Monday 22/04/24

1. In AUTOMOTIVE NEWS, we see that an EV glut could cause problems, Tesla has a tough time and Nissan cuts profit estimates
2. In AI NEWS, the US seeks an alliance with Abu Dhabi and commodities traders use AI to get an edge
3. In CONSUMER & REAL ESTATE NEWS, UK households cut spending the most and asking prices in the UK approach record highs
4. In MISCELLANEOUS NEWS, Chinese flying taxis take off and the Resolution Foundation says that higher interest rates could hold back the green energy transition
5. AND FINALLY, I show you what sort of apartment you could get in New York City for a mere $54.6m…

So EVs face tough times and Nissan cuts its annual profit estimates…

Don’t miss our next news roundup for April, it’ll be on Monday 29th April at 5pm with Jake Schogger of the Commercial Law Academy. HERE’S THE LINK TO REGISTER! See you there!

Did you know that there is a podcast to go with Watson’s Daily? In this podcast, I discuss two stories from the day’s edition in a bit more depth with a Watson’s Daily Ambassador, my mate Ralph (on the Weekly podcast) or a special guest. The idea of this is to help to give you more of an idea of what talking about this stuff could sound like 👍 You can find the podcasts on the buttons below:

Electric car glut could tip manufacturers into crisis (The Times, Robert Lea) is an interesting article which suggests that a combination of huge global overproduction of EVs and weakening consumer demand will lead to millions of zero-emission vehicles gathering dust over the next two years and prompt price wars. Research from New Automotive, a transport research group, shows that even recently reduced expectations for production are still 50% ahead of consumer demand and the oversupply of battery electric cars is set to get worse over the next couple of years. * SO WHAT? * This is great for consumers but some parts of the automotive industry could be crushed – particularly Western automotive manufacturers who can’t make EVs as cheaply or in as many numbers as their Chinese counterparts. It seems to me that things are getting so bad that lawmakers will need to backtrack on their guidance for the “road to electrification” because continued weak demand from consumers will mean that automakers just won’t have a fighting chance of hitting the required sales targets – particularly with the advent of Chinese competition.

Tesla’s nightmare continues in Tesla to Recall 3,878 Cybertrucks Due to Accelerator Pedal Problem (Wall Street Journal, Steven Russolillo and Alyssa Lukpat) which shows that the company is undertaking a voluntary recall to repair or replace faulty accelerator pedals at a time where it could definitely do with some

good news. Without the replacement/repairs, it is thought that the accelerator pad could dislodge and get trapped, causing the vehicle to accelerate without warning and heighten the likelihood of a crash! This probably explains why delivery dates for Cybertrucks were getting delayed…meanwhile, Tesla shareholders braced for worst results in 7 years (Financial Times, Peter Campbell, Harriet Agnew, Arjun Neil Alim and Stephen Morris) shows that shareholders are preparing for a poor performance in Tesla’s upcoming quarterly results this week thanks to the cumulative effects of slowing demand and an ongoing price war. There is also growing speculation that Tesla might be going in a new direction (concentrating on self-driving “robotaxis”) that will delay plans for a cheaper “Model 2” $25,000 electric car. He’s not actually confirmed this yet but he did say last week that a Tesla robotaxi would launch on August 8th. If so, this could lead to Tesla being less of a large-scale manufacturer and more of a smaller provider of autonomous technology. * SO WHAT? * This will be controversial opinion no doubt, but I actually think that if Tesla DID actually become more of a small provider of autonomous tech, I think that would be a GOOD thing because although driverless has pretty much died a death recently with the nightmare that Waymo and Cruise have been having, I still think that driverless is great as a concept because it could give so many people more freedom in their lives. I’m not talking about people wanting to drive their cars whilst reading the newspaper (or even Watson’s Daily 😜) – I’m talking about older people, people with disabilities and others who can’t drive for whatever reason. Public transport is extremely patchy in many areas these days so having self-driving cars/taxis could have a major impact on many people’s quality of life. I really do think that any company that can actually make autonomous work will clear up. It’s just a case of who can hang on long enough and put in enough money to make it work!

Then in Nissan Motor Shares Drop After Annual Profit Estimate Lowered on Slower Sales (Wall Street Journal, Kosaku Narioka) we see that Nissan’s shares dropped today following news that it decided to cut its full year profit estimates, which meant that car sale numbers underperformed analyst expectations. Although it’s obviously early days, it’ll be interesting to see whether their recently-announced EV joint venture will help turn things around…

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

The US gets closer to Abu Dhabi and commodity traders try to get an AI edge…

In US seeks alliance with Abu Dhabi on artificial intelligence (Financial Times, Chloe Cornish, Andrew England and George Hammond) we see that last week’s announcement by Microsoft to invest $1.5bn in G42 is part of a wider effort by the Biden administration to encourage more AI deals and partnerships in the UAE to keep it ahead of China. It seems that the US government has been brokering meetings between investors and companies on both sides as execs like OpenAI’s Sam Altman and Nvidia’s Jensen Huang have been visiting the Gulf state on a regular basis. * SO WHAT? * After a bit of to-ing and fro-ing, it seems that the UAE has plumped for the Americans and G42, which the Americans were previously concerned about due to its Chinese connections, eventually decided to sever ties with Chinese partners to prioritise relationships with US companies (which then

cleared the way for the Microsoft investment). It’ll be interesting to see what other deals come of these efforts…

Meanwhile, Commodity traders bet on big data and AI (Financial Times, Tom Wilson and Malcolm Moore) shows that some of the world’s biggest commodity traders, such as Vitol and Trafigura, are investing vast sums in data processing and analysis in order to get an edge on their rivals. It seems that changes in the energy markets and increasing emphasis on renewables will mean that more data will be needed to make better investment decisions faster – and AI will clearly be an extremely valuable tool. As things stand currently, hedge fund Citadel is seen as being at the forefront of this data-led trading movement, but other companies with more “traditional” roots in commodities trading – such as Vitol, Trafigura and Mercuria – are now throwing more money at AI to catch up.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

Brits cut deep on household spending while UK property prices edge higher…

Only one Western country suffers bigger household spending cuts than Britain (Daily Telegraph, Eir Nolsøe) cites analysis by The Daily Telegraph which shows that British households have reined in consumption more sharply than households in every other nation in the 38-member OECD apart from the Czech Republic. Some say that we have had a particularly difficult time of things because we’ve been exposed to the worst of the energy shock and a super-tight labour market. Also, British consumers have had to contend with bigger price rises for everyday goods than other OECD members which meant that they bought fewer things to mitigate higher costs. * SO WHAT? * OK so it hasn’t been particularly pleasant but the expectation is that household spending will increase as time goes on as real incomes settle after the ructions caused by the cost-of-living crisis. This could also be helped by potential tax cuts and falling interest rates.

Meanwhile, in the UK property market, Larger properties drive UK asking prices to near-record high (Financial Times, Valentina Romei) cites the latest stats from Rightmove which show that asking prices for properties coming to the market in the four weeks to mid-April hit near record levels! The average asking price of £372,324 (only £570 shy of the level in May last year which was the highest since Rightmove started collecting data in 2001) was boosted by higher prices for four-bedroom, detached properties and larger houses. The average price of properties of up to two bedrooms was pretty much flat month-on-month but it also added that the number of new properties coming to market increased by 12% annually. * SO WHAT? * When gauging what’s going on in the property market, it is worth noting that the different releases all have their little quirks. For instance, Rightmove prices are based on asking prices, Nationwide stats are based on actual mortgage approvals and the official house price index is based on completed transactions. Very crudely speaking, I’d say this means that Rightmove is more about sentiment and is quite “immediate” whereas the others are based more on ACTUAL movement which take longer to filter through.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

Chinese flying taxis take off and the green transition in the UK could get slowed down by higher-for-longer interest rates…

In a quick scoot around some of today’s other interesting stories, Chinese flying taxi sector claims global lead thanks to regulatory support (Financial Times, Edward White) shows that Shanghai flying taxi company, AutoFlight Group, won an airworthiness certification from the Civil Aviation Administration of China late last month for the design and parts for its unmanned CarryAll aircraft. This is the first time – anywhere in the world – that an electric Vertical Take-Off and Landing (eVTOL) weighing more than one tonne has been cleared by regulators. eVTOL aircraft take off vertically but then change to fixed-wing mode for travelling at higher speeds. Fans say that this could transform the way that we travel and move freight. * SO WHAT? * AutoFlight is talking a good game, saying that it has over 1,000 orders for its aircraft, although a lot of that will include letters of intent and memoranda of understanding. As many of you will know, I think that I am as likely to see flying taxis in the skies of Guildford in the next ten years as I am to see flying pigs. I think it’s expensive, dangerous, mostly pointless in many urban environments, could be hugely disruptive and have a detrimental effect on our lives as we see more things buzzing around in the skies above us. There will undoubtedly be uses for the tech (I think there will be some decent military uses, for instance) but having CEOs flying around from meeting to meeting just isn’t on the cards for a loooooooooooooooong time IMHO. This development does imply, though, that China is ahead of the West in this tech!

Then in High interest rates could add billions to UK green energy transition, says report (The Guardian, Richard Partington) we see that higher-for-longer interest rates could make the transition to more renewable energy a lot more expensive, according to the geniuses at the Resolution Foundation (no 💩, Sherlock). They’ve put a figure on how much it would cost – £29bn a year could be added to household energy bills in 2050 if interest rates continued at current levels versus if they stayed at pre-pandemic levels. * SO WHAT? * OK, so I haven’t read the report (TBF, it has a catchy title for something that was generated by a thinktank – it’s called “Electric Dreams”) but I think if you asked anyone with more than a couple of braincells whether the transition would cost more if interest rates were high they would come to the same conclusion. I just think that we have to continue to pour more money into power generation of all types (but especially renewable or cleaner sources) given the rising electricity needs for mass-EV adoption and the ongoing development of AI. I also think that we need to spend a lot of money on power storage as well because this will mean that we get to “keep hold of” more of the power that we generate, thus helping to smooth out supply volatility which is currently a major issue. If we can solve THAT, I think that it may mean that we can stop using nuclear fission (hopefully by that point nuclear fusion will have become a viable option). Wouldn’t that be amazing!

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

…in other news…

Some people just live on another planet to the rest of us when it comes to finances! Well it seems that if you have $54.6m knocking around in your bank account gathering dust, you could actually get a little bit closer to other planets in this apartment 🤣! Astounding!