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Joe White
Global Autos Correspondent Greetings from the Motor City! When was the last time you gave any thought to the configuration of the nozzle on a gas pump? Right. Never. Unless you grabbed a diesel pump by mistake – which can happen.
Someday – and that day may be coming sooner than we expected – charging an electric vehicle will be just as easy as pumping gas. That may have seemed obvious. Tesla’s power to sway the North American market to its plug and charging standards might have seemed obvious, too, given the superiority of its Supercharger network.
But Tesla’s charging war win evidently caught some shortsellers by surprise. And that’s not all, folks. * Today - VW and Stellantis back a $1 billion copper SPAC - VW is sharpening the knives - Pressure drops on Chinese EV star Nio * Tesla bears get a charging shock
Speculators who bet against Tesla are down more than $6 billion as the electric vehicle maker’s share price has surged since it announced charging deals with Ford and GM, according to S3 Partners, which keeps score on these things.
Between last August and early January 2023, betting against Tesla looked like a smart idea. Indeed, Tesla is the No. 1 shorted stock in the world.
And why not? On paper, Tesla is a niche manufacturer under growing competitive pressure. Elon Musk was busy at Twitter and the narrative (including here) was that Tesla was becoming just like any other automaker, forced to cut prices to keep assembly lines rolling.
Tesla’s shares fell 67% between August 2022 and January 2023. Even a showy “Investor Day” did not help that much.
That was then. Since May 24, the day before Ford said it would adopt Tesla’s North American Charging Standard, Tesla shares have soared by roughly 35%. Tesla has added nearly four General Motors’ worth of value to its market cap as analysts declared Tesla had won the North American charging standard war.
Charging networks Blink and Chargepoint reinforced that narrative Monday, saying they will include Tesla NACS connectors on future charging stations.
As Breakingviews writes, Wall Street loves the charging deals for Tesla - and for the legacy automakers, despite the risks. Piper Sandler analyst Alexander Potter estimated revenue from non-Tesla owners using the Tesla Supercharger network could add $3 billion to Tesla’s 2030 revenue – nice, but not that much compared to the $700 billion in annual revenue PSC expects for Tesla within a decade.
The charging deals help Tesla in Washington, too.
The White House said on Friday that Tesla’s new alliances to open its charging network could qualify the company for subsidies meant to build out U.S EV charging. It was the first time the Biden Administration had explicitly connected Tesla to its $7.5 billion charging buildout plan. * Essential Reading - Ferrari triumphs at LeMans - China is cleaning up its grid - Aurora’s Chris Urmson keeps on robo-trucking * A $1 billion dollar copper deal
Glencore, Stellantis and Volkswagen will back a $1 billion deal by a blank check acquisition company to buy two copper mines in Brazil.
SPAC deals are rare in mining – and had fallen out of favor after a string of disappointing outcomes for deals struck during the SPAC boom of 2020-2021. Demand for metals and minerals essential to EVs and other green technologies is driving an investment and M&A boom in the mining sector. * Nio feels Tesla’s heat
Chinese luxury EV maker Nio cut prices on its models by as much as 9% and said it will end free battery swapping services, bowing to pressure from Tesla (and other rivals).
Nio’s retreat on pricing is the latest sign of the toll taken by the price war Tesla and BYD have escalated in the Chinese market. As Reuters colleagues Zoey Zhang and Brenda Goh report, Nio is one of 40 automakers duking it out in the Chinese EV market.
Nio shares are trading at a third of their level a year ago – despite the bounce they got after announcing the new pricing strategy.
Meanwhile, shares in EV maker Xpeng jumped 10% Monday after the company previewed strong orders for its G6 SUV (priced below the rival Tesla Model X) on its Weibo social media account. Xpeng said its current P7i model had a “substantial increase” in sales during May compared to the prior month. * Cost-cutting on the menu at Volkswagen
Volkswagen’s supervisory board will meet Tuesday to review a menu of cost-cutting measures aimed at taking 3 billion euros out of the budget across the group, sources confirmed.
VW CEO Oliver Blume is scheduled to lead a capital markets day meeting with investors on June 21. Rival automakers – Ford, GM, Stellantis – have already moved to cut staff and costs.
VW investors will likely want to know how the company intends to defend – or transform – its extensive operations in China, which are under pressure from Tesla’s price war and competition from domestic EV makers. VW faces pressure from Chinese EV makers on its home turf as well. * Fast Laps - Poland will fight the European Union’s proposal to ban new combustion vehicles from 2035. - Europe’s automakers warned they could lose 4.3 billion euros and 500,000 vehicles of production if Britain and the EU do not delay imposition of post-Brexit tariffs on EVs, the FT reported. An official of the ACEA, the European auto trade group, warned the Britain-EU tariff standoff risks handing sales (translated, jobs) to Chinese manufacturers. - Airbag maker Autoliv said it expects to hit its financial targets for the year, thanks to higher prices and savings from cutting 8,000 people from the payroll. - Ford said its retooled Cologne assembly plant will build up to 250,000 EVs annually for Europe and be the automaker’s first carbon neutral assembly plant. - Saudi Arabia will join Chinese EV maker Human Horizons in a $5.6 billion project to develop and manufacture electric vehicles. The Kingdom already has a substantial (and growing) investment in money-losing U.S. luxury EV maker Lucid.
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