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EV demand wanes amid high rates, material costs

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Despite electric vehicle (EV) sales continuing to grow, there are mounting concerns about slowing demand for electric vehicles.

High-interest rates have thrown a wrench into the ambitious plans of climate regulators and automakers to accelerate the transition to electric vehicles. This concern was underscored on Wednesday by the abrupt termination of a GM-Honda partnership and a warning issued by a battery manufacturer.

Electric vehicle sales are still on the rise, but they are failing to keep up with the expectations of car manufacturers and other companies that have poured billions of dollars into the EV sector. The anticipation of persistently high-interest rates has led companies to rethink their strategies as they cautiously approach the year 2024.

Lee Chang-sil, the Chief Financial Officer at South Korean battery maker LG Energy Solution (373220.KS), expressed concerns on Wednesday, stating that EV demand for the upcoming year may fall short of expectations due to global economic uncertainties.

Lower cost EV

On the same day, Honda (7267.T) and General Motors (GM.N) announced the abandonment of their $5 billion joint venture aimed at developing lower-cost EVs, just one year after the initiative was revealed. GM also stated that it would focus its short-term EV efforts on meeting demand rather than pursuing specific volume targets.

GM CEO Mary Barra told analysts, “We’re taking immediate steps to enhance the profitability of our EV portfolio and adjust to slowing near-term growth.”

Investors have reacted to this shift in the outlook. Over the past three months, the iShares Self-Driving EV and Tech exchange-traded fund has witnessed a more than 24% decline, significantly greater than the 8.3% drop seen in the MSCI All-World Index (.MIWD00000PUS), a representation of global equities.

Despite the concerns, EV sales are still growing. In the third quarter, EV sales surpassed 300,000 units in the United States for the first time, according to a Cox Automotive report. In September, they rose by 14.3% in the European Union and 22% in China, the world’s largest EV market.

Elon Musk, CEO of Tesla (TSLA.O), raised concerns last week regarding the impact of the high-interest rate environment on car purchases. During Tesla’s earnings conference call, Musk stated, “I am worried about the high interest rate environment that we’re in. The vast majority of people buying a car consider the monthly payment. If interest rates remain high or increase further, it becomes that much harder for people to buy a car.”

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Big tech caught in political drama

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Nine Google employees were escorted out of company offices in New York and Sunnyvale, California, following a sit-in protest against a cloud contract with Israel’s government.

The protest in Sunnyvale targeted Thomas Kurian’s office, CEO of Google’s cloud division, while in New York, it occupied a common area on the tenth floor.

Videos showed Google security staff and local police involved in the removal. Four workers in New York and five in Sunnyvale were reportedly detained, but details of any charges remain unverified.

 

The protest aimed to pressure Google to drop a $1.2 billion cloud computing contract known as Project Nimbus, citing concerns about its involvement with the Israel Defense Forces.

The protesters included software engineers and activists from groups opposing tech contracts with Israel. This incident reflects ongoing activism within tech companies regarding political issues, such as Israel’s actions in Gaza.

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Antitrust concerns arise for streaming sports venture

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U.S. lawmakers Jerry Nadler and Joaquin Castro expressed competition concerns regarding the planned sports streaming joint venture involving Walt Disney, Fox, and Warner Bros Discovery.

They addressed these concerns in a letter to the CEOs of the media companies, questioning the impact on access, competition, and choice in the sports streaming market.

Voicing apprehension about potential consumer price hikes and unfair licensing terms for sports leagues and distributors, they requested responses by April 30, urging the companies to also send their replies to the Department of Justice.

Despite the companies’ announcement in February of launching a joint sports streaming service in the autumn to attract younger viewers, the deal faces DOJ scrutiny and an antitrust lawsuit from FuboTV. While Disney and Warner Bros remained silent on the matter, Fox declined to comment.

The joint venture encompasses a broad range of professional and collegiate sports rights, including NFL, NBA, MLB, FIFA World Cup, and college competitions, offering non-exclusive access to sports networks such as ESPN, Fox Sports 1, and TNT via a new streaming app.

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Trump trial: will the jury selection impact the trial’s outcome?

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The Trump hush money trial has progressed with the selection of the first seven jurors, marking a significant step in the legal proceedings.

  • Seven jurors were selected

  • Defense and prosecution lawyers questioned potential jurors for impartiality

  • The judge warned lawyers he would not tolerate disruptions after he said Former US President Donald Trump audibly muttered during a prospective juror’s questioning

The selection of jurors is a crucial step in ensuring a fair trial, as they will ultimately decide Formers US President Donald Trump’s fate in this legal battle, as reported by Reuters.

The process of jury selection involves careful vetting of potential jurors to ensure impartiality and fairness.

Each juror’s background, beliefs, and potential biases are scrutinised to ensure they can render an impartial verdict based solely on the evidence presented in court.

With seven jurors already chosen, the selection process is expected to continue as both the prosecution and defence seek individuals who can objectively weigh the evidence.

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