As Netanyahu vows Iran payback, markets watch for dangers of further escalation
Israel’s Iron Dome anti-missile system intercepts rockets, as seen from Ashkelon, Israel, October 1, 2024
Amir Cohen | Reuters
Israel’s government has vowed a severe response to Iran’s unprecedented missile barrage into Tel Aviv, leaving the Middle East on edge as fears rise over a possible all-out war between the two long-time foes.
On Tuesday evening, Iran launched roughly 180 ballistic missiles at several sites across Israel, an attack Tehran said came in response to the Israeli assassination of Hezbollah chief Hassan Nasrallah the week prior.
Israeli authorities say there were no casualties as a result of the offensive, and that most of the strikes were intercepted. But the event marked a turning point in a series of escalatory tit-for-tat moves, as Tehran appeared adamant to re-set deterrence and prove to Israel that it could — and would — attack at a time of its choosing.
Markets are now braced for what could follow a likely Israeli retaliation against Iran. Defense stocks are rallying — and long-subdued oil prices may also be set for increases, as industry watchers now see a real threat to crude supplies.
As much as 4% of global oil supply is at risk as oil infrastructure in Iran — one of OPEC’s largest crude producers — could become a target for Israel.
Oil prices gained over 5% in the previous session following the missile strike, before tapering to a 2.5% climb. The December delivery contract of global benchmark Brent was trading at $75.37 per barrel at 10:30 a.m. in London, while front-month November U.S. West Texas Intermediate futures were up 2.68% to $71.70 per barrel.
“I think this focus might be on Israel, but the focus should really be on Iran, and whether there will be attacks on regional infrastructure. That really is the one event that we are looking for, and which could determine a more dangerous path for stock markets, for risk assets in general,” Frederique Carrier, head of investment strategy for the British Isles and Asia at RBC Wealth Management, told CNBC’s Capital Connection on Wednesday.
“We know, looking at the acts of war since the 1940s, that those which create an oil crisis [and] a prolonged increase in oil prices are the ones which have a long-lasting impact on stock markets.”
She added that so far, there is “no indication” of that.
Oil infrastructure ‘tempting targets for Israel’
Lewis Sage-Passant, an adjunct professor of intelligence at Sciences Po in Paris, described energy markets as jittery, as investors watch for Israel’s next moves.
“Iran depends on a handful of ‘chokepoint’ export terminals, such as Khark island, which will be tempting targets for Israel,” Sage-Passant said. “Energy sector teams seem nervous about an escalating tit-for-tat of strikes against regional infrastructure. Even without direct targeting, much of the world’s oil infrastructure sits under these missile’s flight paths, so naturally everyone is very nervous.”
Following the Tuesday attack, U.S. National Security Advisor Jake Sullivan warned of severe consequences for Iran, saying that the U.S. would staunchly support Israel. But Washington’s efforts to de-escalate and prevent a region-wide conflict have clearly failed, according to Roger Zakheim, a former U.S. deputy assistant defense secretary and director of the Ronald Reagan Institute in Washington.
Iran’s attack and the subsequent Israeli response “may result in impact on oil, energy markets, certainly aviation, and I think certainly the defense sector … Investments in missile defense and ammunition, those companies that manufacture and produce those systems, for sure are going to be impacted by what’s playing out in the Middle East,” he said.
Immediately following the Iranian strikes, U.S. defense stocks hit record highs. Their European counterparts also ticked higher on Wednesday morning on the rising conflict risks, with Saab and BAE Systems adding 2.2%. Thales and Rheinmetall both rose more than 1.3%.
“Israelis now will respond, not only in kind, but do what is necessary to restore deterrence,” Zakheim added.
Deterrence, or full-blown war?
Questions remain whether a strong Israeli response would restore deterrence or trigger further escalation from Iran and tip the nations into a full-blown war. In a statement following the country’s missile salvos, Iran’s Foreign Minister Abbas Araghchi said: “Our action is concluded unless the Israeli regime decides to invite further retaliation. In that scenario, our response will be stronger and more powerful.”
Aside from geographical choke points in the oil market, “there are plenty of facilities on [the] Iranian side and also [on the ] Israeli side that could all be targeted in terms of critical infrastructure,” Sara Vakhshouri, founder and president at SVB Energy, told CNBC’s Capital Connection on Wednesday.
“That infrastructure is all connected,” she said, stressing that the sheer size of Iran means “it is impossible to somehow secure all of it.”
Some market watchers are warning oil could hit $100 per barrel.
Vakhshouri expressed doubts over such a forecast, noting that geopolitical events often only affect oil prices temporarily. The extent and duration of any market impact “depends on where the destruction would be and how much oil is going to be taken off the market,” she said.
“Definitely, prices will have an upward trend. [But] the other thing is that the market is focusing on huge uncertainty on both sides … [whether] it’s the demand side or the geopolitical side.”
A longer-term issue underpinning oil prices is the broader global demand picture. Brent crude hit a 33-month low in mid-September and had hovered around $70 per barrel until Iran’s missile attack on Israel, based on slowing global demand and abundant supply, particularly from non-OPEC+ producers.
“So it’s very interesting moment now,” Vakhshouri said. “We have the prices being resilient due to the fear of low demand in the market, but also the geopolitical factor is real. Any side could really push the market, and we have seen just in the past few days, how the prices go up and down, depending on how the sentiments are triggered in the market.”
Although Polestar (PSNY) delivered fewer vehicles in the third quarter than last year, the EV maker expects to achieve a positive gross profit margin in Q4 2024. To hit its target, Polestar’s new CEO said the EV maker needs to go from showing to “actively selling cars.”
Polestar Q3 deliveries fall as new CEO takes over
Polestar delivered around 11,900 vehicles in the third quarter, down from 13,976 in Q3 2023. Through the first nine months of September, Polestar’s deliveries reached 32,300. That’s 22% fewer than last year.
The announcement comes after Polestar’s CEO and founder, Thomas Ingenlath, stepped down on October 1, 2024.
Polestar’s new leader, Michael Lohscheller, said in his first public statement since taking over the reins that the company is “conducting a review of our strategy and operations.”
One of the biggest keys, Lohscheller explained, was “going from showing to actively selling cars.” Polestar’s leader said the company has already adopted a more active sales model, adding that the first markets are “showing solid order intake.”
Polestar expects revenue in 2024 to be about the same as last year at around $2.38 billion. The company also said it expects to achieve a positive gross profit margin in the fourth quarter of the year.
We will learn more about Polestar’s plans during its business and strategy update on January 16, 2025.
Polestar is “engaged in constructive dialogue” alongside parent company Geely and its club loan lenders.
The EV maker is launching two new electric SUVs, the Polestar 3 and 4, which should help boost demand.
| Polestar 3 and 4 electric SUV by trim in the US | Starting Price | Range (expected EPA-est) |
| Polestar 4 Long Range Single Motor | $56,300 | 300 miles |
| Polestar 4 Long Range Dual Motor | $64,300 | 270 miles |
| Polestar 4 Long Range Dual Motor model (with Plus and Performance packs) | $74,300 | 270 miles |
| Polestar 3 Long Range Dual Motor with Pilot Pack | $74,800 | 315 miles |
| Polestar 3 Long Range Dual Motor with Pilot Pack and Plus Pack | $80,300 | 315 miles |
| Polestar 3 Long Range Dual Motor with Pilot and Performance Pack | $80,800 | 279 miles |
| Polestar 3 Long Range Dual Motor with Pilot, Plus, and Performance Pack | $86,300 | 279 miles |
The first Polestar 3 rolled off the production line in the US in August at its South Carolina plant. Polestar’s electric SUV starts at $73,400 and has a range of up to 315 miles.
Meanwhile, Polestar 4 deliveries will kick off in the US later this year. It will start at $56,300 and have a range of up to 300 miles.
Polestar stock is down 5% following Friday’s news. Over the past 12 months, Polestar share prices have fallen 51%.
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Enel X Way North America’s EV chargers will continue to operate with software connectivity beyond today – here’s what we know.
Enel X Way North America keeps the lights on
On October 2, Enel X Way North America announced that it was shutting down its residential and commercial EV charger business in the US and Canada, effective October 11, 2024.
Enel X Way USA, which operates Enel X Way North America, said that a third-party firm, which we now know is financial services provider B. Riley Advisory Services, will be appointed to manage the company’s remaining obligations and communicate directly with customers and partners regarding the shutdown.
While the company’s previous plan was to just leave North America and leave its customers high and dry, it now has a better plan.
Existing JuiceBox and Enel X Way USA LLC customers and clients will still be able to use their software and mobile applications for an extended period. However, there won’t be any customer service.
In the meantime, this “interim measure” will enable B. Riley Advisory Services to “seek a long-term solution for the EV charging platform, with the ultimate goal of maintaining operational continuity for Enel X Way USA customers.”
It’s going to hold a Customer Management Auction, and customers will be transitioned to the winning software provider. Qualified bids will be accepted until October 22 at this website.
Here’s what’s up for bid:
- Transfer of Customer Management and Implement a new SaaS for Residential Customers (120,000 +/- currently).
- Transfer of Customer Management and Implement a new SaaS for Commercial Customers (25,000 +/- currently).
- Bulk Purchase of 17,000 +/- EV Chargers (without SaaS)
- An auction of miscellaneous Corporate Assets.
Electrek’s Take
This is a much better path to take than completely abandoning one’s customers. If I was a business or a residential owner of Enel X Way North America EV chargers, I’d be very relieved. I’d just hope nothing went wrong with my chargers until someone took over the management of their software, seeing how there was no customer service.
I’m going to assume Enel X Way didn’t just find its conscience all by itself. Only yesterday, Consumer Reports, US PIRG, and 60 self-reported owners of JuiceBox EV chargers asked the FTC to investigate Enel X Way’s behavior. That would have been one of many complaints. The company also took Infrastructure Law grants from the federal government to install DC fast chargers. It’s not like its unprofessional departure from the North American market wasn’t going create waves. Glad it had a change of heart.
Read more: Enel X Way North America is shutting down – here’s what we know
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Although BYD was already the best-selling brand in China, it reached an even more significant milestone last month. After overtaking SAIC, BYD is now China’s largest auto group.
BYD tops SAIC to become China’s largest auto group
After sales surged by 62%, with over 3 million vehicles sold last year, BYD officially became China’s best-selling brand.
Last month, BYD hit an even more significant milestone. BYD is now China’s largest auto group after topping SAIC in September sales. The milestone is significant, given that SAIC has joint ventures with leading global automakers, including Volkswagen GM.
BYD Group sold a record 419,426 vehicles last month, a 45% increase from September 2023. The numbers include BYD’s Denza, Fang Cheng Bao, and Yangwang subbrands.
September was BYD’s fourth consecutive record-breaking sales month. Despite an influx of new competition and an intensifying price war in China, BYD is still taking market share.
BYD’s cheapest electric car, the Seagull, was the best-selling EV in China in August, with 40,949 models sold. In September, BYD sold another 43,425 Seagull models.
The BYD Seagull starts at under $10,000 (69,800 yuan) in China and is already stealing market share overseas.
Meanwhile, SAIC is struggling to keep pace. Its joint venture with GM, SAIC-GM-Wuling, is a big reason as sales collapsed 35% in September, with 313,260 units sold.
Through September, SAIC has sold 2,649,333 vehicles (-21.5% YOY) in China, falling behind BYD, which has 2,747,875 vehicle sales (+32% YOY). BYD’s production numbers through September are also now outpacing SAIC’s.
Electrek’s Take
BYD continues to expand in China despite its increasingly competitive market. With low-cost EVs like the Seagull, Dolphin, and Yuan Plus, BYD is leading the market.
Although BYD is best known for its affordable vehicles, the automaker is rapidly expanding its lineup with new pickup trucks, luxury SUVs, and electric supercars.
BYD is also looking overseas to drive future growth. The company is already a leading EV brand in key auto regions like Southeast Asia and Latin America. With new plants planned in Hungary, Pakistan, Mexico, and Turkey, BYD is laying the groundwork to continue its dominant expansion.
After selling more vehicles than Honda and Nissan for the first time in Q2, BYD became the seventh-largest automaker globally. Will it continue to climb the global auto ranks? With new tech and batteries driving down costs, BYD is poised for a run.
Source: CarNewsChina
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