A few charts worth discussing
“Note from this chart how EU medtech stocks' multiples are much lower than they have been over the past several years. More importantly, notice how they have largely converged to trade at very similar multiples, with little differentiation for differences in quality and growth prospects. This is quite rare.”
“The following chart is an index of loss-making companies (i.e., they cost more to run than they make in revenue). Previously we saw this index go up 400% during Covid as people bid up speculative stocks, only for the index to later fall 77% a few years later. This index has now surged over 200% as investors pivot to AI and tech related companies that are losing money. Will history repeat like last time with these companies giving up the bulk of their gains?”
Other charts worth pointing out
U.S. household spending by income level
U.S. household spending by category
Corporate tax rates in major markets – 1980 to 2025
30-year government bond yields by country
Decomposition of long-term S&P 500 Index return on equity growth since 1985
Return on equity – Mega-cap tech vs. rest of the S&P 500 Index
S&P 500 Index borrow costs vs. U.S. 10-year treasury yield
Unemployment rates – all workers vs. recent college graduates
U.S. social media platform engagement
Momentum vs. market performance – U.S. and emerging markets
Indexed performance – asset-heavy vs. asset-light companies
Year-to-date regional index equity return breakdown
Sector performance comparison – pre- and post-pandemic
Indexed stock price performance – Kodak vs. Polaroid
S&P 500 Index performance during the 1973–1974 oil embargo
The electric vehicle transition gets heavy
This is a year of celebration at Daimler Truck, the world’s biggest producer by sales of heavy-duty lorries. The German company is holding a series of events and exhibitions to mark the 130th anniversary of the world’s first motorised truck, which was brought to market by its founder in 1896.
But Chinese rivals are looking to crash the party — by going global with electric models that are casting doubt on the future of the combustion-engine trucks pioneered by Gottlieb Daimler.
Conventional wisdom has long held that heavy commercial vehicles — the backbone of global road freight — will go electric at a sluggish pace, due to the onerous weight of the batteries required, concerns about charging infrastructure and the prohibitive upfront cost.
Even after electric vehicles seize the lion’s share of passenger car markets, the story goes, we can expect rumbling diesel truck engines to keep disgorging greenhouse gases and noxious pollutants for many more years to come.
The China effect
Chinese truckmakers are now putting that theory to a tough test. Global sales of electric heavy freight trucks (weighing 15 tonnes or more) almost tripled last year to about 230,000, according to the International Energy Agency. This was driven overwhelmingly by growth in China, where electric models accounted for 28 per cent of total heavy truck sales.
Last Friday, the country’s transport ministry unveiled a new national strategy to accelerate the transition in the sector. By 2030, it said, “new energy” models should account for 40 per cent of all heavy trucks sold in China, and a fifth of all those on the roads.
More striking — and more ominous for truckmakers elsewhere — is the fact that Beijing has now identified China’s electric truck sector as a national priority. The move comes as China steps up efforts to reduce its reliance on imported fossil fuels, following turmoil in the oil and gas markets caused by the Strait of Hormuz crisis.
Officials are tasked with implementing a wide range of supporting policies, which include ensuring the creation of 30,000km of “zero-carbon highway transportation corridors” and 3,000 truck charging and battery-swapping stations, as well as broader backing for technological development in the space.
Westward bound
Chinese truckmakers are now using the surging domestic demand — driven by plunging battery costs as well as supportive government policy — as a launch pad for international expansion. Half a dozen are set to launch this year in the European market, which is still dominated by European truckmakers such as Daimler.
Electric models accounted for less than 2 per cent of EU heavy truck sales last year, with roughly 5,000 units sold, according to the International Council on Clean Transportation. But electric sales are set for a boost from EU green rules, which require manufacturers to progressively reduce average emissions from their trucks over the coming years. By 2040, these must fall at least 90 per cent from 2019 levels.
Like their peers in the passenger car sector, European truckmakers have been lobbying hard for concessions on the EU’s emissions rules — but have won only limited relief.
Unlike the carmakers, however, their share prices have been doing rather well. Daimler’s stock is up 41 per cent since it was spun out from Mercedes-Benz in December 2021 — compared with a 36 per cent fall for Mercedes and a 52 per cent slump for Volkswagen (a fall that would have been significantly heavier without the robust stock market performance of truck business Traton, which is mostly owned by VW).
The road ahead
Fewer than 4,000 electric heavy trucks have been sold to date in the US, according to analysts at Wood Mackenzie, with high prices acting as a brake on demand. But they reckon the picture could change dramatically with this year’s full commercial launch in the US of Tesla’s long-awaited Semi heavy truck, and a competing model from China’s Windrose, assembled in US factories.
Both are expected to sell for less than $300,000, compared with typical prices well above $400,000 for electric models at present on the market. That’s still a fair whack more than the price of diesel models — but given the lower running costs, fleet owners could recoup the difference in as little as three years, Wood Mackenzie estimates.
A big question hanging over this shift is whether charging infrastructure can be rolled out at the scale required, both at fleet operators’ own depots and at public charging stations. In the US, the federal government’s pro-fossil fuel agenda will raise doubts about this prospect.
And while the EU has promised to support vast investment in charging systems, this is materialising far too slowly, Daimler and other European truckmakers wrote in a letter to EU officials on May 27, complaining that this was undermining their efforts to bring zero-emission trucks to market.
This week’s fun finds
Japanese fans win hearts cleaning up Dallas Stadium after World Cup match
Fans of Japan's national team have captured and warmed hearts, though it had nothing to do with the match against the Netherlands and everything to do with what happened when it was over.
When the Japan vs. Netherlands FIFA World Cup match ended, many fans headed for the exits, but Japanese fans reached for trash bags instead.
Viral cleanup effort captures global attention
The now viral photos show hundreds of Japanese fans cleaning up their section of Dallas Stadium. Trash bags in hand, they picked up cups, wrappers and anything left behind.
The Japanese men's team even left their locker room spotless. No one asked them to do it.
"It's kind of a habit or natural, I guess," said Nina Shimaguchi, with the Japan American Society of Dallas-Fort Worth.
Shimaguchi wasn't surprised. The value of cleaning up is a sign of respect and the habit starts young.
"The Japanese education system, we don't have custodians from elementary to high school, so we have to take care of hallways, restrooms," she said.
But for many, it goes beyond being tidy. Shimaguchi says it's tied to what's called "Shintoism" and the belief that everyday things carry meaning.
