Segway's slick Tron-style motorcycle runs on hydrogen
Sean Szymkowski 

ROADSHOW, 4/12/2021

Americans know Segway as the transportation of choice for tourists and mall cops. But ever since the company became part of China's Ninebot, it's been hard at work rolling out more futuristic scooters and associated mobility gear. That includes the radical new motorcycle seen here, called the Apex H2. Revealed last week, Segway promises to put it into production.

© Provided by Roadshow So, yeah, this looks cool. Segway

It's not just you: The Tron vibes are strong, and it's really wonderful to look at. Now, the challenge will be bringing the looks, and likely enormous engineering challenges associated with them, to production. Also, it runs on a hydrogen fuel-cell powertrain -- yet another big promise for a motorcycle. The details are pretty slim for now on what we can consider a concept, but they also sound realistic for the powertrain. Segway said it targets 80 horsepower with a top speed of around 90 mph. How the company manages to make the suspension work and make the trick, hidden steering system viable remains a mystery.

The wildest thing about the Apex H2 is the company's promised price. At current exchange rates, Segway's talking about roughly $10,700, which is incredibly cheap for a motorcycle with this kind of promised technology. Hopefully the company can swing it, and if it does, we need to get our resident motorcycle man, News and Features Editor Kyle Hyatt, on this bike as soon as possible.

Segway Ninebot KickScooter Max

















a close up of a knife

1/19 SLIDES © Provided by Roadshow

Ducati backs away from electric motorcycle production plans

Steve Dent 

After saying in 2019 that it was "not far from starting production" on an electric motorcyle, Ducati is doing a U-turn on those plans — at least for now. "Will we produce an electric Ducati soon? No. We think that for the kind of machine we produce now, an electric motorcycle cannot guarantee the pleasure, the range, the weight etc. that Ducati riders expect," Ducati VP of sales Francesco Milicia told MCN.

Now, Ducati is exploring electric fuels as a zero emissions option, borrowing the idea from Porsche (both companies are owned by Volkswagen AG). "We are also looking carefully at other solutions for zero or minimal emissions, such as synthetic fuel. Other brands in our group such as Porsche are looking at it and it’s something we are looking at in the medium term," Milicia said.

E-motorcycles are still more expensive than gasoline-powered bikes, but performance is comparable and range is getting close in some models, as Electrek reported. Synthetic fuels, meanwhile, are largely experimental and not widely available. Also, eFuel vehicles are not completely pollution-free and are highly inefficient compared to battery-electric vehicles.


Ducati might be kicking the electric motorbike can down the road, but it hasn't given up on them yet. "We are thinking and working on electric," Milicia said. "We are part of a group that’s going quickly towards electrification and it’s a good opportunity for Ducati.

Magna founder Frank Stronach is back with big plans for a small electric vehicle

Driving 4/12/2021


Frank Stronach made his name and his fortune in auto parts. Now, the 88-year-old founder of Magna International thinks he has another blockbuster idea in the transportation space.

© Provided by Driving.ca Frank Stronach, the man who brought a piece of the global auto industry to rural Ontario, wants to get back in the car business with a tiny electric vehicle he says will revolutionize the industry.

Pending a provincial land-zoning amendment, Stronach says he is hoping to break ground as soon as this month on the construction of a 60,000-square-foot facility north of Toronto, where he plans to research, produce and assemble his latest invention — a three-wheel electric single-seat vehicle slightly wider than a standard doorway.

The 88-year-old envisions the SARIT — an acronym for “Safe Affordable Reliable Innovative Transport” — as a revolutionary product.

The three-foot-by-six-foot vehicle can reach a maximum speed of 32 kilometres per hour, travels 100 kilometres on a single charge, and features a trunk that fits a standard piece of luggage.

“This is my crowning piece, the SARIT,” Stronach said in an interview with the Financial Post this week. “Magna builds a lot of cars. But sometimes something small (like the SARIT) is more difficult to build than something big.”

The self-financed project — he declined to reveal the expected cost — will thrust him into the increasingly competitive global electric vehicle market, but Stronach believes the SARIT will fill a niche as drivers abandon standard or large vehicles for alternatives that are cleaner, cheaper and more compact.

“You have millions of people who drive every morning who are stuck in traffic to get from home to the workplace and back,” he said. “I saw the traffic jams and most cars had only a driver, no other passengers.”

Stronach’s move comes as global automakers are pouring into the electric vehicle space, and tiny, compact cars are gaining traction in markets overseas. In July, General Motors started selling a US$4,000 two-seat mini electric car in China with a maximum speed of 100 kilometres per hour.

Canadian companies are vying to break into the industry, too. British Columbia-based ElectraMeccanica is developing a three-wheel, single-seat EV that reaches a top speed of 80 kilometres per hour and looks like a mini-sedan.

© Postmedia The original Electrameccanica Solo, pictured for Driving’s first drive session back in 2017.

These new products can face several hurdles before they can hit the road, including persuading governments to amend road safety and traffic regulations to permit them on roadways and attracting a consumer base big enough to keep costs down and sway legislators, according to Tyler Hamilton, a cleantech expert at the Toronto-based MaRS Discovery District.

“You’d have to convince Transport Canada (the federal department that regulates transportation) to alter existing legislation to allow these things to be on streets of certain speed limits,” Hamilton said. “It’s a Titanic to move, and is the market large enough to move that Titanic?”

Stronach thinks it is.

RELATED

© Provided by Driving.ca Motor Mouth:

 The politics of building pickups in Oshawa
David Booth

He says the inspiration for the SARIT struck after Ontario Premier Doug Ford called him a few years ago to discuss GM’s plan to shutter its assembly plant in Oshawa and cut more than 2,500 jobs. (GM announced in November that it is reopening the plant this summer to address increasing demand for pickup trucks.)

“(The premier) said, ‘Frank, I’ve got a problem. General Motors is closing. I’d like to have your advice,’” Stronach said. “He was saying that’s a lot of workers, is there another source of creating jobs? … I told him there would be a need for one-seat electric cars. He was encouraging.”

The facility could create as many as 200 jobs in the region, and thousands if more factories across the country are eventually built, Stronach said. As a research facility, the plant would have the capacity to produce and assemble 30,000 electric vehicles each year, which he estimates will be built at a production cost of $2,500 per vehicle and will retail at $4,000

.

The proposed site is a five-minute drive east of Magna’s headquarters in Aurora, the town where Stronach grew the business from a garage studio into one of the world’s largest auto-parts companies.

While Stronach is best known for Magna, he’s no stranger to chasing bucket-list pursuits, including restaurants, thoroughbred racetracks, a magazine, electric bikes, and an energy drink named after him. Some of those ventures have succeeded, other haven’t.

U.S., European consumers warm up to electric vehicles, but remain wary of price: survey

The share of consumers eyeing the purchase of a fully electric vehicle has grown significantly, according to an annual survey 

© Reuters/MATTHIAS RIETSCHEL FILE PHOTO: FILE PHOTO: FILE PHOTO:

 German automaker Volkswagen delivers its ID.4 SUV new electric car, in Dresden

(Reuters) - European and U.S. buyers are warming up to the idea of purchasing a battery-powered vehicle, but continue to have concerns over the price of the technology, a survey showed, underscoring the need for government subsidies to reach EV sales and environmental goals.

The share of consumers eyeing the purchase of a fully electric vehicle has grown significantly, according to an annual survey by OC&C Strategy Consultants, released on Monday exclusively to Reuters. 

http://bit.ly/BatteryLateThanNever

It surveyed more than 7,500 global consumers between December and January. OC&C did not receive external funding for the study, its lead author Felicity Latcham said.

The shift in attitudes comes at a crucial time for the auto industry, which is releasing a growing number of electric models in a race to comply with stricter CO2 emission targets and catch up with Tesla Inc, which has captured the EV market.

In the UK, France and Italy, more than half of consumers said they would consider a battery-powered vehicle as their next purchase, while in Germany and the U.S. nearly half of respondents said so, the survey showed. That represents a marked increase from last year, particularly in the UK and the U.S., where willingness to buy electric increased 81 and 61 percent, respectively.

Study reveals why Canadians reluctant to buy electric vehicles

But consumers remain wary about the price of battery-powered cars, which are generally more expensive than their combustion engine counterparts.

While concerns over EV range and charging infrastructure have decreased compared to last year, the overall cost of EVs represents the largest barrier to consumers considering a battery-powered car, according to the survey.

Of the consumers likely to buy an EV, 69% said they would not pay more than a $500 premium compared to a gasoline-powered car - an unlikely scenario without government subsidies.

Countries with purchase incentives have seen a faster uptick in EV sales and European countries have introduced several generous incentives.

Boosting EV ownership is also at the heart of the U.S. administration's infrastructure plan, which would provide $100 billion in additional EV rebates and $15 billion to build 500,000 new charging stations.

(Reporting by Tina Bellon; editing by Diane Craft)
4/12/2021

Unleashing an American-led clean energy economy to reach net-zero emissions

Rep. Kathy Castor (D-Fla.), opinion contributor 

THE HILL, 4/122021


It's often said that nothing is more powerful than an idea whose time has come. In 2021, that idea is powerfully simple: We can reach net-zero emissions in the United States by the middle of the century, all while creating millions of jobs, ensuring justice for vulnerable Americans, protecting our public health and our national security, and strengthening communities against more frequent and costly extreme weather events. By the time we reach 2050, we'll be able to look back knowing we saved countless lives, reduced pollution across the board and met our science-based deadline to protect families and businesses from climate-fueled risks.

© Greg Nash Unleashing an American-led clean energy economy to reach net-zero emissions

We have a long road ahead of us, and there are hundreds of policies and solutions that can help get us to net zero. In fact, I've counted at least 700 of them. Last Congress, I was tasked with putting together a comprehensive framework of policies to solve the climate crisis, as the chair of the newly formed House Select Committee on the Climate Crisis. With the help of my colleagues - and with the valued advice of scientists, environmental justice champions, farmers, tribal leaders, union members and countless other experts - I led our select committee as we drafted the Climate Crisis Action Plan, which includes hundreds of policy recommendations to help the United States reach net-zero emissions by 2050, or earlier, and net-negative emissions thereafter. When we released the plan last summer, one journalist called it "the most detailed and well-thought-out plan for addressing climate change that has ever been a part of U.S. politics." This Congress, we're building on that progress by helping turn our recommendations into legislation, including ambitious bills like the wide-ranging Climate Leadership and Environmental Action for our Nation's (CLEAN) Future Act.

Introduced by Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.), along with subcommittee chairs Paul Tonko (D-N.Y.) and Bobby Rush (D-Ill.), the CLEAN Future Act would significantly reduce pollution in the United States by decarbonizing the power sector, the building sector, the transportation sector and the industrial sector. As a longtime member of the Energy and Commerce Committee, I'm amazed by the breadth of this legislative effort; if passed, this bill alone would help get America to net zero by 2050. The CLEAN Future Act will ensure American families can power their homes with 100 percent clean electricity by creating a nationwide clean electricity goal. It also will make our buildings more energy efficient, reduce pollution from surface transportation and construction, and put environmental justice at the center of our nation's environmental laws. Most importantly, the CLEAN Future Act will put millions of Americans to work. It will allow us to hire utility workers to bring cleaner, cheaper energy to millions of homes and businesses, as well as welders, roofers, plumbers, engineers and auto workers. And it will ensure our progress in the years ahead won't leave behind Black, brown and tribal communities, or the low-income Americans whose lives have been further upended by the economic impacts of the COVID-19 pandemic.


Video: LafargeHolcim CEO says sustainability will be key amid 'huge demand' for infrastructure projects (CNBC)


Before the pandemic, the clean energy sector was already the fastest growing job creator in America. And as we invest in building the infrastructure needed for more energy efficient homes and electric vehicles, we can put millions of Americans to work in blue-collar jobs that don't require a college degree. Solving the climate crisis means rebuilding our nation in a way that makes our economy stronger, our way of life more sustainable and our society more just. Take solar and wind energy: By investing in these clean sources of electricity, we can save families money on their utility bills, bring union jobs to communities across the nation, reduce our dependence on foreign oil and drive down pollution to help us meet our emissions goals. The same goes for infrastructure spending: Every $1 we spend on resilience and mitigation saves us $6 in reduced costs and risks, as we make every penny go toward protecting communities instead of waiting for the next disaster to strike.

There has never been a more crucial time to act on climate. It's incredible to think of the many challenges our nation can tackle at once by working to unleash an American-led clean energy economy, whether it's through advancing renewable technologies or making our infrastructure more resilient. It's time we make the right investments that will power our 21st century economy, putting Americans to work and helping us reach net zero as fast as the science requires.

Castor is chairwoman of the House Select Committee on the Climate Crisis.

New York pension fund divests $7 million

from Canadian oil sands firms

©

 Reuters/Dan Riedlhuber FILE PHOTO: 

Canadian Natural Resources Limited's Primrose Lake oil sands project is seen near Cold Lake, Alberta

CALGARY, Alberta (Reuters) -New York's state pension fund is restricting investment in six Canadian oil sands companies because they have not shown they are prepared for a transition to a low-carbon future, the fund's Comptroller Thomas DiNapoli said on Monday.

The New York State Common Retirement Fund will divest more than $7 million in securities already held in the companies, and not make any further investments in them, DiNapoli said in a statement.

Canada's oil sands hold the world's third-largest crude reserves and have some of the highest emissions intensity per barrel, due to the carbon-intensive production process of extracting tar-like bitumen from the ground.

Climate-focused investors are putting increasing pressure on the companies to reduce their greenhouse gas emissions or face divestment.

In December, the fund said it would help curb climate change by transitioning its investments to net-zero greenhouse gas emissions by 2040, making it the first U.S. pension fund to set the goal by that date.

"We have carefully reviewed companies in the oil sands industry and are restricting investments in those that do not have viable plans to adapt to the low-carbon future," DiNapoli said. "Companies responsible for large greenhouse gas emissions like those in this industry, pose significant risks for investors."

The companies are Imperial Oil, Canadian Natural Resources Ltd, MEG Energy Corp, Athabasca Oil Corp, Japan Petroleum Exploration Ltd, and Cenovus Energy Inc. A seventh company mentioned in DiNapoli's statement, Husky Energy, was acquired by Cenovus in January.

New York State continues to invest in oil sands producer Suncor Energy.

The fund is the third-largest pension fund in the United States with an estimated valuation of about $248 billion.

"The smart money, led by New York, is headed away from the climate-damaging energy sectors of the past, and into the future with clean, safe renewable energy," said Richard Brooks, Climate Finance Director at Stand.Earth.

(Reporting by Nia WilliamsEditing by Bill Berkrot and Marguerita Choy

TC Energy requests info on renewable energy proposals for its U.S. pipeline

© Reuters/TODD KOROL A TC Energy pump station sits behind mounds of dirt from the Keystone XL crude oil pipeline as it lies idle near Oyen

CALGARY, Alberta (Reuters) - Canada's TC Energy on Monday requested information from around 100 renewable development companies to identify wind energy investment opportunities that would generate 620 megawatts of electricity for its U.S. pipeline business.

The capital investment could total about $1 billion, analysts at BMO Capital Markets said in a note.

Calgary-based TC Energy owns North America's largest natural gas pipeline network and operates the Keystone oil pipeline. The company also has a Canadian power business with a 4,200-megawatt capacity, and cited opportunities to grow in that business.

The request for projects in the central United States and Texas is open for four weeks from April 10. TC Energy will invite a shortlist of companies to submit requests for proposal.

"Ultimately, our goal is to leverage our existing asset base to add more renewable generation into our portfolio and the broader market, resulting in a net reduction of emissions across our North American footprint," said Corey Hessen, TC Energy's president of power and storage.

TC Energy is also looking at ways to invest directly in renewable projects, he added.

BMO Capital Markets analyst Ben Pham said TC Energy's intent to procure wind energy to electrify part of its U.S. pipeline business supports its long-term growth targets, and would reduce energy costs.

TC Energy's $9 billion Keystone XL pipeline, which would have been under construction this year, was blocked when U.S. President Joe Biden revoked a key permit on his first day in office.

(Reporting by Nia Williams; Editing by Richard Chang)

How a winter storm in Texas sent a chill through America's RV industry

© Reuters/REV Group Employees work at a REV plant where they produce recreational vehicles in Decatur

(Reuters) - Bill Reith felt the blast of February's freak cold snap in Texas almost immediately - from inside his office in northern Indiana.

As head of the largest recreational vehicle division of REV Group Inc, a Milwaukee-based producer of specialty vehicles, he watched helplessly as the power grid in Texas buckled under some of the coldest temperatures seen in the state in decades, hobbling shipments of a mundane, but vital, commodity used in every one of his company's RVs: foam.

Petrochemical plants of all types shut down in Texas because of the power cuts, including the only five in North America that produce propylene oxide - a critical raw material for the foam that goes into seat cushions and other RV components.

The disruptions are expected to linger into May and are slowing and even halting operations for U.S. manufacturers.

Chemical plants in Texas were shut for a few days, but it will take weeks to get them fully functional again as workers fix burst pipes and clean materials from clogged equipment. And that delay is being felt in the wider U.S. economy.

Automakers Toyota Motor Corp and Honda Motor Co Ltd have cited shortages of plastic components and petrochemicals - as well as semiconductors - for recent North American production shutdowns, while the Container Store Group Inc, which sells many plastic products, has warned the shortages could hit its profit margins.

RV producers have also highlighted the challenge.

"It hasn't created enough disruption to stop production, but it has caused delays," said Bob Martin, chief executive of Thor Industries Inc. On a visit to the Elkhart, Indiana-based company's newly acquired operation in Alabama last week, Martin said he saw 100 motor homes that couldn't be shipped because workers were still waiting for the arrival of the plush driver chairs that needed to be installed.

He expects, however, that the delays will ease in the coming weeks. "By later this spring, we'll be in good shape," Martin said.

The Texas shutdowns swiftly pushed up prices for some key raw materials just as markets and Federal Reserve policymakers were refocusing their attention on inflation amid widespread supply chain disruptions that have nothing to do with weather in the Lone Star State.

NEWEST HURDLE

Manufacturers in recent years have sought to limit the stock of materials they keep on hand, part of the push to the "just-in-time" strategy that is meant to make the production system more efficient. One upshot of that is that when a storm or other sudden disruption hits, there's little opportunity to grab buffer stocks.

"It was almost instantaneous," said Reith, of the impact of the freeze on supplies and prices. "Plants shut down, they announced force majeure, and everyone was put on allocation," describing the legal move producers take when they can't deliver on contracts and start limiting shipments.

Reith said he was only getting half the furniture he needed for three weeks after the Texas disruptions and is only receiving about 80% now. Reith said he's also seeing shortages on the foam used to insulate walls and doors on RVs.

His division - REV Recreation Group - hasn't curbed production yet, but instead has been pushing RVs through its factories and waiting to install furniture at the last step. It takes about six to eight weeks for an RV to be built in Reith's factories, depending on the size and complexity of the vehicle.

"What we're doing is continuing to build, so when furniture arrives, we're installing it at the end of the process," he said, adding that the production crunch would come later this month if supplies don't quickly recover.

Finding enough fiberglass is also a problem. The product, which REV Recreation Group uses to mold the nose cones and rear ends of its motorhomes, was in short supply even before the Texas cold blast. "This just exacerbated it," Reith said.

So far, prices of that material have gone up nearly 15% as a result of the Texas storm.

The shortfalls come at a tough time for the RV industry, which employs nearly 94,000 workers in the United States in its network of manufacturers and suppliers, and was already stretched thin by the coronavirus pandemic.

Over the past year, RV manufacturers have struggled to produce enough vehicles as stuck-at-home Americans sought ways to travel without having to enter hotels and other public accommodations. The industry is still predicting record sales this year despite the latest supply disruptions. Foam shortages are just a new hurdle.

RV manufacturers don't report how much product is sitting outside factories waiting for foam or other missing parts. But the build-up is visible as parking lots around factories quickly fill up.

Jason Lippert, chief executive of LCI Industries, the industry's largest parts supplier, said his Elkhart, Indiana-based company is scrambling to find substitutes for hard-to-get materials. Lippert has sharply increased imports of RV furniture, for instance.

And in some cases, LCI has shifted to using different materials. Lippert said the company has at times substituted woven fiber for foam in the 4,000 mattresses it makes each day.

The other response, he said, is to raise prices. "Everybody is doing it," Lippert said, "all through the supply chain."

(Reporting by Timothy Aeppel; Editing by Dan Burns and Paul Simao

Alibaba shrugs off $2.75 billion antitrust fine, shares rally

CRIMINAL CAPITALI$M WITH CHINESE CHARACTERISTICS

By Josh Horwitz and Yilei Sun 

4/12/2021

© Reuters/ALY SONG

 Alibaba's 11.11 Singles' Day global shopping festival

SHANGHAI 

(Reuters) -Alibaba Group Holding Ltd does not expect any material impact from the antitrust crackdown in China that will push it to overhaul how it deals with merchants, its CEO said on Monday, after regulators fined the e-commerce giant $2.75 billion for abusing market dominance.

U.S.-listed shares of Alibaba jumped 8.6% and were set for their best day since July last year as a key source of uncertainty for the company was removed, and on relief the fine and steps ordered were not more onerous.

Alibaba has come under intense scrutiny since billionaire founder Jack Ma's public criticism of the Chinese regulatory system in October.

As part of "comprehensive rectifications" sought by regulators, Alibaba will make it easier for merchants to do business with it, Chief Executive Daniel Zhang told an online conference for media and analysts.

Beijing wants Alibaba to stop requiring merchants to chose between doing business with it and rival platforms, a practice known as 'merchant exclusivity', which critics say helped it become China's largest e-commerce operation.

Alibaba executives said despite Saturday's record 18 billion yuan ($2.75 billion) fine and measures ordered by regulators, they remain confident in the government's overall support of the company.

"They are affirming our business model," said Alibaba executive vice chairman Joe Tsai. "We feel comfortable that there's nothing wrong with our fundamental business model as a platform company."

Separately, Ant Financial, the fintech affiliate of Alibaba, will restructure as a financial holding company, China's central bank said on Monday.

SHARES BOUNCE

The company stock was up about 8% in the afternoon trade in Hong Kong, adding $48.5 billion to its market value and putting it on course to post its biggest single-day gain in nearly three months.

"Now the penalty is determined, the market's uncertainty about Alibaba will be reduced," Everbright Sun Hung Kai analyst Kenny Ng said.

"Alibaba's stock price has lagged behind the overall emerging economy stocks for some time in the past. The implementation of this penalty is expected to allow Alibaba's stock price to regain market attention."

Aside from imposing the fine, among the highest ever antitrust penalties globally, the State Administration for Market Regulation (SAMR) ordered Alibaba to make "thorough rectifications" to strengthen internal compliance and protect consumer rights.

"The required corrective measures will likely limit Alibaba's revenue growth as a further expansion in market share will be constrained," said Lina Choi, Senior Vice President at Moody’s Investors Service.

"Investments to retain merchants and upgrade products and services will also reduce its profit margins."

SAMR said it had determined Alibaba, which is also listed in New York, had prevented its merchants from using other online e-commerce platforms since 2015.

The practice, which the SAMR has previously spelt out as illegal, violates China's antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator said.

The probe comes as China bolsters SAMR with extra staff and a wider jurisdiction amid a crackdown on technology conglomerates, signalling a new era after years of laissez-faire approach.

The agency has taken aim recently at China's large tech giants in particular, mirroring increased scrutiny of the sector in the United States and Europe.

EXCLUSIVITY ISSUES

Alibaba said it accepted the penalty and "will ensure its compliance with determination".

Speaking with analysts on Monday, Tsai said that other than a review of the company's mergers and acquisitions, which the company's peers also face, it does not expect further investigation from the antitrust regulator.

"We are pleased we can put this matter behind us," he said.

Tsai added the company "doesn't rely on exclusivity" to retain its merchants, adding such exclusivity arrangements in the past only covered a small number of Tmall flagship stores.

Alibaba and its peers remain under review for mergers and acquisitions from the market regulator, Tsai told the briefing, adding he was not aware of any other anti-monopoly-related investigations.

The fine is more than double the $975 million paid in China by Qualcomm, the world's biggest supplier of mobile phone chips, in 2015 for anticompetitive practices.

"The $2.75 billion fine against Alibaba should be viewed for what it is - a meaningful but affordable price to pay to start the process of reconciliation with the Beijing regime," said Franklin Chu, president of Sage Capital in Rye, New York.

"Alibaba remains an appealing and convenient way to invest in the rapidly growing Chinese economy," he said. "Given the power of its various core business, the stock is undervalued by most conventional measures."

($1 = 7.7780 Hong Kong dollars)

(Reporting by Josh Horwitz and Yilei Sun; Additional reporting by Scott Murdoch, Donny Kwok, Andrew Galbraith and Ross Kerber in Boston; Writing by Ryan Woo; Editing by Lincoln Feast and Himani Sark

China's Huawei blames global chip shortage on U.S. sanctions

Sam Shead 

CNBC

4/12/2021


Huawei rotating chairman Eric Xu said "the U.S. sanctions is the main reason why we are seeing panic stockpiling of major companies around the world."

Huawei itself has built up a stockpile of chips to try to ensure its business — focused on telecoms equipment and consumer electronics — can continue as normal.

Huawei also announced that it is planning to invest $1 billion into self-driving and electric car research and development as it looks to compete with the likes of Tesla, Apple, Nio and Xiaomi

.

© Provided by CNBC The U.S. flag and a smartphone with the Huawei and 5G network logo are seen on a PC motherboard in this illustration taken January 29, 2020.

Huawei said Monday that U.S. sanctions on the company are partly to blame for the ongoing global chip shortage that's the subject of a White House conference on Monday.

Eric Xu, Huawei's rotating chairman, said the sanctions imposed over the last two years on the Chinese tech company are, "hurting the global semiconductor industry" because they have "disrupted the trusted relationship in the semiconductor industry."

Speaking to analysts in Shenzhen at Huawei's Analyst Summit, Xu said: "The U.S. sanctions is the main reason why we are seeing panic stockpiling of major companies around the world."

He added: "Some of them never stockpiled anything, but because of the sanctions they are now having three months or six months of stockpiles."

Huawei itself has built up a stockpile of chips to try to ensure its business — focused on telecoms equipment and consumer electronics — can continue as normal.

Some companies in other industries, such as the automotive sector, have been forced to temporarily shut down operations as a result of the chip shortage. U.S. auto executives and tech leaders were scheduled to meet remotely with President Joe Biden on Monday.

Until recently, the semiconductor supply chain "was running on the assumption that it should be flexible with zero stockpiles," said Xu, one of three Huawei executives who take turns as chairman.

"That's why the panic stockpiling in recent days has added to the supply shortage of global semiconductor industry," he said. "That has disrupted the whole system. Clearly the unwarranted U.S. sanctions against Huawei and other companies are turning into a global and industrywide supply shortage."

The U.S. imposed sanctions on Huawei after accusing it of building backdoors into its equipment that could be exploited by the Chinese Communist Party for espionage purposes.

In 2019, Huawei was put on a U.S. blacklist called the Entity List. This restricted American companies from exporting certain technologies to Huawei. Google ended up cutting ties with Huawei, meaning the Chinese giant could not use Google's Android operating system on its smartphones. Last year, the U.S. moved to cut Huawei off from key chip supplies it needs for its smartphones.

Huawei strongly denies the U.S. allegations.

$1 billion into self-driving cars

Huawei is pursuing new avenues after the sanctions imposed by the Trump administration left its once-leading smartphone business in tatters, while also hindering progress in its semiconductor and 5G businesses.

Xu said he doesn't expect the Biden administration to change the rules any time soon and the company is investing in new areas like health care, farming, and electric cars to try to mitigate the impact of being blacklisted by the U.S.

"We believe, we'll continue to live and work under the entity listing for a long period of time," he said. "The overall strategy as well as the specific initiatives for Huawei are all designed and developed in a way that the company would be able to survive and develop while staying on the entity list for a long time."

Huawei said Monday it plans to invest $1 billion into self-driving and electric car research and development as it looks to compete with the likes of Tesla, Apple, Nio and Xiaomi.

Xu claimed that Huawei's self-driving technology already surpasses Tesla's as it allows cars to cruise for more than 1,000 kilometers (621 miles) without human intervention. Tesla's vehicles can't do more than 800 kilometers and drivers are meant to keep their hands on the wheel for safety purposes.

Huawei will initially partner with three automakers on self-driving cars including BAIC Group, Chongqing Changan Automobile Co and Guangzhou Automobile Group. The company's logo is likely to be put on cars in the same way that Intel's logo is put on some computers.

"Once self-driving is achieved, we're able to disrupt all of the related industries, and we think that in the foreseeable future, namely in the next decade, the biggest opportunity and breakthrough will be from the automobile industry," Xu said.

After sanctions, Huawei turning to businesses less reliant on high-end U.S. tech

© Reuters/GONZALO FUENTES

 Huawei logo at Huawei Technologies France in Boulogne-Billancourt

SHENZHEN, China (Reuters) -Chinese telecoms equipment maker Huawei Technologies is making business resilience its top priority with a push to develop its software capabilities as it seeks to overcome U.S. restrictions that have devastated its smartphone business.

Huawei was put on an export blacklist by former U.S. President Donald Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

The ban put Huawei's handset business under immense pressure.

The company harbours "no expectation" of being removed from the Entity List under the administration of U.S. President Joe Biden, and is now looking to develop other lines of business after spending the last year in survival mode, the company's rotating chairman Eric Xu said on Monday.

"We cannot develop our strategy based on either a groundless assumption or on unrealistic hopes, because if we do that, and if we cannot be taken off from the entity list, it's going to be extremely difficult for the company," Xu said in a Q&A on the launch of the company's annual summit for analysts.

The company will invest more in businesses that are less reliant on advance process techniques, Xu said, highlighting the company's intelligent driving business, in which he said the company would invest more than $1 billion this year.

The company's autonomous driving technology allows cars to travel over 1,000 kilometers, overtaking Tesla in that area, Xu said.

Xu said Huawei was working with three domestic carmarkers on sub-brands that will be designated 'Huawei Inside' models.

In February, Reuters reported that Huawei planned to make electric vehicles under its own brand, which Huawei denies. [L1N2KnW0F9]

Xu said that U.S. action against Huawei had damaged trust across the semiconductor industry, and contributed to global chip shortages as Chinese companies rushed to stockpile three to six months worth of semiconductors last year, fearing similar action against them.

The combined demand from the Chinese market for chip supplies that are not affected by U.S. rules or which could be compliant with U.S. rules would lead companies to invest in chips and also eventually supply Huawei, Xu said.

"If that can be done, and if our inventory level can help Huawei to last to that time, then that will help us to address the problems and challenges we face."

Xu also said the global rollout of 5G telecoms networks had "exceeded expectations."

Last year, the company saw a modest 3.2% rise in its annual profit as overseas revenues declined due to pandemic-related disruption and the impact of the U.S. sanctions, it said last month.

(Reporting by David Kirton. Writing by David Kirton and Tony Munroe. Editing by Ana Nicolaci da Costa and Mark Potter)