By Marian Bocek, Managing Partner, IPM Group
Coronavirus has expedited changes in the way we consume and invest in energy and transport, acting as a catalyst for governments globally to drive forward positive change and establish sustainable transport and energy infrastructures.
The COVID-19 pandemic has caused a cardiac arrest in energy supply chains globally. Chinese battery production was set back by 26GWH output[i], creating a critical supply shortage for western manufacturers – particularly Electric Vehicle (EV) producers, and exposing Europe’s dependence on Asian battery imports.
Equally it has created an opportunity for European leaders to work together and with indigenous suppliers to build a strong European Energy Storage Infrastructure. A powerful combination of policy and investment could see European battery production increase exponentially, eliminating significant supply chain risks by locating the most vital element of the EV supply chain – the battery – within the region of European EV production plants.
European EV demand continues at break-neck speed
While global demand for EVs has slowed, this is not the case for Europe. Sales in the region rose by 44 % in 2019, continuing in the first quarter of 2020, which saw an increase in Europe’s EV market of 25%[ii]. It is estimated that by 2040, 70% of all vehicles sold in Europe will be electric.
Asia still controls the battery market
Despite huge regional growth for EVs in Europe, the supply of the most significant part of the electric vehicle – the battery – remains predominantly in Asian hands. China currently controls three-quarters of the global battery cell supply chain, compared with just 4% for Europe[iii]. The projected battery demand in Europe wildly outstrips the volume of currently confirmed factories (existing or in development) in the region by up to five times. European governments must work fast to ensure that this gap is met by additional manufacturing capacity in the region, rather than imports.
Of the battery makers that currently exist in Europe the majority (LG Chem, Samsung SDI Co. and Envision for example) operate using Asian technology. Recent concerns over Western dependence on Asian tech in other sectors e.g. the telecoms sector regarding Huawei technology should inform Europe’s drive to develop indigenous technology and production in the energy storage market.
Policy and funding
The €750 billion EU Coronavirus Recovery Plan announced in July speaks of repairing ‘the short-term damage from the crisis in a way that also invests in our long-term future’, and as such intends to channel money into The European Green Deal, which holds cleaner transport and logistics as part of its core objectives.
Even before COVID-19, European policy makers had woken up to this new reality. Recently introduced zero-emission vehicles mandates and fuel economy standards indicate a shift towards policies that rely more on regulatory and other structural measures and less on direct subsidies. The EU’s ‘Industrial Strategy’ and ‘Energy Roadmap 2050’ encouraging the development and production of Energy Storage Solutions on the continent, and more recently its ‘Battery 2030+ Roadmap’ to support R&D for the industry demonstrate collaborative intentions, but in the wake of the pandemic, there is more to do.
Automakers have been severely affected during the Covid-19 crisis; with demand dropping to near zero levels. The registration of new cars in the UK in April dropped 97% on the previous month, to 4,321 a staggering drop from a total of 161,064 cars sold in the same period last year. During this period the top two selling cars (the Tesla Model 3 and Jaguar I Pace) were Electric Vehicles.
European Governments and funding bodies must carefully consider using this moment to expedite the end of the combustion engine, deploying stimulus packages to bolster not only electric vehicle production and sales, but also the core component: batteries – creating jobs and significantly contributing to Europe’s economic recovery.
Private sector must play its part
Just as European governments must step up to the challenge of building a sustainable energy infrastructure, Europe’s private sector must also play its part. Policy can only be effective if it is accompanied by world-class technology that delivers a competitive product and efficient supply chain.
Production costs have been a hurdle for the EV market, but Deloitte projects that 2022 will prove to be a tipping point when EV costs become competitive against Internal Combustion Engines (ICE’s). The battery accounts between 40-50 percent of the cost of the electric vehicle so the path towards profitability for automakers lies in a combination of engineering design, manufacturing scale and application of technological innovation at a cell level.
InoBat Auto, a European based R&D and electric battery production company is using ‘High Throughput Platform’ (HTP) R&D to test multiple variations of battery chemistry by applying artificial intelligence (AI) to select the optimum composition to meet the performance requirements of the vehicle manufacturer ten times faster than standard research approaches, enabling customised batteries to be produced cost effectively, and at scale. This is vital. In order to expand the market, automakers need different batteries to serve different applications and different price points, even within the same model line-up. InoBat has recently announced its intention to build a €100 Million R&D Facility and €1 Billion 10GWh Gigafactory in CEE, close to Europe’s major automakers to produce enough batteries to power 240,000 electric vehicles annually by 2024.
Positive impact on climate change
Coronavirus has made clear the benefits of building a sustainable energy and transport infrastructure: not only could it have a substantial impact on Europe’s economic recovery, but perhaps more importantly, it offers the opportunity to move away from a fossil fuel infrastructure, propelling Europe into an age of clean energy that will help to tackle what is arguably the world’s most pressing problem: climate change.
Astrazeneca denies vaccine delivery shortfall to EU, Italy – paper
MILAN (Reuters) – AstraZeneca will deliver 180 million COVID-19 vaccines to Europe in the second quarter, of which 20 million to Italy, the head of its Italian unit was quoted as saying on Thursday, dismissing reports of a possible shortfall.
Lorenzo Wittum, the CEO and chairman of Astrazeneca in Italy, told daily Il Corriere della Sera in an interview Italy would receive more than 5 million shots by the end of March, fewer than the 8 million previously agreed, leading to a total of 25 million doses by June.
Reuters reported on Tuesday, citing an EU official directly involved in talks with the Anglo-Swedish drugmaker, that AstraZeneca expected to deliver less than half the COVID-19 vaccines it was contracted to supply the European Union in the second quarter.
Wittum also said the pharmaceutical company was considering the possibility of administering a third dose and was working on new versions of the vaccine.
(Reporting by Maria Pia Quaglia, editing by Agnieszka Flak)
ByteDance names head of China news unit as global TikTok R&D chief – sources
By Yingzhi Yang and Brenda Goh
BEIJING (Reuters) – Beijing-based ByteDance plans to move the chief of its Chinese news aggregator Jinri Toutiao, Zhu Wenjia, to Singapore to head global research and development for its hit short video app TikTok, two people familiar with the matter said. The role is newly created and would be the first senior R&D position for TikTok. Zhu will be in charge of the app’s product and technologies including its recommendation algorithms, the people said. His position will be parallel to TikTok’s interim head, Vanessa Pappas, and will report directly to ByteDance founder and Chief Executive Zhang Yiming, they said.
ByteDance declined to comment. The sources declined to be named as the information is not public.
TikTok had come under pressure from the Trump administration in the United States to divest the app’s U.S. operations over concerns that user data could be passed on to China, which TikTok has repeatedly denied.
Reuters reported last year that TikTok had moved its key research capabilities outside China and had approached employees from tech giants like Google for a senior engineering role.
U.S. investors, including Oracle Corp and Walmart Inc, have discussed with ByteDance taking a majority stake in TikTok’s American operations.
The White House under Biden has said it is keeping risks TikTok may present to U.S. data under review, but stressed it has taken no new “proactive step” relating to the pending TikTok deal, Reuters reported earlier this month.
“With Trump now out of office, and the new Biden administration focused on urgent matters like the pandemic and the economy, I think TikTok has more leeway to make strategic, rather than reactive, decisions,” said Mark Natkin, managing director of technology consulting firm Marbridge Consulting.
Kevin Chen, a former Didi Chuxing executive who recently joined ByteDance, will replace Zhu as Toutiao’s new CEO, the sources said, adding that the personnel changes have not been internally announced and are still subject to change.
Zhu, now based in Beijing, joined ByteDance in 2015 and became Toutiao’s CEO in 2019. Prior to ByteDance, he worked as an architect at China’s search engine giant Baidu.
In September, Reuters reported that ByteDance planned to invest billions of dollars and recruit hundreds of employees for its new Southeast Asia regional headquarters in Singapore.
(Reporting by Yingzhi Yang in Beijing and Brenda Goh in Shanghai; Editing by Jan Harvey and Stephen Coates)
SE Asia’s biggest travel app plans regional fintech expansion before 2021 listing
By Fanny Potkin and Anshuman Daga
SINGAPORE (Reuters) – Traveloka, Southeast Asia’s largest online travel startup, plans to launch financial services in Thailand and Vietnam as it eyes a U.S. listing through a blank-cheque company, its president said.
The 9-year-old Indonesian company, which counts Expedia and China’s JD.com among its backers, is seeing a strong rebound in its business after the COVID-19 pandemic pummelled demand. The company’s president, Caesar Indra, told Reuters in an interview that Traveloka’s Vietnam business had surpassed pre-COVID-19 levels, is nearly back to normal levels in Thailand, and is at half of pre-COVID level in Indonesia. “The worst has happened and now we’re well prepared for 2021. Domestic travel is driving recovery,” he said.
“The plan is to invest in fintech in a big way to allow more consumers to travel in the region,” Indra said, adding that the travel business had returned to profitability in late 2020. Traveloka, which says it has 40 million active monthly users, is developing “buy now, pay later” services for Thailand and Vietnam markets.
“We recently formed a joint venture with one of the largest banks in Thailand to collaborate in the fintech space,” Indra said. Traveloka, which has smaller local rivals, is also talking to potential partners in Vietnam, but Indra declined to name the parties. Traveloka’s two-year old equivalent service in Indonesia, launched after the firm realised that customers would wait until their paydays to book travel, has already facilitated more than 6 million loans, Indra said. Last year, Traveloka launched “Paylater” credit cards with some Indonesian lenders. It also offers insurance and wealth management services.
Indra said the business potential was huge in Indonesia, Southeast Asia’s largest economy, where only 6% of the population of 270 million has credit cards. When asked whether Traveloka might buy a bank in Indonesia, like other start-ups, to expand its financial services, Indra said, “all options were on the table.” Traveloka, also backed by Singapore sovereign wealth fund GIC and Indonesian venture firm East Ventures, has grown its local lifestyle services in Indonesia, where it offers restaurant vouchers and a food delivery service, as well as a popular rapid COVID-19 testing.
Indra said the company is Indonesia’s largest restaurant review app. Traveloka, which has been preparing for a listing, is holding discussions with special-purpose acquisition companies, or SPACs, for a U.S. listing.
“U.S. markets have become more appealing because there’s more and more appreciation of Southeast Asia as a flourishing region, and by listing in the U.S, we can also provide an opportunity for U.S investors to become part of Southeast Asia’s growth story,” Indra said. Many SPACs, exchange-listed shell companies that raise money through IPOs and merge with firms by enticing them with shorter listing timelines, have approached Southeast Asian startups.
Bridgetown Holdings, backed by Asian tycoon Richard Li, Provident Acquisition and Cova Acquisition are contenders for Traveloka, with a potential valuation of up to $5 billion for the startup, a source said. The firms did not immediately respond to requests for comment made outside normal U.S. business hours.Indra declined to comment but said an Indonesian listing remained an option.
(Reporting by Fanny Potkin and Anshuman Daga in Singapore. Editing by Gerry Doyle)
Astrazeneca denies vaccine delivery shortfall to EU, Italy – paper
MILAN (Reuters) – AstraZeneca will deliver 180 million COVID-19 vaccines to Europe in the second quarter, of which 20 million...
Turpentine Market is Projected to Register a CAGR of 6.0% by the End of 2028
Turpentine sales are expected to surpass 400 KT in 2019, and will record a 4.6% Y-o-Y growth over 2018, according...
Automotive Lighting Market is expected to grow at a CAGR of ~6% during the forecast period of 2019 to 2029 – Future Market Insights
In a recent publication, Future Market Insights (FMI) provides a perspective on the growth trajectory of automotive lighting market for the period...
COVID-19 Impact on Point-to-point Microwave Antenna Market Growth, Overview, Competitive Landscape and Forecast 2019 to 2027 | CommScope Holding Company, Inc., Infinite Electronics International, Inc. (radioWaves), Radio Frequency Systems, mWAVE Industries
Point-to-Point Microwave Antenna Market: Report Synopsis Future Market Insights (FMI) offers a 9-year forecast of the point-to-point microwave antenna market between 2018 and 2027....
Petroleum Liquid Feedstock Market is Estimated to Reach a Value of over US$ 366.1 Bn 2027 End – Future Market Insights
In a recently released research intelligence outlook, Future Market Insights forecasts high value-low growth landscape for the global petroleum liquid...