🏭 Adani and the Gigafactory (plus new iPhone 14 and more in today’s Finbrief)
Hello! Welcome to the September 9th edition of Finbrief: daily business brief.
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🏭 Adani and the Gigafactory
Adani group, led by the world’s 3rd richest man Gautam Adani, is set to join the Gigafactory bandwagon soon. The group announced the building of 3 Gigafactories, as part of a $70 billion investment in clean energy by 2030.
Wait, what’s a Gigafactory?
- Gigafactory comes from the word ‘Giga,’ the unit of measurement representing “billions”. Giga also comes from the Greek word gigas, which means giant.
- The name Gigafactory was coined by Tesla in reference to its massive factories churning out batteries and related products
- Now it has come generally to reference a factory of epic proportions — and usually in the green energy space (e.g., for manufacturing battery packs or solar modules).
So why is Adani building Gigafactories? Well, the group aims to be the world’s top renewable energy producer by 2030. And for such a massive vision, the factories too need to be massive. The 3 factories will focus on: solar modules, wind turbines, and hydrogen electrolyzers — all key parts of a renewable energy value chain. FYI — Adani group is already the world’s largest solar power developer.
But the Adani Group is not alone in the Gigafactory business in India. Another homegrown behemoth, Reliance Industries has committed to building 5 giga factories focused on manufacturing: (1) solar modules (2) batteries for storing the renewable energy (3) green hydrogen (4) fuel cells, and (5) power electronics — again, all focused on the new / renewable energy space. The company announced an investment of $80 billion in the next 10–15 years in the sector.
▶︎ WHAT’S THE TAKEAWAY?
PM Modi has committed to fulfilling 50% of India’s energy requirements with renewable energy by 2030, and set a target of achieving net zero emissions by 2070. Matching the scale of this ambition requires big commitments from the industry — and it is heartening to see two amongst the biggest conglomerates in India making a massive push in this sector.
🗞 Other quick hit stories
💸 European Central Bank (ECB) raises interest rates by a historic 0.75%: The ECB lifted its deposit rate to 0.75% from zero — the largest increase in 23 years — to tame rampant inflation. The increase is aimed at raising the cost of borrowing for consumers, governments and businesses, which in theory slows spending and investment, and cools off soaring consumer prices by reducing the demand for goods. On the flipside, rising borrowing costs will likely increase the risk of a slide into recession for European Union, which is wrestling with surging energy costs (read more in yesterday’s finbrief) and sagging confidence among households and businesses. However, controlling historically high inflation is a bigger priority for the ECB at this point: after reaching a record 9.1% in August, inflation is expected to reach the double digits in the coming months.
📱 Apple announces iPhone 14, Apple Watch 8, new AirPods Pro and more: The company announced a slew of new products in their annual keynote event held on Wednesday. The new iPhone 14 series includes iPhone, iPhone Plus, iPhone Pro and iPhone Pro Max models (the Pro and Pro Max models feature a new processor, a 48MP camera, and the new ‘dynamic island notch’). The other products announced were the new Watch models (Watch 8, Watch SE (2022), and Watch Ultra — a larger / more rugged version of the Watch), and the AirPods Pro 2.
📉 Edtech firm Lido files for bankruptcy: The company initiated bankruptcy proceedings as discussions for an acquisition fell through and they struggle to pay teachers and former employees. Lido used to offer live online tuition classes to students between classes KG to Class 9 in Math, Science, English, and coding. The company was backed by high-profile investors, including Upgrad founder Ronnie Screwvala, Paytm CEO Vijay Shekhar Sharma, and Shaadi.com’s Anupam Mittal, among others. Lido’s not alone in its struggles — many other Edtech startups (e.g., Udayy) have shut operations or shifted to cash conservation mode as funding has dried up in the sector (and more broadly).
💡 Fin fact of the day
India is the 3rd largest emitter of global carbon emissions, behind China and the US. However, on a per capita basis, it ranks 110th — the average emissions per individual in India is roughly a tenth of the average emission per individual in the US.
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