Didi’s vertical integration strategy distracts 9 Jun 2022 The ride-hailing giant may buy a stake in Sinomach’s electric vehicle unit. Didi’s $5 bln cash pile, plus its data and technology, could revive the struggling state firm, which until recently focused on importing cars, not making them. It can’t help rebuild Didi’s core business.
Tesla’s pole position is a blessing, then a curse 3 Jun 2022 Boss Elon Musk wants to cut 10% of the $735 bln automaker’s workforce, even as peers ramp investments. Tesla, unencumbered by a gas-guzzler business, outmaneuvered older rivals to dominate EVs. But not having a legacy business to fall back on means it is more vulnerable, too.
GM draws target on Tesla with EV price cut 2 Jun 2022 Elon Musk’s carmaker stepped back from an ultra-low cost vehicle. But with GM slashing the price on its Bolt, the Detroit automaker has made a big move. Now GM can use its low sticker price to grab market share. It has little to lose – except for cash, which eventually runs out.
WM Motor fundraise will test its anti-Tesla appeal 1 Jun 2022 Founder Freeman Shen missed a chance grabbed by rivals Xpeng and Li Auto to float when valuations were high, stalling his dream of mass-producing affordable electric cars. An IPO filing reveals deep losses; hoped-for economies of scale may be harder to achieve in tough times too.
Geely-backed auto SPAC deal revs up too fast 31 May 2022 Unprofitable maker of tech for car cockpits, Ecarx, is going public via a $3.5 bln sale to a blank-cheque firm, but a plan to boost its sales beyond Li Shufu’s marques looks ambitious. The record Chinese deal requires a leap of faith so soon after Didi’s wild listing ride.
Renault split requires very careful driving 26 May 2022 The $7.7 bln French carmaker may separate its electric and fossil fuel units. That could boost a lagging valuation and open the door to fresh capital, but would also increase costs and complexity. It’s a risky manoeuvre, but CEO Luca de Meo has few other options.
U.S.-China divide creates fast lane for Hyundai 23 May 2022 President Joe Biden's meetings with South Korean conglomerates signal closer bilateral ties. Both sides can benefit from less reliance on Beijing. For the automaker, which just pledged to invest $10.5 bln in America, access to the growing U.S. market might be the biggest prize.
Capital Calls: Ford wisely trims its electric bets 9 May 2022 Concise views on global finance: The Detroit automaker is selling part of its stake in stumbling electric startup Rivian, just as its own costly electric turnaround takes hold.
CATL’s woes will sap others’ batteries too 6 May 2022 The $130 bln battery maker goofed in the first quarter: net profit fell 24% and it revealed a 1.8 bln yuan derivative liability. Shrinking margins suggest its size isn’t a protection against supply chain chaos and commodity price hikes. It’s even worse news for smaller rivals.
Capital Calls: AB InBev 5 May 2022 Concise views on global finance: Anheuser-Busch InBev’s revenue grew 11% in the first quarter compared to last year, but rising prices are a particular headache for the debt-laden brewer.
Capital Calls: Uber vs. Lyft, GE executive pay 4 May 2022 Concise views on global finance: Shares in both ride-hailing firms fell on Wednesday despite Uber signaling it doesn’t have to invest to attract drivers like its smaller rival. And only two-thirds of investors backed CEO Larry Culp’s compensation, even after a $10 mln bonus cut.
Rising costs put U.S. auto revamp in a jam 29 Apr 2022 Prices of cars from makers like Ford and GM are up by 13% in a year. But higher costs have caused profits to stagnate. Revamping businesses away from combustion engines is expensive, and adds pressure. They have few levers to pull, and little cushion to fund change.
Elon Musk can’t buy his other “censorship” foe 28 Apr 2022 The billionaire is set to buy Twitter, motivated by perceived restraints on free speech. But his legal quest to get the U.S. SEC off his back when it comes to vetting tweets about carmaker Tesla failed this week. The regulator won't roll over as easily as Twitter's board.
Capital Calls: U.S. GDP fall masks solid economy 28 Apr 2022 Concise views on global finance: Consumer spending and business investment are resilient amid price hikes.
Musk wealth pours in as fast as Twitter can use it 22 Apr 2022 The Tesla CEO may need to find $33 bln more cash if he buys the social media company. That could require him to sell most of his shares in the electric-car maker that aren’t pledged against loans. But with more vast stock awards coming his way, it’s less risky than it looks.
Musk’s Twitter tilt comes at bad time for Tesla 20 Apr 2022 The billionaire’s quixotic offer for the social-media group will be too big a distraction from running the $1 trln electric-car maker. Tesla faces disruptions from rising costs, supply-chain woes as well as more competition for scarce resources. That demands Musk’s full focus.
Porsche IPO is slow road to a higher VW valuation 20 Apr 2022 The German carmaker’s luxury brand could easily be worth 90 bln euros. Yet a plan to only sell 25% may limit the benefit for shareholders by leaving the company with a small free float and complex governance. Their consolation is that this listing may not be the final model.
Indonesia’s EV dream gets $15 bln spark of reality 20 Apr 2022 South Korea’s LGES, China’s CATL and partners plan to build comprehensive battery supply chains in the country. That’ll please Jakarta, whose bold electrification goals need industry buy-in. With supply chains stressed, it’s a well-timed boost for the wannabe production hub.
How metals markets can limit future debacles 19 Apr 2022 UK regulators want answers after the London Metal Exchange voided nickel trades. A supply crunch in a wider range of metals means Europe’s key market can expect more crises. Regaining trust may require new leaders, but the LME can at least reduce the impact of future shocks.
Renault is awkward guinea pig for Tesla-like trick 13 Apr 2022 The group may list its electric-vehicle business. Automaker CEOs look enviously at the rich valuation of Elon Musk’s group. Yet Renault’s battery unit is modest, and poor profitability and messy governance would mean its rump combustion operation would look even less desirable.