Chinese automaker Great Wall Motor has accused rival BYD of violating evaporative pollutant emission standards with its Qin PLUS DM-i and Song PLUS DM-i vehicles. Great Wall issued a statement on 25 May confirming it had submitted a report to the Ministry of Ecology and Environment, the State Administration for Market Regulation, and the Ministry of Industry and Information Technology on 11 April 2023. BYD responded with a statement denying the allegations and warning it reserved the right to take legal action. Shares in both companies fell: BYD’s stock price dropped more than 2% and Great Wall’s plunged more than 6%.
As detailed in SMM, on May 25, Great Wall Motor issued a statement on its official account, stating that it had submitted a report to the Ministry of Ecology and Environment, the State Administration for Market Regulation, and the Ministry of Industry and Information Technology on April 11, 2023. The report claimed that BYD Qin PLUS DM-i and Song PLUS DM-i, which use atmospheric fuel tanks, are suspected of violating the evaporative pollutant emission standards.
The news quickly spread, prompting BYD to issue a statement around noon on the same day, stating that they “firmly oppose any form of unfair competition and reserve the right to legal proceedings.” They also claimed that their products and related tests meet national standards and have passed certification from national authorities.
Despite this, the news had a significant impact on the two companies’ stock prices. BYD’s stock price fell by more than 2% in the afternoon, while Great Wall Motor’s stock plunged more than 6% at the opening after the release of BYD’s statement in response. As of the closing, BYD reported a 2.41% drop to 255.6 yuan per share, and Great Wall Motor plunged 6.17% to 24.8 yuan per share.
In other news, “Bond King” Jeffrey Gundlach predicts that sharp Fed rate cuts by year-end will push up gold prices. Meanwhile, Rio Tinto warns of risks for paying high premiums for lithium mines after plunging lithium prices triggered an acquisition rush, and Goldman Sachs lowers its price forecast for aluminum and copper in 2023, while seeing nickel prices plunging. Zinc prices are also expected to plummet by 2025, As detailed in recent reports.
The World Bank warns that global commodity prices will plunge precipitously this year at the fastest speed since the Covid outbreak. In response, the G7 plans to expand sanctions covering metals on Russia and promises further support for Ukraine. Citigroup warns that European commercial real estate values will plummet 40%, but sees a medium-term opportunity. The IMF also predicts that US debt defaults will take a heavy toll on the global economy, causing global GDP growth to plunge.
Goldman Sachs warns of serious risks that the US dollar will lose its reserve currency status on the debt ceiling standoff, while BofA sharply lowers its forecast for oil price and global oil consumption in 2023. In contrast, UBS raises China’s GDP growth forecast and sees earnings from the China stock market soaring, with the RMB appreciating. Finally, global aluminum inventory is expected to plunge further amid supply headwinds, and LME aluminum prices are predicted to react fast.
In view of all the above, the recent report from Great Wall Motor has caused a stir in the automotive industry, leading to a drop in stock prices for both Great Wall Motor and BYD. However, the impact of this news may be overshadowed by other factors affecting the global economy and commodity markets. Investors should keep a close eye on these developments to make informed investment decisions.
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