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Tesla will have zero sales in China by 2030: analyst – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla (TSLA) may not have much of a future in the world’s largest electric vehicle market, if one analyst’s predictions pan out. Morgan Stanley’s (MS) Adam Jonas says that CEO Elon Musk’s high-tech automotive company will likely see sales in China plummet to zero by 2030.” data-reactid=”16″>Tesla (TSLA) may not have much of a future in the world’s largest electric vehicle market, if one analyst’s predictions pan out. Morgan Stanley’s (MS) Adam Jonas says that CEO Elon Musk’s high-tech automotive company will likely see sales in China plummet to zero by 2030.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“We have China sales peaking [in the] middle of the decade and then going down…and then eventually nothing after 2030,” Jonas told Yahoo Finance’s “On the Move” this week.” data-reactid=”17″>“We have China sales peaking [in the] middle of the decade and then going down…and then eventually nothing after 2030,” Jonas told Yahoo Finance’s “On the Move” this week.

China has become an important market for Tesla, since Musk worked with the country’s government to build out the firm’s Shanghai Gigafactory. The country has the fastest growing EV market in the world, but saw sales dip last year as Beijing began to phase out government subsidies for alternative energy vehicles with the expectation of ending them in 2020.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla, which doubled its sales in China in the first half of 2020, controls 21% of that country’s EV market, Nikkei Asia reported in August, citing Chinese research firm Ways. That was up from 6% the year prior. But it also comes as Chinese EV sales tumbled by roughly half, according to the report.” data-reactid=”32″>Tesla, which doubled its sales in China in the first half of 2020, controls 21% of that country’s EV market, Nikkei Asia reported in August, citing Chinese research firm Ways. That was up from 6% the year prior. But it also comes as Chinese EV sales tumbled by roughly half, according to the report.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In March, the country extended those subsidies, and in April decided that the subsidies would run until 2022 in an effort to prop up sales of EVs and reach a self-imposed goal of alternative energy vehicles accounting for a fifth of all vehicles sales by 2025.” data-reactid=”33″>In March, the country extended those subsidies, and in April decided that the subsidies would run until 2022 in an effort to prop up sales of EVs and reach a self-imposed goal of alternative energy vehicles accounting for a fifth of all vehicles sales by 2025.

So why then does Jonas believe Tesla’s sales in China will fall off a cliff by 2030? It all has to do with the company’s hopes for autonomous vehicle systems and the impact of the ongoing trade war between the U.S. and China.

A man wearing a face mask following the coronavirus disease (COVID-19) outbreak walks by Tesla Model 3 sedans and Tesla Model X sport utility vehicle at a new Tesla showroom in Shanghai, China May 8, 2020. Picture taken May 8, 2020. REUTERS/Yilei SunA man wearing a face mask following the coronavirus disease (COVID-19) outbreak walks by Tesla Model 3 sedans and Tesla Model X sport utility vehicle at a new Tesla showroom in Shanghai, China May 8, 2020. Picture taken May 8, 2020. REUTERS/Yilei Sun
A man wearing a face mask following the coronavirus disease (COVID-19) outbreak walks by Tesla Model 3 sedans and Tesla Model X sport utility vehicle at a new Tesla showroom in Shanghai, China May 8, 2020. (Image: Reuters Yilei Sun)

With data privacy and security between U.S. and Chinese tech companies top of mind, Jonas said, it’s unlikely the U.S. would allow a network of Chinese-made autonomous vehicles to drive around any major U.S. city in the future. Naturally, the flip side would also be true.

“Can you imagine a Chinese internet of cars autonomous network operating in the streets of Boston in 10 years? Of course not. Wake up. It’s not happening,” he said.

“And so this idea that the Chinese aren’t allowed to use AI network machine learning data privacy networks from the state, but it’s okay for us to do [it] there, is just a fallacy in our opinion,” Jonas added.

While Jonas noted that Tesla might be able to own a stake in an EV Chinese entity, he said that there are still too many unknowns when it comes to how much Chinese and U.S. companies will be allowed to interface with each others’ countries in the future.

Tesla’s stock has been on a tear in 2020, with retail investors largely seen as a major catalyst for its rise from $93.81 at the start of the year to $448.16 as of the close of markets on Oct. 1.

Recently, the company hosted its annual Battery Day event, where Musk announced plans for a new vehicle with a starting price of $25,000 that will be available in three years, something he’s promised in the past. That would be a significant price drop from the current Model 3, which starts at $37,990 before incentives. The company also discussed plans to mine its own lithium.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Got a tip? Email Daniel Howley at&nbsp;dhowley@yahoofinance.com&nbsp;over via encrypted mail at&nbsp;danielphowley@protonmail.com, and follow him on Twitter at&nbsp;@DanielHowley.” data-reactid=”52″>Got a tip? Email Daniel Howley at dhowley@yahoofinance.com over via encrypted mail at danielphowley@protonmail.com, and follow him on Twitter at @DanielHowley.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="More from Dan:” data-reactid=”53″>More from Dan:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on&nbsp;Twitter,&nbsp;Facebook,&nbsp;Instagram,&nbsp;Flipboard,&nbsp;SmartNews,&nbsp;LinkedIn,&nbsp;YouTube, and&nbsp;reddit.” data-reactid=”59″>Follow Yahoo Finance on TwitterFacebookInstagramFlipboardSmartNewsLinkedIn, YouTube, and reddit.

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Coronavirus: Alberta's top doctor says "we have a challenge" as 1440 cases confirmed over weekend – Global News

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  1. Coronavirus: Alberta’s top doctor says “we have a challenge” as 1440 cases confirmed over weekend  Global News
  2. Single-day case count breaks 500  Edmonton Journal
  3. 15-person limit on social gatherings in Calgary and Edmonton  CTV Toronto
  4. Alberta imposes new social gathering restrictions after setting daily record for COVID-19 cases  CBC.ca
  5. New mandatory limits to social gatherings in Calgary; 1,440 new cases over weekend  Calgary Herald
  6. View Full coverage on Google News



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Cenovus Energy shares plummet on news of its $3.8B deal to buy Husky Energy

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The all-share deal by Cenovus Energy Inc. to buy Husky Energy Inc. for about $3.8 billion will likely spark more mega-mergers among Canadian oil and gas majors, according to a veteran oilsands analyst.

“This is likely just the start of big deals in Canadian energy land and thus it begs the question of who is next?” said analyst Phil Skolnick of Eight Capital in a report on Monday.

“As seen in the U.S. with the accelerated M&A activity, when there’s one meaningful transaction, there’s likely more to come.”

Several industry observers point to Calgary-based oilsands producer MEG Energy Inc. as the leading potential target, noting Husky’s failed $3.3-billion hostile takeover attempt of its smaller rival two years ago.

In his report, Skolnick presents scenarios where Canadian Natural Resources Ltd. (sometimes referred to by its stock ticker, CNQ) or Imperial Oil Ltd. buy MEG, while also outlining the numbers involved if Canadian Natural combined with Imperial or Suncor Energy Inc., and if Suncor were to merge with Imperial.

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“Some (scenarios) have been asked about before and I was just bringing up some new ones _ like a CNQ and Suncor merger is not something I’ve heard out there, but nor was Cenovus-Husky,” he said in an interview.

“I’m not going to give zero chance to anything anymore.”

Analysts generally applauded the surprise Cenovus-Husky hookup announced Sunday for its operational advantages but criticized the plus-20-per-cent premium in the price for Husky.

“The deal does makes strategic sense,” said Manav Gupta of Credit Suisse in a note to investors.

“Like U.S. E&P (exploration and production companies), Canadian energy companies also need to come together, cut costs and become leaner to better adapt to lower energy demand in post pandemic world.”

He said Cenovus’s reputation as an efficient operator in its steam-driven oilsands projects will help Husky overcome its struggles with operational issues, including higher operating and administrative costs.

The companies have identified $1.2 billion in potential annual cost savings which will include workforce reductions.

 

But Gupta added the premium is “excessive” and joined other observers in predicting Cenovus shares would trade lower, as they did, falling by as much as 15 per cent to $4.15 in Monday trading in Toronto before closing down 8.4 per cent at $4.47.

Husky, meanwhile, gained as much as 14.2 per cent to $3.62 before closing up 12 per cent at $3.55 .

Husky shareholders are to receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share if the deal is concluded.

Cenovus shareholders would own about 61 per cent of the combined company and Husky shareholders about 39 per cent.

The transaction must be approved by at least two-thirds of Husky’s shareholders but Hong Kong billionaire Li Ka-Shing controls 70 per cent of Husky’s shares and has agreed to vote them in favour of the deal.

The announcement Sunday came just as Calgary’s oilsands companies are about to start rolling out third-quarter financial results, with Suncor Energy Inc. set to report Wednesday and both Cenovus and Husky scheduled to report on Thursday.

© 2020 The Canadian Press

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Ant Group raises $34.4 billion in the biggest IPO of all time – CNBC Television

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  1. Ant Group raises $34.4 billion in the biggest IPO of all time  CNBC Television
  2. Ant Group set to surpass Aramco as biggest-ever IPO  Aljazeera.com
  3. Chinese fintech could shatter records with US$35B share offer  CTV News
  4. Jack Ma Wealth Surges Above Walmart Heirs’ With Record Ant IPO  BNN
  5. Behold the Mighty Ant  The Wall Street Journal
  6. View Full coverage on Google News



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