The Burning Question

India Agribusiness Sector

India occupies a prominent position in the global agribusiness industry. Moreover, in FY2022, the Indian agribusiness sector recorded new record high in the production volume of key products such as rice, sugarcane, fruits, vegetables, inland fishing, marine fishing, and poultry meat (FY2021). However, the sector faces two challenges: low levels of productivity and inflationary pressures on food products. The Indian agribusiness sector showed a solid resilience in an adverse context marked by the negative effects of COVID-19 pandemic in FY2021. Moreover, in FY2022, the industry registered new record highs in key products: rice production stood as 130.3mn tonnes (+6.6% y/y); sugarcane output reached a volume of 431.8mn tonnes (+8.2% y/y); vegetables posted a production volume of 204.8mn tonnes (+2.2% y/y); fruit output recorded a volume of 107.2mn tonnes (4.6% y/y); inland fish production grew to 12.1mn tonnes (+7.8% y/y) and marine fish production rose to 4.1mn tonnes (+18.7% y/y). Poultry meat production increased to 4.5mn tonnes (+3% y/y) in FY2021. Furthermore, India kept its position as one of the largest producers of key products in the 2021/2022 crop year: it is the largest producer of centrifugal sugar, the second largest supplier of rice, the third largest provider of wheat and the seventh largest producer of maize and coffee production during the 2021/2022 crop year. In terms of export volume, India ranked first in rice, second in centrifugal sugar, fifth in coffee and eight in wheat and maize. The good performance of the Indian agribusiness industry allowed the sector to face the enormous demand of the domestic market and to maintain its position as a key global food provider for foreign markets. This performance is based on sheer numbers: the industry relies on a large workforce to achieve positive results. However, there is a strong presence of marginal and small farmers with limited access to credit and technology, therefore, the sector presents relatively low levels of productivity. The government is determined to design policies whose main objective is to improve the productivity levels of Indian farmers as there is a great potential for growth. A second challenge for the Indian agribusiness sector is the global acceleration of inflation since FY2022. This had led to higher production costs and higher food prices, both domestically and internationally. The government-imposed export bans of wheat and rice to control the rising trend of food prices.

Sector Overview

The agribusiness sector plays an important role in India’s economy, accounting for 16.8% of GDP in FY2022 and 8.5% of total exports in 2021. Moreover, the sector employs approximately 40% of the country’s total workforce. India managed to occupy leading positions in the global production of rice, wheat, maize, centrifugal sugar, coffee, banana, poultry meat and shrimp. It is worth noting that the agribusiness industry in India presents low levels of productivity which are compensated by the high levels of productions brought by the relatively high number of farmers. The advantage of sheer numbers allowed the industry to present chronic trade surpluses in its three main segments (crop, livestock and fisheries). Finally, the relatively high size of the domestic market will continue to be the main growth driver for India.

Entry Modes

Entry into the sector depends on the specific activity in mind. Foreign entrants are allowed 100% ownership under the automatic route if the activity falls under the selected agricultural activities set by the government. Automatic route means that the foreign investor or the Indian company do not need approval from the Central Bank or India or the Indian government to undertake the investment. Activities under the automatic route include animal husbandry, fish farming, aquaculture, horticulture, floriculture, apiculture, and tea production, amongst others. According to data from EMIS DealWatch, a total of three deals in the Indian agribusiness sector were executed. Three additional deals took place in the first three quarters of FY2023. The largest deal was the initial public offering made by the food company Adani Wilmar in January 2022, raising USD 478.95mn.

Segment Opportunities

Rice is one of the key crops in India as it represented 41.3% of foodgrain production in FY2022, reporting a new record high of 130.3mn tonnes. The good performance of rice production was based on a solid domestic demand, complemented by exports. Sugarcane production also reached a new record high in FY2022 (431.8mn tones), representing 81.4% of non-foodgrain production. The main growth driver for sugarcane production was the higher output volume of centrifugal sugar in FY2022 (India was the largest producer of centrifugal sugar in the 2021/2022 crop year, according to data from the USDA). Fruits and vegetables also posted a new record high in production with a volume of 312.1mn tonnes, representing 91.2% of horticulture production. Finally, poultry meat also registered a new record high output in FY2021 (4.5mn tonnes), pushed up by a solid domestic demand.

Government Policy

The relatively low levels of productivity and international competitiveness of the Indian agribusiness industry is one of the main concerns of the national government. The Union Budget 2021-2022 and 2022- 2023 set objectives to improve the performance of the industry (an industry with great potential which currently relies on sheer numbers). To achieve this goal, the Indian government is promoting a transition towards sustainable practices, and it is also granting financial assistance to farmers.

Sector Snapshot

In FY2022, the GVA of the crop, livestock, forestry and fisheries in India reported a value of INR 39.8tn and an annual growth of 3%. In terms of volume, the output of crops reached 1.2bn tonnes in FY2022, while fisheries production reported a volume of 16.2mn tonnes. In FY2021, meat reported a production volume of 8.8mn tonnes. Crop production volume grew by 3.3% y/y in FY2022, while crop planted area dropped by 2.5% y/y. Foodgrain production volume reported an annual expansion of 2.3% in FY2022, reaching a new record high of 315.7mn tonnes (foodgrain planted area declined by 2.3% y/y). The good performance of foodgrains was mainly explained by higher rice production (+6.6% y/y; 130.3mn tonnes). This growth more than compensated for the 2.4% y/y contraction in wheat production (106.8mn tonnes). Non foodgrains registered an annual expansion of 6.1% in FY2022, reaching 530.3mn tonnes. Sugarcane was the main growth driver for non-foodgrains as the production of the former grew by 8.2% y/y in FY2022 (431.8mn tonnes). Horticulture production increased by 2.3% y/y in FY2022 (342.3mn tonnes). Vegetables was the main growth driver for horticulture as the output of the former registered an annual expansion of 2.2% (204.8mn tonnes).

Crops were the major contributor to Indian exports of agricultural products, with a share of 67.6% and recording exports of USD 22.7bn in 2021. Crop exports reported an annual increase of 26.8% as a result of higher cereal exports which rose by 42.4% y/y (up to USD 8.6bn). It is worth noting that cereals represented 54.4% of crop total exports in 2021. Crops were also the main import segment in the agribusiness industry, with a participation of 97.2% and a value of USD 8bn in 2021. Similarly, to exports, crop imports registered a two-digit annual growth rate, up by 14.5% y/y. Fruits and nuts were the main imported crop product with a participation of 45.5% and an annual increase of 14.5% y/y (USD 3.7bn).

In FY2021, meat production increased by 2.3% y/y. Poultry meat was the main product with a share of 50.8% and an annual expansion of 3% (4.5mn tonnes). The domestic market is the main growth driver for domestic poultry meat production. Buffalo meat was the second main product with a participation of 18%, posting an annual decrease of 0.2%. Goat meat and sheep meat posted annual growth rates of 2.8% (1.2mn tones) and 14.8% (0.9mn tonnes), respectively, in FY2021. Similarly, to poultry meat, the domestic market was the main growth driver for goat meat and sheep meat. Concerning external trade, the export value of livestock products reached a value of USD 4.2bn, posting an annual growth of 17.8%. Buffalo meat represented 72.2% of livestock products in 2021, with an annual increase of 7.4%.

In FY2022, fisheries production in India expanded by 10.3% y/y. The main subsegment was inland fish production with a participation of 74.6% and an annual increase of 7.8%. Marine fish production represented the remaining 25.4% of fish production in FY2022, posting an annual expansion of 18.7%. The exports of the fisheries segment reached a value of USD 6.7bn in 2021, with an annual growth rate of 30.8%. Crustaceans represented 78% of fisheries exports in 2021.

Road Ahead

The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to the concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.

In the next five years, the central government will aim US$ 9 billion in investments in the fisheries sector under PM Matsya Sampada Yojana. The government is targeting to raise fish production to 220 lakh tonnes by 2024-25. Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP), and Good Hygienic Practices (GHP) by the food processing industry will offer several benefits.

Through the Ministry of Food Processing Industries (MoFPI), the Government of India is taking all necessary steps to boost investments in the food processing industry in India. Government of India has continued the umbrella PMKSY scheme with an allocation of Rs. 4,600 crore (US$ 559.4 million) till March 2026.

In the realm of corporate governance, a board of directors plays a vital role as a governing entity that oversees and supports management in maximizing value creation for shareholders and other stakeholders. To draw an analogy, if the CEO is likened to the lead singer of a band, the board of directors serves as the rhythm section, providing direction and oversight to ensure the interests of shareholders and broader stakeholders are effectively addressed. While the CEO leads the company’s day-to-day operations and execution of strategy, it is the board that lays the foundation and sets the tone for governance.

In today’s fast-paced and ever-evolving business landscape, effective board governance has become increasingly crucial. Traditionally, boards focused on CEO succession and financial strategy, providing support and approval for management’s proposed strategies. However, the role of the modern board has expanded significantly. In addition to strategy oversight, boards now proactively provide guidance on areas such as risk and opportunity management, sustainability, talent management, leadership succession, organizational culture, and even brand management and marketing.

A typical board of directors for publicly traded companies consists of executive, nonexecutive, and independent directors who are elected by shareholders. This structure, known as a one-tier board, often includes the CEO and sometimes the CFO of the company. Nonexecutive directors may include interested parties like shareholders or employee representatives, while independent directors are external subject-matter experts who offer an impartial perspective. Independent directors face the challenge of staying well-informed about the companies they serve on the boards of, as well as the broader ecosystems in which those companies operate.

Some organizations adopt a two-tier board structure, which entails a clear separation between the management board and supervisory board. Although the overall responsibilities of both boards are similar to those of a one-tier structure, the two-tier model may limit information access for the management and supervisory boards.

While most boards operate within the one- or two-tier structure, various countries and ownership structures may exhibit deviations from these models. Family-owned businesses, for instance, often have unique board structures tailored to their specific needs.

Facilitating board activities is the chair, whose role encompasses ensuring productive meetings, fostering a positive dynamic, encouraging constructive debate, and overseeing the implementation of strategy. In many cases, the chair works closely with the CEO, and in some instances, these roles may even be combined.

The board of directors plays a crucial role in steering organizations toward success by providing guidance, oversight, and strategic direction. As the business landscape continues to evolve, the board’s ability to adapt and embrace its expanded responsibilities becomes paramount in driving sustainable growth and ensuring the long-term viability of companies.

Key Elements for Establishing a Strong Board of Directors

When it comes to building an effective board of directors, there are four essential areas that require attention and focus. By addressing these areas, organizations can enhance board performance and drive long-term success.

1. Expand the Board’s Scope
   Traditional boards often limit themselves to overseeing the management team. However, exceptional boards take a more active role by providing valuable input and constructive challenges across a range of strategic areas. This expanded scope may include corporate strategy, risk management, sustainability initiatives, technology and digitization efforts, potential mergers and acquisitions, and fostering a strong organizational culture. To fulfill these responsibilities, directors must possess a higher level of digital literacy to effectively contribute in today’s rapidly evolving business landscape.
2. Deepen Directors’ Commitment
   As boards broaden their scope, directors need to increase their level of involvement. This entails dedicating more time to their board duties, developing forward-thinking agendas, and actively participating in discussions and decision-making processes. It is crucial, however, for directors to maintain a clear distinction between their oversight role and the operational activities managed by the executive team. Striking the right balance preserves the necessary separation while enabling directors to contribute meaningfully to the organization’s strategic direction.
3. Clarify Responsibilities and Board Composition
   A well-functioning board requires a clear understanding of the roles and responsibilities of each director position. The appointment of a capable and ambitious chairperson is pivotal, as they set the tone for board dynamics and effectiveness. A skilled chairperson facilitates productive meetings, fosters a culture of trust and open feedback, and invests in director training and development. Board composition is equally important, with directors bringing a diverse range of experiences and expertise relevant to the organization’s strategic objectives. While directors should have a broad perspective, they should also possess specific areas of specialization to provide valuable insights in their respective domains.
4. Foster Trust and Invest in Board Dynamics
   Effective boards prioritize open communication, trust, and collaboration among directors. Developing strong board dynamics is crucial for fostering healthy discussions, encouraging critical questioning of management decisions, and driving effective governance. Directors must possess a deep understanding of the company and its industry ecosystem, enabling them to challenge management with insightful inquiries and advice. Continuous learning and skill development are vital for board members to stay abreast of industry trends and best practices.

By addressing these four key elements, organizations can establish a strong and high-performing board of directors. A well-rounded board that embraces a broader scope, cultivates strong relationships, and possesses a diverse skill set will be better equipped to guide the organization toward sustainable growth and success.

The Impact of the COVID-19 Pandemic on Board Operations

The COVID-19 pandemic has brought about unprecedented challenges for organizations worldwide, requiring boards of directors to adapt and evolve their approach. Even prior to the pandemic, effective collaboration between directors and management was crucial for a board’s success. However, in times of crisis, this collaboration becomes even more vital. According to a biannual 2021 McKinsey Global Survey involving over 800 board directors and executives, boards have largely risen to the occasion and embraced new ways of working that may have long-lasting positive effects.

The survey revealed that board directors significantly increased their time commitments in response to the crisis. Between 2019 and 2020, directors reported a nearly 20 percent rise in the average number of days dedicated to board work, with expectations of further increases in 2021. Boards also made structural changes to their operating models, such as investing in technology to facilitate digital collaboration and establishing crisis committees. Furthermore, boards modified their working relationship with management and introduced greater flexibility in their agendas. As a result, boards have taken on a more proactive role, serving as catalysts for change by asking probing questions and shaping the path forward.

These changes have proven effective, as nearly four out of five directors and executives reported that collaboration between boards and management has been successful or very successful during the pandemic, compared to two-thirds in the 2019 survey.

Enabling Digital Transformation: The Role of Boards

The significance of digital transformation for businesses is widely acknowledged, but many board directors may be unsure about their role in driving this transformation. However, as board responsibilities expand, there are opportunities for boards to adapt their strategies and tactics to create maximum value.

To have the greatest impact on digital transformation, board directors can consider the following five actions:

1. Gain clarity on technology implications: Board members do not need to possess deep technical knowledge, but they should understand the implications of emerging technologies for the business. If there is a lack of expertise in this area, the board can seek relevant training or consider appointing a new member with the necessary experience.

2. Ensure transformative value creation: Any digital initiative adopted by the company should have the potential to significantly impact at least 20 percent of operating profits. It may require a long-term commitment to fully realize the benefits of digital transformation.

3. Track the effectiveness of digital transformation: Boards need to establish metrics that accurately reflect digital progress. Key metrics could include the speed of translating new ideas into practical tools and the percentage of talent working in agile teams.

4. Broaden talent development: Boards typically play a role in hiring C-suite executives, but expanding their involvement to senior leadership and talent development is crucial in today’s context. Building a strong digital business requires nurturing talent at all levels, as these roles form the foundation of successful digital transformation.

5. Recognize emerging threats beyond traditional sectors: As digital businesses expand into new industries, boards must broaden their perspective on potential threats. Identifying nontraditional emerging risks and understanding their implications is essential for effective governance.

By embracing these actions, boards can play a pivotal role in driving digital transformation within their organizations. As the business landscape continues to evolve, boards must remain agile, forward-thinking, and proactive in their pursuit of digital excellence.

How Boards Shape Talent, Culture, and Resilience in Organizations

Boards of directors play a crucial role in shaping an organization’s talent and culture, recognizing that strategy can only be successfully executed with the right people in the right environment. While boards traditionally focused on financial matters, the rapidly changing business and social landscape has brought questions of talent and culture to the forefront of board agendas.

CEO succession has always been a core responsibility of the board, but effective boards now extend their involvement to appointments and successions beyond the chief executive position. Boards are taking a closer look at strategy execution, assessing whether the organization has access to the critical skills needed for strategic shifts and evaluating the health of the leadership pipeline for key roles. Furthermore, organizational culture is gaining increasing attention. A strong culture, characterized by mindsets and behaviors that drive effective decision-making and work practices, has been shown to outperform peers significantly. Boards can role model culture by promoting individuals based on stated values and fostering lifelong learning, thereby setting the tone for the desired culture throughout the organization.

Building resilience is another crucial focus for boards. Resilience entails the ability to pivot and respond to disruptions effectively, both in the present and future. Previous economic downturns have demonstrated that actions taken by companies during challenging times can make a substantial difference in long-term performance. Boards can enable these actions by enhancing their speed and agility in decision-making, learning from the trial-by-fire experiences of the COVID-19 pandemic. However, despite the lessons learned, a significant percentage of corporate directors feel unprepared for the next major crisis. To address this, boards should engage in robust risk management strategies, including scenario-based exercises and the development of playbooks based on economic cycles, to ensure a focus on defense and offense.

Corporate purpose has gained heightened scrutiny, as organizations are expected to deliver measurable environmental, social, and governance (ESG) commitments. A well-defined purpose not only aligns with societal expectations but also enhances company reputation.

Boards can take specific actions to hone corporate purpose:

1. Build and role model an authentic purpose narrative by engaging stakeholders on the company’s strengths, vulnerabilities, and possibilities.
2. Own purpose in board practices, reflecting diversity and ESG competence while regularly incorporating purpose and ESG issues into the board agenda.
3. Assess purpose commitments and ensure management sets clear, measurable goals, actions, and accountability throughout the organization.
4. Reinforce a purpose-driven approach in core board decisions, using purpose as a lens to test and evaluate strategy, investments, risk management, HR practices, culture, governance, and external reporting.
5. Drive organizational accountability for purpose through board and management evaluations, training, and reporting, including tying ESG metrics to executive compensation and celebrating purpose-related successes.

By actively addressing talent, culture, resilience, and purpose, boards can significantly contribute to the success and long-term sustainability of organizations in today’s dynamic and evolving business landscape.

CB Insights has released its annual AI 100 list, featuring the 100 most promising private AI companies globally. These startups are engaged in various innovative areas, including generative AI infrastructure, emotion analytics, general-purpose humanoids, and more.

Among this year’s winners, around one-third are focused on AI applications in specific industries such as media and entertainment, fashion and retail, offering solutions like visual dubbing and textile recycling. Forty companies are working on cross-industry solutions like AI assistants, digital twins, climate tech, and smell tech.

Furthermore, 27 companies in the cohort are developing tools like vector database tech and synthetic datasets to support AI development.

The selection process involved CB Insights’ research team utilizing their platform to identify these 100 companies from a pool of nearly 9,000 applicants and nominees. Criteria considered included R&D activity, proprietary Mosaic scores, business relationships, Yardstiq transcripts, investor profiles, news sentiment analysis, competitive landscape, and team strength. The team also reviewed thousands of Analyst Briefings submitted by applicants.

The companies are categorized based on their primary focus area and client base, with the market map showing non-mutually exclusive categories.

Noteworthy trends from the AI 100 cohort include diverse funding stages and levels of maturity. The companies have collectively raised nearly $22 billion, driven significantly by OpenAI’s $13 billion investment from Microsoft. The list includes 15 unicorns valued at over $1 billion.

Fifty percent of this year’s winners are in early fundraising stages, working on innovative solutions such as vector search and cancer cell behavior simulation. Some winners, including Talka and Midjourney, have not yet received external equity funding.

The AI 100 cohort covers 14 industries, 19 cross-industry applications, and 11 categories of AI development tools. Healthcare and media & entertainment are the most represented sectors, with applications ranging from AI-powered drug discovery to visual dubbing and generative AI-powered chatbots.

The winners span 13 different countries, with the majority headquartered in the US, followed by the UK and Canada. Other countries with winners include the Netherlands, Sweden, China, and Germany.

Several companies on the list are working on novel applications where the use of AI is not yet widespread. For instance, Osmo, a Google spin-off, is developing a “map of odor” to enhance computers’ understanding and interpretation of smell. Ello is creating a reading coach for children using speech recognition and generative AI, while Refiberd is developing a textile waste sorting system for recycling purposes.

Mark Zuckerberg, the CEO of Meta, has revealed that their newly launched app, Threads, has attracted an impressive 30 million users on its first day. Positioned as a friendly competitor to Twitter, which was acquired by Elon Musk in October, Threads has the potential to appeal to Twitter users dissatisfied with recent changes to the platform. While Threads allows users to post up to 500 characters and shares many features with Twitter, Zuckerberg emphasized the importance of maintaining a friendly platform to ensure its success.

Responding to the launch, Musk remarked that he preferred being attacked by strangers on Twitter rather than indulging in the perceived artificial happiness of Instagram. When asked whether Threads would be bigger than Twitter, Zuckerberg expressed his belief that a public conversations app with over 1 billion users is possible, stating that Twitter had the opportunity but failed to achieve it.

The online response to Threads has been positive, with users viewing it as a much-needed competitor to Twitter. However, competitors have raised concerns about the amount of data the app may collect, including health, financial, and browsing data linked to users’ identities, according to the Apple App Store.

Some users have also expressed worries about the inability to delete their Threads profile without deleting their associated Instagram profile. While Meta acknowledges this limitation and stated that they are working on a solution, users can currently deactivate their Threads profile without deactivating their Instagram account.

Meta has positioned Threads as an initial version of the app, with plans to introduce additional features such as integration with other social media apps. Although Threads functions as a standalone app, users log in using their Instagram accounts, and their Instagram username carries over. Users also have the option to customize their profile specifically for Threads and can choose to follow the same accounts they follow on Instagram.

The release of Threads comes after Meta faced criticism for its business practices, including concerns about prioritizing profits over safety and mishandling personal data. Despite other Twitter alternatives such as Bluesky and Mastodon, Threads has an advantage due to its connection to Instagram and its already established user base.

Threads allows users to share posts between Instagram and the app, including links, photos, and videos up to five minutes long. Users can customize their feed, control who can mention them, and filter out replies containing specific words. The app also enables unfollowing, blocking, restricting, and reporting of profiles, with accounts blocked on Instagram automatically blocked on Threads.

While Meta emphasizes the ties to Instagram, media coverage has highlighted the app’s resemblance to Twitter, leading some investors to refer to it as a potential “Twitter killer.” In recent Twitter-related news, Elon Musk, CEO of Twitter, restricted the number of tweets users could see per day and announced that the user dashboard TweetDeck would soon be behind a paywall.

Threads is currently available for download in over 100 countries, including the UK, but is not yet accessible in the EU due to regulatory uncertainty surrounding the Digital Markets Act. Meta is exploring the possibility of launching Threads in the EU, as the act includes rules on data sharing between platforms owned by large companies like Meta. Meta emphasizes its commitment to privacy protection as a fundamental aspect of its business.

Tech titans Mark Zuckerberg and Elon Musk have engaged in a playful exchange about a potential cage match, but in the business world, the battle is already underway.

Source – Getty Images

Within just 24 hours of Zuckerberg’s launch of Threads, his alternative to Twitter, the platform garnered around 30 million sign-ups. While this is still a small fraction of Twitter’s vast user base, analysts believe it demonstrates Meta’s potential to attract a portion of its 3 billion-plus users on Facebook, Instagram, and WhatsApp to the new offering, potentially bringing advertisers along with them. Zuckerberg, whose company Meta generated over $117 billion in sales last year, has a strong track record in selling adverts. In contrast, Musk has expressed disdain for advertising at Tesla and has sought alternative ways to fund Twitter.

Initially, Threads will be ad-free as the company focuses on refining the app, which allows users to scroll through text-based posts endlessly. However, analysts project that ads on Threads could eventually contribute 1% to 5% of Meta’s overall revenue, potentially generating over $6 billion in the most optimistic scenario, according to Justin Patterson, an equity research analyst at KeyBanc Capital Markets.

This revenue boost could be significant for Meta, especially as the company seeks ways to counter the impact of stricter privacy regulations imposed by Apple, which have impacted ad sales. With Twitter generating $4.5 billion in ad revenue in 2021, the prospect of Threads catching up is not out of reach.

The success of Threads will depend on its development in the coming weeks and months. In response, Musk threatened legal action against Meta, alleging the theft of trade secrets. Despite this, many people, frustrated with Twitter, are eager for an alternative. Meta’s promise of a “saner, kinder place” than Twitter has driven early sign-ups, attracting celebrities like Sarah Jessica Parker, Shakira, Oprah, and Khloe Kardashian.

However, analysts caution that winning over Twitter’s power users or those who never signed up in the first place will not be an easy task. While the fashion and lifestyle content on Instagram appeals to advertisers, it remains uncertain whether the world needs another platform for consuming such content.

Moreover, Zuckerberg’s complex relationship with news, one of Twitter’s primary functions, may pose challenges. He has expressed that users want less news on the platforms he oversees and Meta is preparing to block local reporting in Canada rather than pay for news content.

Advertisers will also seek assurance that they are not exposing themselves to risks related to misinformation and privacy. While Twitter has alienated advertisers with abrupt changes to content moderation and post visibility limits, Meta has benefited from Twitter’s loss of business. However, both companies face scrutiny over data transparency, user privacy, and misinformation.

Meta’s shares rose 4% ahead of the Threads launch, indicating investor confidence in Zuckerberg’s ability to make the platform succeed. However, replicating the way news breaks on Twitter will be challenging, potentially leaving room for both platforms to coexist. Alternatively, the emergence of a serious threat could serve as a “wake-up call” for Musk.

The duration during which Threads remains ad-free will be crucial. That period of time will be the window for Twitter to address its own challenges, according to marketing veteran Lou Paskalis, CEO of AJL Advisory. The situation presents an opportunity for Twitter to right its ship.

KEY POINTS

• Despite promises of increased production and sales, legacy automakers have had minimal impact on the electric vehicle (EV) market.
• Hyundai Motor, along with Kia, surpassed GM in EV sales in the United States, but still lags far behind industry frontrunner Tesla.
• According to data from Motor Intelligence, Tesla, under the leadership of CEO Elon Musk, has extended its lead over traditional automakers with approximately 300,000 all-electric vehicles sold.

Source – Getty Images

DETROIT – Despite promises of significant increases in production and sales of electric vehicles (EVs) from legacy automakers, the impact on the rapidly growing market has been minimal.

Tesla, the industry leader, maintains its top position in EV sales and has further extended its lead over traditional automakers. According to Motor Intelligence, Tesla has a lead of approximately 300,000 units over its closest competitors, Hyundai Motor and General Motors, in the first half of this year. This is a significant increase from the 225,000-unit gap observed in the first half of 2022.

Although Tesla does not disclose regional sales figures, it is estimated that the company sold around 336,892 vehicles to retail and fleet buyers in the U.S. during the first half of the year, marking a 30% increase compared to the previous year.

Meanwhile, Hyundai, including its subsidiary Kia, experienced an 11% growth in EV sales during the same period, reaching 38,457 units. General Motors, initially the second-largest EV seller in the first quarter, witnessed a more than fourfold increase in electric car and truck sales, totaling 36,322 units through June compared to the previous year. Volkswagen also saw significant growth, with EV sales more than doubling to 26,538 units sold through June.

Ford Motor, the second-largest EV seller after Tesla last year, secured the fifth position with sales of 25,709 vehicles through June. However, Ford’s EV sales only increased by 12% compared to the previous year, partly due to production downtime for plant retooling, including the Mexican facility producing the electric Mustang Mach-E crossover.

While Tesla experienced a 30% year-over-year sales growth in the first half of the year, the overall growth of the EV market has outpaced the company. Tesla’s market share of U.S. EV sales declined by nearly 10 percentage points from the previous year, now representing 60% of domestically sold electric vehicles, according to Motor Intelligence data.

Tesla’s loss in market share can be attributed to increased competition in the EV market, leading to overall market growth. EV sales in the U.S. rose by approximately 50% through June compared to the first half of 2022.

Legacy automakers, along with newer players like Rivian Automotive, have been striving to ramp up EV production. However, many of their outputs remain relatively small. Apart from the top contenders, only five other companies hold between 1% and 4% of the U.S. market share, while numerous others fall below 1%, as reported by Motor Intelligence.

On a global scale, Tesla delivered over 889,000 EVs during the first half of the year, including 466,140 vehicles in the second quarter. The company’s production is expected to continue growing, with a target of manufacturing at least 1.8 million electric vehicles in 2023.

Tesla’s CEO, Elon Musk, has expressed his belief that the Texas factory will become the highest-volume production auto plant in the U.S. once it reaches full capacity. Musk previously stated that the Texas plant aimed to produce half a million vehicles annually by the end of 2023.

Hyundai’s rise to the second-place position is noteworthy, particularly because its vehicles do not qualify for federal EV tax incentives, unless they are leased. These incentives, which are designed to benefit EVs produced in North America, do not currently apply to Hyundai’s imported EVs.

The South Korean automaker has capitalized on the leasing option, exploiting the leasing loophole under the Biden administration’s Inflation Reduction Act. Hyundai has increased the leasing of its EVs from around 2% at the beginning of the year to over 30% currently, as stated by Hyundai Motor America CEO Randy Parker.

Parker acknowledged the uneven playing field caused by the lack of federal tax incentives for Hyundai’s EVs, expressing the company’s efforts to navigate the circumstances as effectively as possible.

GM’s performance in EV sales has been disappointing, particularly regarding its new models featuring the “Ultium” battery technologies. The automaker has faced criticism for the slow ramp-up of production for its latest EVs, such as the GMC Hummer and Cadillac Lyriq.

During the first half of the year, the majority of GM’s EV sales were comprised of its outgoing Chevrolet Bolt models, which are slated to be discontinued later in the year.

GM CEO Mary Barra acknowledged at the recent Aspen Ideas Festival that the production of newer EVs has been constrained due to delays in domestic battery production.

Barra has expressed GM’s ambition to catch up to Tesla’s sales by the middle of the decade, as the company plans to introduce more mainstream EV launches later this year, including the Chevrolet Silverado, Blazer, and Equinox. Additionally, GM is preparing to launch a new electric delivery van and a luxury Cadillac EV called the Celestiq, with a price tag exceeding $300,000, in 2023.

The Detroit automaker has set a target to produce 150,000 EVs for the U.S. market this year.