New Year News, Dec 29 - Jan 7

UK launches zero emission vehicle mandate to propel green car future

The UK's Zero Emission Vehicle (ZEV) mandate took effect this week, setting ambitious targets for the production of new zero emission cars and vans. By 2030, 80% of new cars and 70% of new vans must be zero emission, increasing to 100% by 2035. Supported by over ￡2 billion in government funding, this initiative is designed to spur economic growth, aid manufacturers, and promote a cleaner environment. The mandate is expected to provide certainty to the charging sector, encouraging the growth of the UK's charging infrastructure, which currently boasts over 50,000 public charge points. Technology and Decarbonisation Minister Anthony Brown highlights the mandate's role in boosting the economy and supporting the automotive industry. David Hall of Schneider Electric UK&I emphasises the need for improved planning and integration of renewable energy sources to meet these ambitious goals and enhance grid flexibility.

Shares plunge on profit warning

Mobileye , a leading autonomous driving technology producer, experienced a significant drop in its share value, plunging over 25% in pre-market trading. The company, spun off from Intel and listed on Nasdaq in 2022, cited reduced orders due to carmakers cutting back in response to excessive inventory levels. Mobileye, established in 1999 in Israel, initially specialised in collision-avoidance technology and now focuses on fully autonomous driving. Major clients include Porsche and Volkswagen. Despite a current market capitalisation of $32 billion, Mobileye anticipates a lower revenue range of $1.83bn to $1.96bn for the year, falling short of the estimated $2.58bn. This reduction is attributed to customers using excess stock amassed during Covid-19 supply chain disruptions. The company also expects its operating loss to increase significantly, from an estimated loss of $33mn-$39mn in 2023 to between $378mn and $468mn.

BYD Surpasses Tesla in Electric Vehicle Sales in Q4 2023

In the final quarter of 2023, Chinese company 比亚迪 surpassed Tesla in electric vehicle (EV) sales, marking a significant milestone in the EV industry. BYD sold a record 526,000 battery-only vehicles, outpacing Tesla for the first time in a quarter. Tesla, led by Elon Musk, reported 484,500 EV deliveries in the same period and 1.8 million throughout 2023, slightly below its anticipated target of two million. BYD's success is attributed to its background in battery manufacturing, allowing it to reduce costs and offer competitive prices. This achievement by BYD highlights the intensifying competition in the EV market and the challenges Tesla faces in maintaining its leadership position.

Chery eyeing up factory in UK

Chery International , a leading Chinese carmaker, is considering establishing a factory in the UK as it prepares to launch its Omoda and JAECOO UK brands in 2024. The company aims to rival Hyundai and Kia in the British market, with plans for a local production facility to meet the growing demand. While exploring options for two European factories, one dedicated to the UK market, Chery is in preliminary discussions about this significant investment. This move, focusing on electric, petrol, and hybrid models, is seen as a potential boost for the UK automotive industry, especially following recent plant closures and investments by other carmakers.

Rome plans to boost the sale of EV that are 'made in Italy'

The Italian government plans to invest €930 million in 2024 to encourage the replacement of petrol and diesel cars with electric vehicles (EVs), particularly focusing on models made in Italy. Under this plan, low-income families can receive up to €13,750 for trading in old cars for new EVs. This initiative aims to promote Italian-made EVs, contrasting with 2022's scheme where 80% of funds went to foreign-made cars. Funded by an €8.7 billion automotive fund established by the previous government, the scheme offers varying incentives based on car age and type (hybrid or fully electric). Italy's car fleet is one of Europe's oldest and most polluting, with a slow EV adoption rate due to inadequate charging infrastructure. The government's collaboration with Stellantis , the primary car manufacturer in Italy, aims to increase domestic production and EV adoption.

Trumps threatens EV subsidies

Carmakers are concerned that potential changes to the Inflation Reduction Act (IRA) under a future Trump presidency could harm the growth of electric vehicle (EV) sales in the US. The IRA encourages EV manufacturing domestically by offering incentives for vehicles using parts from the US or its partners, a move to reduce reliance on Chinese technology. This legislation has triggered significant investments in the US auto and battery sectors. However, Trump's advisers have indicated plans to revise US policy, which could impact EV sales and foreign investments. Industry leaders like General Motors and Nissan have emphasized the IRA's crucial role in promoting EV sales and profitability. Despite the global rise in EV sales, growth is slowing in key markets, including the US and Europe, partly due to concerns over EV prices and charging inconveniences. Analysts and executives warn that reducing IRA incentives could increase investment risks and slow down the EV transition in the US.