China’s EV sales zoom past western rivals

Good morning. Today I’ll be covering:

• The deal drought squeezing private equity payouts

• Russia’s Christmas Day attack on Ukraine

• America’s vanishing drugstores

• And why young Canadians are steering clear of ice hockey

Sales of electric vehicles are set to overtake traditional cars in China for the first time next year, putting the country miles ahead of Europe, the US and Japan, where competition weighs on national manufacturing champions and domestic EV sales have slowed.

More than 12mn cars are expected to be sold in China in 2025, according to estimates supplied to the Financial Times from investment banks and research groups. Some 11mn cars with internal combustion engines are set to be sold in the country next year.

While uncertainty over government subsidies and rising protectionism hit western carmakers, industry forecasts imply that Chinese factories producing cars with traditional engines will have almost no domestic market to serve over the coming decade.

Yuqian Ding, a Beijing-based HSBC analyst, told the FT: “While China’s domestic EV sector is clearly flourishing, it is also facing slowing growth — from a very high base — models oversupply, intense competition and a price war . . . [but] the longer-term direction of travel is clear — China’s EV juggernaut is unstoppable.”

Five more top stories

1. Private equity funds cashed out just half the value of investments they typically sell in 2024 — below the historic average for the third consecutive year — because of a deal drought. Firms have struggled to strike deals at attractive prices since early 2022, when rising interest rates caused financing costs to soar and corporate valuations to fall.

2. Demand for artificial intelligence-enabled smartphones could help to spare the semiconductor industry a “vicious” downturn if investment in data centres slows, said the head of the world’s largest provider of chip testing machines. Read our interview with Doug Lefever, CEO of Nvidia supplier Advantest.

3. Vacancies at open-air shopping centres in the US have fallen to historically low levels, defying dour predictions of a “retail apocalypse” caused by the rise of online shopping. Only 6.2 per cent of outdoor retail space is currently available for rent, according to property data company CoStar, contradicting deep-seated beliefs about the strength of the sector.

4. Russia launched a Christmas Day attack on Ukraine’s energy system, leaving half a million people without heating, water and electricity. Ukrainian President Volodymyr Zelenskyy said about 50 of the 70 missiles fired in the attack were intercepted, along with a “significant” portion of the more than 100 attack drones deployed.

5. Confectionery groups such as Mondelēz International and Tate & Lyle are pouring funds into finding alternatives ingredients for cocoa, as climate change drives rocketing prices and a growing global shortage of beans. “If we don’t change how we source cocoa, we won’t have chocolate in two decades,” said the CEO of one cell-based cocoa start-up.

News in-depth

Ice hockey is a cultural phenomenon in Canada, having shaped the country’s national identity and values for more than 100 years. But the expense of learning the sport and historic scandals embroiling coaches at the national level have undermined its popularity, leading many young Canadians to opt for the football field or basketball court instead.

We’re also reading . . . 

Chart of the day

US drugstores are vanishing from street corners, as high labour costs and low reimbursement rates squeeze business at pharmacy counters.

Take a break from the news

What should you read to get to grips with a new job? Apart from the employee manual, these offbeat classics picked by people working in key sectors can act as spiritual guidebooks, revealing the subtler nuances in corporate culture or the artistry of the day-to-day.