Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

Highlights for July are as follows:<ul>
<li>Europe continues to attract attention, with Chinese player SVOLT Energy Technology planning to build a battery manufacturing base there</li>
<li>
<a href="https://www.smartkarma.com/entities/bayerische-motoren-werke-ag" target="_blank" data-smartkarma-citation="entities:21591:1" rel="noopener">Bayerische Motoren Werke Ag (BMW GR)</a> focuses on increasing battery capacity for PHEVs, raising concerns regarding evolving pure EV battery demand opportunities, specifically in Europe</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a> invests in capacity expansion in the US while aiming to produce its own battery cathode material in South Korea to keep up with competition.</li>
<li>
<a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung Sdi (006400 KS)</a> to supply batteries for Volvo’s trucks. Concerns regarding its ability to increase capacity following VW’s change in battery plans do not seem warranted.</li>
<li>
<a href="https://www.smartkarma.com/entities/panasonic-corp" target="_blank" data-smartkarma-citation="entities:222:1" rel="noopener">Panasonic Corp (6752 JP)</a> creates no news during the month, apart from reporting its rather weak earnings ( <a href="https://www.smartkarma.com/insights/a-disappointing-1q-panasonic-likely-to-approach-our-worst-case-scenario" target="_blank" data-smartkarma-citation="insights:31465" rel="noopener">A Disappointing 1Q: Panasonic Likely to Approach Our Worst-Case Scenario</a>). Tesla continues to draw attention with reported plans to build its own battery plant, now in Indonesia.</li>
<li>Chinese players <a href="https://www.smartkarma.com/entities/byd-co-ltd" target="_blank" data-smartkarma-citation="entities:26048:1" rel="noopener">BYD Co Ltd (002594 CH)</a> and <a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH)</a> are chosen by <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> to ensure that Toyota’s accelerated EV plans are not hindered by supply issues.</li>
<li>The leading Chinese battery players witnessed relatively positive momentum last month, despite the weakness of overall markets.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/879/original/ev.png?1564972507" class="editor-image img-responsive" data-smartkarma-image-id="94879"></figure><div class="content-remarks">Source: CapIQ</div>

Highlights for July are as follows:
Europe continues to attract attention, with Chinese player SVOLT Energy Technology planning to build a battery manufacturing base there

Bayerische Motoren Werke Ag (BMW GR) focuses on increasing battery capacity for PHEVs, raising concerns regarding evolving pure EV battery demand opportunities, specifically in Europe

LG Chem Ltd (051910 KS) invests in capacity expansion in the US while aiming to produce its own battery cathode material in South Korea to keep up with competition.

Samsung Sdi (006400 KS) to supply batteries for Volvo’s trucks. Concerns regarding its ability to increase capacity following VW’s change in battery plans do not seem warranted.

Panasonic Corp (6752 JP) creates no news during the month, apart from reporting its rather weak earnings ( A Disappointing 1Q: Panasonic Likely to Approach Our Worst-Case Scenario). Tesla continues to draw attention with reported plans to build its own battery plant, now in Indonesia.
Chinese players BYD Co Ltd (002594 CH) and CATL (A) (300750 CH) are chosen by Toyota Motor (7203 JP) to ensure that Toyota’s accelerated EV plans are not hindered by supply issues.
The leading Chinese battery players witnessed relatively positive momentum last month, despite the weakness of overall markets.
Source: CapIQ

EV Batteries Monthly: Concentration on Europe Increases, Toyota’s Focus on Chinese Players Grows

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

In June, China Customs cleared 6,039 imported Tesla, of which 1,361 cars arrived last month and 4,678 cars arrived in April, but clearance was delayed due to a need for additional paperwork.   According to data released by China Customs, 1,807 battery electric passenger vehicles were imported in June.  Tesla counts for 75% of total volume, while <a href="https://www.smartkarma.com/entities/bayerische-motoren-werke-ag" target="_blank" data-smartkarma-citation="entities:21591:1" rel="noopener">Bayerische Motoren Werke Ag (BMW GR)</a> , <a href="https://www.smartkarma.com/entities/volkswagen-ag" target="_blank" data-smartkarma-citation="entities:21738:1" rel="noopener">Volkswagen (VOW GR)</a> , <a href="https://www.smartkarma.com/entities/tata-motors-ltd-spon-adr" target="_blank" data-smartkarma-citation="entities:12763:1" rel="noopener">Tata Motors Ltd Spon Adr (TTM US)</a> JLR and other foreign OEMs shipped less than 446 units to China.

In June, China Customs cleared 6,039 imported Tesla, of which 1,361 cars arrived last month and 4,678 cars arrived in April, but clearance was delayed due to a need for additional paperwork.   According to data released by China Customs, 1,807 battery electric passenger vehicles were imported in June.  Tesla counts for 75% of total volume, while Bayerische Motoren Werke Ag (BMW GR) , Volkswagen (VOW GR) , Tata Motors Ltd Spon Adr (TTM US) JLR and other foreign OEMs shipped less than 446 units to China. 

TSLA China Update: June Import and Registration Data

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/375/original/tesla%20GA4%20tent%20%20%20%20source%20%20%20Stephen%20Lam%20Reuters.jpg?1563394610" class="editor-image img-responsive" data-smartkarma-image-id="93375"></figure><div class="content-caption">Tesla GA4 tent. Stephen Lam/Reuters</div>CNBC filed a <a href="https://www.cnbc.com/2019/07/15/tesla-workers-in-ga4-tent-describe-pressure-to-make-model-3-goals.html" target="_blank" rel="noopener">scathing report</a> this week detailing serious problems at the <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> GA4 tent, a supposedly temporary solution set up in the parking lot last year to ease Model 3 production constraints at the company's primary manufacturing plant in Fremont, California.Even more troubling, as I long have warned, is that the problems CNBC uncovered really aren't new. Tesla's troubles also are no longer about being a quirky start-up still figuring things out as it goes. This is a $45 billion company now more than sixteen years old and more than a year into full-scale production capability for all of its models that it's expanding across the globe.Tesla denies CNBC's findings, <a href="https://www.businessinsider.com.au/tesla-workers-took-shortcuts-used-electrical-tape-model-3-goals-2019-7" target="_blank" rel="noopener">telling Business Insider</a> they are “misleading” and that it has “dedicated teams” that “track every car throughout every shop in the assembly line.”<blockquote>“In order to ensure the highest quality, we review every vehicle for even the smallest refinement before it leaves the factory. Dedicated inspection teams track every car throughout every shop in the assembly line, and every vehicle is then subjected to an additional quality control process towards the end of line. And all of this happens before a vehicle leaves the factory and is delivered to a customer. This applies to all areas of the factory, including our operations at GA4, and it’s why Tesla is able to build the safest and best-performing cars available today,'' the company said in a statement."</blockquote>Gee, who should we believe? If only there was mounting evidence from multiple sources showing Tesla has a long history of serious and escalating problems with its working conditions, plant safety, quality controls, and management oversight which already have cost the company millions of dollars in fines and settlements and yet no signs of being convincingly resolved.Hint: there is. Lots, as I've been warning since last year.Read on for Bond Angle analysis.

Tesla GA4 tent. Stephen Lam/ReutersCNBC filed a scathing report this week detailing serious problems at the Tesla Motors (TSLA US) GA4 tent, a supposedly temporary solution set up in the parking lot last year to ease Model 3 production constraints at the company's primary manufacturing plant in Fremont, California.Even more troubling, as I long have warned, is that the problems CNBC uncovered really aren't new. Tesla's troubles also are no longer about being a quirky start-up still figuring things out as it goes. This is a $45 billion company now more than sixteen years old and more than a year into full-scale production capability for all of its models that it's expanding across the globe.Tesla denies CNBC's findings, telling Business Insider they are “misleading” and that it has “dedicated teams” that “track every car throughout every shop in the assembly line.”“In order to ensure the highest quality, we review every vehicle for even the smallest refinement before it leaves the factory. Dedicated inspection teams track every car throughout every shop in the assembly line, and every vehicle is then subjected to an additional quality control process towards the end of line. And all of this happens before a vehicle leaves the factory and is delivered to a customer. This applies to all areas of the factory, including our operations at GA4, and it’s why Tesla is able to build the safest and best-performing cars available today,'' the company said in a statement."Gee, who should we believe? If only there was mounting evidence from multiple sources showing Tesla has a long history of serious and escalating problems with its working conditions, plant safety, quality controls, and management oversight which already have cost the company millions of dollars in fines and settlements and yet no signs of being convincingly resolved.Hint: there is. Lots, as I've been warning since last year.Read on for Bond Angle analysis.

The Trouble With Tesla's Arrested Development

A prolonged decline in new car sales obviously hurts China’s manufacturing sector and is a drag on GDP growth. But the data above does not imply a hard landing in overall discretionary consumption.  In fact, we are seeing a structural shift to used car purchases which has cannibalized demand for new cars.  Consumers are spending on cars, just all new cars.)

A prolonged decline in new car sales obviously hurts China’s manufacturing sector and is a drag on GDP growth. But the data above does not imply a hard landing in overall discretionary consumption.  In fact, we are seeing a structural shift to used car purchases which has cannibalized demand for new cars.  Consumers are spending on cars, just all new cars.)

China Auto Market H1 Review- Decoupling of Auto Sales and Consumer Discretionary Consumption

Highlights for June are as follows:
<ul class="">
<li>
<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> plans to develop its own batteries following the halt in investments in its Gigafactory with Panasonic.</li>
<li>European automakers are striving to compete with the US and Asian players in the EV space and smooth battery production is considered key in achieving their EV aims. Automakers and certain significant investors are financing the ‘Swedish project’, which involves building a battery plant jointly with local battery maker Northvolt, in an attempt to compete with the Gigafactory.</li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH)</a> increases investment plans in Europe provoked by aggressive EV targets set by Automakers such as <a href="https://www.smartkarma.com/entities/volkswagen-ag" target="_blank" data-smartkarma-citation="entities:21738:1" rel="noopener">Volkswagen (VOW GR)</a> and <a href="https://www.smartkarma.com/entities/bayerische-motoren-werke-ag" target="_blank" data-smartkarma-citation="entities:21591:1" rel="noopener">Bayerische Motoren Werke Ag (BMW GR)</a>.</li>
<li>The leading battery players witnessed a relatively steady movement in stock last month, supported by steady movement in the overall markets. Tesla has outperformed the market during the month, but we are still sceptical of the company’s continuous steady performance and view the company’s performance to be highly volatile.</li>
</ul>
<div class="content-caption"> Leading Battery Makers Show a Relatively Steady Movement in Stock 
</div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/092/106/original/11.jpg?1562151110" class="editor-image img-responsive" data-smartkarma-image-id="92106"></figure>
<div class="content-remarks">
Source: CapIQ
</div>
<div class="content-caption">Market Performance Has Also Been Positive in June</div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/092/107/original/12.jpg?1562151129" class="editor-image img-responsive" data-smartkarma-image-id="92107"></figure>
<div class="content-remarks">
Source: CapIQ
</div>
Previous Monthly: <a href="https://www.smartkarma.com/insights/a-monthly-on-ev-batteries-intense-competition-on-capacity-expansions-and-securing-deals" target="_blank" data-smartkarma-citation="insights:30238" rel="noopener">A Monthly on EV Batteries: Intense Competition on Capacity Expansions and Securing Deals</a>

Highlights for June are as follows:


Tesla Motors (TSLA US) plans to develop its own batteries following the halt in investments in its Gigafactory with Panasonic.
European automakers are striving to compete with the US and Asian players in the EV space and smooth battery production is considered key in achieving their EV aims. Automakers and certain significant investors are financing the ‘Swedish project’, which involves building a battery plant jointly with local battery maker Northvolt, in an attempt to compete with the Gigafactory.

CATL (A) (300750 CH) increases investment plans in Europe provoked by aggressive EV targets set by Automakers such as Volkswagen (VOW GR) and Bayerische Motoren Werke Ag (BMW GR).
The leading battery players witnessed a relatively steady movement in stock last month, supported by steady movement in the overall markets. Tesla has outperformed the market during the month, but we are still sceptical of the company’s continuous steady performance and view the company’s performance to be highly volatile.

 Leading Battery Makers Show a Relatively Steady Movement in Stock 



Source: CapIQ

Market Performance Has Also Been Positive in June


Source: CapIQ

Previous Monthly: A Monthly on EV Batteries: Intense Competition on Capacity Expansions and Securing Deals 

Monthly on EV Batteries: Panasonic Giving Up on Tesla?; Europe in The Limelight For Battery Players

Germany

Bayerische Motoren Werke Aktiengesellschaft (BMW) manufactures and sells cars and motorcycles. The Company offers convertible sports cars, sedans, and touring motorcycles with large displacement engines. BMW serves customers worldwide.

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Bayerische Motoren Werke (BMW) (BMW GR)

EV Batteries Monthly: Concentration on Europe Increases, Toyota’s Focus on Chinese Players Grows

Highlights for July are as follows: Europe continues to attract attention, with Chinese player SVOLT Energy Technology planning to build a battery...

Aqila Ali

TSLA China Update: June Import and Registration Data

In June, China Customs cleared 6,039 imported Tesla, of which 1,361 cars arrived last month and 4,678 cars arrived in April, but clearance was...

JL Warren Capital

The Trouble With Tesla's Arrested Development

CNBC filed a scathing report this week detailing serious problems at the Tesla Motors (TSLA US) GA4 tent, a supposedly temporary solution set up in...

Vicki Bryan

China Auto Market H1 Review- Decoupling of Auto Sales and Consumer Discretionary Consumption

A prolonged decline in new car sales obviously hurts China’s manufacturing sector and is a drag on GDP growth. But the data above does not imply a...

JL Warren Capital

Monthly on EV Batteries: Panasonic Giving Up on Tesla?; Europe in The Limelight For Battery Players

Highlights for June are as follows: Tesla Motors (TSLA US) plans to develop its own batteries following the halt in investments in its...

Aqila Ali

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