The German government is reportedly preparing to sell energy giant Uniper in a deal that could fetch up to €18 billion, according to a Reuters report citing unnamed sources.

Uniper, which holds significant UK assets, has drawn interest from potential buyers, including Canadian investment management firm Brookfield. The company is chaired by Mark Carney, former governor of the Bank of England (2013–2020).

Move Toward Privatization

The reported sale marks a move to privatize Uniper, which was nationalized in 2022 to safeguard Germany’s energy security during the European energy crisis. The crisis was triggered by Russia’s invasion of Ukraine and the subsequent reduction and eventual halt of natural gas supplies to Uniper by Russia’s Gazprom.

Uniper, a key player in Germany’s energy sector, became a focal point of government intervention as it faced mounting losses due to soaring energy prices and supply disruptions. Its assets, including infrastructure and operations in the UK, are seen as highly valuable to prospective buyers.

Brookfield Emerges as Potential Bidder

Brookfield, a global investment group with expertise in infrastructure and energy assets, has been identified as a potential bidder. The firm’s interest underscores the appeal of Uniper’s portfolio, which includes power plants, gas storage facilities, and renewable energy projects.

Mark Carney’s leadership at Brookfield adds further weight to the speculation. The former central banker has been a vocal advocate for sustainable energy investments, aligning with the broader transition in the energy industry.

Strategic Implications

If the sale proceeds, it could mark a significant milestone in Germany’s efforts to stabilize its energy sector while transitioning ownership of critical infrastructure back to private hands. The German government’s intervention in Uniper was seen as a necessary step during a time of unprecedented energy market volatility.

Analysts suggest that privatizing Uniper now could attract investment needed to support long-term energy transition goals, particularly as Europe pushes for renewable energy expansion and reduced reliance on fossil fuels.

Broader Context

The potential sale comes as European governments and energy companies navigate the fallout of geopolitical tensions and shifting energy dynamics. Uniper’s nationalization reflected the broader challenges faced by energy firms heavily reliant on Russian gas supplies.

Germany’s Ministry for Economic Affairs and Energy has not yet commented on the reported sale. Similarly, Brookfield has not confirmed its interest in acquiring Uniper.

The outcome of the potential deal could have wide-reaching implications for the energy market, particularly in terms of investment flows and the role of private capital in bolstering energy resilience. For now, the energy industry awaits further developments as the process unfolds.

Goldman Sachs has downgraded German automotive giants Mercedes-Benz AG and Porsche AG, citing mounting challenges including rising costs, tariff risks, and weakening electric vehicle (EV) profitability. The move underscores growing concerns over the European car industry as it grapples with intensifying market pressures.

In a note released Tuesday, Goldman Sachs analyst George Galliers highlighted a bleak outlook for 2025, driven by higher labor costs, stricter environmental regulations, and dwindling earnings from Chinese joint ventures. The sector, already reeling from a 12% decline in 2024, faces an anticipated 9% earnings drop in 2025 and a further 6% in 2026.

Challenges Facing European Automakers

Battery Electric Vehicles (BEVs), a cornerstone of Europe’s strategy to reduce carbon emissions, remain a significant challenge for profitability. Goldman Sachs projects BEV penetration in Europe and the European Free Trade Association to grow from 14.3% in 2024 to 19% in 2025, driven by regulatory pressures. However, Galliers questioned whether the anticipated sales growth could offset high production costs, which continue to weigh on profit margins.

Another pressing issue is the sharp decline in earnings from Chinese joint ventures. According to Goldman, these earnings fell 36% year-on-year in 2024, reflecting broader difficulties faced by Western automakers in the world’s largest car market. Notably, Ford and General Motors have already seen their Chinese operations become unprofitable, raising concerns that European manufacturers could face a similar fate.

Downgrade Details

Goldman Sachs downgraded Porsche SE from a “Buy” to a “Sell” rating, citing limited growth prospects and ongoing financial risks. Galliers noted that softening demand for BEVs in Western markets and challenges in China could dampen Porsche’s outlook for 2025. Additionally, high leverage and Volkswagen’s restructuring efforts are expected to hinder near-term financial improvements.

Mercedes-Benz AG was downgraded from “Buy” to “Neutral.” The report pointed to declining demand for luxury vehicles, mixed reception for AMG models, and challenges posed by an ageing S-Class lineup. By the end of Q3 2024, Mercedes’ car division had seen a 44% decline in adjusted earnings before interest and taxes (EBIT), with a further 14% drop forecasted for 2025 before a modest recovery in 2026.

Despite these setbacks, the report highlighted opportunities for Mercedes in autonomous driving technology and its partnership with Nvidia. Advancements in these areas, coupled with shareholder return strategies, could provide a brighter long-term outlook.

Tariff Risks and Industry Uncertainty

Trade tensions and tariff risks further complicate the industry’s recovery. The European Union recently imposed tariffs on Chinese-made BEVs, while potential trade disputes with the U.S. could disrupt global supply chains.

A Potential Bright Spot

Amid the challenges, Renault emerged as a potential outperformer in the European auto sector. Goldman cited the French automaker’s focus on cost discipline and strong product pipeline as key strengths.

As European automakers navigate this turbulent landscape, Galliers remarked: “Secular concerns have weighed on auto multiples for almost a decade.” The question remains whether industry leaders can adapt to an evolving market and reclaim their competitive edge.

China’s electric vehicle (EV) market experienced remarkable growth in 2024, led by a surge in plug-in hybrid sales, as more buyers sought alternatives to traditional fuel-powered vehicles. According to the China Association of Automobile Manufacturers (CAAM), total vehicle sales in the world’s largest automotive market rose by 4.5% to 31.4 million units.

Plug-In Hybrids Lead Growth

Plug-in hybrids, which combine battery power with a small gasoline engine, emerged as the fastest-growing segment in the EV market. These vehicles appeal to a second generation of EV buyers who prioritize extended range or remain hesitant to fully transition to pure EVs.

The demand for all types of new energy vehicles (NEVs)—including battery EVs, plug-in hybrids, and fuel-cell cars—boosted overall EV sales by more than 40% compared to 2023.

Decline in Petrol Vehicle Sales

Sales of petrol and diesel-powered vehicles continued to decline sharply, dropping 17% to 11.6 million units in 2024. For the first time, traditional fuel vehicles accounted for just 51% of total new car sales in China.

This shift has dealt a significant blow to foreign automakers like Volkswagen AG and Nissan Motor Corp., which have long relied on China’s appetite for petrol-powered vehicles. To remain competitive, global manufacturers such as Honda and Nissan have announced plans for a merger, aiming to accelerate the development of EVs tailored to the Chinese market.

Boost from Rebates and Trade-Ins

Domestic passenger car sales increased by 13.6% in December alone, bolstered by government rebates for trade-ins. Over the year, passenger car sales grew by 3.1%, reaching 22.6 million units.

Meanwhile, China’s vehicle production grew at a slower rate of 3.7%, slightly lagging behind the increase in sales.

Strong EV Exports

China’s exports of passenger vehicles also surged by nearly 20%, totaling close to five million units in 2024. Exports of NEVs saw a 6.7% increase from the previous year, reaching 1.28 million units, further solidifying China’s position as a leading global player in EV manufacturing and export.

Contrasts with Western Markets

The rapid expansion of China’s EV market stands in stark contrast to the United States and Europe, where EV growth has slowed. Analysts point to robust domestic demand and government incentives as key factors driving China’s success.

As the shift toward electric mobility accelerates, China’s automotive landscape is evolving rapidly, leaving traditional petrol vehicles behind and forcing automakers worldwide to adapt to the growing dominance of EVs.