Weekly Reads - January 16, 2023
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Electric vehicle sales achieved a key milestone in 2022 accounting for 10% of total vehicle sales for the first time. China and Europe were the biggest drivers behind EV sales with the U.S lagging behind these two regions. Global sales of EVs totaled 7.8 million a 68% increase from 2021. Volkswagen, the EV market leader in Europe, has already stated that they believe that China could reach a point where sales of ICE vehicles begin to permanently decline as EVs take market share. EVs have reached market share of 19% in China and 11% in Europe with the U.S lagging behind with only a 5.8% EV market share. While Tesla remains the dominant EV maker, traditional auto makers have stepped up their game releasing more EV models over last few years. With EVs forecasted to reach close to 50% market share by 2030 it is likely we see many traditional auto makers continuing to release more EV car models while scaling down their investment and production of ICE vehicles.
The Chinese government is set to take so-called “golden shares” in units of Alibaba and Tencent ensuring more control over the largest Chinese tech companies. These “golden shares” will allow the government to nominate directors or influence key decisions for these companies. The Cyberspace Administration of China took a 1% stake in Alibaba’s digital media subsidiary in Guangzhou. This subsidiary includes streaming platform Youku and mobile browser UC web. The Chinese government has wasted no time exerting its new power by reportedly nominating a new director. It is still unknown how the Chinese government plans to leverage these golden shares but analysts have speculated that the government may be looking to gain access to important data these companies generate. For Alibaba and Tencent this new agreement could help them get faster approvals for new business ventures and reduce the risk of further regulatory clampdowns. This could be a win-win agreement for both sides yet there is still a significant risk that the Chinese government will disrupt business operations by pushing their own political agenda.
YouTube is introducing ad supported streaming of linear channels via its new hub called FAST. FAST will compete against companies such as Roku, Pluto TV, and Tubi who offer ad supported linear tv. YouTube is testing this new hub through its core YouTube page expanding the amount of content users have access to. This announcement follows YouTube’s $2 billion purchase of the NFL’s Sunday Ticket. There is no doubt YouTube is trying to become the primary entertainment platform with Nielsen reporting that YouTube already has incurred the largest share of TV viewing time with nearly 9% share. By accumulating and integrating different types of entertainment content into one popular and central platform YouTube is giving users more content choices and incentivizing longer viewership times which should continue to drive advertising dollars and create stickier relationships with end users.