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Tesla looks to pave the way for Chinese battery makers to come to U.S.

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October 21, 2021

By Hyunjoo Jin and Subrat Patnaik

(Reuters) – Tesla Inc wants to shift to a less expensive battery for its electric vehicles but first needs to figure out how to overcome political tensions to get a Chinese partner to build the iron-based batteries near its U.S. factories.

The world’s two biggest economies have yet to resolve disputes over tariffs, intellectual property rights and Chinese incursions into Taiwan’s air defense identification zone. And China’s sweeping regulatory crackdown, aimed largely at the technology sector, could pose yet another hurdle.

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China dominates the production of iron-based batteries thanks to a series of key patents, which have allowed the country to make 95% of the world’s Lithium Iron Phosphate (LFP) batteries.

However, these patents expire soon and Tesla said it plans to adopt LFP batteries in its fleet of standard-range vehicles globally and move battery production closer to its factories.

“Our goal is to localize all key parts of the vehicles on the continent,” Drew Baglino, senior vice president of powertrain and energy engineering at Tesla, told investors. Tesla is building factories in the United States and Germany.

“We’re working internally with our suppliers to accomplish that goal, and not just at the end-assembly level but as far upstream as possible.”

The company did not provide additional details about the decision and was not immediately available to comment.

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LFP technology is considered to be cheaper and safer than nickel-based batteries, although they lack the same energy density as nickel-based ones to allow cars to travel farther on a single charge.

The technology has garnered interest from EV makers and Reuters reported in June that Apple Inc is in early stage talks with China’s CATL and BYD to get LFP batteries for its planned electric vehicles and wants them to build factories in the United States.

But CATL is reluctant to build a factory in the country due to political tensions between Washington and Beijing as well as cost concerns, people said at that time.

“You cannot discount the whole geopolitical aspect of it,” Sanjiv Malhotra, founder of battery startup Sparkz and former U.S. Department of Energy executive, told Reuters.

“Our customers, they do not want to be caught in this political crossfire,” said the U.S. startup, which is looking at setting up production lines to challenge China’s dominance.

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CATL is probably better off manufacturing in China, as that is where they have access to the world’s lowest-cost materials, Roth Capital analyst Craig Irwin said.

“A U.S. facility would need a better U.S. supply chain to get similar to the low cost available in China.”

President Joe Biden has made it a priority to support the rollout of electric vehicles to combat climate change, but battery constrains could remain a key hurdle to his ambitious plan.

China is the largest global EV market and dominates the supply chain for the manufacture of lithium-ion batteries, including the processing of minerals and raw materials.

Electric Last Mile Solutions Inc (ELMS), a commercial electric vehicle company which currently imports CATL’S battery packs, is in talks with the company about the possibility of sourcing batteries at CATL’s potential U.S. factory.

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Last year, CEO Elon Musk said Tesla would use LFP batteries for its China-made Model 3, saying the move would free up battery capacity for the Semi truck and other vehicles that require higher-density, long-range batteries based in nickel.

Since then, Musk has pledged to use the tech in more products.

The company is facing higher costs primarily due to rising prices of cobalt, nickel and aluminum. Tesla uses these materials to make its batteries.

(Reporting by Hyunjoo Jin in San Francisco and Subrat Patnaik in Bengaluru; Editing by Lisa Shumaker)

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UK firms struggle to find staff, see higher inflation – BoE survey

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December 2, 2021

LONDON (Reuters) – British companies are struggling to find the staff they need and expect higher inflation in the year ahead, according to a survey published on Thursday by the Bank of England which is weighing up whether to raise interest rates this month.

The BoE’s monthly Decision Maker Panel survey showed 85% of respondent firms were finding it harder to recruit new employees compared to normal, with 58% reporting it to be much harder.

The survey also showed year-ahead annual price inflation was expected to be 4.2%, up from 3.9% in the October survey.

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(Writing by William Schomberg, editing by Andy Bruce)

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Sustainable investors look for profits in fuzzy data

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December 2, 2021

By Ross Kerber and Simon Jessop

(Reuters) – Sustainability-focused investors believe a little effort can go a long way toward finding profitable opportunities buried in incomplete corporate environmental or social impact filings.

That is according to several speakers on a panel at  the  Reuters Next conference, who described how they choose sustainable investments and work with executives at a time when there are few standard requirements for how major U.S. and European companies should detail carbon emissions disclosures or workforce demographics.

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Eoin Murray, head of investment at Federated Hermes, said the disparate reports from many companies give portfolio managers the chance to dig deeper.

“As an active manager, there’s a part of me which doesn’t mind that some of the data doesn’t entirely line up, because it means the rewards go to those that do their homework properly and unearth the real gems,” Murray said.

Mary Jane McQuillen, a managing director for ClearBridge Investments, said while some companies are eager to become more sustainable, others are defensive and don’t want to be burdened by yet another topic of investor interest.

A third group, McQuillen said, admits there is much about sustainable reporting they don’t know, and is seeking input from their shareholders.

“They say, ‘we really don’t know what the issues are. If you can help us as an owner, and with your years of experience as an investor in understanding how these issues may apply to my industry, as well as to my particular company, that would be super helpful,” she said.

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U.S. regulators are in the process of developing guidance for how companies should spell out things like emissions, and rules in Europe are just coming into place.

At the U.N. climate change conference in Glasgow, Scotland, in November, global leaders agreed to do more to curb carbon emissions and took other steps toward setting up global carbon markets and an international body to set sustainability reporting standards.

Julie Gorte, senior vice president at Impax Asset Management, said absent complete corporate reporting, investors can still learn a great deal about companies’ environmental, social or governance impact through government filings.

“For companies the watchword is, look, people are going to find out stuff about you, whether you tell them or not. If you want them to know what the truth is, tell them,” Gorte said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

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(Reporting by Ross Kerber and by Simon Jessop; Editing by Sonya Hepinstall)

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Facebook could be sued by consumer groups, EU court adviser says

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December 2, 2021

By Foo Yun Chee

BRUSSELS (Reuters) – Facebook could be sued by consumer groups for privacy violations, an adviser to Europe’s top court said on Thursday, in a German online gaming case that could pave the way for similar action across the EU.

The case started in 2012 and is one of several privacy and antitrust headaches facing Facebook in Europe, where regulators have introduced legislation to curb the power of so-called tech giants and ensure more transparency.

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“Member states may allow consumer protection associations to bring representative actions against infringements of the protection of personal data,” Richard de la Tour, advocate general at the Luxembourg-based Court of Justice of the European Union (CJEU), said in an opinion.

Such actions must be based on infringements of rights derived directly from GDPR, he added, referring to the landmark EU privacy rules adopted three years ago.

“We’ll analyse the Advocate General’s opinion. Legal clarity on scope and process of GDPR is important and we’re glad the Court of Justice of the European Union is considering the questions raised in this case.” said a spokesperson Meta Platforms Inc.

GDPR stipulates that any requests to collect personal data should be subject to clear and informed consent.

De la Tour said consumer bodies that defend the collective interests of consumers are particularly suited to GDPR’s objective of establishing a high level of personal data protection.

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Facebook found itself in the dock after the Federation of German Consumer Organisations filed a lawsuit alleging that the social network had allowed operators of online games to improperly collect the personal data of gamers.

The games were offered on Facebook’s App Center in 2012. By playing the games, users automatically agreed to share personal data including email addresses. At the end of the game, they would receive a message saying that the app could post their status, photos and other information.

A German lower court had ruled in favour of the German federation, leading Facebook to appeal to a higher court, which subsequently sought advice from the CJEU.

Facebook has since revamped its privacy settings.

(Reporting by Foo Yun Chee; Editing by David Goodman)

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