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Trump shoots down EV incentives; Tesla sued over Congo cobalt

TOP NEWS

* The U.S. Congress rejected a proposal to extend a $7,500 tax credit for electric vehicles, Reuters reported. General Motors Co. and Tesla Inc. have sought an extension of the credit, which phases out once an automaker sells 200,000 electric vehicles. Both carmakers have sold more than 200,000 EVs. Sen. Debbie Stabenow, D-Mich., who authored a proposal to extend the credit, said Dec. 16 the EV proposal faced significant opposition from the White House. "There has been extreme resistance from the president," Stabenow reportedly said.

* Human rights organization The International Rights Advocates filed a lawsuit against major companies including Tesla Inc. for "aiding and abetting" the use of young children to mine cobalt in the Democratic Republic of the Congo. The lawsuit alleges that Microsoft, Apple, Google parent Alphabet, Dell and Tesla knew cobalt used in their products could be linked to child labor. The lawsuit also accuses the companies of failing to regulate the cobalt supply chain, which resulted in child cobalt miners working in "exceedingly harsh, hazardous, and toxic conditions."

CARMAKERS

* Peugeot SA's planned merger with Fiat Chrysler Automobiles NV is said to have gained support from two of the French automaker's major shareholders, the Peugeot family and the French government. Both the carmakers have called board meetings Dec. 17 to consider the next steps to finalize a deal. An announcement on the matter will likely be made Dec. 18, according to Bloomberg News.

* Toyota Motor Corp. plans to produce 10.9 million vehicles worldwide and sell 10.77 million vehicles in 2020, with its production target growing 1% from its initial forecast of 10.8 million vehicles. However, the Japanese carmaker will only produce 4.41 million vehicles and sell 2.26 million vehicles locally, down 4% from its 2019 forecast.

* Daimler AG is planning to take control of its Beijing Benz Automotive Co. Ltd. venture in China, Reuters reported, citing sources. Daimler, which owns 49% of the venture with local carmaker BAIC Motor Corp. Ltd., plans to raise its stake to 75% as Chinese companies are set to become its top two shareholders.

* Moody's downgraded Daimler's long-term rating with a negative outlook. Moody's downgraded the German automaker's long-term rating to A3 from A2 and its short-term rating to Prime 2 from Prime 1. "The downgrade to A3 was triggered by Daimler's significantly reduced guidance for its earnings outlook for the period 2020-2022 that will be further burdened by restructuring provisions and cash needs for the planned redundancy program over the same period," Moody's said.

* Volvo Cars said it issued 5 billion Swedish kronor worth of convertible preference shares to local investors including pension fund AMF and insurer Folksam. The proceeds will be used to refinance its existing preference shares worth the same amount.

ELECTRIC AND AUTONOMOUS VEHICLES

* Tesla will open a 3,000-square-meter service center in Hanover, Germany, Automotive News reported. The electric-car maker, which plans to move staff from another location to the new site, plans to build a gigafactory in Berlin.

* Audi AG said it was able to recycle about 90% of the cobalt and nickel it used for its electric-vehicle batteries during a testing phase with mining company Umicore. The Volkswagen AG-owned carmaker said it will operate on a closed-loop for its nickel and cobalt from January.

* Opel said it installed 350 charging points in Rüsselsheim, Germany. The Peugeot-owned carmaker plans to install 1,300 charging stations in partnership with the City of Rüsselsheim am Main and RheinMain University.

* Volkswagen Group and its Porsche unit joined e.V., a Frankfurt-based alliance promoting best practices and transparency in electrification efforts.

* Toyota plans to equip its mobility service vehicles with Level 4 self-driving technologies before deploying it in personal vehicles, Reuters reported, citing the CEO of Toyota Research Institute-Advanced Development James Kuffner. The carmaker will begin testing Level 2 self-driving vehicles on highways in 2020.

MOBILITY SERVICES

* Indonesian ride-hailing company PT Go-Jek Indonesia is nearing a deal to acquire 5% of local taxi operator PT Blue Bird Tbk for about $30 million, Bloomberg News reported, citing sources. Go-Jek's investment would value the startup at about $600 million.

AUTO PARTS AND EQUIPMENT

* Bridgestone Corp. Chairman and CEO Masaaki Tsuya will become Chairman of its Bridgestone Americas arm, replacing Paolo Ferrari, who is also president and CEO of Bridgestone Europe NV/SA. Ferrari will become President, CEO and COO of Bridgestone Americas, replacing Gordon Knapp who is leaving the company. Laurent Dartoux, COO of Bridgestone Europe, will be the new CEO of the EMEA unit, while Emilio Tiberio will replace him as COO. All changes are effective Jan. 15, 2020.

* Japanese parts-maker Denso Corp. said it took an unspecified equity stake in Germany's PiNTeam, which develops in-vehicle software. Denso said the investment will speed up the development of its in-vehicle electronic control units.

AUTOMOTIVE RETAIL

* Private equity firm Hellman & Friedman is nearing a deal to acquire car trading business AutoScout24 GmbH for about €2.5 billion, the Financial Times (London) reported, citing sources. Germany's Scout24 shortlisted two other private equity firms and Australian automotive platform carsales.com Ltd. as bidders in early December.

* EBay-owned classifieds website Gumtree Australia is in talks to acquire Australia-based automotive classified businesses CarsGuide and AutoTrader, The Australian Financial Review reported, citing sources. EBay is reportedly in talks with Cox Automotive, which is the majority owner of the company that owns CarsGuide and AutoTrader, for a deal worth less than A$100 million.

* EU passenger car registrations grew 4.9% year over year in November to 1,175,959 vehicles, according to data from the European Automobile Manufacturers Association.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was up 1.22% to 27,843.71, and the Nikkei 225 rose 0.47% to 24,066.12.

In Europe, around midday, the FTSE 100 fell 0.21% to 7,503.42, and the Euronext 100 was down 0.38% to 1,141.94.

On the macro front

The housing starts report, the Redbook index for retail sales, the industrial production report and the Labor Department's JOLTS report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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