|Day's range||362.65 - 362.70|
(Bloomberg Opinion) -- Tianqi Lithium Corp. had everything going for it: generous subsidies, Beijing’s blessing on the electric-vehicle industry it supplies, and the hype of Tesla Inc. getting its sedans off the production line in China. The only thing interrupting this nice fairy tale is the reality of demand and making money.Over the past few years, China has supported its electric-car industry by doling out large subsidies; giving preferential treatment to domestic companies; and providing large outlays for charging infrastructure. The sector has surged as a result. The kickoff of Tesla’s Model 3 in Shanghai last month sparked a fresh rally among producers of lithium – a key ingredient in batteries – and other suppliers.All this is excitement is bubbling away despite the cratering of the lithium market. After peaking more than a year and a half ago, prices have slumped over 50% and inventories have piled up. The glut, a problem China knows all too well, has weighed on producers.This reality is starting to settle in for Tianqi Lithum. Earlier this week, the company canceled its bondholder meeting as worries about repaying investors 318 million yuan ($46 million) in principal and interest loomed. Its bonds fell to just over 64 cents on the dollar from around 75 cents days earlier.While China reported its first monthly slump in electric-vehicle purchases in July, Tianqi Lithium was struggling before then. The world’s second-largest producer reported its first quarterly loss in almost six years years in September, following two quarters of declining net income.Like many fad-commodity producers before it, Tianqi Lithium is seeing the painful consequences of China’s supply and demand mismatch. The adoption of electric cars and progress on battery technology have both been slower than anticipated. Expectations were so far off the mark that despite lithium prices falling, analysts adjusted higher their estimates for the average selling price of batteries last year.Tianqi Lithium booked a 63% increase in government subsidies in the nine months to September as non-operating income from a year earlier. The government's supportive rhetoric also led the company to pile on debt as it sought stakes in Chile’s Sociedad Quimica y Minera de Chile SA and an Australian lithium mine. The company eventually financed its way to commanding a 16% share of global lithium production; but now its balance sheet looks bloated and questions about the company’s ability to refinance its debt – and at what cost – are becoming more pressing.For all the hopes pegged to its expansion and profitability, Tianqi Lithium didn’t have enough cash to cover the 3.1 billion yuan of short-term debt it owes as of September. The company has already tapped various channels of funding, from medium-term notes to an equity raising. When Moody’s Investors Service downgraded the company last month, it cited Tianqi Lithium’s inability to raise enough capital through its rights offering, saying it would have trouble deleveraging.Expectations for the electric-car industry are starting to recalibrate. With targeted subsidies shifting from cars to batteries and infrastructure, the bargaining power has moved from manufacturers of one to the other. The likes of Geely Automobile Holdings Ltd., BMW AG and Volkswagen AG are locking in long-term contracts and partnerships with battery makers, but these car giants are no longer calling the shots.Battery makers nevertheless face their share of challenges: They haven’t quite figured out how to advance technology safely, while bringing down prices and preserving margins. Any reduction in subsidies will pass through to suppliers as well. It may be time for a more realistic reassessment.Tianqi Lithium may be able to keep rolling over its debt, but that doesn’t change the fact that we’re still years away from widespread adoption of electric cars. A few thousand Teslas on the streets of China isn’t going to change that. EV suppliers may be better served keeping an eye on their balance sheets than Elon Musk’s production line.To contact the author of this story: Anjani Trivedi at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- As major players jostle for market share in large-scale power storage, American Electric Power and Nissan Motor Co. are testing new technology that re-uses old electric vehicle batteries to slash costs.The pilot study in Ohio will road test technology that could lower system costs by about a half and extend the life of lithium-ion batteries by about a third, according to its Australian developer.Costs of energy storage systems are falling globally on technology improvements, larger manufacturing volumes, increased competition between suppliers and as the sector adds more expertise, BloombergNEF said in an October report. That’s driving an expansion in investment in projects to store power, with as much as $5 billion worth of deals possible this year for systems paired with renewable energy, according to the forecaster.American Electric’s Ohio study is using expired Nissan Leaf car batteries and is intended to test the innovations at scale after laboratory work in Australia and Japan.Results so far appear promising, Ram Sastry, American Electric’s vice president, innovation and technology, said by phone. “It’s in a facility that we own, but connected to the real grid.” he said.The technology is developed by Melbourne-based Relectrify and uses old, or second-life, vehicle batteries and reduces the number of components needed, the company said Friday in a statement. That can reduce costs for key parts of typical industrial or grid storage systems to about $150 per kilowatt hour, it said.That compares with a current average price for similar technology using new batteries of $289 a kilowatt hour, according to the BloombergNEF 2019 Energy Storage System Costs Survey.Companies like BMW AG and Toyota Motor Corp. are already putting re-used cells to work in applications including renewable energy storage, electric vehicle charging, and to power street lights and homes. About three-quarters of vehicle batteries are eventually likely to be reused, according to London-based researcher Circular Energy Storage.Cheaper energy storage with batteries could provide an alternative to adding more capacity at electricity substations, or building more transformers. It could also be harnessed to provide backup power and bolster reliability for consumers, according to American Electric’s Sastry.“There are many use cases that we have for batteries that are predicated on the cost,” he said. “If the battery goes lower in cost, it can compete with the wires.”Yet even as the price of lithium-ion battery cells has fallen, it’s been difficult to reduce costs of components such inverters. “The inverter is the Achilles heel of energy storage,” said Bradley Smith, president of Covington, Louisiana-based Beauvoir Consulting Services and previously an executive developing second-life battery products at Nissan.Relectrify’s system reduces the need for separate electronics for both the inverter and battery management system, lowering costs, Smith said.The technology can also extend the lifespan of either reused or new batteries by offering more precise management of individual cells, according to Valentin Muenzel, CEO of Relectrify, a 14-person firm launched in 2015 that’s collaborated with companies including Volkswagen AG and International Business Machines Corp.Some potential end users remain wary of re-using lithium-ion batteries over concerns about their longevity and costs of re-purposing cells, according to BNEF’s head of clean power Logan Goldie-Scot.“Many customers are not yet comfortable with second-life batteries even at a steep discount,” he said. Tesla Inc. has in the past suggested it will favor recycling spent packs from vehicles to recover raw materials, rather than seek to re-use the cells first.Relectrify, which is holding talks with battery manufacturers and distributors, sees potential to eventually help improve performance of batteries for the auto sector, in addition to energy storage.“We see stationary storage as the low hanging fruit,” Muenzel said. “We’re already getting demand for use in some mobility applications and we expect that is an area that will continue to grow with time.”To contact the reporter on this story: David Stringer in Melbourne at email@example.comTo contact the editor responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Investors betting against Tesla Inc. are not backing down despite the impressive run in shares that has boosted the stock price more than 36% just this year.The stock’s rally has led many to speculate about a possible short squeeze, where the share price is driven up as short sellers rush to close their positions. But experts say there is no conclusive data that point to that.“Unfortunately there isn’t very much to go on in terms of tangible data,” IHS Markit’s Samuel Pierson said, discussing a potential rush in Tesla short covering.“I would think the impact of short covering is likely to be far less than long buying overall, just based on traded volume year to date,” Pierson said. However he added that it was possible short covering played a role in the recent rally.About 19.8% of Tesla’s free float is held short, according to data from S3 Partners. While the number has come down significantly from 36.4% in early June, it has not changed much since early December.Shares of the electric vehicle maker have risen 121% over the past three months, helped by a surprise third-quarter profit, strong deliveries for the fourth quarter and the opening of a new plant in Shanghai, China. The company is poised to report fourth-quarter results next week.S3 Partners’ Ihor Dusaniwsky said the latest rally was not “squeeze based,” noting that shares shorted have actually increased by 171,000 shares over the last week, or about 0.65%.“This is probably longer term shorts re-adjusting their positions and some new shorts jumping into the deep end of this rally hoping for a short term pull back if the Tesla bulls take a breather,” Dusaniwsky said.To contact the reporter on this story: Esha Dey in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Steven Fromm, Will DaleyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
U.S. antitrust officials have begun asking companies about communications with their biggest shareholders as part of merger investigations.
Seven U.S. bombs from World War Two have been found in the plot of land outside Berlin where electric car pioneer Tesla wants to build its first European factory, local authorities said on Thursday. The duds weigh about 50 kg each and explosives experts plan to defuse them in future, said a spokesman for the interior minister in the state of Brandenburg where the property is. Tesla has agreed to buy land in Gruenheide just outside Berlin where it wants to build a giant factory that would give its cars the "Made in Germany" branding.
While Ford's (F) Q4 results are likely to be hit by a pre-tax charge of $2.2 billion, Fiat Chrysler (FCAU) teams up with Foxconn to develop EVs in China.
(Bloomberg) -- Tesla Inc.’s legal victory to sell its electric vehicles in Michigan without dealers could clear a path for other carmakers to follow.As long as it complies with a few unrestrictive legal technicalities, the electric-car maker is free to deliver Model 3, S and X vehicles directly to customers and service them through a subsidiary, the state ruled Wednesday. While Michigan will consider other businesses’ approaches on a case-by-case basis, as long as a manufacturer doesn’t have an existing dealer network, it could follow in Tesla’s footsteps, according to Kelly Rossman-McKinney, a spokeswoman for the attorney general.That’s significant for electric-car upstarts including Rivian Automotive Inc., the truck and SUV maker that raised almost $3 billion last year from the likes of Amazon.com Inc. and Ford Motor Co. The Plymouth, Michigan-based company planning to start selling its R1T pickup and R1S sport utility vehicle late this year is waging the same costly legal battles state-by-state that Tesla faced in its early days.“Having settled on these terms with Tesla, it would seem legally very difficult for the state to deny a similar arrangement to any other company situated like Tesla,” Daniel Crane, a University of Michigan law professor who specializes in antitrust and regulatory issues, wrote in a blog post after the settlement was announced.Rivian declined to comment, as did the Michigan Automobile Dealers Association. Other new entrants planning to sell cars directly to consumers include Lucid Motors, which has said it aims to start production of its Air sedan late this year, and Byton Ltd., which is targeting 2021 for the launch of its M-Byte SUV.Federal FightTesla secured a victory in Michigan after filing a federal lawsuit against the state in 2016 challenging its ban on direct-to-consumer car sales. The attorney general’s office insists the accord doesn’t jeopardize existing state franchise laws, which prevent manufacturers from opening stores that would compete with dealers.Michigan ruled that sale contracts Tesla signs with Michigan consumers will have to indicate that the transaction took place elsewhere. But customers won’t actually have to leave the state to complete the contracts, so the stipulation amounts to a paperwork requirement.The decision isn’t a slam dunk for Tesla because Michigan’s ruling fell short of setting a national precedent, according to Patrick Anderson, principal of an eponymous consulting firm that has assisted dealers in other state battles over franchise laws.Easier ServiceExisting Tesla owners in the state, who until now have had to travel to Ohio and other states to have their cars repaired, are poised to benefit from the ruling.Robert Vogt, an automotive engineer living in Ann Arbor, said Tesla used to pick up his Model S and haul it more than 50 miles (80 kilometers) away to work on his car in Toledo and would drop off a loaner car for him. But that stopped last summer, when Model 3 deliveries surged and started taxing the company’s mobile-service support network.“I have a service light on mine that just popped up, and I’m trying to figure out how to get that dealt with, because I’m not going to Toledo,” Vogt said. “If they had a service place in Ann Arbor, that would be totally fine; I would be happy to take it there.”To contact the reporter on this story: Gabrielle Coppola in New York at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, David WelchFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Tesla's stock has more than doubled in value in the last three months, with its market capitalization piercing $100 billion on Wednesday, a first for a listed U.S. automaker. During the rally, its value has leapfrogged more established global rivals: Honda <7267.T>, BMW , General Motors and Daimler . On Wednesday, it eclipsed VW's $99.4 billion value.
Tesla's stock has more than doubled in value in the last three months, with its market capitalisation piercing $100 billion (£76 billion) on Wednesday, a first for a listed U.S. automaker. During the rally, its value has leapfrogged more established global rivals: Honda , BMW , General Motors and Daimler . On Wednesday, it eclipsed VW's $99.4 billion value.
Toyota (TM) to recall 2.9 million U.S. vehicles, which includes Corolla 2011-2019, Matrix 2011-2013, Avalon 2012-2018 and Avalon Hybrid vehicles 2013-2018.
(Bloomberg) -- Even after more than doubling his Tesla Inc. price target, UBS Group AG analyst Patrick Hummel still recommends that investors sell the electric-car maker.With the shares worth more than twice as much as they were at the beginning of October, UBS’s increased target of $410 is still 28% below the last closing price of $569.56.While Tesla has the potential to become the most profitable original equipment manufacturer (OEM), the positives are “taken for granted” at the current price, according to Hummel, who sees the company’s volumes doubling by 2022.Having the biggest long-term opportunity in autonomous vehicles, Tesla justifies a market value “well above” most incumbent OEMs, Hummel wrote in a note to restart coverage of the stock. Still, risks in execution and U.S. demand following the phase-out of electric vehicle tax credits seem to get ignored, he said.The shares have surged of late amid a surprise third-quarter profit and strong deliveries for the fourth quarter, while the company’s market capitalization topped $100 billion on Wednesday.Just this week, Tesla’s biggest bull predicted that the stock could reach a level as high as $960 by early 2021. The stock has nine buy ratings, 11 holds and 17 sells, with an average price target of about $370, according to Bloomberg consensus estimates.The shares fell 1.2% in U.S. pre-market trading, also weighed down by a downgrade to neutral from outperform at Exane BNP Paribas. Tesla is due to report quarterly earnings next Wednesday.(Updates with more analyst comments in fourth paragraph)To contact the reporters on this story: Kit Rees in London at email@example.com;Beth Mellor in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Celeste Perri at email@example.com, Paul JarvisFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A daily overview of the top business, market, and economic stories to watch in the UK, Europe, and abroad.
The fallout continues from the diesel emissions scandal for the German car giant, which has also been leapfrogged by Tesla as the world's second most valuable carmaker.
Planes and cars are the main topics today and EVs are a big deal no matter what Erique thinks. Airbus takes advantage of a limping Boeing and we get into the Battleground.
Technology shares led the S&P 500 marginally higher on Wednesday, as a healthy forecast from IBM helped mitigate worries over the developing coronavirus outbreak. The S&P 500 and the Nasdaq closed barely in the black after approaching, then backing down from record highs the day after virus fears prompted a sell-off. The Dow closed nominally lower.
Elon Musk on road to $50bn payout as Tesla's value passes $100bnUnder pay scheme, founder must build electric carmaker into $650bn company by 2028
Tech shares led all three major U.S. stock averages into the black, with the S&P 500 and the Nasdaq setting a course to notch new record closing highs, the day after virus fears prompted a sell-off. Streaming pioneer Neftlix Inc acknowledged stiffer competition in the United States, where quarterly growth fell short of analyst estimates.