Innovation and expansion in energy supply: Mercedes-Benz, Altech Advanced Materials and Alibaba in focus

Mercedes-Benz focuses on successful projects abroad - China and Brazil in focus

Car manufacturers in Europe, such as Mercedes-Benz (ISIN DE0007100000), are feeling the effects of the energy crisis. Production costs in Germany, in particular, are being driven up by horrendous electricity prices. Sales of new cars with electric drives are progressing slowly. "We are in the fifth year of the crisis. New registrations are moving sideways, and there is hardly any sign of a real recovery," explains automotive expert Constantin Gal from the consultancy firm EY. "The electric segment as a growth driver is failing this year, and the new car market is likely to stagnate at the current low level."

The Central Association of the German Motor Trade Zentralverband Deutsches Kraftfahrzeuggewerbe, ZDK predicts that there will be a greater decline than forecast by the manufacturers' association VDA, namely to around 2.65 million new car registrations. The German Association of the Automotive Industry (VDA) expects a decline of 1% compared to 2023 to 2.8 million vehicles - this corresponds to around 1/4 less than in 2019 before the crisis. From the buyers' point of view, falling prices and favourable leasing offers could be positive. **For Mercedes-Benz, this translates to finding economic success abroad. So it is no wonder that the Stuttgart-based company is doing business with the country that is ahead in terms of EVs: China.

According to a report by Reuters, the Chinese state market regulatory authority has given Mercedes-Benz and BMW the green light to set up a joint venture in China. In November last year, the companies had already announced that they would set up a network of fast-charging stations for electric vehicles in China by 2024. According to the companies, they are planning at least 1,000 public stations with around 7,000 charging points across the country by the end of 2026, which will be accessible to all vehicle brands.

The knowledge gained about infrastructure, supply chains, and challenges will also be helpful for these companies in implementing similar plans in Germany.

Mercedes-Benz is also active in South America. In Brazil Daimler Truck is launching its first truck rental business to cater to the growing vehicle rental market. With higher vehicle prices and weaker economic growth in Brazil, rental is a more cost-effective alternative for many customers. The Company plans to rent out 100 trucks initially and offer 200 vehicles by the end of the year, with an investment of BRL 200 million (EUR 37.3 million).

Revolutionary solid-state battery: Altech Advanced Materials and Fraunhofer IKTS launch salt-based battery

Battery power is becoming increasingly important in the architecture of critical infrastructures. This refers to systems, facilities and resources vital to the smooth functioning of a society, economy and nation. These infrastructures are vital, and their disruption or destruction could seriously impact daily life, security and economic stability. For instance, energy supply by local electricity providers, water supply, healthcare facilities such as hospitals, especially intensive care units, emergency rooms, etc.

The German company Altech Advanced Materials (ISIN DE000A31C3Y4) and its Fraunhofer IKTS joint venture are focusing on precisely this type of supply with a new kind of solid-state battery based on sodium chloride for stationary operation. The stationary battery, called CERENERGY®, is non-flammable and can, therefore, be used for emergency power supplies, particularly in critical infrastructure such as hospitals.

The ceramic solid-state battery consists of salt, nickel and ceramics - all materials that are abundant in Europe. This ensures secure supply chains. In addition, CERENERGY® does not require critical and highly volatile materials such as graphite, lithium and cobalt. With a life span of over 15 years, the battery is durable.

Uwe Ahrens, CEO of Altech Advanced Materials, explains: "The batteries can be operated completely safely in buildings and halls. Safety distances do not need to be maintained, and the batteries can also be stacked safely. None of this is possible with conventional lithium-ion batteries. These contain a flammable liquid electrolyte and a flammable plastic separator and, as is well known, cannot actually be extinguished once a chemical chain reaction that produces oxygen is triggered."

Anyone interested in discovering more about this exciting venture will have the opportunity to do so on February 21 at the 10th International Investment Forum. Ahrens will be presenting live and answering investors' questions. Click here to register.

Alibaba share price rises despite turbulence in the Chinese economy

Retail giant Alibaba (ISIN US01609W1027) has had a difficult time in recent years. China's regulatory measures against the tech industry and COVID-19 lockdowns have had a devastating impact on its share price, sending it down more than 70% from its peak at the end of 2020 to early 2023. A recovery expected last year failed to materialize as the Chinese economy stagnated and came under further pressure from the country's extensive and highly indebted real estate sector.

In addition, exports of semiconductor chips have fallen sharply due to geopolitical tensions with the US, which has slowed the growth of Alibaba's cloud and AI division. Previous plans to spin off the business entirely have, therefore, remained on hold.

Investors anticipate glimmers of hope through potential additional government incentives, particularly in the energy supply sector, to further boost the efficiency of the cloud business. Alibaba's quarterly results could provide a more comprehensive outlook, as results from the core e-commerce business offer insights into broader consumer trends.

According to FactSet, analysts expect Alibaba to report fourth-quarter earnings of CNY 2.39 (EUR 0.30) per share on revenue of CNY 261 billion (EUR 34.07 billion). If the results are in line with expectations, this would mean a 1% YOY decline in profit and a 5% increase in revenue.

Due to the energy crisis, German companies such as Mercedes-Benz are increasingly focusing on lucrative business projects abroad. In China, Mercedes-Benz is planning to expand a network of fast-charging stations for electric cars together with BMW. In Brazil, Mercedes-Benz is testing the truck rental market in order to offer customers cost-effective alternatives in the face of rising vehicle prices and weaker economic growth. Altech Advanced Materials and Fraunhofer IKTS are jointly developing a ceramic solid-state battery based on sodium chloride as an environmentally friendly alternative to conventional batteries. The battery, called CERENERGY®, is characterized by its non-flammability and is ideal for use in critical infrastructure such as hospitals to ensure emergency power supply. With a life span beyond 15 years and the availability of materials in Europe, it offers a reliable and sustainable energy source. Despite challenges in the Chinese market, Alibaba's share price is showing a slight upward trend. The quarterly results are eagerly awaited as they could provide insights into Alibaba's core e-commerce business and possible clues to broader consumer trends. Analysts forecast fourth-quarter earnings of CNY 2.39 (EUR 0.30) per share and revenue of CNY 261 billion (EUR 34.07 billion), representing a slight decline in profit but an increase in revenue.