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Tesla, BMW drive into EU tariff battle

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January 28, 2025

TLDR: Tesla and BMW challenge each other in EV production for China, Norway aims to be the first all-electric country, and Smithfield Foods issues new shares. No transcripts available.

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In this episode of Seeking Alpha's Wall Street Breakfast, host Julie Morgan dives into the significant developments in the electric vehicle (EV) sector, particularly focusing on the legal battle that Tesla and BMW are engaging in against the European Union (EU) tariffs on Chinese-made EVs. Here’s an overview of the key discussions and insights from the episode.

Key Highlights

1. Background of the EU Tariffs

  • The EU imposed tariffs of up to 45% on EVs imported from China, citing concerns about Beijing's subsidies, which were seen to harm European manufacturers.
  • Tesla's EVs manufactured in China face a 7.8% tariff, while BMW contends with a 20.7% tariff on its Chinese models.

2. Legal Action by Tesla and BMW

  • Tesla and BMW have formally challenged these tariffs by filing cases against the European Commission at the EU’s General Court.
  • BMW has expressed that these tariffs disrupt their global business model, potentially limiting access to European customers and decelerating efforts towards transportation decarbonization.
  • The European Commission has acknowledged these legal actions and indicated an openness to negotiation aimed at resolving competition concerns.

Norway's EV Success

3. Leading the Charge in Electric Vehicles

  • Norway is on track to become the first country to phase out gasoline and diesel car sales by 2025.
  • A staggering 96% of new car sales in Norway in early 2025 are fully electric, thanks to government incentives and infrastructure investment.
  • In 2024, 90% of sold vehicles were EVs, with Tesla’s Model Y and Model 3 topping the charts in popularity.
  • While 28% of all cars in Norway are fully electric, the number climbs to over 40% in Oslo.

4. Government Support

  • The success of Norway's transition is largely attributed to:
    • Tax breaks for electric vehicles.
    • Significant investments in EV charging infrastructure.
    • Grants to promote at-home charging solutions.

Smithfield Foods IPO

5. Market Moves and IPO Pricing

  • Smithfield Foods has priced its IPO at $20 per share, comprising 26 million shares being offered to the public.
  • Of these shares, 13 million will be sold by Smithfield and 13 million by existing shareholders.
  • The IPO is expected to begin trading on the NASDAQ under the ticker symbol SFD on January 29, indicating robust market activity.

Market Trends and Economic Outlook

6. Trending Updates

  • The episode highlights several articles trending on Seeking Alpha related to stock movements in the market.
  • A notable drop in over 20 ETFs by more than 10% was discussed, affecting investor sentiment and potentially leading to additional volatility.
  • The upcoming FOMC meeting, alongside other economic indicators like durable goods and consumer confidence, is also on the radar for investors.

Closing Thoughts

The host, Julie Morgan, wraps up with a snapshot of current market conditions, mentioning positive futures for major indices such as the Dow, S&P, and NASDAQ, alongside rising prices in crude oil and Bitcoin.

  • The discussion emphasizes the ongoing tussle between major automotive companies and regulatory frameworks impacting the EV market in Europe.
  • Tesla and BMW's legal challenges add a crucial dimension to the conversation regarding fair competition and the future of EVs both in Europe and globally.

Key Takeaways:

  • Understanding Tariffs: Investors should pay close attention to how these tariffs may affect the competitive landscape for EV manufacturers.
  • Norway’s Model: The impressive transition of Norway to EVs can serve as a model for other nations seeking to decarbonize.
  • Market Opportunities: As new IPOs emerge and existing stocks face volatility, investors must stay informed to navigate the complex landscape.

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