Challenging times for the global car industry

Today’s top stories

• The US Federal Reserve announces its decision on interest rates at 2pm ET/6pm UK. Check FT.com for the details and market reaction.

• Grain shipments from Ukraine are set to resume after Russia agreed to rejoin a UN-backed initiative to allow exports via the Black Sea, ending a stand-off that had fuelled fears of a global food crisis.

• The head of AP Møller-Maersk, the world’s second-largest container shipping group, said global trade would slow this year as western economies slide into recession. “Every indicator we are looking at is flashing dark red,” he said.

For up-to-the-minute news updates, visit our live blog

Good evening,

“A number of changes are occurring simultaneously that could affect the future of the broad automotive industry . . . It’s hard to look six months ahead.”

Those are the words of Kenta Kon, executive vice-president of Toyota, the world’s largest carmaker, speaking after yesterday’s announcement of a 25 per cent plunge in quarterly profits. Aston Martin followed suit today, blaming supply chain problems as it cut sales and profit forecasts for the year, sending its shares plummeting.

It’s been a tough few months for the autos industry. While traditional carmakers have been struggling with problems such as a shortage of semiconductors, electric vehicle manufacturers are fighting to secure supplies of metals used for batteries.

The birth pangs of the nascent sector have also been on display in the UK. Battery technology company Britishvolt today secured a funding lifeline after teetering on the brink of collapse on Monday. The company, which aims to build a £3.8bn gigafactory in the north-east of England, is months from receiving firm orders and has been struggling to raise money this year because of tumultuous market conditions.

While the UK’s attempt at building an industry champion is on the edge, cars from China, the world’s biggest market for EVs, are set to take Europe by storm, with up to a dozen brands set to launch, leaving other countries at risk of being left behind.

The big problem for the electric car industry remains the struggle for raw materials, highlighted by our story yesterday revealing Tesla held talks (now foundered) with Glencore about buying up to 20 per cent of the Swiss commodities group. Glencore is the world’s biggest producer of cobalt, which is used to manufacture batteries, through its operations in the Democratic Republic of Congo, Australia and Canada.

Indonesia, the world’s largest producer of nickel, has even suggested setting up an Opec-style cartel for nations that are rich in the resources needed to make electric cars. Any such attempt would not be an easy task: Russia supplies a fifth of the high-purity nickel used in batteries, while Canada and Australia are also big producers.

Add to that, says the Lex column (for Premium subscribers), the fact that Indonesia’s output depends on producers such as Xiang Guangda’s Tsingshan Holdings, which is headquartered in China. Nickel miners based in the west, such as Glencore and BHP, could also face legal challenges if they join a sellers’ club.

There is also a much darker side to the struggle for the supplies of these minerals, exemplified in the tragedy of the DRC. The central African country is rich in minerals but remains one of the poorest in the world and has also become the battleground of a deadly proxy war over resources.

Need to know: UK and Europe economy

Fancy taking charge of the UK’s finances? Try our new “plug the fiscal hole” interactive to see what options chancellor Jeremy Hunt has as he prepares for his Autumn Statement on November 17. Spending cuts aside, the nation’s households are set for a “very, very hard winter”, according to the National Grid chief.

The Bank of England has become the first major central bank to sell bonds back to financial markets as it unwinds its quantitative easing programme. The BoE announces its decision on interest rates tomorrow.

The war in Ukraine has exposed Germany’s decades-long reliance on Russian gas but, as our Big Read details, the country has an even deeper dependence on China, a country that has long been one of the biggest markets for its machinery, chemicals and cars.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Denmark’s centre-left prime minister Mette Frederiksen has secured an ultra-slim majority after the country’s parliamentary election but faces an uphill struggle to form a viable government coalition.

Need to know: Global economy

Jair Bolsonaro vowed to follow Brazil’s constitution without explicitly conceding defeat to presidential election victor (and former president) Luiz Inácio Lula da Silva. Investors await news on Lula’s fiscal plans, but the FT editorial board said his priorities should be addressing low growth, ratifying a stalled trade deal between the Mercosur bloc and the EU, and tackling Amazon deforestation.

Our second comeback kid is Israel’s former prime minister Benjamin Netanyahu after a partial count of parliamentary elections put his rightwing bloc on course to win a majority in the Knesset.

China’s strict zero-Covid policy was on display again as Shanghai authorities rushed to trace and test visitors to its Disneyland theme park after a single guest tested positive. Hong Kong, meanwhile, faces a challenge persuading global investors to return.

Saudi Arabia unveiled its first integrated economic zone with the aim of becoming the region’s top logistics hub and attracting foreign investment as it diversifies away from oil. Most multinationals’ regional HQs are based in the UAE.

Chief economics commentator Martin Wolf ponders the end of globalisation. A relatively peaceful “decoupling” of economies so closely stitched together is unlikely, he argues.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Need to know: business

Saudi Aramco and BP became the latest Big Oil companies to announce a bumper set of earnings, fuelling calls for more windfall taxes in the UK and the US, where President Joe Biden accused the majors of “war profiteering”.

Columnist Helen Thomas discusses the disastrous impact of Brexit on the UK food industry. Exports have collapsed as businesses try to cope with the estimated 15 to 20 per cent higher costs of sending goods to continental Europe.

US pharma groups CVS Health and Walgreens agreed to pay almost $10bn to settle lawsuits over their prescription of powerful opioid painkillers. They are the first settlements by pharmacy chains in the opioids crisis, which has led to hundreds of thousands of deaths.

The rise of Chinese retailer Shein — poised to become the world’s largest fast-fashion company — has spawned a range of imitators targeting Gen Z’s growing appetite for cheap clothing.

The World of Work

Unilever is the biggest company yet to offer a vote of confidence in a four-day working week, extending a trial from New Zealand to staff in Australia. “We’ve had strong business performance, high engagement, people feeling happier, and time spent in meetings also coming down,” a spokesperson said.

Can you run a company without managers? The Working It podcast discusses flat hierarchies (aka holacracy).

Get the latest worldwide picture with our vaccine tracker

Some good news

A rewilding initiative in ancient Canterbury woodland in south-east England has delivered an unexpected bonus: a baby bison — an animal on the brink of extinction in Europe after the first world war. The Wilder Blean Project is raising money on JustGiving to fund its work on combating the climate and biodiversity crises.