The News

Russian President Vladimir Putin will meet with the foreign ministers of the BRICS bloc of developing economies today, as Moscow courts foreign investment to offset Western sanctions.

Analysts say Putin is attempting to build an alternative to the United States-led global power structures, angling to partner with states like China and India to challenge the West.

Russia developing new avenues of soft power

After being barred from this year’s Eurovision Song Contest and Olympic Games, Moscow is fashioning its own versions of key events. Russia’s Intervision Song Contest, a revamped form of a Soviet-era competition, will feature only Russia’s allies with Western performers banned from participating. The Kremlin is also running a “World Friendship Games” in September. “The message of these cultural and sports events for both Russians and the rest of the world is, simply: We don’t need you any more,” The Wall Street Journal noted.

Putin courts Indian, Chinese investments

At Russia’s recently concluded annual financial summit — the St Petersburg International Economic Forum — Moscow focused on courting investments from partners in the Global South, including India and China. Putin has said that nations friendly to Russia comprise more than three quarters of its trade, despite Western sanctions that have targeted its exports. Specifically, the Kremlin is looking to New Delhi and Beijing to boost high-tech trade and domestic development of tech products as it attempts to cultivate “technological independence,” Nikkei Asia reported.

Moscow is increasingly isolated from the West

Once attended by delegates from the US and the European Union, Russia’s SPIEF event this year hosted notably fewer Western delegates, as business leaders have blacklisted Moscow following its full-scale invasion of Ukraine. The presidents of Bolivia and Zimbabwe were in attendance, as was the Hungarian foreign minister — but “both the level and representation of international participants at the St. Petersburg Forum have significantly declined since the war,” one Russian economist noted to The Moscow Times. The forum’s status has slumped compared to prior years, and even analysts friendly to the Kremlin have observed its decline: SPIEF “has turned into a domestic Russian event,” Russian political analyst Sergei Markov said.

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Among the EU election’s biggest losers: Electric vehicles

The News

The European Parliament’s shift to the right could slow the bloc’s decarbonization efforts — particularly when it comes to transitioning to electric vehicles instead of traditional gas-powered transport.

Europe’s lawmakers could double-down on boosting Europe’s competitiveness against China, and new tariffs on Chinese imports, especially EVs, are expected this week, even as Chinese EV giant, BYD, is due to sponsor the European Championships, one of the bloc’s biggest sporting tournaments, which starts on Friday.

Fears of Chinese competition trump decarbonization efforts

It’s “too early to tell” how far-right parties will approach China, particularly given their conflicting philosophies on how to deal with Beijing, Sebestyén Hompot, a research fellow at the Central European Institute of Asian Studies, told Semafor. Ultimately, European parliamentarians appear relatively united in securing Europe’s “economic security” and will work to promote European business interests, even at the expense of the bloc’s decarbonization targets, he said. Europeans themselves have become a key consumer for (cheaper) Chinese EVs, but EU lawmakers are more concerned about the risks of “becoming dependent on China” for EVs, Hompot said, than they are interested in making European-made EVs cheaper.

Traditional automakers see shift to the right as win

With the shift to the right, many objectives of the bloc’s 2020 Green Deal are now in limbo as the center-right will be forced to collaborate with far-right parties for power. Of particular concern is meeting a 2035 target to stop the sale of traditional internal-combustion vehicles. Canceling the deadline “has become a significant objective for Europe’s right-wing parties,” according to Global Data, an analytics firm. Industry leaders have argued that the 2035 target is too soon and European automakers cannot financially survive if they try to transition to all-electric fleets before then. Internal-combustion vehicles are “a testament to the power of European creativity and ingenuity” and are the only economically viable alternative to the rise of Chinese EVs, according to the Conservatives and Reformists’ manifesto.

Chinese EV makers still investing in Europe for long-term

Despite these reservations against Chinese EVs — and the bloc considering tariff rates against Chinese EVs this week — Chinese EV-makers themselves are confident they will retain business in Europe and are investing for the long-term on the continent, according to Reuters. EV-maker Chery will begin production in Spain later this year, and the company is considering a second plant in Italy where Prime Minister Giorgia Meloni has been seen as more pragmatic about Chinese investment, as Semafor previously reported. And like European automakers that have built a loyal customer base through “strong branding,” BYD has gained similar traction and will get more as the main sponsor of this year’s UEFA Euros soccer tournament, according to economist Davide Oneglia.

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Chinese automakers committed to Europe despite EV tariff probe, industry group says

Chinese automakers' plans to invest in Europe won't be deflected by the EU's anti-subsidy probe into Chinese-made electric vehicles, a leading Chinese auto industry association said on Tuesday.

"Chinese enterprises will continue to unswervingly develop in Europe and integrate into local markets," said Cui Dongshu, secretary general of the China Passenger Car Association (CPCA)

He made the remarks while announcing a rare drop in Chinese car exports for May amid an ongoing slide in domestic sales.

The European Union alleges Chinese automakers benefit unfairly from state subsidies and accuses them of dumping excess production on Europe, charges that Beijing denies.

The EU is this week expected to announced the tariffs it plans to impose on Chinese electric vehicles in a move that could prompt retaliation.

"The traditional carmaking industry plays a big part in generating employment in Europe ... Chinese firms won't take aggressive measures or low-pricing moves to disrupt the stability of employment in Europe," Cui said.

Chinese exports of new energy vehicles (NEVs) - which include electric cars and plug-in hybrids - fell 4% year-on-year in May and were down 18.8% from the previous month, CPCA data showed. NEV exports as a percentage of overall car exports stood at 24.8%, a rare yearly fall of 6.8 percentage points.

Overall, passenger vehicle exports fell 9% from a record high in April to 378,000 vehicles in May, the data showed.

"Export growth didn’t meet our expectations," Cui said.

Domestic vehicle sales were down 2.2% following a 5.8% decline in April, in a sign weak demand is becoming entrenched in the world's biggest auto market amid a sputtering economy.

Sales of NEVs in China made up 46.7% of total car sales in May, a fresh monthly high. EV sales rose 27.4% after a 12.1% increase in April, while plug-in hybrid sales rose 61.1% versus a 64.2% jump the month before.

Stiff competition and the threat of EU tariffs, which China labels as protectionism, have done little so far to deter Chinese EV makers from ramping up production and exploring overseas markets.

Nio, the eighth biggest EV maker in China by sales, has won regulatory approval to build a third factory in China that would boost its total approved production capacity to 1 million cars, Reuters reported. The company also opened its first showroom in Amsterdam in May.

Sales of NEVs in China have been helped by government subsidies for trade-in schemes worth 11.2 billion yuan ($1.55 billion) this year, and contrast with a continued decline in demand for gasoline cars.

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