Global EV Price Cuts | Smartphone Demand Further Declines | Samsung may replace Google for default search

Welcome to Portfolio Intelligence Daily, where each weekday morning we spotlight under-the-radar investment themes involving supply chain issues, ESG risks, and regulatory and government actions.

Today:?

1. Global EV Price Cuts
2. Smartphone Demand Further Declines?
3. Samsung might replace Google as default search engine

Summaries are curated by Auquan’s analyst team using our Portfolio Intelligence Engine to uncover investment insights at scale.

Global EV Price Cuts

Tesla has increased prices of its premium Model S and Model X vehicles by 2.4% to 4.3% shortly after the stock dropped almost 10% following lower-than-expected automotive gross margin in Q1 2023.?

• The company previously lowered prices of the two models in early April by around 5% each.?
• Renault is reviewing its pricing policies worldwide for EVs after numerous price cuts by Tesla. The French carmaker’s competitor cut prices in Europe, including France, last week, causing Renault to analyse country by country to stay competitive. The company is betting on higher-margin cars to boost profits.
• Xpeng slashed costs by 25 per cent to stay ahead of the price war that is heating up in the world’s largest vehicle market.
• Impacted companies include: Impacted Companies: Volkswagen Group, BMW, Lucid Motors, Kia, Ford Motor Company, Tesla, Inc., Hyundai Motor Company, VinFast, XPeng, Renault, Rivian Automotive

“We face pressures from all sides, including pressure on the entire supply chain and that on costs,” Chen Liming, president of automotive semiconductor manufacturer Horizon Robotics Technology, told Yicai Global. “As a result, we have noticed that the whole market has become more conservative and returned to business essentials.”

Select timeline

• 21 Apr’23: Tesla Raises Model S, X Prices After Stock Drops Nearly 10%
• 20 Apr’23: Cost Pressures Force Chinese EV Makers to Choose Chips More Carefully
• 17 Apr’23: Renault reviewing prices worldwide after Tesla cuts
• 17 Apr’23: Tesla Margins in Focus as EV Price War Kicks Into High Gear
• 16 Apr’23: Xpeng aims to cut 2024 production cost by 25 per cent as it fine-tunes designs and enhance efficiency to survive competition

Smartphone Demand Further Declines?

• The smartphone market in India declined 10-20% YoY in Q1 2023 due to low demand and stock build-up.
• ?Samsung remained the market leader despite recording a 2% decline in its home country’s market in 2022.?
• Qualcomm’s financial performance is also affected by weak smartphone demand and a supply glut, with its Q2 revenue and profit forecasts below Wall Street estimates.?
• The decline in China’s smartphone market continued, with a 14% YoY drop in shipments in 2022.?
• Apple emerged as the winner with an all-time high market share of 18% in China.
• Impacted Companies: Win Semiconductors Corp., Samsung Electronics, Apple Inc., Foxconn, Samsung Heavy Industries, Qualcomm Inc., Murata Manufacturing

Select timeline

• 20 Apr’23: Phone shipments slip 20% in January-March on poor demand; stock pile-up a worry for cos
• 17 Apr’23: Smartphone sales slide

Samsung might replace Google as default search engine

Samsung is reportedly considering replacing Google as the default search engine on its devices with Microsoft's Bing due to Microsoft's recent success with AI technology. Google currently pays $3 billion as part of its contract with Samsung to be the default search engine, and might pay as much as $20 billion for a similar contract with Apple.?

Select timeline

20 Apr’23: Samsung considering Microsoft's AI-powered Bing as default search engine over Google

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