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Nvidia Faces Antimonopoly Investigation in China, Shares Decline

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Nvidia’s shares experienced a decline of about 2.6% on Monday after China’s State Administration for Market Regulation (SAMR) announced an investigation into the company over potential violations of the country’s antimonopoly laws.

The investigation focuses on Nvidia’s 2020 acquisition of Mellanox, an Israeli technology company specializing in network solutions for data centers and servers. The Chinese regulator is examining specific agreements related to this acquisition, according to an official statement.

This development comes amid escalating tensions between the U.S. and China, particularly in the semiconductor industry. The Biden administration recently imposed new restrictions on semiconductor toolmakers, and the investigation could be linked to broader geopolitical factors. The U.S. has already restricted Nvidia and other chipmakers from selling their most advanced AI chips to China, aiming to curb the country’s military advancements.

Nvidia, which has seen its stock rise dramatically in 2024 due to growing demand for AI technologies, responded to the investigation, expressing willingness to cooperate with regulators. In a statement, Nvidia emphasized that its success is due to its products’ merits and customer satisfaction, highlighting that clients have the freedom to choose from various solutions.

 

China’s Car Sales Surge in November, EVs Lead the Charge

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China’s car sales surged 16.6% in November compared to the same period last year, marking the fastest growth since January. This increase, which saw a total of 2.45 million vehicles sold, is driven by a rise in government-subsidized auto trade-ins as the year draws to a close. For the first 11 months of 2024, total car sales have increased by 4.4% year-on-year, reflecting a steady recovery in the market.

Electric Vehicles Dominate

Electric vehicles (EVs), plug-in hybrids, and extended-range vehicles saw a remarkable 50.5% increase in sales, now accounting for 51.8% of total car sales in the country. This marks the fifth consecutive month that battery-powered cars, including plug-ins, have outsold traditional gasoline-powered vehicles in China, the world’s largest car market.

BYD Set to Surpass 2024 Sales Goals, Overtake Ford and Honda

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China’s leading electric vehicle (EV) maker, BYD, is poised to exceed its 2024 global sales target of 4 million vehicles, positioning it to surpass Ford and Honda in the process. The company’s growth has been bolstered by its significant market share gains in China, as well as strong sales driven by its competitive lineup of plug-in hybrid models. In the first 11 months of 2024, BYD delivered 3.76 million vehicles, including 506,804 units in November alone. This robust performance comes as China’s car sales grew at their fastest pace in 2024, supported by government-subsidized auto trade-ins.

Expansion and Market Share Gains

BYD’s impressive growth trajectory is largely fueled by an expansion in production capacity and an aggressive hiring strategy. The company added nearly 200,000 units in production capacity between August and October and hired 200,000 new employees. Its workforce now totals nearly 1 million, a sharp increase from 703,500 at the end of 2023. BYD’s market share in China stood at 17.1% as of November, a significant jump from 12.5% in 2023, according to the China Passenger Car Association.

Competitive Edge in the Price War

The company’s success is also attributed to its ability to thrive in a price war that has challenged foreign automakers. BYD has managed to maintain competitive pricing by requesting price cuts from suppliers and benefiting from its extensive scale. This strategic move has helped BYD reduce costs, outperform its rivals, and capitalize on the growing demand for electric vehicles in China.

Outpacing Rivals

BYD’s rapid growth in 2024 has allowed it to outpace traditional automakers like Ford and Honda. If current sales momentum continues, the company is on track to sell over 6 million units in the next 12 months, putting it in the same league as industry giants such as General Motors and Stellantis. The Chinese EV maker is targeting sales of 5 to 6 million vehicles in 2025, according to Citi analysts.