Transitioning from excess to the second phase of Trump: Predictions for the EV battery market in 2025

Here's some key information about the EV battery industry in 2025.

What can we expect for the future of EV batteries in 2025?

Nikhil Bhandari, the co-head of natural resources and clean energy research for Asia-Pacific at Goldman Sachs, predicts that the worldwide average price for an EV battery may drop to around $90 per kilowatt-hour (kWh) in 2025, a decrease from $111 per kWh at the close of 2024.

The investment bank projects that by 2026, the cost per kilowatt-hour may drop to US$82, almost 50% less than the US$149 it might be in 2023. This would make the expense of owning an electric vehicle equivalent to that of a gasoline vehicle in the US, without any subsidies.

Bhandari indicated that the driving forces behind this trend are advancements in technology and the decreasing costs of essential battery metals. He also mentioned that the energy density of many newly released battery products has increased by approximately 30% and they are more affordable.

Goldman predicts that lower commodity costs will contribute to over 40% of the reduction in worldwide average battery prices between 2023 and 2030. The metals used in batteries make up close to 60% of the battery's total cost.

Templewater in Hong Kong is establishing connections in the Middle East to secure energy transition agreements. The private equity company is scouting for opportunities for its subsidiaries in the car manufacturing and sales distribution sectors in the nations of the Gulf Cooperation Council.

The private equity company Templewater, based in Hong Kong, is collaborating with Middle Eastern countries to exploit investment possibilities presented by the region's shift towards more sustainable energy sources, as it aims to secure profits for its stakeholders.

They are collaborating with the Future Fund Oman, a 2 billion Omani rial (equivalent to US$5.2 billion) investment fund initiated by the Oman Investment Authority (OIA), the sultanate's sovereign wealth fund. They aim to concentrate on opportunities for energy transition and localisation, says Yufeng Wan, partner and chief of decarbonisation investment at Templewater.

"He stated that these endeavors will foster business and financial growth, aiding the area's aspirations for carbon neutrality and economic diversification."

According to its online platform, the fund aims to tap into the possibilities offered by sectors such as tourism, industrial and manufacturing processes, renewable energy, IT and communication, port and logistic operations, mining, fisheries, and agriculture.

Templewater's majority-owned company, Wisdom Motor, which focuses on the production of zero-emission commercial vehicles, is seeking to establish itself in manufacturing, service provision, and sales distribution in the six nations comprising the Gulf Cooperation Council (GCC).

In March, it entered into an initial contract with the OIA, an organization that oversees $50 billion worth of assets, paving the way for investment and cooperation in eco-friendly transportation. Prior to this, it had committed to providing tailored hydrogen-fueled vehicles in the United Arab Emirates.

"Felix Xu, the chief strategy officer, mentioned that there are numerous shared aspects between Wisdom Motor and the GCC nations," he stated. "We aim to be the frontrunners in supplying commercial vehicle solutions with no emissions, which aligns seamlessly with the region's strategy and objectives for decarbonisation," he further elaborated.

No other way but forward: Chinese agricultural drones gain ground as sector expands

While some foreign administrations remain doubtful, China's farming drones are becoming increasingly prevalent in rural areas as farmers start to incorporate automation.

Five years ago, Wang Fei initiated his farming drone enterprise. At that time, the unique humming of the self-operating machines was almost unnoticeable across the vast expanses of agricultural land in his home region of Anlu.

Previously, Wang, an ex-sales manager for farming equipment in the western center of Chengdu, claimed that he observed "tremendous potential" for the use of drone technology. He then returned home to explore these possibilities further.

Currently, Chufei Agriculture provides services to approximately 40% of the agricultural land in Anlu. Utilizing drones for tasks such as seed planting and pesticide or fertilizer application, the agricultural outputs have increased for this central Chinese region and its nearly half a million inhabitants.

Wang's achievement is just one of numerous that are taking place as technological advancements in China accelerate. The country's widespread use of farming drones has elevated it to a leading position globally in terms of total operational area. This development has also sparked worries in the United States about the prevalence of these devices on American agricultural lands.

Over the previous year, a globally superior collection of 251,000 pesticide-spraying drones spanned a cumulative 2.67 billion mu (178 million hectares) across China, as per information from the National Agro-tech Extension and Service Centre. Both of these numbers saw an approximate 25 per cent rise in comparison to 2023.

Bitcoin's value saw a two-fold increase in 2024, with experts predicting further growth in 2025. Analysts from the brokerage firm Bernstein firmly believe that reaching US$100,000 is not the ultimate goal.

The most prominent and biggest cryptocurrency worldwide reached a value of US$100,000 in December, a significant achievement that has sparked enthusiasm among advocates of the formerly emerging asset category.

Bitcoin has seen an increase of over 120% this year, while Ether, the second biggest cryptocurrency, has risen nearly 50%. As a result, the cryptocurrency industry's market value has soared to approximately $3.5 trillion, as per data from CoinGecko.

Analysts predict further growth for 2025.

Analysts at Bernstein brokerage firmly believe that $100,000 is not the ultimate goal, as noted in a client update last month. They predict that Bitcoin will reach an all-time high of $200,000 towards the end of 2025.

MicroStrategy, a software company that has emerged as the biggest corporate owner of bitcoin globally, witnessed its stock prices skyrocket almost five times in 2024.

The start of the trading year in Hong Kong has seen the worst performance since 2019. The Hang Seng Index began the year down by 2.2% compared to its 2.8% drop on the first trading day of 2019.

The Hang Seng Index experienced a 2.2 per cent drop, ending at 19,623.32. It had previously taken a 2.8 per cent blow on the first trading day of 2019. Likewise, the Hang Seng Tech Index went down by 2.5 per cent. In mainland China, the CSI 300 Index suffered a 2.9 per cent fall, marking its most significant downturn since 2016 when it plummeted by 7 per cent. Meanwhile, the Shanghai Composite Index decreased by 2.7 per cent.

The Caixin manufacturing purchasing managers' index, which primarily measures the performance of smaller companies, dropped to 50.5 in December, down from 51.5 in November, according to an announcement made by Caixin and S&P Global on Thursday. Although the reading was over 50, signifying growth in activity, it did not meet the median prediction of 51.7 made by economists monitored by Bloomberg.

The somber atmosphere is further intensified by a change in attitude towards US stocks, which finished 2024 on a low note with four days of back-to-back falls. Investors have redirected their attention to the possible implications of tariffs and inflation-inducing strategies by the upcoming Trump administration, moving away from their initial enthusiasm for fiscal support and tax reductions, as per analysts. The Federal Reserve has moderated predictions for monetary easing, projecting just two rate reductions for this year in the dot plot.

Bocom International anticipates that the trend of confined trading will persist, as stated in their Thursday report. Whether there will be a significant shift in the market relies heavily on the potential improvement of China's economic base in a long-term manner, along with the speed of interest rate reductions globally.

Beijing's new policy initiative in 2025 will boost the use of low-carbon hydrogen. Beijing has mandated that national refining and chemical firms ramp up their consumption of low-carbon hydrogen to cut down on emissions.

The strategy proposed that the nation's refining and chemical enterprises expand their utilization of hydrogen in their manufacturing methods to cut down on emissions. It also urged these businesses to enhance their research and development initiatives in the field of green methanol and green ammonia, which are two hydrogen-sourced fuels that have no carbon footprint. These can be employed in the electricity production and transportation sectors.

The strategy also proposes an increase in the usage of hydrogen fuel cell vehicles, alongside the creation of hydrogen-fueled ships, planes, and trains.

The plan suggests that by the year 2027, the industrial field is expected to be significantly advancing in the generation and utilization of low-carbon hydrogen and related fuels.

"BOCI Securities analyst Wu Jiaxiong has asserted that hydrogen's potential in the industrial sector is undeniable," as stated in his Tuesday report.

Sales of electric vehicles (EVs) from BYD, Nio, Xpeng, Li Auto, Leap, and Zeekr skyrocketed in December due to a shopping frenzy in China. All these companies, including Leapmotor backed by Stellantis and Geely's Zeekr, reported record-breaking EV deliveries last month.

The incentive of 20,000 yuan (approximately US$2,740) for swapping gas-guzzling cars with electric vehicles, which represented about 10 to 20 percent of the cost of half of the electric vehicles on China's roads, was offered from July to December. This led to a flurry of eager customers securing deals before the close of the year, according to Zhao Zhen, a sales director at Wan Zhuo Auto, a dealership located in Shanghai.

In this manner, they can "take advantage of the grant", she pointed out, adding that the sales trend might not continue in 2025 due to the end of the grant. This is because economically careful Chinese buyers might avoid purchasing high-cost products in the face of a decelerating economy.

Hua Hong, China's second largest chip foundry, appoints an ex-Intel stalwart as their new president

With more than three decades in the semiconductor manufacturing industry, Bai has served in leadership roles in numerous chip-making companies, including Intel.

The second-largest chip manufacturer in China, Hua Hong Semiconductor, has recruited a former veteran from Intel to be its new president during a recent restructuring of management.

Hua Hong Semiconductor, a chipset producer headquartered in Shanghai and known for its advanced node technology, announced via a stock filing on Thursday that they have appointed Intel's ex-global vice-president, Bai Peng, 62, as their new president under a three-year agreement. Bai is replacing Tang Junjun in the presidential role, however, Tang will continue as the chairman and executive director of the firm.

Bai boasts more than three decades of expertise in the field of semiconductor manufacturing and has served in high-ranking roles at several chip-producing companies, including the American powerhouse, Intel. Bai's educational journey began at the esteemed Peking University in China and he subsequently achieved his undergraduate degree in physics in 1985 from the University of Bucharest in Romania. His physics doctorate was granted by New York's Rensselaer Polytechnic Institute, as stated in his official biography.

Bai previously served as the CEO of Rong Semiconductor (Ningbo) Co, a company that produces image sensors, power management chips, and display drivers utilizing well-established node technology ranging from 28- to 180-nanometer. Prior to this, Bai held several roles at Intel, including process integration engineer, director of yield engineering, R&D director, vice-president, and finally global vice-president, as stated in the report.

Bai's induction comes shortly after Hua Hong initiated operations at a new facility in Wuxi, a city close to Shanghai in Jiangsu province. This comes on the heels of a decision by the state-owned Hua Hong Group, the parent company of Hua Hong Semiconductor, to name Qin Jian as the new chairman, taking over from Zhang Suxin, who held the position since 2016.

The reorganization of leadership occurs as China's chip-making sector confronts fresh challenges, amid the US initiating a commerce probe into China's manufacturing of traditional semiconductors – a significant area of concern for Hua Hong.

In the third quarter of 2024, the Hua Hong Group secured a position as the world's sixth largest global foundry, propelled by the needs of domestic chip design firms. Based on information from the Taiwanese IC research firm TrendForce, the Group's market share for the quarter stood at 2.2 per cent, a slight decrease from the 2.6 per cent it held during the equivalent period the previous year.

Perspective | From American shares to China's economic expansion, 5 misconceptions obscure the predictions for 2025

While there are predictions of a 10 per cent increase for the S&P 500 and a lagging China this year, crucial factors make these results complex.

Every legend carries a measure of truth within it. When expressing these, there's a chance that a portion of the legend may indeed be accurate.

Predictions for the market in the upcoming year will be influenced by unpredictable events, which ex-US defense secretary Donald Rumsfeld would describe as "unknown unknowns" – factors we can't anticipate yet still upset established trends. Therefore, I measure the accuracy of my 2024 predictions not in fixed terms, but in relation to how correct I was.

The top five misconceptions prevalent in the markets for 2025 are listed below.

China experiences a 21% increase in government investments, primarily driven by Middle Eastern funds. According to Global SWF, $10.3 billion was invested in China by state-owned investors last year, with 62% of this amount originating from nations in the Persian Gulf.

China's significance in the portfolios of sovereign investors has increased, with a 21 percent annual surge in inflows in 2024, as per a monitor of approximately 750 globally owned state investors.

The globe's second biggest economy drew in $10.3 billion from investments managed by central banks, sovereign wealth funds, and public pension funds. This is an increase from the $8.5 billion in 2023, as reported by Global SWF. The surge in investments can be attributed to the improving relationship between China and the Middle East, as well as the amplified diversification objectives among investors.

"China is becoming increasingly significant to sovereign investors due to their desire to broaden their portfolios beyond developed markets," shared Diego López, the creator and chief executive of the data platform, with the Post on Thursday. "We anticipate this pattern to persist in both equity capital markets and private investments."

Last year, Persian Gulf countries, such as Saudi Arabia's Public Investment Fund (PIF), Abu Dhabi's Mubadala and Investment Authority (ADIA), and the Qatar Investment Authority (QIA), were responsible for 62% of the total investments made by sovereign wealth funds in China. Meanwhile, Singapore, including entities like Temasek and GIC, contributed to 24% of these investments.

The investors showed interest in sectors such as real estate, financial services, and technology, to name a few.

"The two agreements came about due to sell-offs that occurred in the midst of China's property market crisis. This situation led to a significant increase in borrowing expenses and triggered Beijing's strict regulation of the real estate industry," stated Global SWF in a Wednesday report.

The demand for catastrophe bonds in Hong Kong is increasing, with Taiping Re emerging as the sixth issuer. The most recent transaction has raised Hong Kong's total issuance to US$748 million since the inception of insurance-linked securities in 2021.

Hong Kong investors are demonstrating increased interest in catastrophe bonds after the most recent issuance by Taiping Reinsurance. This is the city's sixth offering of insurance-linked securities since the inception of the regulatory system in 2021.

Taiping Re has successfully garnered $35 million from private investors via a specially designed entity known as Silk Road Re, as per an official announcement. In this deal, Silk Road Re is set to offer Taiping Re protection for several years against the risk of earthquakes in mainland China and specific windstorm threats in the United States.

Asia's first three-year bond, which includes two types of risks and two payout triggers, has been oversubscribed and priced at the lower spectrum of the unspecified indicative offer price range, according to the reinsurer. The five transactions prior to this only included coverage for a single nation and one class of natural calamity.

The issuance of bonds has successfully provided the firm with a varied approach to managing risks related to potential disasters, stated CEO Yu Xiaodong. He also noted that it fosters the linkage between the insurance sector and the capital market.

Disaster bonds, often referred to as cat bonds, are insurance-related securities utilized by insurance companies to shift severe risks to bond investors. Ever since China Reinsurance (Group) launched the first of these bonds in October 2021, the total amount has grown to $748 million. King & Wood Mallesons delivered legal counsel for all the transactions.

Apple is introducing new price reductions on iPhones in China due to intensified rivalry with Huawei. From January 4th to 7th, there will be a promotion that gives Chinese buyers a $68 price drop on the premium iPhone 16 Pro models.

A discount of 400 yuan will be provided for the standard iPhone 16 and iPhone 16 Plus models. Previous versions, such as the iPhone 15 and iPhone 14 series, will receive a reduction of up to 300 yuan.

The MacBook Air will have significant price reductions of up to 800 yuan. Additionally, the company's website indicates that there will be slight price decreases for iPads, Apple Watches, AirPods, and Apple Pencils.

The reductions in price will also be available at the company's physical Apple Stores, however, the promotional items will be restricted in numbers, with just 29,300 discounted iPhones on offer.