TheChek News Flow

The marriage has been rockier than anyone expected, at least on the track

Key Points

From the moment Lewis Hamilton strode through the gates at Ferrari’s historic Maranello campus outside Modena, Italy, he became the star of his own Italian opera.

The hero, the greatest driver Formula One has ever known, was living out his childhood dream, having joined Ferrari, and things couldn’t be going better. He posed in front of the house where Enzo Ferrari, the team’s founder, had lived. He pulled on the famous red overalls. And he even chuckled through a few words of Italian. The F1 world couldn’t help but applaud.

Then Hamilton actually squeezed into his race car, and a harsher reality began to set in.

After winning six of his record seven world championships in a Mercedes, adapting to a new team with new terminology, new colleagues and a new teammate in Charles Leclerc was always going to be a challenge. But how quickly Hamilton could make it work instantly became the headline story of the 2025 season.

So far, it’s been rockier than anyone expected. The 40-year-old Hamilton crashed one car during testing in Italy, scraped into 10th place at the first Grand Prix of the season in Australia, and found himself stripped of a result in the second race in China when both Ferraris in the race were disqualified for technical violations. Through five races, he has only cracked the top six once and has yet to reach the podium.

“Hopefully we won’t do that again as I continue to learn this car,” Hamilton said after his disqualification in Shanghai. “Obviously we’re losing ground to the McLarens points-wise…but we’ve just got to keep pushing.” McLaren is currently first in the F1 team standings.

A risky move

What makes every episode of this saga so compelling is that Hamilton signing for Ferrari was a surefire success off the track, and a risky bet on it.

In addition to holding nearly every major record in Formula One and being the sport’s first and only Black driver, Hamilton is also a style icon and globe-trotting A-lister. His personal brand merging with the heritage, glamour and sex appeal of Ferrari was always going to be a winner. (Hamilton’s first photos in front of Enzo Ferrari’s house turning into the most popular Instagram posts in F1 history confirmed that much.)

When it came to the business of actually winning races, however, things weren’t so clear-cut. In Formula One, the 10 teams spend a 24-race season competing on two fronts at once. The drivers, two per squad, rack up points for their teams in the Constructors’ Championship and for themselves as individuals in the drivers’ standings. Ferrari hasn’t claimed either title since 2008.

Not only that, but Ferrari has spent the past six years invested in turning Leclerc, a talented 27-year-old from Monaco, into a world champion. He’s the one the Italian media dubbed Il Predestinato, the chosen one. Only now the team has dropped the F1 GOAT squarely into the Ferrari garage he once ruled, and Leclerc has to play it cool. “Ferrari is my life,” he told reporters over the offseason. “It will be a nice duel with Hamilton.”

Ferrari insists that there is no hierarchy between its drivers—its army of scarlet-clad engineers and mechanics will do everything to help both men win. But in this odd dynamic, Leclerc and Hamilton are both teammates and rivals, driving nearly identical machines, with finely honed instincts to elbow each other for every millisecond on the road. It’s up to Ferrari team principal Frédéric Vasseur to referee the fight and remind Hamilton and Leclerc that they aren’t just competing for themselves—they’re racing for the Prancing Horse painted on their cars.

“At no time can that battle between them cost the team a single point,” Vasseur says. “At the same time, I don’t want to put on the brakes, because that’s where the performance comes from.”

F1 heritage

Vasseur knows just how high the stakes are for Ferrari, which occupies a singular place in the sport. The Scuderia, as it’s also known, is the only team to compete in every single season since the series began in 1950. As the sport’s former boss Bernie Ecclestone used to put it, “Ferrari is Formula One and Formula One is Ferrari.”

Still, should Vasseur fail to win a Constructors’ Championship, the team’s dry spell would reach 17 years, the longest since Enzo first entered one of his cars in a Grand Prix.

Standing in his way is an ascendant McLaren team that narrowly beat Ferrari for the 2024 title, a quickly improving Mercedes team, and as always, Red Bull, whose lead driver Max Verstappen has won the past four drivers’ crowns. And with its calamitous start to the season, the Scuderia has spotted all of them a head start. Five races in and going into Miami, Ferrari sits in fourth place.

Hamilton is confident that a turnaround is coming soon—after all, the season lasts until December. In the longer term, he is betting that Ferrari will be back among the leaders when wholesale regulation changes come into effect next year, radically altering the technical specifications of the sport.

Meanwhile, Hamilton will continue to draw the spotlight for the late-career move that rocked F1—whether he starts winning or not. And if there’s one driver who has proven he can cope with the burning levels of attention that come with being a seven-time world champion racing for the sport’s most storied, most neurotic team, it’s him.

“He’s one of the only drivers who really knows how to compartmentalize his life,” Vasseur says. “He can spend one day doing marketing, the next day doing fashion, and the third discussing his front left tire with an engineer.”

DAX:

MDAX:

SDAX:

After negotiations, companies paying Trump’s car tariffs won’t also be charged for other levies

Key Points

WASHINGTON—President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter.

The decision will mean that automakers paying Trump’s automotive tariffs won’t also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy. The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.

The administration will also modify its tariffs on foreign auto parts—slated to be 25% and effective May 3—allowing automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would fall to 2.5% of the car’s value in a second year, and then be phased out altogether.

Trump is expected to take the actions ahead of a trip to Michigan for a rally outside Detroit on Tuesday evening, marking 100 days since he took office.

Automakers, who have been in near daily communications with the administration, secured some relief while Trump obtained commitments to further his domestic manufacturing goals, the people said.

“President Trump is building an important partnership with both the domestic automakers and our great American workers,” Commerce Secretary Howard Lutnick said. “This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”

The steps are meant to provide automakers time to move supply chains for parts back to the U.S., and would likely be a significant boost to automakers in the short term, said one person familiar with the plan. Automakers would have to apply to the government for reimbursements, and it wasn’t immediately clear where those funds would come from.

“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Ford Chief Executive Jim Farley said in a statement. “We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America. Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential.’’

Mary Barra, chair and chief executive officer of General Motors, said: “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”

Analysts predicted higher prices for cars as a result of Trump’s auto tariffs. Morgan Stanley estimated the 25% tariff could increase the average cost of a car by $6,000, which would translate into a 10%-to-12% price hike.

Ahead of announcing new tariffs earlier this month, Trump warned top automakers against raising prices. Automakers and industry suppliers have said bringing back their factories to the U.S.—the goal of Trump’s tariff plan—could take years.

Softening the impact of auto tariffs is the latest rollback of elements of the president’s trade policies, following market upheaval and intense lobbying by companies and countries.

Trump imposed a 90-day pause earlier this month on many of the tariffs he had put in place just days earlier. He also recently softened his tone on China after ratcheting up tariffs on imports from the country to 145%.

Chinese carmakers reset European ambitions as EU tariffs bite

Extra costs have hit the price competitiveness of many groups while some have struggled to expand distribution networks

Chinese carmakers expanding into Europe are being forced to readjust their short-term ambitions as tariff roadblocks have slowed product launches and made their electric vehicles less affordable.

The rapid rise of Chinese-made electric vehicles — with their low pricing and advanced software features — has sparked protectionist measures in both the US and EU, with Brussels last year imposing tariffs of up to 45 per cent on EVs from the country, while the US market remains essentially closed to Chinese carmakers. 

The additional costs have weakened the price competitiveness of many companies, while others face problems expanding their distribution networks.

The “difficulties were certainly underestimated in our initial planning”, Nio chief executive William Li said at last week’s Shanghai Auto Show, although he said that the EV company remained “firmly committed” to growing gradually its footprint in Europe. 

Despite their declared ambitions, the market share of Chinese brands in Europe and the UK is still small at 4.3 per cent in the first two months of this year, according to automotive analyst Matthias Schmidt.

Last month, Leapmotor chief executive Zhu Jiangming warned that “the 30.7 per cent tariff and 10 per cent shipping cost combined have significantly impacted our competitiveness [in Europe]“. 

Stellantis last year bought a 20 per cent stake in Leapmotor in a landmark deal, where the Hangzhou-based start-up’s EVs were to be sold at the Fiat and Peugeot owner’s dealerships in Europe. 

But the partnership has already suffered a major setback after Stellantis abruptly halted production of Leapmotor’s T03 small electric model in Poland in late March, without giving a reason publicly.

Poland was among EU nations that voted in favour of the bloc’s tariffs after Brussels concluded that Chinese-made EVs were unfairly subsidised by Beijing.

The company’s priority now is to start production in Europe by the second or third quarter of 2026.

“The anti-subsidy tariffs appear to have slammed the brakes on the penetration progress [of Chinese EVs],” Schmidt said, despite brands such as Xpeng and BYD entering the continent with new models. 

The Chinese groups’ share of new EVs in Europe has also fallen from 50 per cent prior to tariffs imposed by Brussels — to 30 per cent — as they shift to more profitable petrol vehicles to avoid the levies.

Nio aims to launch a new small EV under its sub-brand Firefly in more than five European countries by the end of the year, after failing to synchronise the model’s debut with its China launch this month. The company has been struggling to expand its local dealer network in Europe and recently ditched a direct-to-consumer sales model following weak European sales.

Li said it was possible to open 100 showrooms in a single month in China, but “achieving that same pace in Europe is much more challenging, with costs far exceeding our expectations”.

Nevertheless, some Chinese groups are pressing on with expansion plans.

BYD management told Citi analysts in Shanghai the group expected the EU to account for 20 per cent of its vehicle exports this year, up from 15 per cent in 2024, with production set to start in Hungary this year.

Hybrids are driving the projected growth as the vehicles are not subject to EU tariffs and are expected to make up about half of BYD’s exports. 

Geely-backed Zeekr also downplayed the impact of EU tariffs on its price competitiveness. “In some countries, the tariffs are high, which is fair to everyone. It’s not a problem,” said Mars Chen, Zeekr’s vice-president.

The group, which has a presence in Sweden, the Netherlands and Norway, aims to expand into nine European markets, including Germany, Switzerland and Denmark by the end of the year.

China is also seeking to reset ties with the EU and step up high-level negotiations to resolve the tariff issue amid a bruising global trade war launched by Donald Trump. 

Mercedes-Benz chief executive Ola Källenius told reporters in Shanghai that he hoped the two sides would reach “an equitable and intelligent solution”.

“We are open for competition in any direction, through any country, on a level playing field,” he said.

Debt-laden utility was a ‘better business after our stewardship’, says executive from Australian group

Macquarie has told investors it is “very proud” of its record as the owner of Thames Water, the debt-laden utility that has fallen into deep financial difficulty since the Australian infrastructure investor sold its stake seven years ago.

Macquarie, now the majority owner of Southern Water, has drawn the ire of politicians and campaigners for its decade-long ownership of Thames Water in which debt increased dramatically and dividends were regularly paid out to shareholders.

“We’re actually proud, very proud of our ownership of Thames Water,” said Ben Way, group head of Macquarie Asset Management, an investor day last month.

He added that over the past decade “no regulator in the UK” has looked at the Australian financial group as anything other than “a very positive owner of assets”.

Thames Water’s debt increased from £3.4bn in 2006, when Macquarie first bought into the business, to £10.8bn when it sold its final stake in 2017. Now teetering on the brink of insolvency, the utility ’s debt pile has since ballooned to nearly £20bn and it is set to borrow up to £3bn more in high-interest emergency loans from its senior lenders.

“Imagine being blamed for a house that you own seven years ago when the roof leaked,” Way said.

During Macquarie’s ownership, about £2.7bn was taken out in dividends and a further £2.2bn in loans.

However, Macquarie has previously defended its record, pointing to £11bn in customer bills that was spent on infrastructure during its ownership — a figure it claimed was “the highest per customer investment level of all water companies in England and Wales”.

It has also said Thames Water’s water leakage fell 22 per cent over the period and it reduced “pollution incidents” by 75 per cent compared to 2006.

“It was a much better business, imperfect, but much better business after our stewardship,” Way said. “Thames Water is a very good example of the ability to have the courage of your convictions and look beyond the media drama or noise.”

Macquarie said: “Under our ownership we supported Thames Water as it delivered record levels of investment, which enabled significant improvements in water quality, reduced leakage and pollution incidents . . . When we sold our final stake in 2017 the company was meeting all conditions set by the regulator, and had an investment grade credit rating.”

Several of Thames Water’s largest shareholders, including pension fund Ontario Municipal Employees Retirement System and Abu Dhabi’s sovereign wealth fund, wrote off the value of their investments in the utility last year.

Thames Water has selected KKR — a shareholder in Northumbrian Water — as its preferred bidder in a process aimed at recapitalising the group, after the US private equity group submitted a preliminary £4bn bid to take a majority stake in Thames Water.

Sarah Olney, Liberal Democrat MP for Richmond Park, last year said: “Under Macquarie’s ownership, Thames Water pumped millions of litres of disgusting sewage into British rivers while racking up billions of pounds worth of debt that was then paid out to shareholders.”

Macquarie acquired the majority of Southern Water, the UK’s next most distressed water company, in 2021. The company is struggling under its own £6bn debt pile and is in talks with lenders to its holding company over potential writedowns to their loans.

Alongside the proposed haircut, Macquarie Asset Management is injecting £900mn of fresh equity into Southern Water.

Mediobanca’s ‘mini-UBS’ defence gives it a fighting chance

Italian investment bank’s bid for Banca Generali offers something to please most of the parties involved

Mediobanca is known for being wily, creative and ruthless on behalf of clients. It is now putting those qualities to good use in its own defence. Having found itself on the receiving end of a hostile bid from Monte dei Paschi di Siena, the Italian investment bank has decided to fight back.

Its tactic: a €6.3bn offer for wealth manager Banca Generali, launched on Monday. Financially, the deal passes muster. Mediobanca forecasts €215mn of cost and funding synergies, the present value of which should cover the modest premium and yield an uptick of between 5 and 10 per cent on Mediobanca’s market value.

That, as it happens, is about the same amount of value creation that Mediobanca might achieve from acceding to Monte dei Paschi’s €14bn offer. The investment bank would emerge with 60 per cent of a combined entity worth perhaps €25bn, including synergies, or about 10 per cent more than the Milanese bank’s market value.

Where Italian financial institutions are concerned, nothing is ever simple. In this case, Mediobanca is proposing to pay for Banca Generali with its own 13 per cent stake in Assicurazioni Generali, the parent group that owns 50 per cent of the wealth manager. Warring shareholders of that company have driven its shares up 40 per cent this year.

Technicalities aside, Mediobanca chief executive Alberto Nagel is laying out a standalone strategy that his shareholders can get behind. Banca Generali would turn Mediobanca into Italy’s very own mini-UBS, getting almost half its revenue from wealth management. That’s not a bad idea given the higher multiples these steady, growing and capital-light businesses command. UBS, for instance, trades at 14 times this year’s earnings, a 30 per cent premium to Mediobanca itself.

The prospect of a livelier valuation may be enough to entice institutional investors and Italian industrialists, who together make up almost 50 per cent of Mediobanca’s shareholder base, to support the deal.

It may even be enough to convince rebel shareholders — Francesco Gaetano Caltagirone and the Luxottica family’s holding company Delfin, which together own about 27 per cent of Mediobanca. What they really seem to want is control of Generali, in which they also own shares. They have tried and failed to add directors to the bank’s board. With Mediobanca out of the picture, Generali becomes a more accessible target next time.

This deal, then, does something to please most of the parties involved. But that doesn’t mean it is guaranteed to succeed. There is still the chance that Banca Generali, now in play, attracts an offer from other interested buyers. Mediobanca, if it really wants to create an Italian counterpart to Swiss wealth giant UBS, may then find it has to dig a little deeper.

Market suffers one of ‘greatest tightening shocks’ in its history as traders race to get ahead of potential levies

China’s copper stockpiles are on track to dwindle to nothing in just a few months, as the market suffers “one of the greatest tightening shocks” in its history on fears of US tariffs, according to senior executives at commodities trading house Mercuria.

Huge US demand, as buyers rush to get their hands on copper ahead of the potential imposition of levies by the Trump administration, was sucking imports of the metal into the country from the rest of the world and setting it up in direct competition with China for supplies, said the Geneva-based group.

Chinese stocks of copper have rapidly declined over the past few weeks, and “at the current pace of draws, those Chinese inventories could deplete [to zero] by the middle of June”, Nicholas Snowdon, Mercuria’s head of metals and mining research, told the Financial Times.

The country’s inventories fell by almost 55,000 tonnes to 116,800 tonnes last week, the biggest weekly drop on record, according to Shanghai Futures Exchange data.

This “is potentially going to be one of the greatest tightening shocks this market’s ever seen”, Snowdon said. Beijing had a “razor thin inventory buffer” to meet domestic demand, he added.

Kostas Bintas, the company’s head of metals and mining, said the US was for the “first time” competing with China for supplies of copper, which was likely to supercharge prices.

The impact of US protectionism on the copper market adds to pressure from Chinese domestic demand and retaliatory levies that could hit vital flows of copper scrap.

Metals buyers have been importing large amounts of copper into the US ahead of possible tariffs, which could result from an investigation initiated by US President Donald Trump into alleged “dumping and state sponsored overproduction” of the metal. He has already imposed a 25 per cent levy on aluminium and steel imports.

Copper stocks in Comex warehouses in the US have climbed sharply this month to their highest level on Friday since 2018.

Helping drive supplies to the US is a trading arbitrage created by investors’ fear of tariffs. This has pushed up the price of the metal on New York’s Comex exchange in comparison with prices on London’s London Metal Exchange.

This so-called spread has created a lucrative arbitrage opportunity for traders willing to buy copper futures contracts in London and sell contracts in New York. The spread stood at nearly $1,200 per tonne on Monday, having risen above $1,600 in March, well above its long-term average.

Some traders who had large commitments to sell copper on Comex have been urgently trying to get their hands on additional tonnes into the US to cover those short positions before any new tariffs were introduced, said Bintas.

Retaliatory levies imposed by China on US imports could also hit the crucial copper scrap market, analysts said, adding to the tightness in the Chinese market.

That could worsen if the US imposes a ban on the export of copper scrap, of which it is a big exporter. It shipped 960,000 tonnes in 2024, with almost half going to China, according to commodity pricing agency Fastmarkets.

In January and February, the latest data available, the US exported 142,000 tonnes in total, compared with 149,000 during the same period last year.

Andrew Cole, a metals analyst at Fastmarkets, said he expected “a significant plunge in scrap shipments from the US to China in March to May at the very least.

“That’s what will lead to the escalation of supply squeeze in China we have been expecting to develop as the year progresses,” he said.

However, while Chinese stocks were being depleted, in reality markets would react before stocks reached zero, with higher prices attracting more imports of copper and scrap, said Snowdon.

“That comes at the point of record pull of copper units into the US. As those two forces meet that creates an unprecedented competition for copper,” he said.