.

(Reporting by Joe White in Louisville, Kentucky; Editing by Matthew Lewis)

By Ananya Mariam Rajesh and Hilary Russ

(Reuters) -Restaurant Brands International Inc beat Wall Street estimates for first-quarter revenue and profit on Tuesday, boosted by higher traffic and prices at Tim Hortons restaurants in Canada despite closures of some U.S. Burger King locations.

The company’s global comparable sales rose nearly 10% in the March quarter, versus analysts’ estimates of 6.5% according to Refinitiv IBES data. Tim Hortons Canada sales grew 16% and Burger King International’s were 12% higher. Shares were up 1.5%.

Big restaurant chains have posted strong sales in the first quarter despite rising concerns about consumer spending power this year amid stubbornly high inflation.

McDonald’s Corp and Chipotle Mexican Grill Inc also topped quarterly sales and profit expectations as they pushed new menu items and raised prices over the past year to protect margins from a jump in raw materials and labor costs.

While Burger King has been adding restaurants and growing comparable sales internationally, in the United States it has struggled with bankruptcies by two big franchisees.

In the first quarter, Burger King closed a net 124 U.S. locations or 1.7%, to end the quarter with just under 7,000 U.S. restaurants, according to its earnings release.

This year, the brand is seeking additional franchisees with stronger finances but still expects to close between 300 and 400 more restaurants, Chief Executive Joshua Kobza said during a call with investors. Usually, it closes a couple hundred annually, he said.

“There will always be a minority (of franchisees) who aren’t dedicated, enthusiastic operators,” Chairman Patrick Doyle said on the call. “We’ll work with them to leave the system.”

The brand’s $400 million “Reclaim the Flame” turnaround plan – to reverse its loss of market share, revive run-down restaurants, streamline overly complicated menus and operations, and draw more young customers – may be starting to work as Burger King’s U.S. comparable sales rose 8.7%.

Tim Hortons drove visits higher – including during afternoon hours – with new items like chipotle steak for its loaded bowls and wraps.

Higher menu prices and other offerings like cold brew also drove sales.

Excluding items, Restaurant Brands, which also owns Popeyes and Firehouse Subs, earned 75 cents per share, compared with estimates of 64 cents, according to Refinitiv IBES data.

Total revenue rose to $1.59 billion from $1.45 billion a year earlier. Analysts on average had expected $1.56 billion.

(Reporting by Ananya Mariam Rajesh in Bengaluru and Hilary Russ in New York; Editing by Subhranshu Sahu and Jonathan Oatis)

By Medha Singh

(Reuters) -What’s the cost of students using ChatGPT for homework? For U.S. education services provider Chegg Inc, it could be nearly $1 billion in market valuation.    

Chegg signaled the rising popularity of viral chatbot ChatGPT was pressuring its subscriber growth and prompted it to suspend its full-year outlook, sending shares of the company 47% lower in early trading on Tuesday.

“Since March, we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate,” said Chegg CEO Dan Rosensweig.

There are fears Chegg’s core business could become extinct as consumers experiment with free artificial intelligence (AI) tools, said analyst Brent Thill at Jefferies, which downgraded the stock to “hold”.

Last month, the Santa Clara, California-based firm said it would launch ChatGPT’s AI powered CheggMate, a study aide tailored to students’ needs, at a time educators were grappling with the consequences of the homework drafting chatbot.

However, analysts said it was unclear if CheggMate would be enough to counter a slowdown in company’s core business.

“We fear Chegg could start to lose mind-share before CheggMate fully rolls out,” Thill said.

If losses hold through the session, Chegg would lose $994 million in market capitalization.

Shares of Chegg’s UK rival Pearson PLC shed nearly 11.5% on Tuesday.

Chegg said it was suspending its full-year outlook due to uncertainty of the impact on results and targeted second-quarter total revenue between $175 million and $178 million, which fell short of Wall Street expectations of $186.3 million.

“Chegg has to make significant changes in a rapidly changing environment that is akin to ‘dancing in the rain without getting wet,'” said Arvind Ramnani, analyst at Piper Sandler.

(Reporting by Medha Singh in Bengaluru, additional reporting by Aditya Soni; Editing by Shinjini Ganguli)