Autos & Shared Mobility_ Why We're Bullish on China-US Cooperation on EVs

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Autos & Shared Mobility sector, particularly regarding China-US cooperation on electric vehicles (EVs) [1][8]. Core Insights and Arguments - Sino-US Relations: Current relations between the US and China in the auto industry are at a low point, but there is potential for cooperation in EV technology despite ongoing national security concerns [1][2]. - Market Transformation: The transition from traditional vehicles to AI-enabled EVs is reshaping the global auto market, supply chains, and regulatory frameworks. Cooperation between US and Chinese automakers is deemed necessary for mutual benefit [2][3]. - EV Adoption Forecast: Short-term EV sales are influenced by policies and tariffs, but a significant increase in adoption is expected from 2027 to 2030. EVs are seen as essential for integrating AI technologies into vehicles [3][4]. - China's Competitive Edge: China is perceived to have a lead in producing affordable EVs, which may need to be manufactured in the US to meet local market demands. Tariffs may be used to incentivize localization of production [4][5]. - Capital Efficiency: Traditional US automakers like GM and Ford are expected to seek more capital-efficient strategies in the EV market, potentially collaborating with Chinese firms to optimize their investments [5][6]. - IRA Restructuring: The Inflation Reduction Act (IRA) may require significant changes, particularly regarding the definition of Foreign Entity of Concern (FEOC), to facilitate joint ventures that utilize US-based resources while relying on Chinese technology [6][9]. Additional Important Insights - Strategic Partnerships: Increased frequency of strategic announcements, joint ventures, and consolidations between legacy Western and Chinese EV companies is anticipated [11]. - Stock Ratings: Companies such as Tesla (TSLA), Rivian (RIVN), and Lucid (LCID) may see continued support, while traditional internal combustion engine (ICE) companies may face stagnation [11][62]. - Investment Opportunities: Analysts suggest reconsidering investments in Chinese EV-exposed companies and highlight potential benefits for EV-exposed suppliers [11][62]. This summary encapsulates the critical insights and implications for the auto industry, particularly regarding the evolving dynamics between US and Chinese automakers in the context of electric vehicle technology and market strategies.