|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||0.9650 - 1.0100|
|52 Week Range||0.7400 - 1.2900|
|Beta (5Y Monthly)||0.48|
|PE Ratio (TTM)||10.90|
|Forward Dividend & Yield||0.03 (2.63%)|
|Ex-Dividend Date||Sep 10, 2020|
|1y Target Est||N/A|
(Bloomberg) -- Huawei Technologies Co. will invest $1 billion on researching self-driving and electric-car technologies, accelerating plans to compete with Tesla Inc. and Xiaomi Corp. in the world’s biggest vehicle arena.Huawei’s autonomous-driving technology has already surpassed Tesla’s in some spheres, for instance by allowing cars to cruise for more than 1,000 kilometers (621 miles) without human intervention, Rotating Chairman Eric Xu told analysts in Shenzhen Monday.The Chinese telecom giant will partner with three automakers initially to make self-driving cars that carry the Huawei name as a sub-brand, said Xu, one of three executives who take turns to fill the post. It will keep its circle of partners small and get its logo onto cars -- not unlike how Intel Corp. calls attention to its microprocessors on PCs -- that adopt its autonomous driving technology, he added. The mobile giant has so far agreed to team up with BAIC Group, Chongqing Changan Automobile Co. and Guangzhou Automobile Group Co.“The smart car business unit receives one of the heaviest investments from Huawei. We will invest more than $1 billion in car component development this year,” Xu said. “China adds 30 million cars each year and the number is growing. Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan from each car sold in China, that’s already a very big business for Huawei.”Huawei is emerging from its toughest year on record, when Trump-administration sanctions smothered its once leading smartphone business and stymied advances into chipmaking and fifth-generation networking. The Biden White House has shown few signs of letting up, prompting billionaire founder Ren Zhengfei to direct Huawei toward new growth areas such as smart agriculture, health care and electric cars. It hopes for a seat at the table with tech giants vying to define the rapidly evolving fields of connected vehicles, homes and workplaces.Huawei aims to join tech giants from Apple Inc. to Xiaomi in targeting the vehicle industry, betting future cars will grow increasingly green, autonomous and connected. EV sales in China may climb more than 50% this year alone as consumers embrace cleaner automobiles and costs tumble, research firm Canalys estimates. Huawei’s info and entertainment features can already be found in Mercedes-Benz sedans and the firm has teamed up with domestic players such as BAIC BluePark New Energy Technology Co. to develop smart car systems. The first model under its partnership with the Chinese EV maker, the Arcfox αS HBT, will be unveiled at Auto Shanghai in April.“I don’t know if they were bragging, but my team said they can have cars driving on their own without human intervention for 1,000 kilometers. That’s way better than Tesla,” Xu said Monday.But Huawei’s piling into an already crowded arena, where an array of automakers from Tesla to local upstarts Nio Inc. and Xpeng Inc. are battling for a slice of the world’s biggest EV market. Xiaomi -- better known for its affordable gadgets and home appliances from rice cookers to robo-vacuums -- unveiled plans last month to invest about $10 billion over the next decade on manufacturing electric cars. Search giant Baidu Inc. and Geely Automobile Holdings Ltd. are also said to be teaming up to build vehicles.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- More than a year after its outbreak, the coronavirus keeps finding new ways to hit carmakers.After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.The shortage risks dragging on, with lockdowns and travel restrictions prompting housebound consumers to snap up more phones, game consoles, smart TVs and laptops to get online. Lower down in importance to chipmakers, auto manufacturers from Toyota Motor Corp. to Volkswagen AG risk not getting enough goods to fuel a fledgling recovery in their own industry.“Customers can’t build because they can’t get parts,” Glen De Vos, chief technology officer of car-component supplier Aptiv Plc, said in an interview. “We’ve avoided a situation where we’re shutting down customers, but we’ve been impacted.”Semiconductor shortages may persist throughout the first half as chipmakers adjust their operations, researcher IHS Market predicted on Dec. 23. Automakers will start to see component supply gradually ease in the next two to three months, China Passenger Car Association, which groups the country’s largest carmakers, said Monday.Chipmakers favor consumer-electronics customers because their orders are larger than those of automakers -- the annual smartphone market alone is more than 1 billion devices, compared with fewer than 100 million cars. Automaking is also a lower-margin business, leaving manufacturers unwilling to bid up chip prices as they avoid risking their profitability.And while the newest cars require more chips, so do the latest consumer gadgets. Smartphones using so-called 5G connectivity require 40% more semiconductors than older 4G versions. Chip foundry Taiwan Semiconductor Manufacturing Co. reported record fourth-quarter revenue last week, with new 5G iPhones taking up a large chunk of capacity.The auto-chip shortage stems from overly conservative demand estimates made early last year as car plants closed to cope with the onset of the pandemic, De Vos said. Once the plants re-opened, vehicle sales rebounded more strongly than anticipated after governments unleashed stimulus packages and commuters avoided public transport.At the same time, foundries such as TSMC, United Microelectronics Corp. and Globalfoundries Inc. as well as chip assemblers like ASE Technology Holding Co. weren’t expanding fast enough to meet the pandemic-induced spike in demand for consumer gadgets. Those bottlenecks snarled the flow of chips not just to cars, but also in Xboxes and Playstations and even certain iPhones. The foundries are responsible for making a significant portion of the world’s semiconductors and serve automotive-chip companies such as NXP Semiconductors NV, Infineon Technologies AG and Renesas Electronics Corp.The Trump administration’s move to blacklist China’s Semiconductor Manufacturing International Corp. in December drove customers to seek alternatives and further constrained the global chip supply. Some semiconductor buyers have also been building up inventories to hedge against future shortages or disruptions.“It’ll take some time,” De Vos said, “but we’re climbing out of it.”Auto-chip companies cut orders with Taiwanese foundries significantly in the first half of 2020 and when they wanted the capacity back in the second half, the contract chipmakers had allocated it to others, a person familiar with the matter said.General Motors Co. has asked for the Taiwanese government’s help to secure chip supply, and Taiwanese officials have helped to relay the request to foundries including TSMC, according to the person. The European Union has also approached Taiwanese officials about the same issue, the person said.There’s no guarantee such requests will yield results -- smartphone and gadget customers contribute more to foundries’ revenue and profit and are willing to shell out more.“Consumer-electronics companies are ready to pay more for chips to ensure their gadgets will get to market on time,” said Jeff Pu, an analyst at GF Securities. “Carmakers are less inclined to do so.”Meanwhile, it’s not simple to boost semiconductor supply. Chipmakers need to spend years and billions of dollars to build fabrication plants capable of cranking out silicon for a wide range of products. They tend to err on the side of conservative planning because of the risks involved -- and the enormous potential losses.At least one major automotive chip supplier is having a significant volume of its orders turned away by TSMC because of lack of capacity, according to a person familiar with the matter. There are no signs of the situation getting easier for carmakers, the person said. A TSMC spokeswoman declined to comment, saying the company will discuss automotive chips at its investor conference on Thursday.Such setbacks have left some carmakers with no option but to cut production.Toyota said Tuesday it’s partially halting production in China while Honda Motor Co. is reducing output at five factories across North America as it becomes harder to procure chips.Toyota, the world’s No. 2 automaker, said the impacted lines were at its factory in Guangzhou, in China’s south. The suspension could result in a cut in January’s output of as much as 30% depending on how long it drags on, the Nikkei reported earlier Tuesday, without attribution. Toyota jointly operates the site with Guangzhou Automobile Group Co. Toyota is additionally lowering output of a pickup made in Texas.Honda, which had to scale back output at its U.K. plant last week, said it will reduce manufacturing of the Accord, Civic and Insight sedans, as well as the Odyssey minivan and Acura RDX, a crossover sports-utility vehicle. The Japanese automaker is also reducing output by about 4,000 cars at a domestic factory, while Nissan Motor Co. is adjusting production of its Note hatchback.VW said last month it would have to change manufacturing plans. Fiat Chrysler Automobiles NV is temporarily closing a Canadian plant and delaying the restart of output at a Mexican Jeep factory until the end of January.“The global semiconductor shortage is presenting challenges and production disruptions,” Ford Motor Co. said in an emailed statement. The carmaker is working to prioritize key vehicle lines, “making the most of our semiconductor allocation.” In North America, Ford is idling a SUV factory in KentuckyCarmakers’ predicament is exacerbated by the fact that chips are crucial for the latest features they are touting, be it assisted driving, large displays or connectivity. Semiconductor-based components are set to account for more than 50% of a car’s manufacturing cost by 2030, up from about 35% now, according to a report by China EV 100 and Roland Berger.“Chips are getting more important for the upcoming software-defined cars,” said Shi Ji, an analyst at Haitong International Securities Co. in Hong Kong. “They are essential to all cars, not just electric ones.”(Updates with detail on Toyota, Honda cuts in 19th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Nidec Corp., the world’s top supplier of motors for everything from hard drives to power plants, is betting it can make a key component for Tesla Inc.’s electric vehicles cheaper and better than anyone else, possibly including its chief executive officer, Elon Musk.“I very much want to have a top-level discussion with Elon Musk,” Jun Seki, Nidec’s president and chief operating officer, said in an interview. Without an outside partner, Tesla won’t be able to achieve Musk’s goal of producing 20 million EVs a year by 2030, he said.It’s an audacious overture to a company that flirted with being the world’s most valuable last week, making Musk the richest man, but Nidec isn’t just any ordinary parts supplier.The manufacturer is a quiet behemoth in the global electric-motor industry. Although the vast majority of people who use the company’s products don’t know its name, Nidec’s motors are used in about 85% of the world’s hard drives and it controls almost half of the global market for brushless motors found in everything from air conditioners to factory robots. Nidec is Japan’s ninth-largest enterprise, with a market value of about $82 billion on Tuesday, after climbing 2%. The stock rose 73% last year.That’s made CEO Shigenobu Nagamori Japan’s fourth-wealthiest individual with a net worth of $10.2 billion, according to the Bloomberg Billionaires Index. He poached Seki from Nissan Motor Co., where Seki had come up through engineering to becoming vice-COO, a year ago to embark on a bet-the-company pivot. The goal? Turning the manufacturer Nagamori founded in a shed in Kyoto 47 years ago into the world’s top supplier of motors for electric vehicles. Nagamori, 76, is backing the effort with a pledge to invest close to $10 billion over the next five years to grab a market share of 40% to 45%.With Japan, California and other major automobile markets mandating that all new car sales be electric over the next two decades, the global EV traction motor market is on track to reach about $29 billion by 2026, according to consultancy firm Shibuya Data Count. Up until now, much of the industry’s focus has been on building out the capacity to produce enough batteries, while improving technology to make them more efficient and expand the range of EVs.After batteries, traction motors are the most expensive component of an EV, meaning the segment is ripe for claiming if a company is able to mass-produce a disruptively cheap product. Combining the motor, gears and electronic components, traction motors are also used in electric trains; they must be able to withstand mechanical stress and cool efficiently because of the high power levels involved.“As we move forward with mass-production, costs will come down and it’ll be easier to win out against rivals,” said Seki, 59, who traveled abroad several times during the 2020 pandemic to secure deals with automakers, seeking to edge out Bosch Corp., ZF Friedrichshafen AG, Dana Inc. and other competitors.Tesla, based in Palo Alto, California, is just one of the many carmakers in Nidec’s sights. The Japanese manufacturer has already reached agreements to provide EV motors to 22 automakers, including China’s Guangzhou Automobile Group Co. and France’s Peugeot SA, according to Seki.Whether it’s a traditional auto manufacturer, or an electric-truck startup or Apple Inc., which is said to be planning a self-driving electric car, “any new company entering into the realm of electric vehicles is a chance for us,” Seki said. Through its joint venture with Peugeot, Nidec also has a “big opportunity” with Fiat Chrysler Automobiles NV, as the automaker is set to merge with Peugeot, he added.Nidec’s pitch to automakers is its “E-Axle” system, which combines motors, gears and inverters into a single package. As EV makers seek smaller and more efficient powertrains, that will give an edge to manufacturers that are able to design high-precision durable gears and cool them effectively, all while keeping costs down.To secure the technologies and resources needed, Nidec is ready to spend as much as 1 trillion yen ($9.7 billion) on mergers and acquisitions, Seki said. He singled out gear and inverter manufacturing as two industries ripe for growth.If Nidec’s vision plays out, it will be able to offer Tesla and other EV makers a traction motor that’s less than $1,000 in under five years, down from the standard today which can run up to $2,000 or more. While batteries make up about a third of a typical EV’s cost, a basic motor makes up about 10%.Why Building an Electric Car Is So Expensive, For Now: QuickTakeNidec sees Europe and China as relatively quick adopters of EVs. As such, it has invested heavily in the latter over the past three years and is planning to inject some 200 billion yen into its European operations. The company is looking at Serbia as the top candidate for a new EV motor factory it’s looking to build in the region.For now, Seki is laying the groundwork to be able to meet a spike in demand that’s anticipated in the decade after 2025. Thanks to greater investment, battery costs are coming down, making EVs more affordable. At the same time, a number of governments including Japan and the U.K. have said they will ban the sale of new gasoline vehicles.By 2035, annual EV sales are projected to exceed 48 million units, up from roughly 2 million this year, according to Bloomberg Intelligence. To clinch a share of that, Seki is counting on adding Tesla as a customer. Although Nidec’s U.S. representatives have approached the EV maker, whose market capitalization now exceeds that of Toyota Motor Corp. and Japan’s six other major car manufacturers combined, no deals between the two have been announced.Despite its outsized valuation, Tesla made about 500,000 vehicles last year, or less than a 10th of what Toyota will produce. Tesla is believed to mainly design and manufacture its own traction motors for the Model S, X, Y and 3. With new factories being built in Texas and Germany to add to plants in California and China, Musk struck an optimistic tone in September that Tesla will hit his lofty goal.Seki said there are also a number of storied automakers that won’t consider diverging from in-house production of the important electrification technology. Nissan, for one, will equip future EV models with its own dual electric motor “E-4orce” system. General Motors Co. is also designing proprietary e-axle systems.While Nidec is a relative newcomer to the EV motor sector with much left to prove, the manufacturer is betting that its plunge into the technology can be modeled after its success in hard-drive motors, where it invested early and built production capacity to drive down costs.The company is regarded as a bellwether of manufacturing trends, picking up early on shifts such as the growth of factory automation. Today, Nidec produces more than 3 billion motors a year, and is betting that the automotive business will make up a growing portion of the 10 trillion yen in annual net sales that Nagamori aims to reach by fiscal 2030.The next move Nidec is considering after traction motors is to offer nearly complete EV platforms. There will be demand for such packages from new entrants in the sector that would prefer to focus on a vehicle’s interior and styling, Seki said.With the wave of electrification hitting the automotive industry “this kind of creative destruction is already happening,” he said.(Updates with shares in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.