The world entered a pivotal year for green investment

The new US President Joe Biden’s strong pledges to restore the country’s “world leadership” promise to trigger a broad green revolution.

Thirst … chip

Gone are the days of oil thirst, electricity thirst, what the world is thirsty for is… chips. Shortages of chip supply are threatening the safety of the global auto industry as the industry has just escaped from pure mechanical engineering, as evidenced by Elon Musk’s “genius madman” Tesla’s now branded turmeric more.

Toyota, Volkswagen and a number of other car manufacturers around the world are having to “brake” to production plans due to lack of semiconductors, in the context of the need to use chips for other products such as smartphones and receiver stations. Original generation (telecommunications) is increasing.

Investment in sustainable development will make a significant progress in 2021 and this is seen as a pivotal year for green investment. This activity is not only encouraged by US President Joe Biden’s efforts to promote a $ 2,000 billion investment package in green infrastructure, but also tightening fossil energy controls and areas of environmental comfort. school, society and administration.
Fan Cheuk Wan, Investment Manager at Private Banking and Asset Management (HSBC Group)

Toyota Motor has decided to reduce production of Tundra pickup trucks at its factory in Texas due to a lack of semiconductors. By the beginning of January this year, the company has yet to disclose details of the scale and timing of production cuts. Earlier, in December 2020, a Toyota representative informed Japanese auto parts companies that they had not yet determined whether they could secure enough semiconductors. Normally, Toyota will have to clarify production plans next year, but the global chip crisis has caused the automaker to struggle to come up with an official production plan.

According to Nikkei news agency, Nissan Motor is estimated to reduce production of 5,000 Note flagship cars in January and the cut could last until February this year. Along with that, Honda also decided to reduce output of 4,000 Fit small cars in January at its factory in Mie Prefecture (Japan). Meanwhile, Germany’s Volkswagen has also announced it will cut production in China, North America and Europe. In Germany, this car company halted production of the Golf model from December 2020 and lasted until mid-January 2021.

Due to a lack of chips, most carmakers are scrambling to source from top auto parts suppliers like Continental and Bosch. Sources of semiconductors purchased from major companies such as the NXP joint venture between the US and the Netherlands and the Swiss STMicroelectronics have also slowed.

Semiconductors have become indispensable in the modern automobile industry, as electric cars and autonomous vehicles are increasingly popular in the world. As cars become more premium, functional and sophisticated, the demand for semiconductors will increase. According to KPMG Japan, a member unit of KPMG Auditing Firm, an electric vehicle uses twice the amount of semiconductor as a gasoline car.

It is no coincidence that after Joe Biden won the 2020 election and officially took office as the 46th US President, car companies and technology companies simultaneously turned to make electric cars in the form of an association. Because, President Joe Biden is said to be more traditional diplomacy, orderly and less surprised. The “boss” of the White House also emphasizes more on value systems, not only democracy, human rights, but also environmental issues, climate change, clean energy, labor, social welfare …

Obviously, automakers and technology have “sniffed” the signals of the Joe Biden government about green development, responding to climate change. The evidence is that on the first day of the oath of office, President Biden has killed the $ 9 billion oil pipeline project from Canada to the US – Keystone XL. This move has dealt a fatal blow to the traditional energy industry, and is also a strong action demonstrating a commitment to respond to climate change.

Most recently, a week after President Biden took office, General Motors announced its ambition to completely end the production of diesel and gasoline-powered cars, trucks and multi-purpose sports cars by 2035, moving completely. to make electric vehicles to become a carbon neutral company by 2040.

And yet, the automaker also plans to use 100% renewable energy to run factories in the US by 2030 and other global facilities over the next five years. The ambitions were announced by General Motors on Jan. 28, a day after President Bide signed a series of administrative decrees that prioritize climate change response at all levels of government and bring America back on track. process to limit carbon emissions.

Activate green investment flows

In the midst of the thirst for chips, the heat of the auto industry has been compounded when the technology “giants” want to “jump” into the “green car” field. Indeed, General Motors with great ambitions cannot do all the work. On January 19, the company announced it had raised $ 2 billion in new capital for its subsidiary that specializes in developing self-propelled cars, including capital from Honda Motor and Microsoft – a cloud service provider. for Cruise with the American automaker’s long-awaited ride-hailing service expected to compete with Uber and Lyft.

Meanwhile, an electric truck start-up Rivian (USA) is expected to ship its first cars this summer after raising $ 2.65 billion from major investors, including the Fund. Amazon’s Climate Commitment (CPF), investment management funds like T. Rowe Price, Fidelity Investments and others are part of Rivian’s upcoming public offering.

Tech players like Foxconn and Apple are also not out of the game. At the beginning of 2021, Foxconn – a major supplier of Apple in Asia – had a step of tension when signing a strategic cooperation agreement with electric vehicle start-up Byton (China) and Geely Automotive (Hong Kong) for electric vehicle manufacturing. And the “giant” Apple technology also makes people have to rethink the electric vehicle plan that has been criticized for being slow to implement after Hyundai (Korea) announced about establishing a joint venture to manufacture electric cars. by 2024.

The Korean media quoted Apple as saying that Apple had proposed cooperation and Hyundai was considering the terms. Meanwhile, Hyundai has hinted at partners for the new venture, without mentioning Apple directly.

In China, where billionaire Elon Musk’s Tesla electric car is making headlines, Baidu – China’s Internet giant in mid-January reached a strategic partnership agreement with Domestic automaker Geely set up his own company to make electric vehicles. The joint venture will operate independently of Baidu, but Baidu still holds the majority of shares, while Geely holds a small stake, a source familiar with CNBC’s sources said.

According to Fan Cheuk Wan, Chief Investment Officer at the private banking and wealth management unit (HSBC Group), the strong commitment of global leaders to carbon neutrality will continue. providing many opportunities for green investment, especially in the new energy sector, electric vehicles and other related industries. Ms. Fan Cheuk Wan said that in Asia, investors can expect the green revolution in China with new investment and business opportunities to appear. At the same time, businesses / industries that pose environmental, social and governance risks, such as energy, must be driven by low carbon emissions. “That means, investors will have to restructure their portfolios in a more sustainable direction, in order to minimize environmental, social and governance risks,” noted Fan Cheuk Wan.

(According to foreign press)

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