The world's coal addiction got a little worse
Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened, but why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.?
Check out the audio here:
And the video is here:?
In today’s episode, we look at 2 big stories:
Are people only buying SUVs?
Maruti Suzuki, a long-standing market leader in India’s passenger vehicle segment, continues to assert its dominance with a 40% market share, significantly ahead of Hyundai, which holds 14%. Their latest earnings report reveals a robust financial performance, showcasing a 10% year-on-year increase in revenue and a remarkable 47% rise in net profits.?
Source: Tijori
Notably, despite only a 5% growth in sales, profits surged ahead, indicating efficient cost management and perhaps higher margin product sales.
Source: Maruti Results
Source: Maruti Results
Like many in the automotive industry, Maruti Suzuki is also jumping on the EV bandwagon. They announced plans to launch their first EV in January 2025, with a goal to roll out six EV models by 2031. This move aligns with the global shift towards sustainable and eco-friendly transportation solutions.
Maruti Suzuki's strong performance and strategic initiatives underscore their commitment to maintaining market leadership and adapting to evolving consumer preferences. Their focus on expanding export markets, promoting CNG vehicles, and entering the EV space positions them well for future growth in a dynamic automotive landscape.
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The world's coal addiction got a little worse?
In 2023, the world will hit a peculiar milestone. We generated a record amount of electricity globally from coal, yet managed to reduce coal's share in the world's power mix from 35.7% to 35.4%. This reduction might seem minor in absolute terms, but it's a significant indicator that the world is starting to acknowledge climate change and is making moves to address it.
Today, I want to delve into this global shift from coal.
There are numerous reasons for the world's transition away from coal, but two key factors stand out:
Developed countries have made notable strides in reducing coal usage. In just one year, the US saw coal generation fall by 19%, and the EU experienced a 25% drop. This decline is largely attributed to the rise of renewable energy sources like wind and solar, improvements in energy efficiency, and other technological advancements.
However, the story is quite different in developing nations. In 2023, China, the world's largest coal consumer, increased its coal-fired generation by 5.9%. India, Vietnam, and Mexico also saw significant increases. The primary reason? Severe heatwaves and uneven monsoons, exacerbated by climate change, affected hydropower generation, a crucial part of these countries' energy mix. As a result, they had to substitute the lost hydropower with coal-generated electricity.
Under normal circumstances, the addition of clean energy in 2023 would have reduced fossil fuel generation. However, the shortfall in hydropower led to an increase in coal generation, causing a 1% rise in global power sector emissions. Notably, 95% of the rise in coal generation occurred in four countries severely impacted by droughts: China, India, Vietnam, and Mexico.
Source: IEA
Interestingly, despite being the largest consumer of coal, China is also a global leader in renewable energy deployment, from electric vehicles to solar power. India, too, has set ambitious targets for clean energy growth in the coming years, following China's example.
Source: Our World In Data
The main discussion isn't about whether countries like India and China can transition away from coal, but how quickly this can be achieved without compromising their development goals. Transitioning from a source that constitutes a third of the global energy mix is a monumental task, compounded by significant human and economic costs.
Most developing countries can't transition away from coal simply because they can't afford alternative energy sources. Even if they did, solar and wind alone can't meet all their energy needs. The only viable clean alternative is nuclear energy, which is expensive and has a controversial history due to incidents like Chernobyl and Fukushima. Financing remains the biggest challenge, as poor and developing countries lack access to affordable funding to go green.
Source: IEA
Despite these challenges, the benefits of moving away from coal are immense. Preventing millions of deaths caused by air pollution would not only save lives but also boost economic productivity through a healthier population.
Let's hope we can collectively get our act together and stop harming ourselves and our planet. The shift from coal is not just necessary; it's urgent. With the right support and global cooperation, we can make this transition a reality and secure a healthier, more sustainable future for all.
?Source: Our World In Data