Here’s what you need to know today

• Melbourne has announced a ban on rented e-scooters, citing too many people riding on pavement and creating tripping hazards around the city. The scooter hire apps, Lime and Neuron, have been given 30 days to remove them.
  
  

• Australia’s corporate regulator ASIC is suing the ASX, claiming Australia’s major stock market operator mislead the market. ASIC claim the ASX knew its plan to replace the CHESS system with a blockchain-based system was not on track as early as February 2022, despite making comments to the contrary.
  
  

• Commonwealth Bank led yesterday’s results from Reporting Season. CBA’s $9.8 billion profit was down 6% from last year, as the bank revealed mortgage arrears was up from 0.92% to 1.3%. Pro Medicus was the star of the day, shares were up 10% as it reported profit up 37%. Seven West Media was the disappointment, profit down 69% as the total TV advertising market dropped 8%.
  
  

• The Reserve Bank of New Zealand cut its cash rate by 25 basis points to 5.25%. New Zealand increased rates earlier and harder than Australia, and has inflation at 3.3%.
  
  

• Over in the United States, more signs that the consumer is struggling. Hardware retailer Home Depot forecast a 3-4% drop in same store sales, which was an increase from the 1% drop it previously forecast.
  
  

• Sometimes the stock market can send you a clear message. Starbucks CEO Laxman Narasimhan must have heard it loud and clear after the coffee chain announced he would be replaced by CEO of Chipotle, Brian Niccol, and the share price jumped 25%.
  
  

• Japan’s Prime Minister, Fumio Kishida, will step down in September as voter frustration over unrecorded political donations and ties to a controversial church boil over. This ends three years of Kishida’s leadership, a time marred by scandals. 
  
  

• Concerns are rising about an escalating conflict in the Middle East as Iran’s foreign minister rejected calls for Iran to not retaliate against Israel. 20 airlines have now cancelled flights to the Middle East.

What the…?

Ever wondered what happens to spacecraft after they return to Earth? Turns out there is a ‘spacecraft cemetery’ in the South Pacific Ocean, more than 2,500kms from land that has been used since the 1970s. Just another reason to celebrate the onset of reusable rockets and spacecraft.

Investing is a lifelong journey

Here’s what you can learn today.

China has spent at least $230 billion to develop its EV industry and 'flood' the market

The story of China’s support for its electric vehicle (EV) makers has been told with quite a negative tilt recently, mainly framed in the context of the brewing trade wars with the European Union and the United States. The EU has imposed tariffs of up to 38% on Chinese-made EVs, while the US has increased tariffs to 100% (i.e. doubling the price of a Chinese-made EV sold to a US consumer).

The White House press release at the time told the story: “With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China's exports of EVs grew by 70% from 2022 to 2023—jeopardizing productive investments elsewhere.”

While European and American leaders are working to protect their own nascent EV industries, the Chinese side of the story is one that should be reflected on. It is a story of what large government investments can make happen in a very short amount of time.

Three years ago, electric vehicles and plug-in hybrids made up just 7% of China’s new vehicles sales. Last month, it reached 50.7% of new cars sold.

According to a recent estimate from the US Center for Strategic and International Studies, China has spent at least $230.8 billion between 2009 and 2023 to make this happen. The funding has been spread across 5 key areas: rebates for car buyers, government funding for EV infrastructure (i.e. charging stations), research and development funding for EV makers, government purchases of EVs and an exemption from China’s 10% sales tax.

It is a massive government investment, but the results speak for themselves. More than 10 million EVs will be sold in China this year. $230 billion over 15 years works out to be about $15 billion a year - for context, that is just shy of Australia’s subsidies to the fossil fuel industry this year.

Today’s sponsor is Australian Property Scout

Join Sammy Gordon, regular Equity Mates property expert in the studio with his co-host Jimmy Ibrahim and the rest of the Australian Property Scout brains trust as they dissect the last 12 months in real estate.

After dissecting the last 6-12 months in the Australian Property Market, they then turn their attentions to the remaining 6 months left of the year and detail where they believe the property market is heading.

A must listen for all current and aspiring property investors. 

Tune in to this episode on the Scouting Australia Podcast on all your favourite listening platforms.

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