[World Cartoon] Audi Hit Hard by China Slump; Xiaomi Ramps Up Battery Ambitions

Audi lowers its profit forecast

Audi now expects its operating profit margin for this year to be between 3% and 3%, down from at least 5%. Bloomberg reports that sales of gas-engine cars fell in China, and competition grew in Europe. The company also plans to build its first U.S. factory in Georgia, while keeping new car, software, and driver-assist projects going. Harley-Davidson's electric motorcycle spin-off LiveWire warned that it may not survive the next year, and its stock fell 42% in one day.

Key numbers

• Audi's operating profit for January to September was 1.15 billion euros, down 26% from a year earlier.
• Audi's Neckarsulm plant employs 15,000 people and must have a plan to keep production going after 2034 by the middle of 2027.
• Audi plans to invest about 4 billion dollars in a Georgia factory that could build up to 200,000 cars a year, including the Q9 and Q5.
• LiveWire's adjusted EBITDA (a measure of profit before some costs) was minus 14.7 million dollars.
• LiveWire's stock fell 42% after the announcement, its biggest one-day drop ever, and was already down 64% this year.

Xiaomi and Sinwanda

Xiaomi will invest 1.7 billion yuan in Sinwanda's battery company, Sinwanda EVB, to own 5.34%. After shareholders approve, Xiaomi will become the third-largest shareholder. Sinwanda will lose control of EVB because its board seats fall below half, so EVB will no longer be included in its financial statements. This is Xiaomi's second car-company deal of this kind in under two months, after Li Auto.

Why it matters

Car makers are under pressure from falling sales and high costs, so they are looking for new ways to earn money and secure supplies. Electric vehicle and battery businesses are becoming tied together through investment. For readers, it shows how quickly the car industry in China and Europe is changing.

What to watch

• Whether Audi reaches agreements with its workers on cutting costs at German plants.
• Whether Audi decides to sell Ducati, which is being reviewed inside the Volkswagen group.
• How LiveWire pays its debts, refinances, finds partners, or sells the company.
• Whether Sinwanda's shareholders approve Xiaomi's investment.
• Final figures for Sinwanda's one-time accounting gain, which will be confirmed after an audit.