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Tesla unveils Model Y: Price, release date

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Tesla on Thursday introduced its latest electric vehicle, the Model Y, a crossover SUV that will cost from $39,000 to $60,000 depending on configuration.

The Model Y is about 10 percent bigger than the Model 3, seats seven, features a panoramic glass roof and 66 cubic feet of cargo space, Tesla CEO Elon Musk said, showing off the company’s Model Y prototype at the Tesla design center in Hawthorne, California Thursday night.

Demand for sport utility vehicles in the United States has been high over the past few years. New models have flooded the market, looking to unseat best-sellers like the Toyota RAV 4, Nissan Rogue or Honda CR-V.

Tesla hasn’t offered a new SUV to tap into that demand since it began producing its Model X vehicles in 2015. The X features falcon-wing doors, which delighted some drivers but repelled others. The Model Y ditches this feature.

According to Musk, however, the Model Y will share about 75 percent of its components with the company’s Model 3 electric sedans, allowing Tesla to start manufacturing the new SUV for far less money that it spent to begin producing the Model 3.

Auto-makers typically share parts across new models, and sometimes build different models on shared assembly lines. This helps them control costs and get new vehicles to the market relatively quickly.

In the past, Tesla missed its part-sharing goals, production and sales targets.

Its Model X was supposed to share a majority of its parts with Tesla’s Model S, but it only wound up sharing around 30 percent after Musk originally planned for 60 percent.

Pricing of the Model is a key consideration for investors. Bernstein senior technology research analyst Toni Sacconaghi wrote in a note ahead of the Model Y debut, “We’d expect the initial price to be around $55,000. This will be key to manage against cannibalization.” He also said that longer-term, the Model Y could enjoy higher gross margins than Tesla’s Model 3, a car that the company intended to offer for an accessible price, aiming to bring electric vehicles to the masses.

Tesla previously said it would most likely manufacture the Model Y at Gigafactory 1, its sprawling battery plant outside of Reno, Nevada.

This story is developing.

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China’s new foreign investment law may not be enough for US trade deal

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Following increasing frustration by foreign businesses about their ability to compete fairly with Chinese companies, the U.S. and China became embroiled in trade tensions last year.

Under U.S. President Donald Trump, the rhetoric about the spat initially focused on the American trade deficit with China. That resulted in the application of tariffs on $250 billion worth of imported goods from China, to which Beijing countered with duties on $110 billion worth of goods from the U.S. In the last several months, the negotiations between both sides have increasingly centered on issues of intellectual property protection and claims of forced technology transfer.

Little detail about progress on the talks has been made public. On Friday, Chinese state media said leaders of both trade delegations held a phone call in the morning Beijing time and made “substantial progress.”

A few hours later, the symbolic gathering of delegates endorsed the new foreign investment law. It took just about three months from the time the NPC Standing Committee began soliciting comments on its first draft.

“It’s rushing this through,” Lester Ross, chair of the policy committee of the American Chamber of Commerce in China, said in a phone interview with CNBC on Thursday. “It’s not giving this adequate time for public comment from AmCham (and foreign businesses).The law is drafted in a pretty general way.”

Ross also noted the draft gave China the right to retaliate against a particular country for restricting Chinese companies there. “The law offers a more broad-based retaliation,” said Ross, who is also partner at law firm Wilmer Cutler Pickering Hale and Dorr.

Such a clause essentially reinforces the unequal footing that foreign and Chinese companies have in accessing each others’ countries. U.S. companies have complained that they get less access in China than Chinese companies have in America.

But the Chinese government is clearly trying to show it has the interests of foreigners in mind. At the last minute, Beijing even added new language that provides further protection of foreign company commercial and trade secrets, according to a final draft reviewed by the U.S.-China Business Council.

“The addition of language imposing criminal penalties for sharing sensitive foreign company information adopts a much tougher deterrent against counterfeiting and (intellectual property) theft and will offer new avenues for the enforcement of (intellectual property) protection,” Jake Parker, vice president of China operations at the U.S.-China Business Council, said in a statement.

He noted the council is “pleased” with the new language. He cautioned that “enforcement will be the key metric for evaluating success, but the business community has collectively advocated for years for the Chinese government to impose criminal penalties for (intellectual property) infringement, we need to recognize this positive progress to that end.”

The law is set to be implemented on Jan. 1, 2020. It’s expected to abolish three existing regulations on equity joint ventures, wholly foreign-owned enterprises and contractual joint ventures, according to an English translation of the draft on China Law Translate.

In all, for foreign businesses already eyeing opportunities to profit off the world’s second-largest economy, the law does give them more incentive to enter China, Ross said: “It is moving in a good direction. It doesn’t go nearly far enough.”

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Apple slams Spotify’s claims about its App Store being unfair

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Apple CEO Tim Cook speaks at the Anti-Defamation League's "Never is Now" summit in New York City, December 3, 2018

Brendan McDermid | Reuters

Apple CEO Tim Cook speaks at the Anti-Defamation League’s “Never is Now” summit in New York City, December 3, 2018

Apple refuted Spotify‘s complaints that its App Store creates unfair competition, saying the music streaming company’s goal is to “make more money off others’ work.”

Spotify filed a complaint with the European Commission earlier this week, claiming the App Store deprives consumers of choice and imposes unfair fees on competitors, giving its Apple Music service an advantage over rivals.

In statement published Thursday, Apple said Spotify is seeking all the benefits of a free app, without being free.

“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong,” Apple said in the statement.

Spotify’s complaint centers around a 30 percent fee Apple charges developers on most in-app purchases made through the App Store. The Sweden-based music streaming company said Wednesday the fees make it impossible to keep its prices competitive with Apple Music.

In its statement, Apple slammed Spotify’s “misleading rhetoric,” saying 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. It also pointed out that the 30 percent fee drops to 15 percent after the first year of an annual subscription.

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Venezuela’s electricity crisis could disrupt oil markets

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An anti-government demonstrator stands next to a national flag during an opposition protest blocking the Francisco Fajardo highway in Caracas on May 27, 2017.

LUIS ROBAYO | AFP | Getty Images

An anti-government demonstrator stands next to a national flag during an opposition protest blocking the Francisco Fajardo highway in Caracas on May 27, 2017.

A nationwide power failure in crisis-stricken Venezuela could trigger “serious disruption” to the oil market, the International Energy Agency (IEA) warned on Friday, but OPEC kingpin Saudi Arabia should have the means to offset any further production woes in Caracas.

The IEA report comes at a time when Venezuela, home to the world’s biggest oil reserves, is in the midst of the Western Hemisphere’s worst humanitarian crisis in recent memory.

“The electricity crisis in Venezuela has paralysed most of the country for significant periods of time,” the Paris-based group said in its closely-watched report on Friday.

“Although there are signs that the situation is improving, the degradation of the power system is such that we cannot be sure if the fixes are durable… During the past week, industry operations were seriously disrupted and ongoing losses on a significant scale could present a challenge to the market.”

A failure at the Guri hydropower plant last Thursday plunged most of the South American country into darkness for days.

The outage crippled the OPEC member country’s oil exports and left millions of citizens struggling to find food and water.

Power was restored to much of Venezuela on Tuesday, but many areas in the oil-rich, but cash-poor, country remain without electricity. It is widely expected that normal services may not resume for weeks — or possibly months.

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