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Tesla shares shoot up over privatization plan; Magna cuts full-year outlook

TOP NEWS

* Tesla Inc. shares closed about 11% higher in heavy trading Aug. 7 after CEO Elon Musk confirmed his interest in taking the carmaker private. "[A] final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best," Musk said in an email to employees that was published on the company's website. The announcement came after the Financial Times (London) reported that Saudi Arabia's Public Investment Fund has built up a stake in Tesla worth between $1.7 billion and $2.9 billion, making the state fund one of Tesla's eight biggest shareholders.

* Automotive parts-maker Magna International Inc. reduced its full-year outlook to reflect the stronger U.S. dollar, poor performance of its transmission joint venture, and the potential impact of U.S. tariffs. Magna said net income attributable to the company rose to $626 million for the second quarter, up 14% year over year. The company said any tariff increase on vehicles could reduce demand and in turn have a material impact on Magna's profitability. Magna's adjusted EPS for the quarter of $1.67 missed the consensus estimate of $1.74, according to analysts polled by S&P Global Market Intelligence, even as sales for the quarter ended June 30 increased to $10.28 billion from $9.14 billion.

CARMAKERS

* Ford Motor Co. plans to launch a new entry-level SUV for the Chinese market called Ford Territory in early 2019 to tap the low-cost car segment and ramp up sagging sales in the country, Reuters reported. The carmaker reportedly will develop the model in partnership with China's Jiangling Motors Corp. Ltd. and make it available across three powertrain variants, including a plug-in hybrid version. Ford Territory would be priced at about 150,000 yuan, two individuals familiar with the car told the news agency, and is part of Ford's strategy to roll out 50 new or revamped models in China through 2025.

* Volkswagen AG-owned Porsche AG expects its 2018 sales to "slightly exceed" 2017 figures of 246,375 units sold, after previously forecasting flat sales for the year, helped chiefly by China slashing import duties on cars, Automotive News Europe reported, citing a Porsche spokesman. The German luxury-car maker's China head, Jens Puttfarcken, reportedly said new car deliveries, which were so far held up for the new import duties to set in, would result in "a big increase" in Porsche's July sales results.

ELECTRIC AND AUTONOMOUS VEHICLES

* Ian Zhu, managing partner of Chinese venture capital firm Nio Capital, expects just 1% of all electric-vehicle startups in the country to survive in the future as building a car "from scratch" requires "abundant investments and a large group of people," Bloomberg News reported. Zhu reportedly also expects the ongoing trade war between the U.S. and China to impede investment in technology and slow down the industry's shift toward self-driving vehicles.

* Tencent Holdings Ltd.-backed Chinese electric vehicle startup NIO could file the prospectus for its U.S. IPO in September, with a possible listing on the NYSE, Gasgoo reported, citing people with knowledge of the matter. NIO reportedly has roped in Credit Suisse AG, Bank of America Merrill Lynch, Citibank and Deutsche Bank as underwriters for the public offering that is scheduled for 2018-end or the first quarter of 2019. The company, which refused to comment on the plans, hopes to raise over $2 billion through the offering, Gasgoo reported.

REGULATIONS AND SAFETY

* The U.S. National Highway Traffic Safety Administration is looking into five complaints of fires involving Ford Motor's F-150 Supercrew pickups that might possibly impact 1.4 million vehicles made between 2015 and 2018, Reuters reported. The fires reportedly resulted after deploying seatbelt pretensioners, made by Takata Corp., at the time of a crash. Pretensioners are used to tighten up a seatbelt webbing and work alongside an airbag during a crash, Reuters reported.

* Germany is mulling changes to its Foreign Trade Ordinance law that would empower the government to step in when an investor outside the EU buys a stake of at least 15% in a German company, Reuters reported, citing newspaper Die Welt. As of now, only investments of more than 25% of a company's shares reportedly attract additional scrutiny.

AUTO PARTS AND EQUIPMENT

* Chinese automakers BAIC Motor Corp. Ltd. and Great Wall Motor Co. Ltd. formed a strategic cooperation agreement to pool their auto parts resources, among other tie-ups, Gasgoo reported, citing a source familiar with the event. Both companies reportedly have not yet commented on the matter.

* Mazda Motor Corp. announced a joint research project with Saudi Aramco and Japan's National Institute of Advanced Industrial Science and Technology, or AIST, in a bid to make more efficient internal combustion engines. The Saudi refiner will develop a fuel that emits low levels of CO2, and Mazda and AIST will produce an engine that runs on the fuel.

TRUCKS AND MOTORCYCLES

* Yamaha Motor Co. Ltd. reported profit attributable to shareholders of ¥57 billion in the first half, up 6.3% year over year, missing analysts' consensus estimate of ¥62.55 billion compiled by S&P Global Market Intelligence. Net sales in the period for the Japanese motorcycle-maker, which reaffirmed its forecast for the year, rose 2.8% year over year to ¥851.3 billion on higher sales in its emerging markets motorcycle business, the marine business, and the industrial machinery and robots business.

* Nikola Motor Co. CEO Trevor Milton expects the hydrogen-powered truck-maker's $200 million series C funding round to be oversubscribed as the company has already secured over $100 million in August. Arizona-based Nikola, which has nearly $7 billion of preorders of its zero-emission trucks due 2021, said it is worth $1.1 billion at pre-money valuation.

Now featured on S&P Global Market Intelligence

US to impose 25% tariff on $16B of Chinese goods on Aug. 23

The day ahead

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

In Asia, Hang Seng climbed 0.39% to 28,359.14, while the Nikkei 225 fell 0.08% to 22,644.31.

In Europe, around midday, the FTSE 100 gained 0.86% to 7,785.15, and the Euronext 100 rose 0.04% to 1,081.78.

On the macro front

The MBA mortgage applications report and the EIA Petroleum Status Report are due out today.

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