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Electric vehicle options grow, but automakers still unclear if Canadians will buy them – Global News

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Automakers are rolling out some big additions to the electric vehicle landscape this year as the market evolves, but it’s still not clear how much Canadians will be convinced to buy them.

Selection is certainly increasing. At the Canadian International AutoShow in Toronto that wraps up this weekend, automakers were showing off more than 40 hybrid and fully-electric plug-in vehicles, while McKinsey & Co. figures around 400 fully electric models will hit the market globally by 2025, including 113 this year alone.

But analysts say that government policies are crucial to actually push companies to sell those models, since automakers otherwise don’t have enough incentive to move away from internal combustion engine vehicles.

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“I think the real, key problem for them,” said James Carter, principal consultant at Toronto-based Vision Mobility, “is really because they make so much money off ICE trucks, pickups, SUVs right now, that basically, the question that they’re having to ask themselves is ‘how the hell do we get off this drug?”’

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He notes that some companies have been reluctant to move to electrification, while others such as Hyundai and Kia have rolled out popular models but are not producing enough to meet demand, because profitability is a challenge for electric vehicles.

Companies risk losing ground on new technologies if they don’t move fast enough, but also need to make enough profit to make billions of dollars of investment worthwhile, said Carter.

Ford Motor Co. is one of several companies that have made big promises about moving to electric. At the Toronto show they were showing off their all-electric Mustang Mach-E with a towering display and stadium seating for visitors to watch the SUV roll silently on stage. Despite the marketing, it’s still not clear how many will be available for Canadians when they roll out near the end of the year.






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Why people don’t buy electric cars…yet


Why people don’t buy electric cars…yet

The company is hoping the SUV, with upwards of 500 kilometres of range, can win over buyers looking for more space but not willing to giving up performance.

“They don’t want to lose anything in terms of fun to drive, thrilling performance, acceleration, so we do see there is a real appeal to that consumer,” said Ford Canada president Dean Stoneley.

General Motors Co., meanwhile, plans to revive its Hummer brand this year with an electric model, as part of its commitment to move heavily into the space with “no-compromise” vehicles that provide the range and space consumers want, while pushing hard on achieving cost parity between electric and gas vehicles.

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If companies can bring those costs down, and more charging infrastructure is built, Canadians seem to be interested in buying. Vision Mobility partnered on a poll of 1,200 Canadians that showed 56 per cent were either interested or very interested in full-electric vehicles, and 62 per cent on hybrids.


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But demand is heavily influenced by policy. A recent EY report estimated that if all the incentives such as rebates, charging network investments, and emission regulations were removed, then plug-ins might see little market growth from the current roughly three per cent of sales by 2030, while policies could boost it to 30 per cent of new sales.

The International Energy Agency put out a similar estimate for Canadian plug-in sales by the end of the decade based on current policies, while noting that fewer initiatives in the U.S. means electric sales there will likely make up only eight per cent by 2030.

“Policies play a crucial role,” said the IEA in its global electric vehicle outlook last year.

Policies in Canada include rebates from the federal, B.C. and Quebec governments, with the two provinces also mandating that portions of sales in their provinces be plug-in vehicles. The federal government has also set a goal of selling only electric cars by 2040 (though not mandated into law), and is also helping to fund charging infrastructure.

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Drivers urged to shift gears as Canada lags in electric vehicle sales


Drivers urged to shift gears as Canada lags in electric vehicle sales

But some automakers question the fixation on electrification, arguing that total emission reductions should be the goal and that the shift to electric should be gradual because the costs are so significant.

“We’re not rushing to fully electric,” said Jean Marc Leclerc, senior vice-president of sales and marketing at Honda Canada. “The jump to full electric is going to put a tremendous amount of strain, it already is, on the industry.”

Honda has one of the lowest fleet emission profiles among major automakers, which has made it easier for the company to support California’s stricter emission standards.

Ford has also indicated it will fall in line with the tighter standards while Toyota, General Motors and Fiat Chrysler Automobiles have sided with U.S. President Donald Trump’s efforts to loosen emission regulations in the debate. Canadian emissions standards typically follow U.S. regulations.


READ MORE:
Electric car incentives in Canada — what to know about the rebate that includes Tesla 3

Rather than push headlong into electric, Honda is instead making smaller shifts in marketing, including more clear reporting of carbon emissions for all of its models, so consumers can better see the impact.

The company might, however, change their marketing and sales strategy if they start to run up against emission standards that other automakers are already starting to hit.

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“Out of necessity to hit the policy quotas, you’re going to see maybe a push from a marketing perspective to pump the sale of these vehicles,” said Leclerc.

“When we have to sell them to hit a GHG target we may be pushing harder to say, OK, you want that hybrid.”

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India’s Adani Group loses $48bn in stocks over fraud claims

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Hindenburg Research claimed Adani Group had committed ‘brazen’ corporate fraud but Adani Group dismissed the report.

Shares of Asia’s richest man Gautam Adani’s business empire plunged, leading to losses of $48bn after a US investment firm claimed it had committed “brazen” corporate fraud.

Seven listed companies of the Adani conglomerate lost a combined $48bn in market capitalisation after Hindenburg Research flagged concerns in a January 24 report about debt levels and the use of tax havens.

Adani who was the world’s third-richest person at the start of the week is now ranked number seven on Forbes’ billionaires tracker after a $22.6bn hit to his fortune in Friday’s trade.

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Adani Enterprises, the group’s flagship company, plunged nearly 20 percent over the day’s trading in Mumbai, briefly triggering an automatic trading halt, before recovering slightly to close 18.52 percent lower.

Five other group companies hit their own stock exchange circuit breakers, with shares in Adani Total Gas, Adani Green Energy and Adani Transmission falling 20 percent apiece.

“Obviously, this is panic-selling,” JM Financials equity research chief Ashish Chaturmohta told AFP, adding that traders were creating new short-sell positions to protect earlier bullish bets on Adani stocks.

Hindenburg Research said in its report that Adani Group had used undisclosed related-party transactions and earnings manipulation to “maintain the appearance of financial health and solvency” of its listed business units.

Adani Group dismissed the report as baseless and that it was the victim of a “maliciously mischievous” reputational attack by Hindenburg.

Legal chief Jatin Jalundhwala said Adani was exploring considering taking legal action against the New York-based research advisory in US and Indian courts.

Hindenburg responded that Adani had ducked the issues its research had raised and instead resorted to “bluster and threats”.

“If Adani is serious, it should also file suit in the US,” the firm said in a statement. “We have a long list of documents we would demand in a legal discovery process.”

Adani, with a net worth of $96.6bn, is considered a close supporter of Prime Minister Narendra Modi. India’s main opposition Congress party has often accused Adani, and other billionaires, of getting favourable policy treatment from Modi’s administration, allegations the billionaire has denied.

The Adani Group was established in 1988, beginning with commodities trading. The conglomerate’s business interests now extend from ports and airports to mining and renewable power.

The report said a pattern of “government leniency towards the group” stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge the group’s conduct “for fear of reprisal”.

“The signal is that because the Adanis are very close to the powers that be today, therefore nobody would challenge them,” economist Arun Kumar told AFP.

“Those who earlier criticised Adani, those who tried to do some investigation, Adani’s launched big [legal] cases against them, so they have scared off a lot of people,” he added.

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Rapidly cooling housing market helps to quell Canadian inflation

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Housing costs, and Canada’s unique way of capturing them in inflation, suggest that consumer price gains may slow rapidly in coming months.

As the largest expense for most households, shelter makes up 30 per cent of Canada’s consumer price index — a similar proportion to the U.S. But unlike its southern neighbor, Canada’s inflation metrics capture these costs in a way that’s more sensitive to changes in interest rates and home prices.

That means Canadian inflation measures are influenced by both the rise in mortgage costs as the Bank of Canada aggressively raises rates and by the resulting slowdown in the housing market.

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While inflation was still 6.3 per cent in December, price pressures in Canada are expected to lose momentum thanks to base effects and continued cooling in the Canadian real estate market, which features shorter-duration mortgages than the U.S. and a higher share of variable-rate home loans.

Those differences are one reason economists say the Bank of Canada — which said this week it intends to pause its tightening campaign — won’t have to raise borrowing costs as high as the Federal Reserve.

“One way Canada actually stands out from a lot of other countries is that when the Bank of Canada raises interest rates, there’s a temporary boost to inflation because of this mortgage interest rate effect,” Stephen Brown, an economist at Capital Economics, said by phone.

CROSS-BORDER DIFFERENCES

The U.S. calculates housing inflation using owners’ equivalent rent, or the price a property owner would have to pay to rent to live there. Canada calculates it through a formula that includes mortgage interest, replacement cost, property taxes and maintenance.

Shelter has been a major driver of Canadian inflation in recent months, and was up 7 per cent in December. The mortgage interest and rent sub-indexes saw year-over-year jumps of 18 per cent and 5.8 per cent, respectively.

But with rates now on hold, Brown expects mortgage interest costs to peak before dropping sharply in the second half of this year. Other inflation inputs, such as commissions on home sales, are already easing.

His forecast is for increases in the shelter component of CPI to fall to 3.5 per cent by June and to 1.5 per cent by December. With energy, food and goods prices also expected to fall sharply, Brown said the Bank of Canada may be “underestimating how quickly overall inflation will decline.”

Macklem’s rapid interest-rate hikes, to 4.5 per cent from an emergency pandemic low of 0.25 per cent in March, have dramatically cooled the real estate market. Prices have fallen more than 13 per cent since their peak last year. Higher mortgage costs are also squeezing some of the world’s most indebted households, forcing them to tighten their purse strings.

“The bank might be feeling like they’ve done enough on housing, and that the effect is going to unravel over the coming months,” said Rishi Mishra, an analyst at Futures First Canada Inc. “They don’t want to press down too hard, just because how large the exposure is to housing market in Canada.”

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Stock market news live updates: Stocks rally, Intel craters, as inflation data cools

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U.S. stocks rallied on Friday, after slipping earlier at the open, as investors weigh in on fresh economic data including consumer spending data, a closely watched measure by the Federal Reserve.

The S&P 500 (^GSPC) added 0.2%, while the Dow Jones Industrial Average (^DJI) ticked up 0.08%. The technology-heavy Nasdaq Composite (^IXIC) was up roughly 1%, closing out its best week since November.

The biggest mover on Friday were shares of Intel (INTC), which fell as much as 10% on Friday after the company’s bleak outlook disappointed.

Intel reported a quarterly earnings miss after the close Thursday, adjusted earnings per share coming in at $0.10 against the $0.19 expected by the Street. Revenue totaled $14.04 billion, below estimates for $14.5 billion.

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In the first quarter, Intel expects revenues to come in between $10.5-$11.5 billion, with losses totaling $0.80 per share. In delivering these results, CEO Pat Gelsinger cited “economic and market headwinds,” adding the company, “will continue to navigate the short-term challenges while striving to meet our long-term commitments.”

Elsewhere in markets, Tesla (TSLA) stock has become hot. The shares rose above 10% in Friday trading, eyeing its best week since May 10, 2013. The company’s latest earnings has prompted a boost for the shares. Separately, CEO Elon Musk is being investigated by US regulators in his role shaping the carmaker’s self-driving car claims, Bloomberg reported.

Lucid (LCID) stock surged Friday on reports that a Saudi Arabia’s Public Investment Fund could be planning a takeover and buying shares the EV maker doesn’t already own.

The yield on the benchmark 10-year U.S. Treasury note ticked up to 3.52% from 3.497% on Thursday. The dollar index was little changed. WTI crude oil sank 2% to trade at $79.41 a barrel.

U.S. core personal-consumption expenditures price index (PCE), excluding energy and food, rose 0.3% month-over-month, while the annual rate fell to a one-year low of 4.4% in December from 4.7% the prior month, in line with consensus forecasts.

Pending home sales increased 2.5% in December, ending a sixth month slide, according to the National Association of Realtors.

Meanwhile, consumers remain optimistic. The consumer sentiment index rose to 64.9, a slight increase from 64.6 reading two weeks ago, according to preliminary results from the University of Michigan’s consumer survey. Economists surveyed were expecting a reading of 64.6.

Stocks rallied on Thursday as investors digested other data that showed the U.S. economy ended the year on a solid foot despite higher interest rates and recessionary fears looming.

Gross Domestic Product (GDP) — the sum of all goods and services – expanded at a 2.9% annual pace in the final quarter of 2022. For the full year, GDP grew 2.1%.

Durable-goods orders in December increased by 5.6% topping expectations for 2.4%, the sharpest gain since July 2020. Meanwhile, the resilience of the U.S. job market has been a major surprise. Initial jobless claims fell again to 187,000, the lowest level since April 2022.

“Markets deciphered a lot of mixed clues [on Thursday] and, after some cause for concerns, decided that it was easier to shrug it all off and drive equities to fresh 2023 highs,” Jim Reid and colleagues at Deutsche Bank wrote in an early morning note Friday morning. “Earnings also helped the mood, to be fair.”

Visa (V) shares were higher Friday after the company reported results late Thursday. Revenue increased to $7.94 billion compared to expectations of $7.69 billion. And adjusted earnings per share came in at $2.18 versus estimates of $2.00. The company announced that Ryan McInerney will be stepping in as chief executive officer starting February 1st.

Hasbro (HAS) also joined the wave of company layoffs announcing it will cut its workforce by 15 percent, or 1,000 employees, effective in the coming weeks. The move comes as the toymaker seeks to save around $250 million and $300 million annually by the end of 2025.

Also in stock moves, Chevron (CVX) shares were down after reporting fourth quarter profit of $6.4 billion, down from the $11.2 billion in the third quarter. Ahead of Friday’s report Chevron, announced it was hiking its dividend by 6% along with massive $75 billion share repurchase plan.

Shares of American Express (AXP) rose after the credit card company reported fourth quarter net income of $1.57 billion. On a per-share basis, it had a profit of $2.07. American Express expects full-year earnings to be $11 to $11.40 per share.

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