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Electric cars in China and Boohoo’s boom


Electric cars in China

You will probably be aware that car sales in China aren’t going that well at the moment after many decades of constant growth.

You may also be aware of China’s intention that it wants to be the world leader in the development of electric vehicles – HOWEVER, things are about to get much more difficult as subsidies are being cut this month on electric vehicles. Until now, subsidies have averaged at around $10,000 per vehicle, but this is being cut by about 65%.

Sales of EVs always get hit hard when subsidies are taken away or reduced, so I suspect this is going to lead to big problems for a lot of the smaller manufacturers.

There will no doubt be consolidation among these smaller manufacturers as they are bought up by bigger domestic or international players while others will just fall by the wayside and go out of business.

The timing of this subsidy cut isn’t great given that car sales overall have just fallen by 20% last month due to tighter emissions rules coming in and increased fears over the health of the Chinese economy.

Boohoo’s boom

The other thing I wanted to talk about today was online clothing retailer Boohoo bucking the general gloom in retail as it unveiled a very strong start to the financial year with UK sales up by 27% and international sales up by over 50%.

However, as I said the other day, online retailers in particular need to be mindful of the European Second Payments Services Directive coming into force THIS September. Basically, this legislation will require most online payments of over EUR30 to go through an extra level of authentification, such as the input of a code texted to your mobile.

Many fear that this extra level of faff for the consumer is going to result in lost sales and there are increased calls for an 18 month transition period for companies to get up to speed with the required software.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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