On the Move, August 5-11, 2024

Albemarle calls for intervention to break China’s lithium grip

Albemarle Corporation , the world’s largest lithium producer, urges governments to counter China's dominance in the lithium market essential for electric car batteries. CEO Kent Masters calls for more support to build Western supply chains amidst a big drop in lithium prices and increased Chinese competition. The price plunge has led Albemarle to cut expansion plans and implement cost-cutting measures, including job cuts and mothballing production lines. Despite the US Inflation Reduction Act, Western reliance on Chinese lithium remains strong. European companies aim to compete using advanced technology to lower costs.

Continental cuts sales forecast as European vehicle production slows

大陆集团 , a major car parts supplier, slashed its full-year sales forecast amid declining vehicle production in Europe, particularly in the electric vehicle sector. The company now anticipates a 4-6% drop in European car production, revising its revenue expectations to €40bn-€42.5bn. Additionally, Continental is contemplating spinning off its automotive division, which generates half of its sales. Cost-cutting measures, including job cuts, have been implemented to boost margins, which rose to 7% in Q2. This restructuring has been positively received by investors, increasing the share price by nearly 5%.

Lucid secures $1.5bn Saudi boost ahead of SUV debut

Lucid Motors has secured $1.5bn in funding from Saudi Arabia's Public Investment Fund (PIF) to support the launch of its new Gravity SUV and navigate a global demand slowdown. PIF, holding a 60% stake, will purchase $750mn in convertible stock and provide a $750mn loan facility. Lucid’s shares rose 7% post-announcement despite a 53% fall over the past year. The company delivered 2,394 vehicles in Q2, a 71% increase, but reported a widened net loss of $790mn. Founder Peter Rawlinson stresses the need for cost-cutting and increased sales, aiming to produce a more affordable model by 2026.

Chinese battery industry faces consolidation amid slowing EV sales

China's battery industry is experiencing major consolidation due to declining EV sales, fierce competition, and stricter regulations. In the first seven months of the year, 19 battery gigafactory projects were cancelled or postponed, reducing the anticipated 2030 capacity by 3%. Leading companies like CATL and 比亚迪 continue to expand, while smaller players struggle to survive. New regulations are forcing some manufacturers to halt projects, and many smaller companies are abandoning aggressive expansion plans. Despite the upheaval, top-tier manufacturers are expected to emerge stronger and increase investments both domestically and internationally.

MG Motor to build manufacturing plant and R&D centre in Mexico

MG Motor is set to establish a manufacturing plant and research and development centre in Mexico to gain market intelligence specific to Latin America. This initiative aligns MG with other EV makers like BYD and Tesla, though Tesla's plans are currently on hold. Owned by China's SAIC Motor Group, MG aims to make Mexico a growth hub for SAIC Group and MG in Latin America and the Caribbean. The investment details and timeline remain undisclosed. Additionally, MG's luxury EV sister brand, IM, plans to enter the Mexican market, despite the U.S. imposing steep tariffs on Chinese EVs.?

Uber returns to profitability, surpasses forecasts

Uber reported strong financial results despite concerns about a weakening US economy, with record-high trips and a 16% revenue increase to $10.7bn. Net income of $1bn surpassed expectations, driven by growth in ride-hailing and food delivery services. CEO Dara Khosrowshahi noted resilient consumer demand, with no signs of reduced spending. Uber’s shares rose 11% amid a broader market recovery, and the company continues to focus on growth through investments and potential acquisitions. Uber also highlighted its growing ads business and expanding markets, including grocery delivery and self-driving cars.