Float Baby Float
The election of Donald Trump has seen the US dollar rally and Bitcoin storm higher while US equities have traded sideways. Gold, European and Asian currencies have slipped while Asian equities have fallen sharply, led by China.
Trump’s proposed tax cuts and the threat of import tariffs (10% across the board and 60% for China) pose significant issues across the multiple export orientated Asian economies such as China, Korea and Taiwan. Expectations that the Federal Reserve will continue to cut rates persist but the prior ‘soft dollar, lower rates’ narrative, always a tailwind for Asian asset prices, is on hold at best.
China recently commissioned the world's largest offshore solar farm. Situated off the coast of Dongying City, the farm – all 3,000 acres of it - has the capacity to harvest one gigawatt which is sufficient to power approximately one million homes. This is the first large scale offshore solar farm globally. It will not be the last. According to Ember, an independent energy think tank, China is currently generating almost 600 terawatt hours of solar each year, more than twice that of the United States and some six times more than Japan or India.
China’s passenger vehicle (PV) sales hit 25.5mn last year – 65% larger than US PV sales, almost six times bigger than third placed Japan and nine times bigger than fourth placed Germany. As we have noted in previous dailies, EVs now account for the majority of PV sales in China. The ‘tipping point’ has been reached.
Now the Electrification of commercial vehicles is coming of age. General Motors’ Chinese joint venture with SAIC Motor and Wuling Motors has become the first maker of commercial vehicles to join Contemporary Amperex Technology’s (CATL) battery swapping alliance. The Wuling Yangguang, a minivan scheduled for market launch next year, will be the first commercial vehicle to use CATL’s Choco-SEB swappable battery. Battery swapping vehicles offer much shorter energy top-up times matching the needs of commercial vehicle owners.
CATL is also focused on battery swapping for ride-hailing services. In January 2022, CATL launched its battery swapping brand Evogo along with three related products, including Choco-SEB. In the past two years, seven companies, including passenger car producers GAC Aion and BAIC BluePark New Energy Vehicle Technology, as well as ride-hailing giant Didi Global, have teamed up with Evogo. CATL’s alliance is one of two ventures pushing battery swapping systems in China. New energy vehicle startup Nio leads the other which also has been joined by eight carmakers. To cut development and operating costs for battery-swappable vehicles and sustainably develop the swapping ecosystem, the two alliances are working hard to unify technology standards.
Which country – the United States or China – is making progress?
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