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☆ Another Quarter, Another Change in EV Tax Credits
▼ + stars: | 2023-03-31 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Getting the full $7,500 tax credit on a new electric vehicle is about to become tougher. On Friday, the Treasury Department and Internal Revenue Service published the fine print for their new EV tax credits. Auto makers have been waiting for this to confirm whether their products will qualify. Unless they find ways to flex the rules, the upshot is likely to be a massive reduction in EV subsidies from April 18, when the new regime takes effect.

☆ Credit Suisse Has UBS Worried, Spurring Return of Sergio Ermotti
▼ + stars: | 2023-03-29 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

UBS is replacing its chief executive officer for the same reason that investors are still wary of its deal with Credit Suisse: Execution risk looms large. The Swiss bank said Wednesday that former CEO Sergio Ermotti would succeed incumbent Ralph Hamers next week to complete the takeover of Credit Suisse and lead the subsequent integration. Mr. Ermotti guided UBS through its crisis years following a rogue-trader scandal in 2011, cutting risk at the investment bank and refocusing the brand squarely on wealth management. Given that the Credit Suisse takeover will also involve downsizing a risk-happy investment bank, he is an obvious candidate for the job.

☆ Deutsche Bank and the Ghost of Crisis Past
▼ + stars: | 2023-03-24 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

The dynamic surrounding Deutsche Bank is different than Credit Suisse, but it is still perilous for the German company. Deutsche Bank resembles neither Credit Suisse nor Silicon Valley Bank. Yet it is still vulnerable. Shares in the German lender fell about 10% Friday in a sign that worries about European banks are spreading beyond Credit Suisse. Deutsche Bank could be in focus for the same reason that Credit Suisse was until its cut-price rescue by UBS last weekend: Investors are wondering who might be next.

☆ Did UBS Just Get the Deal of the Decade?
▼ + stars: | 2023-03-23 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Did UBS get the deal of the decade with Credit Suisse , or a decade of headaches? The investor debate is just getting started, but the answer to both questions might be yes. UBS certainly got a good price. Then there is the controversial write-off of Credit Suisse’s $17 billion in AT1 bonds. The lawsuits will come, but the decision was taken by the Swiss regulator rather than UBS, so the bank shouldn’t have to bear any costs.

☆ Credit Suisse’s ‘Bail-In’ Bonds Made an Easy Target for Politicians
▼ + stars: | 2023-03-22 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Switzerland’s decision to give priority to shareholders over some bondholders in its rescue of Credit Suisse is counterintuitive for finance folk. But it has a political logic and, in bank failures, politics matters. Financial markets have broadly welcomed the takeover of Credit Suisse by UBS arranged by Swiss authorities over the weekend. After an initial panic, European bank stocks rose on Monday, and they were up almost 4% on Tuesday in a further sign that the deal has calmed investor nerves.

☆ Credit Suisse’s Death Gives Birth to New Type of Bank Crisis
▼ + stars: | 2023-03-20 | by ( Stephen Wilmot | Telis Demos | ) www.wsj.com time to read: 1 min

With Credit Suisse , investors just got their first, messy view of what happens when a big global bank fails in the post-2008 era. UBS agreed to buy its local rival over the weekend in a historic deal brokered by Swiss regulators. Credit Suisse shareholders will get UBS shares that were worth the equivalent of about $3.25 billion before the market opened on Monday, and less after the acquirer’s stock fell about 5% on Monday morning. Credit Suisse had a market value of some $8 billion at the end of last week and a tangible book value of $45 billion.

☆ Panic Abates at Credit Suisse. Now Comes the Hard Part.
▼ + stars: | 2023-03-16 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Investors are worried generally and, if there is a big European bank to worry about, it is by default Credit Suisse. In the confidence game of banking, momentum matters more than the initial impulse. After a 24% fall in its stock Wednesday that wasn’t easy to explain, Credit Suisse tried to break a vicious spiral of worries through a deal with the Swiss central bank. It said early Thursday that it would “pre-emptively” strengthen its liquidity by borrowing up to 50 billion Swiss francs, equivalent to about $54 billion. The message was clear enough: Switzerland won’t let Credit Suisse run out of money.

☆ BMW and Volkswagen Are Spending Whatever It Takes to Rival Tesla
▼ + stars: | 2023-03-16 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

BMW wants 15% of the total number of vehicles it sells this year to be all-electric, compared with 9% last year. Making electric-vehicle investments pay off is a challenge for all auto makers, but it is easier if you can charge luxury prices. Bayerische Motoren Werke, better known as BMW , closed the financial reporting season for the German car industry Wednesday with a glitzy annual conference for press and investors. It had already disclosed a record profit for last year, but its outlook was new, including a target for 15% of its sales volumes to be from all-electric vehicles this year, up from about 9% in 2022.

☆ BMW and Volkswagen Are Spending Whatever it Takes To Rival Tesla
▼ + stars: | 2023-03-15 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

☆ Indiscriminate Banking Selloff Points to Bargains in Europe
▼ + stars: | 2023-03-14 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

As the dust settles on Silicon Valley Bank’s collapse, bargains will likely emerge. Europe’s lenders are a good place to look. The Stoxx Europe 600 bank index is down about 11% since Wednesday evening, when SVB announced a capital raise, triggering a bank run. European lenders fell some on Thursday and Friday, and more again on Monday before finding a more stable footing Tuesday.

☆ Critical-Mineral Diplomacy Needs to Focus on Supply, Not Demand
▼ + stars: | 2023-03-13 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Diplomacy has a role to play in creating non-Chinese supply chains for renewable energy—but not this kind of diplomacy. Politicians are talking a lot about critical minerals: metals, such as lithium and rare earths, that today are turned into valuable manufacturing inputs mainly in China, and that in the future will be needed in much greater quantities for things like electric vehicles and wind turbines. On Friday, the subject played a starring role in a meeting between U.S. President Joe Biden and European Commission President Ursula von der Leyen . This week, the European Union will launch a Critical Raw Materials Act to improve its green-energy security.

☆ Home Food Delivery’s Questionable Value, for Consumers and Investors
▼ + stars: | 2023-03-07 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Serving food with a side of technology was the perfect pandemic business model. Now old doubts are back with a vengeance: Just how many people will pay what it costs to have grub delivered to their door? HelloFresh shares fell 9% Tuesday after the meal-kit company said it was targeting revenue growth of anywhere between 2% and 10% this year, stripping out currency movements—a wide bracket but below most analysts’ forecasts at the midpoint. Its profit guidance also came in below expectations.

☆ Why Stock-Market Tourists Flock to New York
▼ + stars: | 2023-03-03 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Competition between European financial hubs may just hand more power to the U.S.SoftBank’s choice of New York for a listing of British microchip designer Arm has led to predictable hand-wringing about national decline in the U.K. capital. But this isn’t just about London. On Wednesday, when Bloomberg reported SoftBank’s latest plan, industrial-gas giant Linde also delisted its shares from the Frankfurt stock exchange. With a market value of $175 billion, the company was the most valuable company in Germany’s Dax index.

☆ No News Is Bad News at Tesla
▼ + stars: | 2023-03-02 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Tesla ’s investor day served up an example of an old Wall Street adage: Buy the rumor, sell the news. The event late Wednesday failed to live up to the frenzy of anticipation that preceded it. The company didn’t commit to any new numbers or dates, as other companies typically do on investor days. That wasn’t surprising: Tesla isn’t one for medium-term targets or doing the usual corporate thing. What was disappointing is that it didn’t offer much else to fill the void.

☆ Rivian’s $6.4 Billion Cash Burn Might Be a Tech Record
▼ + stars: | 2023-03-01 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Rivian electric trucks don’t burn gas, but they sure do burn cash. The company’s stock could increasingly become a bet on the funding environment. Free cash flow for 2022 ended up at a negative $6.4 billion, according to results posted late Tuesday, as Rivian lost money on each car it sold whilst also investing for the future. Airlines consumed more in pandemic-afflicted 2020, but among tech disrupters throwing new money at old markets this might be a record: Netflix ’s free cash flow bottomed out at minus $3.1 billion in 2019, Uber ’s at $4.8 billion the same year.

☆ Rivian’s $6.4 Billion Cash Burn Might Be a Record for Startups
▼ + stars: | 2023-03-01 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Rivian electric trucks don’t burn gas, but they sure do burn cash. Free cash flow for 2022 ended up at a negative $6.4 billion, according to results posted late Tuesday, as Rivian lost money on each car it sold while also investing for the future. Airlines consumed more in pandemic-afflicted 2020, but among tech disrupters throwing new money at old markets this is a number with few peers. Netflix ’s free cash flow bottomed out at minus $3.1 billion in 2019, Uber’s at $4.8 billion the same year. Amazon , Rivian’s largest shareholder and customer, has posted bigger outflows for the past two years, but only because of outsized investments.

☆ Move Over EVs, Hybrids Are Hot in China
▼ + stars: | 2023-02-27 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

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☆ EV Startups Have a New Bottleneck: Demand
▼ + stars: | 2023-02-23 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Lucid expects production of 10,000 to 14,000 vehicles this year. Last year American electric-vehicle startups were tripped up by production challenges. This year the problem could be demand. Late on Wednesday, Lucid Group kicked off the reporting season for the various U.S. EV ventures that went public during the pandemic. The company made an operating loss of $2.6 billion on revenues of just $608 million last year, but that was to be expected as it ramps up output.

☆ Wondering Whether to Buy GM or Ford Stock? Try Stellantis.
▼ + stars: | 2023-02-22 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Stellantis’s brands at the Chicago Auto Show earlier this month. The largest U.S. auto maker by profit is the one that investors often treat as Detroit’s third wheel: Chrysler. The North American arm of automotive group Stellantis , which is roughly equivalent to the old Chrysler business with brands such as RAM, Jeep and Dodge, generated adjusted operating income of roughly 14 billion euros last year, equivalent to $14.9 billion at today’s exchange rate. The comparable numbers for General Motors and Ford were $13 billion and $9.2 billion, respectively. Tesla doesn’t split its business geographically, but made $13.7 billion in operating profit globally.

☆ Russia’s Bear Hug Fades, but Europe Faces Rate Squeeze
▼ + stars: | 2023-02-21 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

A pedestrian looks out over the La Defense business district in Paris, France. Energy and growth worries appear to be receding in Europe. While war continues to rage in Ukraine, its imprint on Europe’s biggest economies and stocks is fading. Purchasing manager indexes—a closely watched early measure of economic activity based on surveys—are looking surprisingly strong in the region. For the U.K., the latest reading was 53, up from 48.5.

☆ For Mining EV Metals, the Arctic Is Hot
▼ + stars: | 2023-02-13 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Most iron ore mined in the EU comes from a site near the Arctic town of Kiruna. The rush to secure green-energy metals is bringing new life to one of the world’s oldest mining hubs. Like the U.S., Europe is worried that it is too reliant on China for supplies of once-obscure natural resources, such as lithium and rare-earth metals, that are seen as climate-friendly successors to oil and gas. The European Union is due to announce policies to improve its green-energy security in a “critical raw materials act” next month. Self-sufficiency targets are among the options being discussed.

☆ Nissan, Renault and Mitsubishi Must Make Their New Alliance Pay
▼ + stars: | 2023-02-06 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Consumers like driving big cars, but they also like the speed and agility of a low-slung sports car. It isn’t easy to strike the right balance. The same tension exists in the alliance between French car maker Renault and its Japanese peers Nissan and Mitsubishi . As the automotive industry goes electric and digital, car makers need to move faster than before. At the same time, Tesla ‘s model of manufacturing a few products in high volumes for global markets also has underlined the continuing value of scale.

☆ Ford’s Profit Engine Needs a Full Overhaul
▼ + stars: | 2023-02-03 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Ford has struggled to get parts to come together at the right time to make vehicles roll smoothly off its production lines. Ford Motor has a cost problem—and that is before it starts selling many cut-price Mustang Mach-Es. Investors should brace for falls in Ford’s stock Friday. Before hours it was down almost 8%, following results late Thursday that fell short of its guidance. Adjusted operating profit ended up at $10.4 billion for the year, whereas the company in October said it would make about $11.5 billion.

☆ GM Drains the Dregs of the Pandemic Boom
▼ + stars: | 2023-02-01 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

General Motors ’ annual results show a business on the cusp of radical change and uncertainty: It is churning out profit by selling an old technology while investing more than ever in a new one—and cutting costs just in case. On Tuesday, the largest U.S. auto maker by sales announced unexpectedly strong fourth-quarter revenues that kept full-year profit at around the record pandemic-era level achieved in 2021. Improving chip supplies meant GM sold about 25% more vehicles than in 2021, and inflation in its costs was almost entirely offset by higher selling prices. The resulting bonanza compensated for deteriorating profit from the company’s financing arm, where falling used-vehicle prices and rising provisions for loan losses are headwinds.

☆ Nissan and Renault Fix One Problem, Leave Others
▼ + stars: | 2023-01-30 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

A new era for the unhappy marriage of Nissan and Renault brings hope but also complications. On Monday, the two auto makers announced a shake-up of the cross-shareholdings that underpin their beleaguered global alliance. Renault will transfer most of its stake in its Japanese peer to a trust for eventual sale, where it won’t carry voting rights. The companies will then have 15% effective stakes and 15% voting rights in each other, redressing an imbalance that has upset Nissan for years and held back cooperation since unifying former boss Carlos Ghosn was arrested in 2018.

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