European economic slowdown, rapid decline in electric vehicle growth, delisting of startups, falling stock prices
The International Monetary Fund (IMF) said in its latest economic outlook on the 30th, “Europe’s growth rate has slowed significantly, reflecting weak consumer sentiment, the impact of high energy prices, and weakening investment in interest rate-sensitive manufacturing and businesses.”
Eurozone growth this year will be only 0.9%, and the eurozone economy has slumped at the end of last year as the energy crisis persisted, triggering a loss of competitiveness in some European industries and consumers curbing spending to grapple with high living costs, the European Statistics Office announced today.
Economic output in the 20 countries that use the euro grew by 0% compared to the previous quarter in the last three months of 2023 and contracted in the third quarter, narrowly avoiding a recession.
The Eurozone economy grew by only 0.1% compared to a year ago.
The IMF's latest economic forecast predicts a global economic growth rate of 3.1% this year, the same rate as 2023.
The outlook has improved because of the strength of the U.S. economy, which grew 3.1% last year, and the IMF expects the U.S. economy to grow 2.1% this year, which is an upward adjustment from the previous forecast of 1.5%.
The Chinese economy is expected to grow by 4.6% this year, but the problem of bad real estate loans is growing.
“Currently, the gap in economic activity between the United States and the eurozone is widening significantly,” Bert Colin, chief eurozone economist at ING Bank, told the NYT. “We only expect the eurozone economy to improve substantially by the end of this year.” It was diagnosed as ‘speech improvement’.
Tata Steel, Britain's largest steel mill, said it planned to close its blast furnaces in Port Talbot, Wales and replace them with electric furnaces, which could result in the loss of 2,800 jobs.
The German economy, which came out of a standstill, contracted by 0.3% in 2023, growing the slowest among the 20 countries that use the euro.
“The strength of Europe’s economic rebound could largely depend on the fate of Germany,” said Carsten Brzeski, head of global macroeconomics at ING. “Germany’s economy shrank 0.3% in the fourth quarter after a sluggish second quarter. “We remained in the ‘twilight zone between recession and recession,’” he told the NYT.
Reuters said, “Auto manufacturers and suppliers are betting big on future demand for electric vehicles, but the short-term global economic slowdown is causing suffering such as bankruptcies, scrapped IPOs, and production cuts,” and “On the 29th, France's Renault announced that it will sell electric vehicles. “The plan to list our business Ampere was canceled due to the sluggish stock market,” the company announced on the 30th.
Renault's new electric car company has been expected by the market to be valued at up to 10 billion euros for its IPO.
The German Automobile Association (VDA) predicted on the 30th that German electric vehicle sales will decline by 16% in 2023 and by a further 9% in 2024.
VDA expects plug-in hybrid sales to increase from 176,000 to 185,000 units, and battery electric vehicle sales to plummet 14% from 524,000 to 451,000 units.
Citing a VDA report, Reuters said German car sales are lagging behind the recovery of the global passenger car market, with sales expected to be 25% below pre-pandemic levels in 2024.
The VDA said the global passenger car market is expected to grow 2% this year to 77.4 million units, close to the pre-pandemic level of 78.8 million units, and that Germany's passenger car market is expected to shrink 1% to 2.82 million units, about a quarter less than before the pandemic. .
“Global electric vehicle momentum is stalling,” Morgan Stanley analyst Adam Jonas said in a recent research note. “The market is in a state of oversupply relative to demand.”
Albemarle, the world's largest producer of lithium, a key material for electric vehicle batteries, said in a report, "We are reducing jobs and capital expenditures in response to falling prices," and added, "The mass layoff is 4% of the total workforce," Reuters reported.
Due to rapidly weakening demand for electric vehicles in Europe and oversupply from Chinese competitors, European electric vehicle startups
Britain's Arrival received a notice of ‘delisting and suspension of stock trading’ from Nasdaq on the 29th, and its stock plunged 15% that day.
Reuters reported on the 30th that European electric vehicle startups Lordstown Motors, Proterra and Sweden's Volta Trucks went bankrupt as the difficult economy weighed on demand and hampered access to capital.
“In the long term, automakers are betting on EVs even though they still benefit from strong demand for internal combustion engine (ICE)-powered vehicles,” Reuters said.
“We know that the electric vehicle market will not grow linearly,” GM Chief Financial Officer Paul Jacobson said on the 30th. “We are prepared to respond flexibly,” he told Reuters on the 30th.
GM CEO Mary Barra said, “It is true that uncertainty has increased as the growth rate of electric vehicles has slowed. “We will build to meet demand,” he said publicly at the performance presentation on the 30th.
“What dragged Europe down was the loss of competitiveness due to structural changes following the war in Ukraine and the energy crisis,” said Bert Colin, chief Eurozone economist at ING Bank. “He told Reuters.
Reuters said, “Economists say the U.S. is unlikely to emerge from a recession any time soon. European companies have been raising wages, but at a slower pace, and consumers are saving rather than spending.” “The rise has subsided, but it is not yet enough to completely reduce the suffering of households, and wage increases have increased costs for manufacturers,” he said, revealing the gap between the U.S. economy and the euro zone.
“There is no doubt that limitations in charging electric vehicles and lack of battery resilience at low temperatures are causing consumer anxiety,” said Tim Piechowski, portfolio manager at ACR Alpine Capital Research, the majority owner of GM stock. “The adoption curve is slowing and there is pushback from regulators on fuel efficiency, but it will be a longer ramp than initially expected,” he told Reuters.
Korea's all-industry production index of 110.9 last year was a 0.7% increase from the previous year, with the service industry increasing by 2.9% and the mining and industrial production decreasing by 3.8%.
Manufacturing production decreased by 3.9%, the largest decline since 1998 (-6.5%), and retail sales decreased by 1.4% from the previous year, marking the second consecutive year of decline.
In the 'Industrial Activity Trend Assessment' on the 31st, the Ministry of Strategy and Finance diagnosed that the production side is "positive due to the recent improvement in exports, the rebound in the business conditions of major industries such as semiconductors, and the launch of new mobile products."
Most Korean media reported on the 31st that the IMF raised Korea's economic growth rate to 2.3% this year, 0.1 percentage points higher than the forecast in October last year, and predicted that this would help the Korean economy as the economies of the United States and China recover.
Korea's overall industrial production index of 110.9 last year was a 0.7% increase from the previous year, but the service industry increased by 2.9% and the mining and industrial production decreased by 3.8%.
Manufacturing production decreased by 3.9%, the largest decline since 1998 (-6.5%), and retail sales decreased by 1.4% from the previous year, marking the second consecutive year of decline.
Samsung Electronics recorded a loss of 2.2 trillion won in its semiconductor business last year.
Manufacturing production decreased by 3.9%, the largest decline since 1998 (-6.5%), and retail sales decreased by 1.4% from the previous year, marking the second consecutive year of decline.
In the 'Industrial Activity Trend Assessment' on the 31st, the Ministry of Strategy and Finance diagnosed that the production side was "positive due to the recent improvement in exports, a rebound in the business conditions of major industries such as semiconductors, and the launch of new mobile products."
Most Korean media reported on the 31st that the IMF raised Korea's economic growth rate to 2.3% this year, 0.1 percentage points higher than the forecast in October last year, and predicted that this would help the Korean economy as the economies of the United States and China recover.
At the Korea-U.S. summit in May 2022, Yoon Seok-yeol's regime secured tax credits for batteries for U.S. electric vehicles and handed over cutting-edge semiconductors to Japan, and as China's all-solid-state battery system became stronger with its low-price offensive, stock prices rose, bearing the burden of the U.S. supply chain protection strategy. The economic stimulus strategy was exposed to crisis.