Monday, June 17, 2024

Daily Tech Roundup: Li Auto Gets Sued, New U.S. Tariffs to Hit Chinese Battery-Makers Hardest

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The Daily Tech Roundup delivers essential technology news focusing on China and broader Asian markets. One of the key stories is a class action lawsuit filed against Li Auto Inc. in the U.S., where investors accuse the Chinese EV manufacturer of overstating the market demand for its Li Mega MPV. The vehicle, launched on March 1, was expected to sell 8,000 units monthly but underperformed in a sluggish market, resulting in financial losses for investors. This development marks another challenge for Li Auto amidst an increasingly competitive and price-sensitive EV market [para. 2].

In trade news, the U.S. has announced new tariff hikes targeting Chinese imports, with lithium-ion batteries bearing the brunt of these new measures. The Biden administration aims to protect the American market from an influx of inexpensive Chinese products. The new tariffs include $18 billion worth of strategic goods such as EVs, semiconductors, and medical devices. Data from S&P Global Market Intelligence indicates that 71.5% of U.S. lithium-ion battery imports by value in the first quarter of 2024 came from China. This tariff increase is likely to significantly impact the Chinese battery sector [para. 3].

Meanwhile, Nio Inc., a prominent Chinese EV manufacturer, has introduced a more budget-friendly brand named Onvo. This move aims at enhancing Nio’s presence in China’s fiercely competitive EV market, as Tesla’s dominance appears to be waning. The Onvo brand targets family buyers, and its inaugural model competes directly with Tesla’s Model Y and Toyota’s RAV4. The Onvo L60, which boasts larger dimensions than the Model Y, is priced starting at 219,900 yuan ($30,400), with deliveries expected to begin in September. This pricing strategy contrasts with Tesla’s Model Y, priced at 249,900 yuan in China, and the base Nio vehicle starting at 298,000 yuan [para. 4].

Baidu Inc., a leading internet search company in China, has faced a slowdown in revenue growth, the slowest in over a year. The company’s revenue for the three months ending in March increased by a mere 1%, totaling 31.5 billion yuan, aligning with market expectations. Despite this slow revenue growth, Baidu achieved a better-than-expected net income of 5.4 billion yuan due to cost reduction efforts. The results highlight Baidu’s ongoing struggle to convert its pioneering position in generative AI into substantial revenue amid China’s economic slowdown [para. 5].

JD.com Inc., on the other hand, posted a 7% increase in revenue for the March quarter, surpassing analyst expectations. The company’s sales reached about 260.1 billion yuan, compared to the projected 258.4 billion yuan. This growth accelerated from the previous quarter’s 3.6%. Net income also saw a significant rise, increasing by 13.9% to 7.1 billion yuan. The improvement comes as a result of price cuts and enhanced shopper perks, illustrating JD.com’s aggressive strategies to attract consumers during an economic downturn. JD.com’s performance is often regarded as an indicator of China’s overall consumer spending, particularly significant as the nation emerges from nearly three years of Covid-19 restrictions [para. 6].

AI generated, for reference only

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