Govt launches scheme for imported EVs
New Delhi: Govt on Tuesday opened the window for auto companies to sell imported EVs by paying lower duty in return for promising to invest in the country. While Tesla has opted to stay out, doors have been shut for Chinese companies, such as BYD.
Heavy industries and steel minister H D Kumaraswamy said four-five companies have shown interest, while Tesla will sell its cars through its showrooms after importing them at full duty. The application window will remain open till early Oct.
Heavy industries secretary Kamran Rizvi said OEMs applying under the scheme and availing of lower import duty will have to roll out a car with at least 25per cent domestic value addition within three years and increase it to 50% within five years.
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Time of India
15 minutes ago
- Time of India
Two Chinese chip firms plan $1.7 billion IPOs, bet US export curbs to spur growth
BEIJING: Two Chinese artificial intelligence chip startups are seeking to raise a combined 12 billion yuan ($1.65 billion) in initial public offerings, hoping U.S. curbs on advanced chip sales to China will boost local demand for their products, their filings show. Beijing-based Moore Threads plans to raise 8 billion yuan, while Shanghai-based MetaX seeks 3.9 billion yuan, according to their IPO prospectuses filed on Monday. Both companies intend to list on Shanghai's STAR Market, the tech-focused board of the Shanghai Stock Exchange. Their fundraising plans underscore growing efforts by Chinese chipmakers to capitalise on Beijing's push to develop domestic champions in graphics processing units (GPU), which are crucial for AI development. Reuters reported last week that Biren Technology, another Chinese AI chipmaker, raised about 1.5 billion yuan in fresh funding and was preparing for a Hong Kong IPO. Developing domestic chip champions has become increasingly urgent for Beijing, as the U.S. tightens export restrictions, with the latest rules implemented in April banning Nvidia's H20 chips, one of its most popular chips, from being shipped to China. The U.S. has also imposed restrictions since last year that prevent Chinese AI chip designers from accessing advanced global foundries like Taiwan Semiconductor Manufacturing for producing cutting-edge semiconductors. Moore Threads and MetaX both cited U.S. sanctions as a major risk to their development but also emphasised the restrictions could create significant market opportunities. "U.S. restrictions on high-end GPU exports to China are prompting Chinese companies to accelerate domestic substitution processes," Moore Threads said. The company was added to the U.S. Entity List in late 2023 and is barred from partnering with TSMC. MetaX said "geopolitical pressures are forcing relevant domestic clients to use domestically-produced GPU products, which will help domestic GPU manufacturers establish closer ties with local customers and suppliers." The two firms design GPUs to compete with Nvidia products and have reported steep losses over the last three years, which they largely attributed to heavy research and development spending. Moore Threads generated revenue of 438 million yuan in 2024 but posted a loss of 1.49 billion yuan, adding to losses of 1.67 billion yuan in 2023 and 1.84 billion yuan in 2022. MetaX posted 2024 revenue of 743 million yuan against a 1.4 billion yuan loss, following losses of 871 million yuan in 2023 and 777 million yuan in 2022. "Moore Threads and MetaX are both considered leading GPU firms in China, and accessing the capital market in China would be crucial for them to continue their research and development," said He Hui, research director on semiconductors at Omdia. China's drive to achieve higher self-sufficiency in chips would help domestic GPU firms achieve economies of scale, crucial to generating higher revenue and profits, He said. Both companies were founded in 2020 by executives who previously worked at major U.S. chip firms. MetaX was founded by former AMD employees, including Chairman Chen Weiliang, who previously served as the U.S. chipmaker's global head of GPU product line design. Moore Threads was established by former Nvidia employees, including Chairman Zhang Jianzhong, who previously held the role of general manager for the AI chip giant's China operations. The two firms compete with a growing roster of domestic rivals including Huawei, Cambricon, Hygon and other startups.
Mint
42 minutes ago
- Mint
The Cybertruck's future is brighter than you think
While running errands in suburban Boston recently, I spotted two Cybertrucks within the space of just a few minutes. The first was painted white, emblazoned with American flags. The other was the now-familiar matte-finished, stainless steel model, which I have begun to see on a regular basis. It occurred to me then what I see now in the data: Rumors of the Cybertruck's demise may be premature. With the launch of the Cybertruck in late 2023, Tesla aimed to gain a foothold in the U.S. pickup truck market—which sells nearly three million units annually. Unlike any of the full-size pickup trucks available from Ford, General Motors, and Stellantis, which dominate the gasoline-powered U.S. pickup truck market, the Cybertruck is, in the words of the announcer on Monty Python, something completely different. Its angular, futuristic aesthetic is a blend of Bauhaus and Blade Runner. Its early adopters are auto-enthusiasts, enthralled by the truck's unique—if for some—polarizing appearance. When Tesla entered the electric vehicle truck market, the water had already been warmed by Rivian. Its R1T won Motor Trend's 2022 Truck of the Year. Ford's F-150 Lightning received the same award the following year. Sales of EV pickup trucks have been modest. Earlier this year, Ford announced it had sold 33,510 Ford F-150 Lightning EVs in 2024, an increase of 39% from the previous year. Rivian doesn't publish unit sales by model, but my firm, Battle Road Research, estimates it sold roughly 12,000 R1Ts in 2024, likely flat with 2023. Tesla, for its part, doesn't reveal sales by model. But it reported that its 'Other Models" category, which includes the Cybertruck, Model S, Model X, and the Tesla Semi, accounted for 85,133 units delivered in 2024. Cox Automotive estimates nearly 39,000 Cybertrucks were sold last year. If that number is correct, then for all of the negative press and criticism of its design and reliability, the Cybertruck became the category leader in its first full year of availability. We now estimate Tesla's share at 36% of a 108,000-unit market in the U.S. Ford's F-150 Lightning follows with 31% market share. The road to leadership has been rocky for Tesla. The Cybertruck has had its share of recalls—though a recall isn't the headache it was in the pre-EV era, when every issue required a trip to the dealership. Like Apple, Tesla has been able to address many of its flaws through over-the-air software updates, such as enlarging the font size of its instrument panel so that braking and parking indicators could be seen. Flaws in the rearview camera's display and in the warning light for the tire pressure monitoring system were also fixed with software updates. Some physical recalls have been required to fix things like a trapped foot pedal that caused unintended acceleration. Of course, the Ford F-150 Lightning and the Rivian R1T have also had their share of physical recalls. The Cybertruck will now have to face-off with the venerable GM, another newcomer to the EV pickup market. GM is taking a portfolio approach, with three different EV pickup models: the GMC Hummer EV (available as an SUV or pickup truck), the Sierra EV, and the Chevrolet Silverado EV. But GM, like Ford, has much to lose by entering the EV market. It has roughly 40% of the conventional pickup truck market. Ford, which dominated the pickup truck market for nearly a half-century, now has 32% of the market, with 765,649 F-series units sold in 2024. So there may be little or no incentive for them to cannibalize the sales of their gas-powered pickups, particularly since those tend to be their most profitable models. This may be why both GM and Ford are pouring cold water on the idea that EVs will one day soon overtake gas-powered engines All indications are that Tesla will remain committed to the category. This year, Tesla started offering a long-range rear wheel drive version of the Cybertruck priced at $70,000, which makes it the first model to qualify for the full Inflation Reduction Act's $7,500 EV tax credit. Previously, only the Ford F-150 Lightning and Chevy Silverado qualified for the full credit. Tesla will likely remain one of the category's volume leaders. Cox Automotive estimates that in the first quarter of 2025, Cybertruck registrations totaled 7,126, just behind Ford's F-150 Lightning sales of 7,913. If Tesla wants to gain more market share, it will need to get down the cost curve with a reasonable price for the Cybertruck. At some point, though probably not for at least a couple of years, another incarnation of the Cybertruck will breach the $50,000 price level. There is precedent for this type of price and performance improvement in Tesla's product line: The Model 3 is a more affordable version of the Model S, and the Model Y is a dramatically lower-priced version of the Model X. So don't be surprised if in the next few years Tesla unveils a Cybertruck successor—smaller, fleeter, and faster. Ben Z. Rose is president and analyst at Battle Road Research
Mint
42 minutes ago
- Mint
How Bain Capital rescued Australia's second-largest airline
SYDNEY—With businesses sending workers home at the start of the Covid-19 pandemic, Bain Capital's Mike Murphy dashed to buy his first webcam. While browsing an electronics store, his phone rang for one of the most important calls of his life. Bain Co-Chairman Steve Pagliuca had heard the Australia office established by Murphy in 2016 was considering a move for Virgin Australia. The country's No. 2 carrier had stumbled under the debt racked up in a capacity and price war with Qantas Airways. Global fleets had yet to be grounded, but travel demand was plummeting. It was clear airlines worldwide would need bailouts to survive. Pagliuca wanted to know what his local chief was thinking. 'I got a call saying, 'what's this I hear about some Virgin opportunity?'" Murphy, a partner on Bain's Asia-Pacific private-equity team, said. Instead of picking tech for his home office, Murphy told Pagliuca how Virgin Australia had run into trouble and about the opportunity in funding a turnaround. Key to the deal, Murphy said, was air travel's importance in a country where a third of the population lives across three cities separated by at least 500 miles. 'He got it very quickly," said Murphy. 'We had our chairman very supportive of the concept, subject to the work stacking up." Three months after that March 2020 conversation, Bain agreed to acquire Virgin Australia out of bankruptcy protection for 3.5 billion Australian dollars, equivalent to US$2.3 billion. Last week, the slimmed-down airline relisted with an implied enterprise value of A$3.62 billion. After a 15% rise across its first two days on market, the stock is 8.3% up on its initial public offering price. Bain this year sold a 25% stake in Virgin to Qatar Airways for an undisclosed amount. It remains the largest shareholder with 40% and will stay invested for at least another year. The IPO was Australia's most anticipated of recent years. Bain, which has over US$185 billion in assets under management, relaunched Virgin into an aviation industry reshaped by the pandemic. A two-time Olympian with Australia's diving team, Murphy became interested in Virgin in 2019. Already stretched by an attempt to take on Qantas across domestic and international routes, Virgin raised more capital to take full ownership of its loyalty program. That A$700 million acquisition left Virgin with a debt almost 5.5 times the size of its earnings. As a listed company, albeit one partially owned by Etihad Airways, Singapore Airlines and Chinese conglomerate HNA Group, Virgin's accounts were publicly available. 'Being five and a half times levered for any business publicly, but particularly for an airline, was a pretty alarmingly high level of leverage," Murphy said. 'It was clear that this could be a challenging situation." On March 20, 2020, that challenge became insurmountable when Australia closed its borders to nonresidents to limit Covid-19's spread. It would be almost two years until the country welcomed visitors again. Domestic fleets were also grounded for long spells. While Qantas raised capital from equity markets, Virgin entered bankruptcy protection after lawmakers refused financial aid on fears it would amount to a bailout of the foreign carriers that together owned 90% of the airline's stock. 'We mobilized from a couple of thought bubbles in this office to a team of nearly 30 globally working on the deal," Murphy said. The airline's administrator, Deloitte, slashed costs to keep it afloat but Murphy and his team needed to convince colleagues the deal was worth pursuing. Its complexity meant the investment committee had 11 members rather than the typical seven, with representatives from Bain's private-equity and credit teams. The final committee meeting began at 11 p.m. Sydney time on Sunday, June 21. With unanimous support essential, the discussion ran until 7 a.m. 'I was in my study watching no planes fly in the sky all night long. It was a very, very rigorous decision-making process," Murphy said. On June 26, Deloitte, which had allowed 19 potential buyers to look at the books, announced Bain had beaten New York-based Cyrus Capital Partners and a late proposal by an ad hoc group of Virgin Australia bondholders. Bain swiftly injected more than A$100 million to cover short-term costs and set about overhauling the business for when planes could fly again. The retirement of Virgin's Tigerair budget carrier was confirmed, routes including to Los Angeles were scrapped, and more than 500 contracts were renegotiated or exited. Jobs were cut and employment terms were changed. The fleet was slimmed down and simplified from seven craft types to three, reducing maintenance and training costs, and improving network flexibility. 'It was a dramatic resetting of the cost base. The administration process allowed us to be able to do things that you can't normally do," Murphy said. After taking ownership in November 2020, Bain reintroduced some routes, overhauled fare structures, and made investments including in back-office technology and a business loyalty program. By the end of 2024, debt was down to 1.3 times earnings, roughly the same level reported by Qantas. With travel restrictions over, Virgin's underlying earnings margin improved from 2.9% prior to the pandemic, to 9.4% in the 12 months through June 2024. Its prospectus forecast was for an 11.1% margin this financial year. Bain moved forward with the IPO shortly after Australia's government approved Qatar Airways' investment in February this year. With staff numbers down by about 20% and revenues growing, the pitch to investors centered on Virgin as a strong, profitable No. 2 player happy to focus primarily on domestic operations. 'A lot of the activity is in Brisbane, Sydney, Melbourne. There's no other alternative in getting between those cities except spending 12 hours driving," Murphy said. The IPO involved a 30% stake carved out of Bain's holding. Murphy, who this month was fundraising in Tokyo for Bain's sixth Asia fund, said the offering was oversubscribed and that Bain should be able to fully exit within its usual five- to seven-year window.
