Autos

China Inc offers 360 view of SPAC last hurrah

14 Jul 2022

Carmaker Chijet is merging with a blank-cheque vehicle that planned to scout for healthcare firms. Video streamer Glory Star, bought by a SPAC in 2020, is accepting a net buyout price barely equal to last year’s earnings. They are fitting examples of a distorted and dying market.

Capital Calls: Fed faces inflation divergence

30 Jun 2022

Concise views on global finance: The central bank’s preferred measure of rising prices, the U.S. personal consumption index, rose 6.3% in May. That’s more subdued than the surging consumer price index. But the latter offers a better read on household spending.

Texas becomes Tesla’s new China

29 Jun 2022

The U.S. state has been good to the carmaker, offering tax breaks while the top prosecutor backed Elon Musk’s Twitter bot claims. That’s similar to how his relationship has worked with China. Musk returned favors to Beijing. Soon, he could become a dutiful friend of Texas, too.

Chip shortages may soon turn to gluts

29 Jun 2022

Volkswagen says its chip shortages are fading. Other industries may be in even better shape as $185 bln of investment increases production and demand falters. Bloating inventories and the realization users ordered too many chips could turn shortfalls to excess with a crack.

Lithium landgrab sparks new electric-car risk

24 Jun 2022

Tesla, Stellantis and others want to lock in long-term supplies of the battery component. Elon Musk might even try mining it. Such steps are enticing after the metal’s price rose tenfold in two years. But deals struck under duress can be a shock to the system down the road.

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

Ferrari races into a greener, pricier world

16 Jun 2022

The luxury sports carmaker wants to boost revenue to 6.7 bln euros by 2026 and nearly double EBITDA. That will fund investment in electric vehicles, where new CEO Benedetto Vigna needs to catch up. Success rests on convincing its millionaire clients to pay ever higher prices.

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.

Nissan makes hay while the sun doesn’t shine

12 May 2022

The Japanese car giant logged a $1.7 bln profit in the last fiscal year, back in the black after three years. A weak yen flattered overseas sales, but a cost-cutting campaign and smarter product strategy did more. Such discipline will come in handy for a challenging year ahead.

Super-car SPAC tests EV hype’s reset expectations

11 May 2022

A $1.7 bln bid to resurrect a battered Chinese electric automaker comes as other upstarts are under pressure. Buyer Liu Suying likes a comeback story: he recently relisted Playboy. But CH-Auto’s failure to flog sporty coupes means it’s unlikely to be the next Tesla or Nio.

Renault’s Russia exit plans mix logic and delusion

10 May 2022

The French carmaker could sell its Russian assets for a symbolic euro with a plan to buy them back at a later date. Its hope for a “return to normal” after the war in Ukraine sounds optimistic, if not delusional. But for now, Renault sheds a burden and avoids the Kremlin’s ire.

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.