China set to hit EV sales target a decade early

Today’s agenda: Russia’s Christmas Day attack on Ukraine; Azerbaijan Airlines plane crash; De Beers’ $2bn diamond stockpile; South Africa gold mine gangs; and India claims Asia IPO crown

Good morning and welcome back to FirstFT. We start with an exclusive about electric vehicle sales in China, which are expected to exceed those of cars with internal combustion engines for the first time next year, smashing forecasts.

What’s the scale? Domestic EV sales in China — including pure battery and plug-in hybrids — are set to grow about 20 per cent year on year to more than 12mn cars in 2025, according to estimates from several banks and research groups. That would be more than double the 5.9mn vehicles sold in 2022.

At the same time, sales of traditionally powered cars are expected to fall by more than 10 per cent next year to less than 11mn, a near 30 per cent plunge from 2022.

Why it matters: The projections point to a historic inflection point that would put China years ahead of western rivals, where the uptake of electric cars has slowed. One analyst said China’s EV milestone reflected its success in technology development and securing crucial global supply chains for the industry, allowing steep manufacturing cost reductions and lower prices for consumers.

The forecasts also suggest that the industry will beat Beijing’s official EV target 10 years ahead of schedule. This implies that over the coming decade, factories set up in China to produce tens of millions of cars with traditional engines will have almost no domestic market to serve. We have more details on the rapid rise of China’s EV industry here.

Financial markets in the UK and other countries remain closed for the holidays. Happy Boxing Day!

Five more top stories

1. Russia attacked Ukraine’s energy system, leaving half a million people without heating, water and electricity on Christmas Day. 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. Ukraine’s president called yesterday’s attack “deliberate” and “inhuman”.

2. An Azerbaijan Airlines plane carrying 62 passengers and five crew crashed while making an emergency landing at a Kazakhstan airport, with 29 survivors, including two children, taken to hospital. Nine of them were in serious condition, local media outlets reported, and search and rescue operations are under way.

3. Exclusive: 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.

4. De Beers Group has amassed its biggest stockpile of diamonds since the 2008 financial crisis. The scale of the stockpile, which has not been previously reported, has hovered around $2bn for much of the year, amid prolonged weakness in demand since the Covid pandemic. Here’s why it’s been a bad year for diamonds.

5. Confectionery groups such as Mondelez International and Tate & Lyle are pouring funds into finding alternatives ingredients for cocoa as climate change drives skyrocketing 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

Wealthy Russians are routinely sidestepping sanctions on luxury brands through a cottage industry of personal shoppers and cross-border smugglers. Resellers are touting their services on social media to large retailers and private buyers, promising a way to circumvent trade restrictions on expensive handbags and haute couture.

We’re also reading . . . 

• Year in a word: War. From Gaza and Lebanon to Syria and Iran, the Middle East has endured one of its most destructive years in modern history, writes Andrew England.

• US real estate: Vacancies at open-air shopping centres have dropped to historically low levels, defying forecasts of a retail apocalypse caused by the rise of ecommerce. 

• Gold mine gangs: South African authorities are resorting to siege tactics to “smoke out” thousands of miners trapped underground by brutal criminal syndicates.

Chart of the day

India has eclipsed China as Asia’s top market for company listings this year, as buoyant stock prices spark a boom in initial public offerings. The National Stock Exchange of India is also set to be the number-one venue for primary listings by value, ahead of Nasdaq.

Take a break from the news

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