Category: Financial news

Shares of Chinese electric vehicle giant BYD Co. (1211.HK) have fallen over 17% in the past week, as investor concerns mount over the sustainability of its aggressive pricing strategy and the potential for increased regulatory intervention.

The decline follows critical commentary from Chinese state media and industry regulators. The People’s Daily, a key publication aligned with the Chinese Communist Party, warned that unchecked price competition could destabilize supply chains and damage the global perception of Chinese manufacturing. While no companies were named, the message was widely interpreted as a response to the intensifying EV price war. China’s main automotive industry association also issued a statement cautioning against “vicious competition,” which it said could erode profit margins and compromise product quality. The Ministry of Industry and Information Technology echoed these concerns and signaled plans to strengthen oversight of the sector.

BYD has been at the forefront of recent price cuts, slashing prices by up to 34% in May. While this move boosted showroom traffic Citigroup analysts estimate a 30–40% week on week increase it has also raised questions about long term profitability. Despite delivering a record 382,476 vehicles in May, BYD’s year-on-year growth rate of 15% was its slowest since mid-2020, excluding seasonal dips.

To meet its ambitious 2025 sales target of 5.5 million units, BYD will need to average over 530,000 monthly deliveries for the remainder of the year, according to Morgan Stanley analysts. The fourth quarter typically sees a seasonal boost in sales, but the pressure remains high.

Google’s dominance in the online search market is under intense legal scrutiny as U.S. District Judge Amit Mehta prepares to issue a ruling that could reshape the company’s core business. The decision follows the conclusion of the remedies phase in a landmark antitrust case brought by the U.S. Department of Justice (DOJ), which previously found Google in violation of antitrust laws related to its search and search advertising practices.

The DOJ is now pushing for sweeping structural changes, including the potential divestiture of Google’s Chrome browser, the termination of exclusive search engine agreements, and the mandatory sharing of search data with competitors. These measures aim to reduce Google’s control over the search ecosystem and foster greater competition.

Google, which plans to appeal the initial ruling, argues that the proposed remedies are excessive and would primarily benefit rivals like Microsoft, while potentially harming consumers and device manufacturers. The company emphasized that its partnerships, such as the $20 billion annual deal with Apple to remain the default search engine on Safari, are standard industry practices.

The outcome of this case could have far-reaching implications. Chrome, the world’s most widely used browser, plays a critical role in directing users to Google Search. Losing control over Chrome or its default search status on mobile devices could significantly weaken Google’s market position. Adding to the complexity is the rise of generative AI, which is beginning to shift how users interact with search. Competitors like ChatGPT, Perplexity, and Claude are gaining traction, and even Apple has noted a decline in traditional search queries, suggesting users are exploring AI-driven alternatives. Judge Mehta is expected to issue his decision on remedies in August. Until then, the future of Google’s search empire and the broader digital search market hangs in the balance.

Ford Motor Company’s $3 billion electric vehicle (EV) battery plant in Marshall, Michigan, is facing significant uncertainty following the passage of a tax reform bill by the U.S. House of Representatives. The legislation proposes eliminating key federal tax credits for EV batteries that involve Chinese technology, a move that could directly impact the viability of Ford’s nearly completed facility. Executive Chair Bill Ford expressed concern that the removal of these incentives could jeopardize the project, which is already 60% built and expected to create 1,700 jobs.

The plant, announced in early 2023, is designed to produce battery cells using technology licensed from Chinese battery manufacturer CATL. “If it doesn’t stay, it will imperil what we do in Marshall,” Ford said at a recent policy conference, emphasizing that the company’s investment was made based on existing federal policies and that changing those rules midstream would be unfair.

The proposed legislation not only targets production tax credits for batteries with Chinese ties but also seeks to repeal the $7,500 consumer tax credit for new EV purchases. Additionally, it introduces a $250 annual fee on EVs to fund road maintenance and aims to roll back emissions regulations that encourage automakers to increase EV production.

Ford’s project has already seen reduced state level incentives due to scaled back production plans amid slowing EV demand, and it has drawn political scrutiny over its partnership with CATL. In response, more than 100 local business owners, educators, and elected officials from the Marshall area have signed a letter urging Congress to maintain the tax incentives, highlighting the region’s economic struggles and the plant’s potential to revitalize the local job market. The U.S. Senate is expected to review and potentially revise the bill in the coming weeks, setting the stage for a critical debate over the future of EV manufacturing policy in the United States.

In a significant development nearly ten years after the diesel emissions scandal first came to light, a German court has convicted four former Volkswagen executives for their roles in the company’s emissions fraud. The verdict, delivered by the regional court in Braunschweig, marks a major milestone in the long-running legal reckoning for one of the auto industry’s most damaging corporate scandals.

Two of the former managers received prison sentences: the ex-head of diesel engine development was sentenced to four and a half years, while the former head of drive train electronics received two years and seven months. The remaining two defendants were handed suspended sentences of 15 and 10 months, respectively. The scandal, widely known as “Dieselgate,” erupted in 2015 when the U.S. Environmental Protection Agency revealed that Volkswagen had installed software in diesel vehicles to cheat emissions tests. The software enabled vehicles to meet regulatory standards during testing conditions, while in real-world driving they emitted pollutants far above legal limits.

Volkswagen has since paid more than €33 billion (approximately $37.5 billion) in fines, settlements, and compensation worldwide. Legal consequences have spanned multiple countries, including the United States, where two former VW managers were imprisoned. In Germany, former Audi CEO Rupert Stadler received a suspended sentence and a €1.1 million fine, though his case remains under appeal.

Notably, former Volkswagen CEO Martin Winterkorn has not stood trial. Proceedings against him were suspended due to health concerns, and it remains uncertain whether he will face court. Winterkorn has denied any wrongdoing. German prosecutors continue to investigate 31 additional individuals in connection with the emissions manipulation, indicating that the legal and reputational consequences for Volkswagen and its former leadership are far from over.

OpenAI has announced the establishment of its first office in Seoul, marking a significant step in its global expansion strategy. The move comes as South Korea emerges as one of the most active markets for the company’s flagship product, ChatGPT. According to OpenAI, South Korea ranks second only to the United States in terms of paid ChatGPT subscriptions. This growing user base has prompted the company to formalize its presence in the country by registering a local entity and initiating recruitment efforts.

The company’s Chief Strategy Officer, Jason Kwon, highlighted South Korea’s robust AI ecosystem as a key factor in the decision. “Korea’s full stack AI capabilities from hardware to software, and across all age groups make it a uniquely promising environment for impactful AI development,” Kwon stated.

OpenAI is also deepening its ties with local industry players. Earlier this year, it announced a collaboration with Kakao, a major South Korean tech firm, to codevelop AI solutions tailored to the Korean market. Kwon is currently in Seoul and is expected to meet with representatives from both the ruling People Power Party and the opposition Democratic Party, signaling OpenAI’s intent to engage with policymakers as it scales its operations in the region.

Bayer shares advanced on the Frankfurt Stock Exchange after receiving a key endorsement from the European Medicines Agency (EMA) for its eye drug Eylea. The EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion supporting the use of an 8 mg dose with extended treatment intervals of up to six months.

This update applies to two serious retinal conditions: neovascular (wet) age-related macular degeneration and diabetic macular edema. If the European Commission confirms the recommendation in the coming weeks, Eylea 8 mg would become the only anti-VEGF therapy in the EU offering such long intervals between injections for both diseases. A potential competitive advantage over Roche’s Vabysmo, which currently dominates part of the market. The ability to reduce the frequency of injections and clinic visits could significantly improve patient convenience and adherence.

Christine Roth, Executive Vice President at Bayer Pharmaceuticals, highlighted that the extended dosing schedule, combined with Eylea 8 mg’s clinical profile, positions it as a potential new standard of care in retinal disease treatment.

Oil prices surged on Wednesday following reports that Israel may be preparing for a military strike on Iranian nuclear facilities, according to new U.S. intelligence cited by CNN. The news sent Brent crude above $66 per barrel, while West Texas Intermediate (WTI) rose as much as 3.5% before easing slightly.

The potential for conflict has reignited concerns over stability in the Middle East, a region that supplies roughly one-third of the world’s crude oil. The report did not confirm whether Israeli leadership has made a final decision, but the possibility of military action has added a significant geopolitical risk premium to oil markets. The timing of the report is critical, as it comes amid fragile negotiations between the U.S. and Iran over the latter’s nuclear program. Analysts warn that any escalation could derail diplomatic progress and disrupt global energy supplies.

“This development underscores the high stakes involved in the nuclear talks and the potential for significant market disruption if diplomacy fails,” said Robert Rennie, head of commodity and carbon research at Westpac.

The geopolitical tension also briefly lifted safe-haven currencies like the Swiss franc and Japanese yen, though those gains were later pared. U.S. and Israeli officials have not commented on the intelligence report. Israel has long considered military options to counter Iran’s nuclear ambitions, but the effectiveness of such a strike remains uncertain due to the fortified nature of many Iranian facilities. Meanwhile, the oil market had been anticipating a potential supply increase later this year, with OPEC+ planning to ease production cuts and U.S. shale output still showing room for growth. However, prices near $50 per barrel could limit further expansion, according to ConocoPhillips’ CEO.

Iran’s Supreme Leader recently expressed doubt about the outcome of the current negotiations with Washington. Analysts at Bloomberg Intelligence suggest that if sanctions on Iranian oil exports were lifted, WTI prices could fall to $40 per barrel.

Deere & Company announced impressive second-quarter earnings on Monday, exceeding market expectations despite lowering the lower end of its full-year net income forecast due to challenging market conditions. Following the announcement, the agricultural equipment maker’s stock saw a modest 1% increase.

Despite a 21% year-over-year decline in sales within its Production & Precision Agriculture segment, Deere maintained robust operating margins across its key divisions. John May, chairman and CEO of John Deere, emphasized the company’s commitment to its customers and praised the team’s performance amid market challenges.

In response to the dynamic market environment, Deere revised its full-year net income guidance to a range of $4.75 billion to $5.50 billion, compared to the previous forecast of $5.0 billion to $5.5 billion.

Meta Platforms, a global technology company, is facing potential legal action from Austrian advocacy group NOYB over its plan to use European users’ personal data to train its AI models. NOYB, led by privacy activist Max Schrems, has announced its intention to seek an injunction against Meta, arguing that the company’s approach could lead to substantial claims if it proceeds with its data collection strategy.

Meta plans to begin using personal data from European users of Instagram and Facebook starting May 27, citing “legitimate interest” under EU privacy regulations. The company intends to leverage this data to train and develop its generative AI models and other AI tools, which may be shared with third parties. Users will be provided with a link to a form allowing them to object to their data being used for AI training. Additionally, Meta has stated that private messages and public data from accounts belonging to users under the age of 18 will not be included in the training process.

Schrems has challenged Meta’s justification, pointing to a previous ruling by the European Court of Justice that prevented the company from claiming “legitimate interest” in targeting users with advertising. He argues that the same principle should apply to AI training, questioning the legality of Meta’s approach. NOYB is considering filing injunctions and potentially pursuing a class action lawsuit for non-material damages. With over 400 million European Meta users, Schrems suggests that collective claims could amount to billions of euros.

The advocacy group has invoked the EU Collective Redress mechanism, which enables consumers to file collective lawsuits against companies operating within the bloc. NOYB has set a deadline of May 21 for Meta to respond to its concerns. Meta has rejected NOYB’s claims, stating that its approach complies with EU regulations and that users have been given a clear option to object to their data being used for AI training. The company has notified users via email and in-app notifications, emphasizing that objections can be submitted at any time.

Ryanair, Europe’s largest low cost airline, has reported a 16% decline in annual profits, attributing the drop to a 7% decrease in ticket prices despite a 9% increase in passenger traffic, reaching a record 200 million passengers. The airline’s revenue grew 4% to €13.95 billion, but the company remains cautious about providing financial guidance for the upcoming year due to geopolitical risks, macroeconomic uncertainties, and potential tariff wars.

The airline has adjusted its passenger target to 206 million for the next fiscal year, citing delays in Boeing aircraft deliveries. Despite these challenges, Ryanair anticipates strong summer demand, with airfares expected to rise by 4-5% in the second quarter. The airline’s stock has responded positively, climbing 2.59% following the earnings report and marking a 20.5% increase year-to-date. In addition to its operational performance, Ryanair has announced a €750 million share buyback program set to commence on May 25, alongside a dividend payout of €0.227 per share. The airline is also set to be included in the MSCI World Index by the end of May, reflecting its growing influence in global markets.

CEO Michael O’Leary stated that while Ryanair expects to recover most, but not all, of last year’s fare decline, it is too early to provide meaningful guidance. The airline remains heavily exposed to external risks, including tariff disputes, geopolitical conflicts, and macroeconomic shocks. However, strong summer demand and cost-saving measures are expected to support profitability in the coming months.