FT : Can Tesla stay a trillion dollar company on just two models?

Can Tesla stay a trillion dollar company on just two models?
BYD is competing directly with Elon Musk’s carmaker in the midsize electric SUV market

Even as BYD has overtaken Tesla in global sales, direct comparisons between their electric vehicles have remained relatively uncommon. Tesla was long regarded as the innovator, while BYD was often cast as the imitator. But now, such comparisons are becoming unavoidable. 

Last year, more than 95 per cent of Tesla’s global deliveries came from the Model 3 and Model Y. These two models have driven the company’s growth for nearly a decade. Yet the market is changing. Demand growth is slowing, competitors are catching up and Tesla’s response has been to cut prices aggressively, in the hope that volume can offset margin.

The launch of the Model Y Standard, priced at $39,990 in the US, and €39,990 in Germany, is the clearest sign of that new strategy. The lower entry point for its most important model is a defensive move, with Tesla fighting to hold its ground against BYD in the same midsize electric SUV segment that once seemed unassailable for Elon Musk’s company. 

BYD’s Sealion 7 is one of the most direct competitors to the Model Y on the market. In both performance and practicality, the Sealion 7 holds its own, offering up to 456km of range, 0 to 60mph in about 4.5 seconds and premium interiors with a minimalist aesthetic. The Model Y Standard offers a range of about 516km and accelerates from 0 to 60mph in 6.8 seconds, while also providing access to Tesla’s vast Supercharger network. Yet in export markets, the Sealion 7 is priced at a premium. Starting at about the equivalent of $60,000 in the UK, it is now at least 30 per cent more expensive than Tesla’s new entry level Model Y in mainland Europe.

That marks a striking reversal of roles. Tesla used to be the brand that needed to justify its premium as BYD climbed up market share rankings. Now BYD faces the same scrutiny. Its cost advantages, vertically integrated supply chain and lithium iron phosphate blade battery give BYD a powerful edge on materials. The cost of these batteries in China already fell to $52 per kilowatt-hour last year, according to S&P Global Mobility. Yet BYD must absorb higher shipping costs, regulatory adaptation and battery packaging complexity. As Tesla closes the cost gap, its pricing power is starting to tilt the market in its favour.

Following price cuts in 2023, Tesla’s deliveries rose 38 per cent year on year to 1.81mn in that year. Even accounting for the reputational challenges the brand has faced in recent years given Musk’s controversies, that experience suggests Tesla’s price cuts could add about 300,000 vehicles to annual demand across its line-up. Even if half of those gains came at BYD’s expense, Tesla would still benefit from higher volumes and improved factory efficiency, while BYD would face erosion in both market share and pricing power.


For BYD, which has thrived amid fierce price competition in China, the timing is precarious. Matching Tesla’s new pricing would put pressure on margins across its Sealion models, which became BYD’s second-best selling line-up last month. BYD’s vertical integration offers some cushion, but not enough to avoid a broader squeeze. Tesla’s greater global scale and extensive distribution network allow it to absorb those pressures more easily.

That may be good news for Tesla in the short term, but it raises deeper questions about the company’s valuation. Its market value of $1.4tn, more than 10 times that of BYD, has been built on the promise of extraordinary margins, which price cuts will inevitably compress. Tesla’s gross margin was around 17 per cent in the second quarter of this year, with automotive sales accounting for about three quarters of total revenue. That is significantly lower than the fourth quarter of 2021 when its automotive gross margins, excluding regulatory credits, were nearly 30 per cent.

True, Tesla’s value extends far beyond its EVs. It is also an AI company, energy provider and robotics innovator. Narratives over the potential growth of those prospects have helped fuel a stock trading at more than 200 times forward earnings. Those ambitions are real but, for now, the bulk of its cash still comes from selling two EV models. Both of those cars now face credible rivals that can match Tesla on performance and increasingly on design.

Tesla’s price cuts prove it can still set the tone for the EV industry. But they also reveal the limits of its current business model. The company that once made EVs a status symbol now must make them affordable to stay competitive. Its valuation will need to adapt to that new reality.

>>> US Close Dow +0.44% S&P-0.16% Nasdaq -0.76% Russell +1.38

Closing Market Summary: Strong buy-the-dip action mitigates early losses
The stock market mounted an impressive intraday reversal from steep opening losses, with the S&P 500 (-0.2%), Nasdaq Composite (-0.8%), and DJIA (+0.4%) finishing mixed as weakness in tech and mega-cap names weighed against broader strength.

Futures fell sharply this morning after Reuters reported that China sanctioned five U.S.-linked subsidiaries of South Korea's Hanwha Ocean, reversing yesterday's optimism sparked by President Trump's reassuring remarks about China.

While there were no headline catalysts around the China situation to prompt the comeback, the lack of headlines around the matter left the market free to focus on a variety of other developments today, with a strong "buy the dip" move coming into play.

Q3 earnings started off on solid footing as a slate of major banks reported earnings before the open. Wells Fargo (WFC 84.56, +5.64, +7.15%) was the top-mover in the S&P 500 today after beating on EPS and revenue expectations, with Citigroup (C 99.84, +3.74, +3.89%) also capturing a solid post-earnings gain.

Goldman Sachs (GS 770.76, -16.02, -2.04%) and JPMorgan Chase (JPM 302.08, -5.89, -1.91%) faced some profit-taking after earnings beats of their own, but closed well off their session lows.

While the financials sector (+1.1%) did not finish with the widest gain today, its move into positive territory from an early loss helped the major averages reverse their downward course.

The consumer staples sector (+1.7%) did not need to reverse course today, as it traded higher this morning while the rest of the market lagged. Walmart (WMT 107.21, +5.09, +4.98%) captured a nice gain after announcing a partnership with OpenAI, joining a recent wave of collaborations with the company that have lifted several tech names in recent weeks.

Elsewhere, the industrials (+1.2%), real estate (+1.1%), utilities (+0.9%) and materials (+0.9%) sectors also finished with solid gains.

The information technology (-1.6%) and consumer discretionary (-0.3%) sectors finished with losses, as some nagging mega-cap weakness pulled the consumer discretionary sector back beneath its flat line late in the session.

The Vanguard Mega Cap Growth ETF finished with a 0.8% loss, and the S&P 500 Equal Weighted Index (+0.8%) comfortably outpaced the market-weighted S&P 500 (-0.2%).

NVIDIA (NVDA 180.01, -8.31, -4.41%) was a notable laggard, contributing to a 2.3% retreat in the PHLX Semiconductor Index.

Separately, the energy sector (-0.1%) finished slightly lower as crude oil futures settled today's session $0.67 lower (-1.1%) at $58.77 per barrel.

The market also benefited from a decent amount of commentary from Fed officials today, which kept the market's expectations for further easing this year steady.

Fed Chair Jerome Powell (FOMC voting member) said in a speech today that downside risks to the job market have risen, while Boston Fed President Susan Collins (FOMC voting member) said modest rate cuts are warranted as inflation eases while hiring has weakened.

The probability of a 25-basis-point rate cut at the October FOMC meeting remained at a sturdy 96.7%, according to the CME FedWatch Tool.

The steadfastness of current rate cut expectations was especially beneficial to smaller-cap names today, as the Russell 2000 (+1.4%) and S&P Mid Cap 400 (+0.9%) both outperformed.

U.S. Treasuries started the session with some safe-haven support, holding on to the bulk of their overnight gains in a bull steepener trade that was rooted in rate cut optimism. The 2-year note yield settled down four basis points to 3.48%, and the 10-year note yield settled down three basis points to 4.02%.
  • Nasdaq Composite: +16.6% YTD
  • S&P 500: + 13.0% YTD
  • Russell 2000: +11.9% YTD
  • DJIA: +8.8% YTD
  • S&P Mid Cap 400: +4.3% YTD

Reviewing today's data:
  • September NFIB Small Business Optimism 98.8; Prior 100.8

TechCrunch : Sam Altman says ChatGPT will soon allow erotica for adult users

Sam Altman says ChatGPT will soon allow erotica for adult users

OpenAI CEO Sam Altman announced in a post on X Tuesday the company will soon relax some of ChatGPT’s safety restrictions, allowing users to make the chatbot’s responses friendlier or more “human-like,” and for “verified adults” to engage in erotic conversations.

“We made ChatGPT pretty restrictive to make sure we were being careful with mental health issues. We realize this made it less useful/enjoyable to many users who had no mental health problems, but given the seriousness of the issue we wanted to get this right,” said Altman. “In December, as we roll out age-gating more fully and as part of our ‘treat adult users like adults’ principle, we will allow even more, like erotica for verified adults.”

The announcement is a notable pivot from OpenAI’s months-long effort to address the concerning relationships that some mentally unstable users have developed with ChatGPT. Altman seems to declare an early victory over these problems, claiming OpenAI has “been able to mitigate the serious mental health issues” around ChatGPT. However, the company has provided little to no evidence for this, and is now plowing ahead with plans for ChatGPT to engage in sexual chats with users.

Several concerning stories emerged this summer around ChatGPT, specifically its GPT-4o model, suggesting the AI chatbot could lead vulnerable users down delusional rabbit holes. In one case, ChatGPT seemed to convince a man he was a math genius who needed to save the world. In another, the parents of a teenager sued OpenAI, alleging ChatGPT encouraged their son’s suicidal ideations in the weeks leading up to his death.

In response, OpenAI released a series of safety features to address AI sycophancy: the tendency for an AI chatbot to hook users by agreeing with whatever they say, even negative behaviors.

OpenAI launched GPT-5 in August, a new AI model that exhibits lower rates of sycophancy and features a router that can identify concerning user behavior. A month later, OpenAI launched safety features for minors, including an age prediction system and a way for parents to control their teen’s ChatGPT account. OpenAI announced Tuesday the formation of an expert council of mental health professionals to advise the company on well-being and AI.

Just a few months after these concerning stories emerged, OpenAI seems to think ChatGPT’s problems around vulnerable users are under control. It’s unclear whether users are still falling down delusional rabbit holes with GPT-5. And while GPT-4o is no longer the default in ChatGPT, the AI model is still available today and being used by thousands of people.

OpenAI did not respond to TechCrunch’s request for comment.

The introduction of erotica in ChatGPT is unchartered territory for OpenAI and raises broader concerns around how vulnerable users will interact with the new features. While Altman insists OpenAI isn’t “usage-maxxing” or optimizing for engagement, making ChatGPT more erotic could certainly draw users in.

Allowing chatbots to engage in romantic or erotic role play has been an effective engagement strategy for other AI chatbot providers, such as Character.AI. The company has gained tens of millions of users, many of whom use its chatbots at a high rate. Character.AI said in 2023 that users spent an average of two hours a day talking to its chatbots. The company is also facing a lawsuit around how it handles vulnerable users.

OpenAI is under pressure to grow its user base. While ChatGPT is already used by 800 million weekly active users, OpenAI is racing against Google and Meta to build mass-adopted AI-powered consumer products. The company has also raised billions of dollars for a historic infrastructure buildout, an investment OpenAI eventually needs to pay back.

While adults are surely having romantic relationships with AI chatbots, it’s also quite popular for minors. A new report from the Center for Democracy and Technology found that 19% of high school students have either had a romantic relationship with an AI chatbot, or know a friend who has.

Altman says OpenAI will soon allow erotica for “verified adults.” It’s unclear whether the company will rely on its age-prediction system, or some other approach, for age-gating ChatGPT’s erotic features. It’s also unclear whether OpenAI will extend erotica to its AI voice, image, and video generation tools.

Altman claims that OpenAI is also making ChatGPT friendlier and erotic because of the company’s “treat adult users like adults” principle. Over the last year, OpenAI has shifted towards a more lenient content moderation strategy for ChatGPT, allowing the chatbot to be more permissive and offer less refusals. In February, OpenAI pledged to represent more political viewpoints in ChatGPT, and in March, the company updated ChatGPT to allow AI-generated images of hate symbols.

These policies seem to be an attempt to make ChatGPT’s response more popular with a wide variety of users. However, vulnerable ChatGPT users may benefit from safeguards that limit what a chatbot can engage with. As OpenAI races towards a billion weekly active users, the tension between growth and protecting vulnerable users may only grow.

>>> US After Hours Summary: PZZA +12.4% on Reuters report APO making another att

After Hours Summary: PZZA +12.4% on Reuters report APO making another attempt to acquire PZZA; XRAY +6.7% as SEC concludes investigation; VERI +25.5% on guidance and VDR contract wins

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: VERI +25.5% (also announces VDR contract wins with hyperscalers), HWC +0.4%

Companies trading higher in after hours in reaction to news: PZZA +12.4% (APO making another attempt to acquire PZZA, according to Reuters), XRAY +6.7% (SEC concludes investigation, does not intend to recommend any enforcement action), STLA +6.3% (to invest $13 bln to grow its business in US, would increase finished vehicle production by 50% in US), BTSG +5.3% (to join S&P SmallCap 600), GPRE +1.7% (successful startup of CCS equipment), BTDR +1.6% (Sept production and operations update), GRND +1.5% (confirms receipt of letter from large shareholders re possible going private transaction), DRS +1.2% (US Army contract), CVV +1% (receives order for two PVT150 systems), ADC +1% (increases dividend), RGR +0.6% (adopts limited duration stockholder rights plan), VIK +0.2% (receives 2 new ships)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: APEI -10.8%, KARO -5%

Companies trading lower in after hours in reaction to news: FGNX -14.9% (stock offering by selling shareholders, relates to warrants), ASPI -11.1% (files for $250 mln mixed securities shelf offering; also files for stock offering), NEWP -9.1% (C$35.1 mln bought deal financing), EYPT -5.1% (provides details for Phase 3 program on DURAVYU; also files mixed shelf offering; also commences $150 mln common stock offering), APO -2.8% (APO making another attempt to acquire PZZA, according to Reuters), IVA -2.4% (files for $300 mln ordinary share offering), CIVB -1.9% (receives regulatory approvals to complete Farmers acquisition), GRDN -1.6% (stock offering by co and by selling shareholders), ASMB -1.5% (stock offering by selling shareholder), LBRT -0.3% (increases dividend), HAL -0.1% (updates minority interest in Voltagrid), BIIB -0.1% (quantifies impact of acquired in-process R&D)

WSJ : D’Angelo, Grammy-Winning Soul Singer, Dead at 51

D’Angelo, Grammy-Winning Soul Singer, Dead at 51
The singer was known for an updated take on 1970s R&B and a provocative music video

D’Angelo, the soul savant whose sensual hit “Untitled (How Does It Feel)” was both his greatest triumph and his biggest frustration, has died. He was 51 years old.

“Untitled (How Does It Feel)” appeared on “Voodoo,” which topped the albums chart for two weeks in 2000 and is widely viewed as a masterpiece. The video for the single showcased D’Angelo’s washboard abs, transforming him into a sex symbol. This new status became a source of distress—he believed the interest in his body took the focus away from his music—and he did not put out a new album for more than a decade.

D’Angelo’s family confirmed his death in a statement, saying it was due to cancer. “We are saddened that he can only leave dear memories with his family, but we are eternally grateful for the legacy of extraordinarily moving music he leaves behind,” his family added.

Michael D’Angelo Archer, known professionally as D’Angelo, was hailed as a singular talent when he debuted in 1995 with “Brown Sugar,” which helped introduce a generation to the tender yet savage style that became known as neo-soul.

The son of a preacher, D’Angelo was steeped in gospel along with Prince and George Clinton, Marvin Gaye and Roberta Flack. “Brown Sugar” showcased his vocal virtuosity and knack for lush harmony, but the drums hit with the same ferocity as the rap that was ascendant on radio at the time. “To me, it’s not melding the two worlds so much as it is exposing where they meet in the middle,” he told Rolling Stone. The album’s title track, all falsetto swagger and oozing keyboards, reached No. 27 on the Hot 100, while “Lady” climbed to No. 10.

D’Angelo spent years working on the follow-up, bingeing videos of Prince and episodes of “Soul Train” for inspiration and leading late-night jam sessions at Electric Lady Studios with a remarkable collection of gifted musicians: the drummer Questlove, the bassist Pino Palladino, the trumpeter Roy Hargrove, the beat-maker J. Dilla, and more. “I knew instantly that whatever album we were making was going to be a historical moment,” Questlove recalled in 2015.

While the great soul men often led with a single, potent lead vocal, D’Angelo split his voice into myriad lines on “Voodoo,” stacking lavish parts like pieces in a Jenga tower. The rhythm section remained taut and rigid—live musicians mimicking the curt slap of hip-hop.

“Voodoo” sold more than 1 million copies, and D’Angelo’s tour in support of the album became the stuff of legend among soul aficionados. The longtime critic Robert Christgau called the singer’s live ensemble “the best funk band in the universe” and said his show at Radio City Music Hall in New York was superior to Gaye’s many years before.

But D’Angelo was haunted by his video for “Untitled (How Does It Feel),” as some fans yelled for him to strip off his shirt during his performance. “By mid-tour it just became, what can we do to stop the ‘Take it off’ stuff?” Questlove said in 2014. After D’Angelo finished the tour, he faded from view. D’Angelo later spoke about struggling with addiction, and he was arrested in New York in 2010, accused of soliciting sex from an undercover police officer.

He mounted a comeback in 2012 and released his third and final album, “Black Messiah,” two years later. By this time, D’Angelo had become a formidable guitar player, and some of his new songs bristled with snarled riffs. “Black Messiah” did not match the commercial success of D’Angelo’ first two albums, but the record won the Best R&B Album Grammy, and the single “Really Love” was awarded Best R&B Song.

In an interview with Rolling Stone following “Black Messiah,” D’Angelo sounded energized and suggested more music was on the way. “I do want to put a lot of music out there,” he said at the time. “I feel like, in a lot of respects, that I’m just getting started.”

FT : Commodities trading houses braced for ‘smaller rewards’

Commodities trading houses braced for ‘smaller rewards’
Vitol, Gunvor and Trafigura experience difficult year after reduced volatility in energy prices hits returns

Three of the world’s largest commodities traders have described 2025 as a difficult year, with one executive warning that the industry would have to get used to “smaller rewards” than in the past.

Vitol chief executive Russell Hardy said his company, the world’s leading oil trader, had endured a “tough year, with lots of nitty gritty required”, while his counterpart at Gunvor, Torbjorn Tornqvist, said it had been “hard work, for little . . . or a little less”.

Ben Luckock, head of oil trading at Trafigura, said the company had been able to “cobble together a decent result out of a difficult year”, as traders reduced their appetite for risk amid political uncertainty in the Middle East and elsewhere.

The three men were speaking at the Energy Intelligence Forum in London, where they suggested lower volatility in energy prices had left little opportunity for the outsized returns that commodities traders had enjoyed in recent years.

The most notable example was the energy crisis unleashed by Russia’s full-scale invasion of Ukraine three years ago, which resulted in bumper profits for the traders who rerouted supplies to Europe. 

“It’s no secret that 2022-23 was an exceptional year for the industry,” Tornqvist said. “Trading margins in the market are obviously much slimmer than they were”.

“You have to get used to the smaller rewards, try to look at it collectively and try to diversify,” he continued, adding that the political uncertainty this year was “hard to read”. 

Gunvor in August reported that net profits in the first half of the year were down nearly 71 per cent to $120.8mn. “Given the market turmoil, Gunvor decided to adopt a more conservative risk approach, focusing on limiting downside risk,” the company said. 

At Vitol, there was no outstanding performance in any one department this year, according to Hardy.

“When people pick over the bones at the end of the year, there aren’t going to be any standouts or highlights. It’s not like gas trading was great, power trading was bad, LNG trading was good. Everything required hard work and organisation and courage to collect earnings,” he said. 

Full-year profits at Trafigura are likely to be buoyed by the company’s metals business, with the price of copper, silver and gold all soaring to new highs this year. Trafigura’s chief executive Richard Holtum said this week that the company had “an extremely good result” because of the “diversity of our business”. 

International oil companies such as Shell and BP have also had a difficult time trading oil and gas markets in 2025. BP said in its third-quarter trading statements on Tuesday that gas trading had been “average” and oil trading weak, although Shell said it expected both divisions to fare better than in the previous quarter.

FT : Russia accuses Mikhail Khodorkovsky of plotting coup

Russia accuses Mikhail Khodorkovsky of plotting coup
Moscow’s intelligence service launches fresh criminal case against former Yukos oil magnate and 22 other dissidents in exile

Russian authorities have opened a fresh criminal case against Mikhail Khodorkovsky, once the country’s richest man and one of the Kremlin’s most prominent critics, for allegedly plotting to overthrow the regime of Vladimir Putin.

The country’s domestic intelligence service (FSB) on Tuesday accused the former Yukos oil tycoon, along with 22 other exiled politicians, activists and businessmen of planning a coup. Khodorkovsky and other alleged “founders” of the group have also been accused of supporting Ukrainian units to seize power by force.

While those targeted have long faced persecution in Russia, the case marks a new stage in the Kremlin’s campaign against its critics and reflects growing concern about the influence of dissidents abroad, despite official claims that the opposition is irrelevant.

Khodorkovsky on Tuesday called the accusations “absurd”, saying they were part of the Kremlin’s attempts to intimidate its opponents.

“Putin is extremely sensitive to the emergence of anti-war democratic Russian representation” abroad, he told the Financial Times. “The Kremlin understands perfectly well that such legitimacy for the Russian opposition could become a very important political factor in the event of . . . a sudden transfer of power.”

Khodorkovsky also faces separate charges of public incitement to terrorism, which carry a potential life sentence if he is extradited and convicted. He spent 10 years in a Siberian prison on fraud charges widely seen as politically motivated. Putin pardoned him and he was exiled in 2013. He currently resides in London.

Former Russian prime minister Mikhail Kasyanov and chess grandmaster Garry Kasparov are also on the list, as well as opposition politician Vladimir Kara-Murza, who was released from a Russian jail last year in a major prisoner swap with the US and European countries.

Other names include Evgeny Chichvarkin, once Russia’s leading electronics retailer, now running a high-end wine shop and a restaurant in London’s Mayfair, and Mikhail Kokorich, who co-founded the Nasdaq-listed Momentus and Swiss-based Destinus aerospace companies.

All those named in the case are linked to the Russian Antiwar Committee, an opposition coalition founded abroad in February 2022, shortly after Putin’s full-scale invasion of Ukraine, and which was promptly banned at home.

The FSB notes the coalition signed a 2023 “Berlin Declaration” that called for the removal of Russia’s current leadership. It also cites the group’s involvement with the Parliamentary Assembly of the Council of Europe (Pace), a human rights forum representing lawmakers from 46 countries. Russia left the Council of Europe in 2022 as it faced exclusion following its invasion of Ukraine.

Earlier this month, Pace announced the creation of a “platform for dialogue between the assembly and Russian democratic forces in exile”, the most significant step to date towards formal representation abroad for anti-Putin groups. Pace said those involved must be of “the highest moral standing” and meet several conditions, including the recognition of Ukraine’s sovereignty, independence and territorial integrity.

According to the FSB, Khodorkovsky portrayed this platform as a “constituent assembly for a transitional period” and an alternative to Russia’s state institutions. The agency also alleged the anti-war committee members “fund and recruit members of Ukrainian nationalist armed groups inside Russia” to “use them later to seize power by force”.

In a post on X, Khodorkovsky dismissed the allegations of “recruiting fighters” and “arming the Ukrainian military” as “lies”. “Sorry, but no. Humanitarian aid — yes,” he wrote.

FT : Europe needs a better chip strategy

Europe needs a better chip strategy
The Dutch seizure of Nexperia shows how ensnared the EU is in the US-China tech war

The Dutch government’s seizure of chipmaker Nexperia from its Chinese owner Wingtech is a landmark moment in Europe’s evolution from one of the world’s most open trading blocs to one increasingly preoccupied by its economic security.

It is all the more striking coming from a small free-trading country with laissez-faire business instincts which approved the sale of Nexperia to Chinese investors in 2017 — a decision that even with the benefit of hindsight it must regret. With this takeover, the Netherlands has stepped straight into the struggle for technological supremacy between the US and China centred on the semiconductor industry.

Nexperia was one of many large-scale strategic takeovers by Chinese investors of western companies in critical technologies or infrastructure during the middle of the last decade. It is the first to be fully clawed back by a western government. It may not be the last.

European countries have intervened with Chinese owners before. France seized the shares of Chinese-controlled chipmaker Ommic in 2023. The previous year the UK government ordered Nexperia to sell the bulk of its stake in Newport Wafer Fab. Both Ommic and NWF were small outfits producing or potentially producing more sophisticated semiconductors for military applications.

Nexperia is in the more mundane business of manufacturing basic chips for a range of consumer electronics, industrial applications and cars. It does, however, have knowhow and production capacity in Europe which the continent needs to protect, given the importance of microelectronics to innovation and supply chains. The global chips shortage in 2021 caused severe disruption to European carmakers and other manufacturers.

In that sense, Nexperia’s business is strategically important to the European economy. If production shifted to China, rather than to other European chipmakers, it would leave the bloc more dependent and more vulnerable. Under chief executive Zhang Xuezheng, Nexperia invested in its European facilities. But Dutch authorities intervened after Zhang stymied moves to carve out Nexperia’s European operations. They also feared he was preparing to transfer assets and intellectual property to his Chinese entities.

Whatever their concerns, the court documents in this case suggest The Hague was acting under pressure from the US to wrench back control of Nexperia from its Chinese owner. Wingtech was blacklisted by the US commerce department last year. With Zhang resisting governance safeguards, Washington in effect upped the ante by making clear the blacklisting also applied to Nexperia, Wingtech’s subsidiary, threatening the business.

As well as safeguarding or building up manufacturing capacities in strategic sectors, European governments and business now have to take geopolitical concerns more seriously. The old assumption that complex interdependencies force countries in the supply chain to work together no longer applies.

The Netherlands has some experience of this tricky balancing act already with ASML, the chipmaking equipment giant. It has had to comply with US export curbs on its most advanced machines. But the takeover of Nexperia is a more drastic move that triggered instant retaliation from Beijing, with a ban on exports of Nexperia products assembled in China. Further retaliation can be expected. The separation of supply chains is accelerating.

The Netherlands made a mistake allowing Nexperia’s sale, even if it has now moved decisively to correct it. The episode underscores the need for the EU to develop a better semiconductor strategy. It is way off its ambition for a 20 per cent global market share. Thinking through its dependencies would be a good start.