Month: January 2024

3/3
© Reuters. FILE PHOTO: Tesla’s new Cybertruck is shown on display at a Tesla store in San Diego, California, U.S., December 9, 2023. REUTERS/Mike Blake/File Photo
2/3

By David Shepardson

WASHINGTON (Reuters) -Many electric vehicles lost eligibility for tax credits of up to $7,500 after new battery sourcing rules took effect on Monday, including the Nissan (OTC:NSANY) Leaf, Tesla (NASDAQ:TSLA) Cybertruck All-Wheel Drive, some Tesla Model 3s and Chevrolet Blazer EV, the U.S. Treasury said.

The Treasury issued guidelines in December detailing new battery sourcing requirements aimed at weaning the U.S. electric vehicle supply chain away from China. They took effect on Monday.

The number of EV models qualifying for U.S. EV tax credits fell from 43 to 19. Those figures include different versions of the same vehicle type. Treasury said some manufacturers have yet to submit information on eligible vehicles, which could lead to changes in the list.

Tesla did not immediately comment Monday but said on its website “Cybertruck is likely to qualify for the federal tax credit later in 2024.”

The new rules allow buyers to claim the tax credit of up to $7,500 at a participating dealership at the point of sale. The tax credit sets limits on vehicle price and buyer income to qualify.

The Volkswagen (ETR:VOWG_p) ID.4, Tesla Model 3 Rear Wheel Drive, BMW (ETR:BMWG) X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq and Ford E-Transit are among the vehicles that fell off the list of vehicles eligible for tax credits.

Volkswagen said on Monday it “is in the process of confirming eligibility for a federal EV tax credit for vehicles” after Jan. 1.

“We are optimistic that MY2023 ID.4s and all MY2024 ID.4s will be eligible under the new rules,” VW added.

BMW did not immediately comment.

Nissan said is working with suppliers in an effort to meet changing requirements “and regain tax credit eligibility for the Nissan Leaf in the future.”

The Treasury said “automakers are adjusting their supply chains to ensure buyers continue to be eligible for the new clean vehicle credit, partnering with allies and bringing jobs and investment back to the United States.”

Ford Motor (NYSE:F) said last month its E-Transit would lose the $3,750 tax credit, as would the Mach-E and Lincoln Aviator Grand Touring plug-in hybrid, but its F-150 EV Lighting and the Lincoln Corsair Grand Touring retained credits.

General Motors (NYSE:GM) noted all of its EVs would temporarily lose eligibility except the Chevrolet Bolt, adding the Lyriq and Blazer EV are losing the credit because of two minor components.

GM expects after a sourcing change the Lyriq and Blazer EV will regain eligibility in early 2024 and said its Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac OPTIQ produced “after the sourcing change will be eligible for the full incentive.”

The 2022 Inflation Reduction Act law reformed the EV tax credit, requiring vehicles to be assembled in North America to qualify for any tax credits, eliminating nearly 70% of eligible models at the time.

Tesla disclosed in December its Model 3 Rear-Wheel Drive and Long Range vehicles would lose federal tax credits starting Jan. 1. The Model 3 Performance retains the $7,500 credit.

By Steven Scheer and Ari Rabinovitch

JERUSALEM (Reuters) – The Bank of Israel lowered short-term borrowing rates for the first time in nearly four years on Monday, becoming the first developed country to ease policy, while urging lawmakers to rein in spending that has soared during Israel’s war with Hamas.

In reducing interest rates for the first time since April 2020, the central bank cited a stabilisation of financial markets since the outbreak of the war on Oct. 7, declining inflation and weaker economic growth.

But Bank of Israel Governor Amir Yaron said the pace of future cuts partly depended on fiscal policy and how Prime Minister Benjamin Netanyahu’s government of far right wing and religious parties would keep to responsible fiscal policy.

He told reporters that defence and civilian costs of the war were expected to reach 210 billion shekels ($58 billion) and would be a “budgetary burden” that needed to be dealt with through spending reductions in areas that were not crucial to the war and by raising revenue, usually meaning higher taxes.

“If the markets perceive that Israel is moving toward a prolonged path of rising debt it is likely to lead to increased yields, depreciation and inflation, such that a higher central bank interest rate will be required,” said Yaron, who was just approved for a second and final five-year term as governor.

He pointed out the government’s inaction so far on making needed budget adjustments – such as cutting back redundant ministries, without giving details of which ministries he meant.

The Finance Ministry estimates a 2024 budget deficit of around 6% of GDP.

“Not acting now … is likely to cost the economy much more in the future,” Yaron added. “What is needed now is a responsible budget that requires adjustments and decisions that are not easy regarding priorities.”

Deputy Governor Andrew Abir said that while falling inflation and a recovery in financial markets allowed for the start of rate cuts, the easing cycle would take time due to the war and what will happen with the budget.

“Going forward it’s a lot more difficult because there’s certainly a lot of uncertainty,” he told Reuters. “We’re going to likely to be fairly cautious going ahead. We will wait to see how things progress … There’s always a balance between monetary policy and fiscal policy. If fiscal policy is more expansive then monetary policy probably needs to take that into account.”

FISCAL POLICY

Finance Minister Bezalel Smotrich praised the rate cut, but seemed to brush aside Yaron’s call for budget discipline.

“The responsible fiscal policy that we have been leading for the past year has contributed to the decrease in inflation, and now the lowering of the interest rate serves the need to help the growth of businesses and the economy at the same time as the war,” Smotrich said.

Ahead of the rates decision that saw the central bank lower its benchmark rate by a quarter-point from 4.75% to 4.50%, analysts were split, with seven expecting no move and seven projecting a 25 basis point reduction.

It had raised rates 10 straight times in an aggressive tightening cycle that has taken the rate from 0.1% last April before pausing in July and again in August, October and November.

The inflation rate eased to 3.3% in November from 3.7% in October but remained above an annual target range of 1%-3%.

The bank’s staff maintained economic growth estimates of 2% for both 2023 and 2024 and set a growth projection of 5% for 2025. Inflation, the bank said, looks set to ease to 2.4% this year, while the interest rate is forecast to gradually fall to 3.75% from 4% by the end of the year.

The shekel weakened 0.6% versus the dollar to a rate of 3.6225 after the rates decision.

($1 = 3.6216 shekels)

By Tim Kelly, Satoshi Sugiyama and Sakura Murakami

TOKYO (Reuters) -A powerful earthquake struck central Japan on Monday, killing at least one person, destroying buildings, knocking out power to tens of thousands of homes and prompting residents in some coastal areas to flee to higher ground.

The quake with a preliminary magnitude of 7.6 triggered waves of about 1 metre along Japan’s west coast and neighbouring South Korea.

The Japan Meteorological Agency (JMA) initially issued a major tsunami warning – its first since the March 2011 earthquake and tsunami that struck northeast Japan killing nearly 20,000 people – for Ishikawa prefecture. It later downgraded that and eventually cut it to an advisory.

It was the strongest quake in the region in more than four decades, according to the U.S. Geological Survey.

Houses were destroyed, fires broke out and army personnel were dispatched to help with rescue operations, government spokesperson Yoshimasa Hayashi told reporters.

An elderly man was pronounced dead after a building fell down in Shika Town in Ishikawa, broadcaster NTV reported citing local police.

Local media footage from the prefecture showed a building collapsing in a plume of dust in the city of Suzu and a huge crack in a road in Wajima where panicked-looking parents clutched their children.

One witness on social media platform X posted footage of the Keta Grand Shrine near the coast in Hakui rocking in the quake as a crowd of visitors watched. “It’s swaying,” she exclaims. “This is scary!”

Millions of Japanese traditionally visit shrines and temples on Jan. 1 to mark the start of the new year.

In nearby Kanazawa, a popular tourist destination, images showed the remnants of a shattered stone gate strewn at the entrance of another shrine as anxious worshippers looked on.

The tremor was also felt in the mountains of neighbouring Nagano prefecture.

“The snow from the electric wire (came) down, and also from the roof it fell down and all the cars are shaking, and so everybody was panicked,” Jonny Wu, a Taiwanese tourist visiting Nagano for a skiing holiday, told Reuters.

More strong quakes in the region, where seismic activity has been simmering for more than three years, could occur over coming days, JMA official Toshihiro Shimoyama said.

Russia and North Korea also issued tsunami warnings for some areas.

The Japanese government said that as of Monday night it had ordered more than 97,000 people in nine prefectures on the western coast of Japan’s main island Honshu to evacuate. They were set to spend the night in sports halls and school gymnasiums, commonly used as evacuation centres in emergencies.

Kanazawa resident Ayako Daikai said she had evacuated to a nearby elementary school with her husband and two children soon after the earthquake hit. Classrooms, stairwells, hallways and the gymnasium were all packed with evacuees, she said.

“We haven’t decided when to return home yet,” she told Reuters when contacted by telephone.

NUCLEAR PLANTS

Japanese Prime Minister Fumio Kishida told reporters late on Monday that he had instructed search and rescue teams to do everything possible to save lives, even though access to quake-hit areas was difficult due to blocked roads.

The Imperial Household Agency said that following the disaster it would cancel Emperor Naruhito and Empress Masako’s slated New Year appearance on Tuesday.

The quake comes at a sensitive time for Japan’s nuclear industry, which has faced fierce opposition from some locals since the 2011 earthquake and tsunami that triggered nuclear meltdowns in Fukushima. Whole towns were devastated in the disaster.

Japan last week lifted an operational ban imposed on the world’s biggest nuclear plant, Kashiwazaki-Kariwa, which has been offline since the 2011 tsunami.

The Nuclear Regulation Authority said no irregularities have been confirmed at nuclear plants along the Sea of Japan, including five active reactors at Kansai Electric Power’s Ohi and Takahama plants in Fukui Prefecture.

Hokuriku’s Shika plant in Ishikawa, the closest nuclear power station to the epicentre, had already halted its two reactors before the quake for regular inspections and saw no impact from the quake, the agency said.

‘TSUNAMI! EVACUATE!’

Following the quake, a bright yellow message reading “Tsunami! Evacuate!” flashed across television screens advising residents in specific areas of the coast to immediately evacuate.

There were reports of at least 30 collapsed buildings in Wajima, a town of around 30,000 known for its lacquerware, and fire engulfed several buildings.

The quake also jolted buildings in the capital Tokyo, some 500 km from Wajima on the opposite coast.

Almost 32,000 households were still without power in Ishikawa prefecture late on Monday, according to utilities provider Hokuriku Electric Power, with temperatures set to drop to near freezing overnight in some areas.

Tohoku Electric Power said 700 households remained without power in neighbouring Niigata prefecture.

West Japan Railway reported late on Monday that a combined 1,400 passengers remained stuck on four halted bullet train services between Kanazawa and Toyama cities.

One of Ishikawa’s airports was forced to shut due to cracks that had opened up in the runway, transport authorities said.

Japanese airline ANA turned back planes headed to airports in Toyama and Ishikawa, while Japan Airlines cancelled most services to the Niigata and Ishikawa regions.

© Reuters. A view shows the logo of Chinese automobile manufacturer Geely at a dealership in Moscow, Russia, March 23, 2023. REUTERS/Maxim Shemetov/File photo

By Summer Zhen

HONG KONG (Reuters) – Chinese carmaker Geely Automobile Holdings (OTC:GELYF) Ltd set its sales volume target at 1.9 million units for 2024, up 13% from its total sales last year, according to a Hong Kong stock exchange filing on Monday.

The company also said it increased its sales volume target for new energy vehicles by more than 66% compared with the total sales volume achieved in 2023, without giving a figure.

Geely, China’s second largest automaker by sales, said it sold 1,686,516 vehicles in 2023, up 18% from 2022.

In December, sales volumes rose 3% from the same period in 2022, it added.