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By Victoria Waldersee, Germany Automotive Correspondent

Looking at the headlines on China, it feels like there’s a flashing warning sign on every possible economic indicator. New home prices are down. Retail, industrial output, and investment are all growing slower than expected. China’s central bank is chopping key interest rates. And according to an analyst at financial firm Nomura, “The worst is yet to come.”

It is not the first unexpected slowdown in China, but what is different this time – and relevant for the auto industry – is that economists think subdued household consumption is the root cause of it, which spells trouble for EV sales.

Despite price cuts and government-induced discounts, consumers scarred by China’s zero-COVID policy and chaos in the property sector are still too wary to buy, with passenger car sales down in June and July. That means we can expect more stimulus measures as both the government, and companies relying on that revenue, desperately try to stoke demand.

In the meantime, today’s news from the autos world:

• VinFast hits $85 billion valuation in Nasdaq listing
• CATL launches fast-charging LFP battery
• Tesla price war, continued

People walk at the main shopping area in Shanghai, March 14, 2023. REUTERS/Aly Song

VinFast became the latest in a string of EV makers (including Lucid, Nikola Corp, and Faraday Future) to list via a SPAC deal, giving it a quick route to the stock market as it gears up to expand in the U.S.

The listing will also allow the company, which has struggled to retain senior executives, to offer share-based compensation.

It has not always been smooth sailing so far for VinFast, which was formed in 2017 as a unit of Vietnam’s largest conglomerate Vingroup. The company was marred by executive departures, its rollout of EVs in California was costly and delayed, it has missed internal delivery targets and has not yet made a profit.

Still on its debut – albeit a tiny float as 99% of VinFast is controlled by its founder and Vietnam’s richest man, Pham Nhat Vuong – the shares surged from $22 to $37.06 by the end of the day, valuing the EV maker at $85 billion – almost twice as much as Ford or General Motors.

But it retreated 10.2% in premarket trading, a sign that things could go in the direction of other EV SPAC deals, such as Lucid, which saw their shares tumble after the first float.

For now, Vinfast – which has previously missed internal delivery targets and sold just 16,000 vehicles this year – needs to take all measures to hit its 2023 sales target of 50,000 vehicles, including partnering with distributors and figuring out how to reduce costs to be on par with Tesla.

People walk past the booth of the battery manufacturer Contemporary Amperex Technology Co. Limited (CATL) at the Auto Shanghai show, in Shanghai, China April 18, 2023. REUTERS/Aly Song

Back to China for a second: CATL, the world’s biggest battery maker, launched a fast-charging lithium iron phosphate battery capable of running 400 km (about 249 miles) on a 10-minute charge.

Mass production of the new battery is expected by the end of the year, with the first vehicles fitted with the battery coming off the production line in 2024.

CATL hopes it could become a standard product available for every electric vehicle – a welcome boost to business for the company currently losing market share to rival BYD.

The logo of car manufacturer Tesla is seen at a branch office in Bern, Switzerland

Tesla has launched cheaper variants of its Model S sedan and Model X SUV with shorter driving ranges in the U.S. as it looks to boost sales amid tepid demand.

This way, consumers who cannot afford to pay more can still have the “badge and the EV experience”, according to the head of money and markets at financial services firm Hargreaves Lansdown.

Meanwhile in China, where the EV maker triggered a price war in January, Tesla cut prices again – this time on inventories for the Model S and Model X by up to 6.9%.

Both moves point to Tesla’s wider strategy of pursuing sales growth over margins to conquer the market, in contrast to rivals in Germany and elsewhere that focus on keeping margins high in the transition to EVs even if it means losing out on volume.

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