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Chinese electric-vehicle maker has emerged as a fierce competitor to Western EV makers

Chinese electric-vehicle maker BYD reported a jump in March sales, a sign of intensifying competition from Chinese auto companies in the global EV market.

In the first quarter, BYD sold 626,263 new-energy vehicles, which includes EVs and plug-ins, up 13% from a year earlier. The company said Monday that March sales surged 46% after slipping in the first two months of the year.

Warren Buffett-backed BYD has emerged as a fierce competitor to Western EV makers including Tesla and the traditional automakers. At the end of last year, BYD overtook Tesla as the world’s largest seller of electric vehicles on a quarterly basis.

Since starting in 1995 as a battery manufacturer, BYD has become China’s leading seller of new-energy vehicles. Its rise reflects China’s growing dominance in the EV space. Many of the country’s automakers have moved more quickly than Western car companies to bring highly digital EVs to market.

BYD also sells EVs that are more affordable than those offered by Tesla, putting a wider swath of the market within reach. It doesn’t yet sell passenger cars in the U.S., but is expanding globally, including in Europe.

BYD on Monday also reported a jump in exports in March, with overseas sales of new-energy vehicles nearly tripling to 38,434 units.

Sales of plug-in hybrids, which made up 52% of the company’s total first-quarter sales, rose 14%, while sales of pure battery EVs increased 13%.

China’s EV market has been locked in a fierce price war that is expected to continue in 2024, but BYD’s figures reflect the broad sales growth reported by Chinese carmakers so far.

Fellow EV maker Li Auto posted a 53% jump in first-quarter deliveries to 80,400 units, while XPeng’s rose 20% to 21,821 vehicles. Geely Automobile sold 475,720 units, up 49% from a year earlier.

SAN FRANCISCO/LONDON, April 1 (Reuters) - The ranks of would-be Tesla buyers in the United States are shrinking, according to a survey by market intelligence firm Caliber, which attributed the drop in part to CEO Elon Musk's polarizing persona.

While Tesla continued to post strong sales growth last year, helped by aggressive price cuts, the electric-vehicle maker is expected to report weak quarterly sales, opens new tab as early as Tuesday.

Caliber's "consideration score" for Tesla, opens new tab, provided exclusively to Reuters, fell to 31% in February, less than half its high of 70% in November 2021 when it started tracking consumer interest in the brand.

Tesla's consideration score fell 8 percentage points from January alone even as Caliber's scores for Mercedes (MBGn.DE), opens new tab, BMW (BMWG.DE), opens new tab and Audi, which produce gas as well as EV models, inched up during that same period, reaching 44-47%.

Tesla did not respond to a request for comment. Musk in the past has blamed high-interest rates for curbing consumer demand for big ticket items like cars.

Caliber cited strong associations between Tesla's reputation and that of Musk for the scores.

"It's very likely that Musk himself is contributing to the reputational downfall," Caliber CEO Shahar Silbershatz told Reuters, saying his company's survey shows 83% of Americans connect Musk with Tesla.

Reuters spoke to five marketing, polling and car experts who said controversies surrounding Musk's increasingly right-wing politics and public statements are weighing on Tesla's brand and demand.

"It is hard enough to win sales without getting into politics," said Tim Calkins, a marketing professor at Northwestern University's Kellogg School of Management.

Economic fears, the lack of affordable new models and rising competition from cheaper rivals like China's BYD have also been cited by Wall Street analysts as putting pressure on Tesla.

Overall electric vehicle sales in the U.S. are forecast to increase 15% in the first quarter of this year, according to estimates by researcher Cox Automotive. Tesla sales are projected to increase by 3%.

"The EV slowdown is shaping up to be a Tesla slowdown," Cox analyst Stephanie Valdez Streaty said during a conference call Thursday.

New car registrations for Teslas in California- their biggest market in the U.S. - posted their first drop in over three years in the fourth quarter of 2023 even as EV sales rose overall.

At least five analysts cut Tesla's target price last month, saying the automaker could post disappointing first-quarter delivery results. Tesla shares are down nearly 30% year to date.

Musk's outsized personality benefited Tesla as he promoted tackling climate change by reimagining cars as stylish, electric computers on wheels that could beat gasoline guzzlers in looks, performance and handling.

Tesla achieved breakneck annual sales growth for more than a decade.

COURTED CONTROVERSY

In recent years, the billionaire courted controversy with comments and actions including his embrace of the Republican party and endorsement of anti-semitic comments on X. Musk has denied being anti-semitic.

When asked by an investor during a January 2023 conference call if his political comments were hurting Tesla's brand and sales, Musk said he was "reasonably popular," referring to his then 127 million followers on X, formerly known as Twitter.

"Whether you hate me, like me or are indifferent, do you want the best car, or do you not want the best car?" Musk said at another event in November.

Brand valuation consultancy Brand Finance found Tesla's reputation fell in 2023, opens new tab in the United States, the Netherlands, France, United Kingdom, and Australia. Tesla's reputation did not suffer in China, where access to news on the company and its CEO may have been limited, and Germany.

In the U.S., a survey by consumer analytics firm CivicScience, opens new tab shown exclusively to Reuters found that 42% of respondents had an unfavorable view of Musk in February, up from 34% in April 2022 when Musk disclosed his stake in Twitter.

"A modest but growing number of EV shoppers are increasingly put off by Elon Musk's behavior and politics and are now finding viable alternatives to Tesla in the marketplace," Ed Kim, president of California-based consultancy AutoPacific said.

That group includes Jonny Page, a London-based consultant who works with climate-focused startups and will purchase an EV this summer. It will not be a Tesla.

Page, 36, said his decision is partly because of concerns over Tesla safety but mostly about Musk's "unhinged" behavior. "I don't want to put a single penny in that man's pockets," Page said.

"I CAN'T GO BACK TO GAS"

Tesla's reputation is still sterling with many.

Market researcher S&P Mobility shows Tesla has the highest loyalty among major car brands, with 68% of owners choosing another Tesla when they bought a new car last year.

Christian Cook, a Tesla Model 3 owner in Texas who identified as leaning right, said Musk's actions made no difference and that he was "becoming numb to the shenanigans."

Kat Beyer, a climate activist in Wisconsin, said she wanted to avoid Tesla because of Musk's support for Republicans, but wound up buying a Model Y last year because of a lack of EVs with reliable charging infrastructure.

"It's hard to drive the car associated with him," Beyer said. "But I can't go back to gas."

Reporting by Hyunjoo Jin in San Francisco and Nick Carey reported from London; Additional reporting by Joe White in Detroit and Stella Qiu in Sydney; Editing by Peter Henderson and Suzanne Goldenberg

MOSCOW, April 1 (Reuters) - Russia's central bank only considered keeping its key rate unchanged at 16% at the March meeting, as it believes the current decline in inflation pressure is less pronounced than that in late 2023, it said on Monday.

According to the minutes of the March meeting published by the regulator, disinflation may require an additional rise in real rates and cutting rates too early could lead to a second wave of inflation that would be harder to combat.

Demis Hassabis is tasked with keeping Google ahead on a technology that its CEO has called more profound than the invention of fire or electricity

Demis Hassabis, the neuroscientist tasked with keeping Google at the vanguard of artificial intelligence, was on a hot streak. Then the AI went haywire.

Google’s AI chatbot began angering users with biased and ahistoric responses. Hassabis wanted to make something clear: It wasn’t the intended behavior of the system his team built.

“There’s more nuances there than I think the product folks fine-tuning these things further down the line had realized,” Hassabis said in a February interview with The Wall Street Journal hours after Google stopped letting its Gemini chatbot generate images of people.

Hassabis, 47 years old, was the second-best chess player in the world for his age group as a teenager. He helped create the hit videogame “Theme Park” during a gap year before college. As head of the AI research lab DeepMind he oversaw inventions that made the covers of Nature and Science magazines.

His current challenge, by all accounts, will require even greater ingenuity. Since the viral launch of ChatGPT in late 2022, Google has been on a mission to prove it is still at the forefront of a technology that Chief Executive Sundar Pichai has called more profound than the invention of fire or electricity. It is up to Hassabis to make that happen.

“I don’t get much sleep,” Hassabis said from London, his home base for directing Google’s most critical AI research following an overhaul last year by Pichai. That change also put him in charge of employees from a California-based division called Brain that had focused on developing AI systems to improve Google products. They are now part of the renamed Google DeepMind.

After taking over the more than 2,500-person team, Hassabis pushed to accelerate development of large AI systems.

In the new assignment, Hassabis has devoted long stretches at night to video calls with Google leaders in Mountain View, Calif. He previously blocked off the time for independent work and catching up on recently published research, a practice he said he would like to resume at some point.

Hassabis likened Google DeepMind to a “relentless production line.” He has consolidated teams working on overlapping projects and mandated they have leaders from both Brain and DeepMind, said people familiar with the efforts.

The chatbot controversy from February threatens to derail those efforts to re-establish Google as the AI leader. It has also forced Google’s executives to reckon with a corporate structure that has largely kept researchers away from major product decisions.

Hassabis has long resisted leaving his hometown of London. He embraced that distance when leading DeepMind, which operated independently from Google under parent company Alphabet GOOGL 0.04%increase; green up pointing triangle. He butted heads with Google executives over his desire for DeepMind to retain that independence, said people familiar with the matter.

Today, Hassabis is more central than ever to Google’s fortunes. Some inside Google have called in recent weeks for Hassabis to have even more influence over turning his team’s research into consumer products, said one person familiar with the discussions.

“He takes his work very seriously,” said Colin Murdoch, one of Hassabis’s top deputies. “Ever since the first days of DeepMind, there was always this sense—this is an exceptionally promising technology, and we need to be careful.”

Pichai told employees in February the company would make structural changes to address Gemini’s shortcomings, without offering specifics.

Shares in Alphabet, which fell more than 4% after the Gemini controversy, have rebounded recently following news that Apple is considering using Google AI technology to power iPhone features.

A researcher and software engineer by background, Hassabis often makes public appearances wearing understated crew-neck sweaters and dots his sentences with scientific references. He idolizes the British mathematician Alan Turing, an influential figure in modern AI’s early development who shared an interest in the human brain.

“I view myself as Turing’s champion,” Hassabis said at Stanford University last year. He has long told people that he wants to build artificial general intelligence, or AGI, which can accomplish any human task.

People who have worked with Hassabis described him as a demanding, competitive leader with a record of successfully steering researchers toward ambitious goals.

Hassabis began building tech products as a teenager working on videogames. After graduating from Cambridge University with a computer-science degree, he started Elixir Studios, a company that produced a political-simulation game called “Republic: The Revolution.”

“We are re-creating a whole living, breathing country in minute detail,” he told one interviewer when promoting Republic. The game received mixed reviews, and Elixir released one more title before closing two years later.

Hassabis chased even loftier ambitions at DeepMind, which he co-founded in 2010 after completing a cognitive neuroscience doctorate at University College London.

Google purchased DeepMind for about $650 million in 2014 following a bidding war with Facebook, a deal that valued Hassabis’s stake at roughly $100 million.

Encouraged by Google leaders including co-founder Larry Page to pursue AGI with few worries about cost, Hassabis pushed DeepMind to tackle what he called grand challenges. He told employees they should think about building AGI that could invent discoveries worthy of Nobel Prizes, said people who heard the remarks.

DeepMind’s breakthroughs included AlphaGo, the first computer system to beat a professional player of the board game Go. Another technology called AlphaFold, which Hassabis has called his favorite modern application of AI, became the basis for an Alphabet-owned drug-discovery business named Isomorphic Labs that he also oversees. It struck partnerships last year with Eli Lilly and Novartis that could be worth a combined $2.9 billion.

DeepMind’s rise attracted scrutiny in the AI community. Elon Musk, an early investor, became concerned about the dangers of superhuman AI following a meeting with Hassabis in 2012, according to a lawsuit he filed recently against OpenAI.

Hassabis invited Musk to join an ethics board DeepMind had promised to establish following Google’s acquisition, according to that lawsuit. Musk, who had tried to purchase DeepMind himself, labeled the efforts a sham after attending the first meeting, according to the lawsuit.

Google spokeswoman Amanda Carl said Hassabis and Musk discussed both the potential benefits and risks of AI in 2012, and Google had a different recollection of what Musk thought following the ethics board meeting.

As the leader of DeepMind, Hassabis was protective of its independence within Alphabet. Jeff Dean, a longtime Google engineering leader who oversaw the Brain division, in recent years clashed with Hassabis about how their two teams should collaborate, said people familiar with the exchanges.

Among other issues, Dean took issue that DeepMind didn’t readily share research that could inform Brain’s work, the people said.

Carl, the Google spokeswoman, said the merger of the Brain and DeepMind teams has been very smooth. Dean and Hassabis have worked closely together for several years and continue to do so, she said.

While Hassabis steered DeepMind toward achievements like drug discovery, other AI research labs such as OpenAI were devoting greater resources to another goal that ended up grabbing the public imagination: building programs that could produce fluent passages of text in a consumer-friendly chatbot.

The launch of ChatGPT caught Hassabis and DeepMind by surprise, said current and former employees. DeepMind had developed a chatbot called Sparrow that was trained to respond more factually than similar products, but Google executives decided it wasn’t as ready for the public as a similar Brain effort called LaMDA.

When Google released its initial response to ChatGPT, a chatbot called Bard, it used LaMDA instead of Sparrow as its underlying technology. Carl said Google later used lessons from Sparrow to help build Gemini.

Hassabis has called this generation of large AI systems “almost unreasonably effective” and predicted that techniques pioneered by DeepMind will be important for building even more powerful systems.

“This is what I’ve always thought, I just wouldn’t have been able to predict the timing,” Hassabis said about the increasing consumer adoption of AI tools.

Hassabis, together with Dean and others at Google, early last year began discussing combining resources to produce an AI system that could rival OpenAI’s technology. Pichai promoted Hassabis months later, putting him in charge of one of the world’s largest collections of AI researchers.

By December, Google largely caught up to breakthroughs made by OpenAI and its primary backer Microsoft with a set of technologies named Gemini.

Soon after, Google introduced a new version that could analyze 700,000 words of text or up to one hour of video, a breakthrough that surprised many AI researchers.

Google in February renamed its chatbot and a host of other products Gemini, matching the branding of the technology produced by Hassabis’s team.

Then Gemini plunged the company into crisis. Users expressed outrage that Gemini produced images of Black Nazi-era German soldiers and, in some cases, refused to depict white people. Boosted by dozens of tweets from rival Musk, the outrage morphed into a broader backlash against Gemini’s responses to a range of queries.

Morale at Google DeepMind took a hit following the controversy, as researchers complained that the chatbot’s responses were unfairly tarnishing their work, said people familiar with the situation. Google’s initial response attempted to distance the issue from the underlying technology developed by Hassabis’s team.

Google co-founder Sergey Brin said in March the Gemini controversy appeared to result from insufficient testing, speaking during an event at a Hillsborough, Calif., mansion known as the AGI House.

The Gemini app used another technology developed by Google DeepMind, Imagen 2, to produce images. Google then layered additional software on top of the system that translated user queries to trigger more diverse outputs, among other changes.

“It’s a quite vast pipeline of things that have to happen,” Hassabis said. Google is still determining the most efficient way to organize those processes, he said.

Speaking at a conference in Barcelona days after Google pulled the chatbot’s ability to generate images of people, Hassabis said the feature would be restored in a few weeks.

“No matter what you try internally, there’s only a few hundred people testing these things,” Hassabis said in the Journal interview. “It’s not the same as having millions of users testing it and then reporting their findings.”