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Tesla bond hits record low; Continental warns managers over missed targets

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Tesla bond hits record low; Continental warns managers over missed targets

TOP NEWS

* Tesla Inc.'s $1.8 billion high-yield bond hit a record low after Daimler AG's Mercedes-Benz unveiled an all-electric SUV to compete against the U.S. electric-car maker and CEO Elon Musk renewed attacks on a British diver who was part of an operation to rescue 12 children in Thailand, Reuters reported. Separately, several Tesla Model 3 customers complained of service issues and missed delivery dates, Electrek reported. Tesla reportedly said the issues will be addressed as it expands "its logistics and scheduling operations." Tesla's stock closed Sept. 5 at $280.74, down 2.84%.

* Continental AG's board warned its senior managers that it will make "adjustments to management personnel" if they fail to turn around struggling businesses, Reuters reported, quoting an internal message signed by the entire management board. Managers of half a dozen business units "repeatedly fail to achieve their own targets," the board reportedly wrote, after Continental lowered its full-year 2018 sales and margin outlook. "These are extremely alarming signals. ... This has to stop here and now," the letter said.

CARMAKERS

* Daimler-owned luxury-car maker Mercedes-Benz said it will be manufacturing Amazon.com Inc.-branded Sprinter vans for the Seattle-based e-commerce firm's new Delivery Service Partner program. In June, Amazon launched an initiative for entrepreneurs who want to establish their own logistics services delivering Amazon packages. Amazon, which will not own the vans but will distribute them to fleet management firms, will increase its original order of Sprinter vans to 20,000 vehicles to make it the world's largest Sprinter customer.

* General Motors Co. priced an offering of three series of senior unsecured notes for a total of $2.1 billion, of which about $600 million will be used to pre-fund certain mandatory non-U.S. pension contributions. Remaining proceeds will be used to refinance the company's maturing senior unsecured notes issued in 2013 as well as for other general corporate purposes.

ELECTRIC AND AUTONOMOUS VEHICLES

* General Motors Co. plans to offer its full-electric Chevrolet Bolt in new markets "in the not-so-distant future," said Pam Fletcher, vice president of the automaker's global electric vehicle programs, at a conference. GM CEO Marry Barra said in a blog post that a new LG Electronics facility in Hazel Park, Mich., is set to start supplying Bolt EV batteries in the fall of 2018 and the company has also expanded its battery lab to over 100,000 square feet to be able to complete nearly all battery testing under one roof, reducing development time and cost. Barra also confirmed a Bloomberg News report that GM is working on superfast EV chargers capable of 180-mile range with less than 10 minutes of charging.

* Chinese electric-vehicle maker BYD Co. Ltd. plans to launch its first self-driving cars within three years in partnership with search engine giant Baidu Inc., the South China Morning Post reported, quoting Wang Chuanfu, BYD chairman and president, at a developer conference in Shenzhen, China. "The new era of intelligent vehicles has arrived and by 2035, they will dominate the streets," Wang reportedly said, without giving an estimate of the number of self-driving cars it will make.

* Toyota Motor Corp. said it is "communicating" with China's Geely Automobile Holdings on a possible collaboration in gasoline-electric hybrid vehicle technology, Reuters reported, citing a Toyota release.

* Volvo Cars unveiled an autonomous, fully electric concept called 360c that could pave way for the Geely Automobile Holdings Ltd.-owned carmaker to provide an alternative to domestic air travel, especially covering distances around 300 kilometers. The Swedish carmaker also called for a new, global standard in how autonomous vehicles can safely communicate with all other road users. It said the 360c concept could have other potential applications as well, such as its use as a sleeping environment, a mobile office, a living room or an entertainment space.

REGULATIONS AND SAFETY

* Nissan Motor Co. Ltd.'s North America unit will recall, starting Oct. 19, 153,047 vehicles in the U.S. due to a problem with their mechanical key ignition system, which can switch to a vehicle's accessory position while running and stall the engine. The issue involves certain of the Japanese carmaker's NV200, Sentra, NV3500 Van, NV3500 Bus, NV200 Taxi, NV1500, NV2500 Van and Chevrolet City Express models of 2017 make, and Nissan's Frontier, Versa Note and Versa Sedan vehicles of 2017-2018 make.

* Bridgestone Corp.'s Americas and Canadian units issued a recall of about 2,700 certain all-position, wide-base radial commercial truck tires because of their failure to meet a mandated endurance test, increasing the likelihood of a crash. The models include the Firestone FS818, the M854, the M860A and the M864 tires produced between June 10 and June 30 across the U.S., Canada and Mexico. There are no known accidents or injuries so far, the Japanese tiremaker said.

* Tesla Inc. said a Model S fire incident in Los Angeles, under investigation by the U.S. National Transportation Safety Board, was an "extraordinarily unusual occurrence," Electrek reported, citing a company statement. It reportedly will continue "to investigate this incident to find out what happened."

AUTO PARTS AND EQUIPMENT

* Jaguar Land Rover Ltd. tapped South Korean battery-maker Samsung SDI Co. Ltd. for the supply of cylindrical cell batteries for the British luxury-car maker's electric-vehicle lineup, due for launch in 2020, The Korea Times reported, citing industry sources. Samsung SDI initially will supply 300 million cells of its 21700 battery model to the Tata Motors Ltd.-owned company and reportedly will build a production facility for the same in Hungary. Samsung SDI refused to comment to the newspaper.

* DENSO Corp.'s automated driving-focused semiconductor parts unit, Nsitexe Inc., and Temasek led a $65 million series C funding into artificial intelligence hardware startup ThinCI Inc. Other investors included GGV Capital, Toyota Motor Corp.-backed Mirai Creation Fund and Daimler AG. ThinCI is developing AI and other algorithms related to the automotive industry that could deliver about 5 to 10 times the computing power and performance offered by peers, Denso said.

* Bayerische Motoren Werke AG and Tencent Holdings Ltd. signed a memorandum of understanding to examine a possible integration of the Chinese internet giant's digital products and services with BMW's digital platform of car terminal and mobile terminal, Gasgoo reported. The companies reportedly also would explore future collaborations in areas such as infotainment system and service, cybersecurity, among others.

AUTOMOTIVE RETAIL

* Overall seasonally adjusted U.S. vehicle sales for August fell to 4.89 million units on an annualized basis, compared with 5.87 million vehicles a year ago, a 16.7% drop year over year, an S&P Global Market Intelligence analysis found. About 3.72 million vehicles sold in the country were assembled in the U.S., Canada and Mexico, while 1.17 million of the vehicles sold were produced outside the North American Free Trade Agreement region.

* Geely Automobile Holdings Ltd. reported that its August vehicle sales rose about 30% year over year to 125,522 units. Exports increased by about 24% year over year to 2,548 vehicles in the month. Year-to-date, Geely achieved 64% of its full-year sales volume target of 1,580,000 vehicles.

TRUCKS AND MOTORCYCLES

* Harley-Davidson Inc. said it will set up in the fourth quarter a research and development facility in Northern California to help future product launches, especially toward the iconic motorcycle maker's first line of electric motorcycles. The site initially will work on electric vehicle research and development, including battery; power electronics; and e-machine design, development and advanced manufacturing. Harley-Davidson expects to hire about 25 personnel for the facility.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng fell 0.99% to 26,974.82, while the Nikkei 225 was down 0.41% to 22,487.94.

In Europe, around midday, the FTSE 100 was down 0.22% to 7,367.23, and the Euronext 100 fell 0.15% to 1,031.10.

On the macro front

The ADP Employment report, the jobless claims report, the productivity and costs report, the PMI Services index, the factory orders report, the ISM's nonmanufacturing index, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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