New car import rules which come into force in January may pose a threat to the UK's struggling car manufacturers. As of next year, all cars exported from the UK into the European Union must contain 45% of their components by value from either the UK or the EU. Vehicles that do not meet this threshold will face a 10% duty when heading for the Continent. The rules were designed to encourage firms to establish supply chains nearer home, however, the UK has failed to establish a battery industry, meaning car executives fear that the deadline will be an "existential threat". Industry experts have warned that the new regulations could cause the closure of such sites as Stellantis's Vauxhall van factory at Ellesmere Port. The rules will also make industry-based technologies, such as professional wireless communication devices, more important when conducting automotive research and development.
The price war in China's auto industry appears to be declining, as Chinese carmakers reduced price cuts. According to reports from Citic Securities, major carmakers in China have stopped reducing prices to fight each other, as it resulted in a 46% increase in deliveries for the first week of May. These levelled prices could bring hope for price recovery. However, economists say that it is unlikely that a car market turnaround will happen soon.
The Canadian and Ontario governments are currently learning the hard way that when you pay a subsidy to one particular industry it can create a domino effect of ransom notes from other companies in that same industry. This is currently happening as Stellantis and LG Energy Solution are requesting an increase in state-subsidised funding for their electric vehicle battery factory after having seen their competitor, Volkswagen, already receive substantially better terms. Last year, Volkswagen was given $13bn worth of subsidies from Ottawa over ten years for its factory, which is 13% of the company’s market value, plus $500m from Ontario. Unfortunately for Canada, it doesn't look like it was satisfied with simply subsidizing Volkswagen and is now in danger of overpaying even more for Stellantis and LG’s ventures. This highlights the problematic nature of the government’s aggressive pursuit of electric vehicles, which could leave the taxpayer footing the bill for a series of increasingly extortionate ransom notes.
European car manufacturers have supported calls from Chancellor of the Exchequer Rishi Sunak for the EU to delay the implementation of a tariff scheduled to be imposed from January on post-Brexit car parts for electric vehicles. The UK would be affected by a ruling applying a tariff when less than 45% of the value of an EV and under 60% of its battery is made within the EU. Stellantis, which owns Citroen, Fiat, Peugeot and Vauxhall, said the changes could lead to it quitting the UK. Sunak said battery-making potential was inadequate in both the UK and the EU.
Toyota’s Chief Scientist has warned that transitioning too quickly to electric vehicles could lead drivers to hold on to old petrol cars and has called for hybrids to be extended in use ahead of the G7 leaders summit in Japan. While subsidies and restrictions help to make EVs attractive to those who can afford them, gas-electric vehicles remain more suitable for other drivers. Toyota’s approach has been criticised as it has taken too long to become fully electric, letting Tesla and China’s BYD take the lead in the EV market.
Germany's auto industry association, the VDA, has called for the post-Brexit rules agreed in which 45% of an electric vehicle's value must come from the EU or UK from 2024 to be postponed. A battery pack can account for up to half the cost of a new EV and Europe currently does not have a big enough battery industry to satisfy these requirements. The VDA said tariffs would be "a significant competitive disadvantage for the European car industry in relation to its Asian competitors in the so important UK market", and also warned of the danger to the development of e-mobility.
From Renaissance ideals to Ebenezer Howard's Garden City, architects and urban planners have created some of the most famous cities with specific ideals in mind. The author mentions an 8th century Kyoto, which had a grid system modeled from China's Chang'an (modern-day Xi'an), long before Manhattan existed; a scaled-down version was made of Nara, the capital before it; the city had temples, shrines, and delicate gardens to the city's backdrop of mountains. 15-minute cities were polarizing in the UK due to their association with low-traffic neighborhoods; Blooming with parks, temples and huge statues, Ramesses II's Pi-Ramesses, was built on the banks of a now-dry branch of the Nile, but was little more than a lost city buried under Egyptian fields for 3,000 years. In the wake of Europe's Black Death, Renaissance idealists harked back to Roman and Greek settlements, developing the concept of the Ideal City. Architects such as Maverick Filarete named his pioneering, star-shaped prototype the Sforzinda. Lastly, urban planner Ebenezer Howard sought a way for normal working-class families to escape the city, leading to garden cities such as Letchworth and Welwyn Garden City that influenced the capital cities of New Delhi and Canberra.
The ongoing AI debate is like the early stages of a discussion over ESG assets, according to Morgan Stanley. In ESG, investors divided their portfolios into ESG-positive and ESG-negative narratives before reassessing their holdings' terminal growth in a new paradigm. Emerging AI investments may undergo the same bifurcation process, with questions around earnings expectations, margins assumptions and terminal growth. A comparison to the rise of electronic vehicles was initially favourable, but AI's disruption is wider. Morgan Stanley clients would like to simplify the prediction process down to point conversations about tangible assets versus intangibles.
The UK will ensure it produces batteries for electric vehicles domestically, finance minister Jeremy Hunt said on 7 July. The comments came the day after carmakers warned that insufficient production could hit investment in the country, while Stellantis said it would face tariffs when exporting electric vans to the EU from 2022.
Tata Motors-owned Jaguar Land Rover (JLR) is deciding between Spain and the UK as the location for its electric vehicle battery factory, a move seen as critical for the future of Britain's car production in the face of a looming ban on the sale of new petrol and diesel cars. The UK is believed to have offered financial support for the gigafactory, with Chancellor Jeremy Hunt suggesting earlier this week that the country is in line for good news on the EV industry. JLRs biggest competitor, Nissan, is the only other UK company with a domestic battery supply.
Portfolio managers at HillsideWealth | iA Private Wealth have explained how a concentrated portfolio of global high-quality stocks gives investors the best chance to outperform both broadly diversified indexes and professional money managers. The pair have been exploring their investment approach, which focuses on businesses generating predictable, high returns on capital and whose shares can be bought at reasonable prices and held for the long-term. They argue that sustainable growth is only meaningful if the incremental capital can be deployed at a high rate of return while excess capital should be returned through dividends and share repurchases. The high-quality companies which the pair prefers contrasts with high-yielding stocks because the price-multiple of the former would have to be very attractive for its yield to meet demanding total return requirements.
Panasonic has announced plans to spend record capital of ¥700bn ($5.05bn) for FY 2023, with over half of the total to be spent on increasing production of electric vehicle batteries. The company anticipates expansion of the EV market in North America and is prioritising the development of batteries to meet increased demand from automakers.
Victoria Coates, senior advisor to the US Secretary of Energy under President Trump, is interviewed on The Kevin Roberts Show about effective national security policies. Coates suggests that the US has been the greatest force for good in human history and discusses that the country doesn't need to overthrow dictatorial regimes and impose democracy rather encourage, instruct, and be a good example. Coates also discusses the importance of seizing opportunities, flexibility, and not being wedded to rigid ideologies that cut you off from unorthodox solutions. She also notes the importance of historical perspective when dealing with human beings and the hallmark of being resilient.
Coates mentions the difficulty of figuring out the triangle of policy, communications, and politics and navigating it in a world where communications and information is flowing at such a rapid rate. She mentions that moral clarity, the clarity of vision, and purpose are also infectious, not just for the men and women who have the privilege of working for people like that, but also for the country and a group of free people around the planet who are going to respond to any American president who’s bold and has a clear vision and also has the ability to speak.
The Limit, Save, Grow Act was passed in the House of Representatives with a slim 217-215 majority. The legislation would reduce the budget deficit by an estimated $4.8tn over 10 years, and includes the “REINS Act” which would subject regulatory agency rulemaking to stricter congressional review and approval processes if proposed regulations would increase costs to individuals or businesses significantly. The deficit reduction is paired with an up to $1.5tn increase to the current $31.4tn statutory debt limit to avoid an interruption in Treasury Department checks. While it is unlikely that the Senate will pass the bill in its current form, the House passage helps push President Joe Biden to the negotiating table and address the nation's financial woes meaningfully. If it were to pass, the legislation's biggest winners are taxpayers who avoid a future tax burden, and consumers can expect inflation to drop, reducing the costs of goods and services. The IRS would be a loser, with taxpayers getting back $70bn of unspent bonus funding. Future generations would benefit from a reduced federal debt burden, and federal bureaucracy would be limited. Untaxed corporations are set to lose the most, as the bill scales back new energy tax breaks enacted by the previous Congress, returning most pre-existing green tax credits to pre-2022 and levelling the playing field of corporate taxes. Small businesses would benefit from a more stable atmosphere, while doctors, lawyers, and advanced degree holders who have not paid their bills would be the biggest losers, with a change in borrower income calculation methods being proposed.
Proposed new EPA regulations mandating that at least 60% of new cars sold from 2030 be electric will increase costs for Americans, as expensive charging and battery replacement become the norm, claims SEPP, a Washington-based group devoted to climate policy. The group has also trafficked in misinformation, calling global warming a “hoax.” It argues that the costs of the proposed battery electric vehicle, batteries, charging stations and increased electricity demand will make it difficult for Americans to upgrade their cars in future, limiting future mobility and leading to a further rise in wealth inequality.
The economic issues surrounding the use of electric vehicles (EVs) in the US, including their cost, convenience, and environmental impact, are outlined in a recent episode of the Heritage Foundation's Heritage Explains podcast. The Biden administration's new regulations requiring EVs to represent at least 54% of all new vehicles sold in 2030 will have an adverse economic impact on the country, the podcast's guest speaker warned. Furthermore, the reliance on China for EV production will make it economically stronger while weakening the US economy. Trillions of dollars would, therefore, be wasted on EV production to benefit China, which makes solar panels, wind turbines, and electric batteries.
US President Joe Biden’s drive to make electric vehicles (EVs) more popular is highly unrealistic and would make cars unaffordable and unwanted, according to a Wall Street Journal editorial. The author compares Biden to the deluded hero of Miguel de Cervantes’ novel Don Quixote and says his goal of 54% of new cars in America being EVs by 2030 is not achievable due to a lack of raw materials. There would be huge increases in demand for lithium, graphite, nickel and rare earth metals, but mining is being blocked, the editorial warns.
Chinese electric vehicle (EV) maker Nio has invested $150m in Neo Fusion, a start-up that is developing technology toward bringing commercial controlled fusion to market globally within two decades. Nio and affiliate Nio Capital have taken a 19.9% stake and 10.1% stake respectively in the company, with $689m and $349m from other sources. Neo Fusion is 50% owned by China's Anhui provincial government, according to a company registration filing seen by Reuters. Fusion technology could help the world curb emissions linked to climate change, according to market observers.
Jigar Shah, Director of the Loan Programs Office at the US Department of Energy, will speak at an event hosted by the CSIS Energy Security and Climate Change Program. Shah will discuss the LPO's contribution to funding high-impact energy projects and advanced vehicle technologies, along with how it is advancing supply chain competitiveness and supporting US advanced nuclear projects in line with the Biden Administration’s clean energy goals. Joseph Majkut, Director of the CSIS Energy Security & Climate Change Program, will moderate the discussion.
Chinese spot lithium carbonate prices have slumped by 70% from November to this year's low point in April, after overpricing caused a demand hit to Chinese buyers in the EV market, there has been a ripple effect on the Chinese battery chain and the spot market. The slump in China's spot price dragged down the whole lithium pricing chain from spodumene concentrate to hydroxide, albeit to varying degrees, however, the prices for lithium carbonate outside of China have fallen to a lesser degree. Q1 2023 prices for SQM are at $51 per kg while Livent predicts a continued increase in prices from 2023.
