You know what they say about the global automobile industry these days: something old, something new, something tariffed, something subsidized (yes, that doesn’t rhyme, shut up). 

On Monday, executives at Stellantis and Renault struck a cheery tone at the Paris Auto Show, saying they believe the market for electric vehicles is about to see a rebound in demand as prices come down. That’s for new vehicles. In the used EV market, prices have already been coming down, according to a Monday report in The Wall Street Journal — sometimes to the chagrin of EV owners. And the market reset for new EVs could make matters worse for them. 

A New Hope

Over the past year or so, the EV industry reached its awkward teenage phase, economically speaking. All the monied early adopters were already kitted out with their electrified rides and the next tranche of demand was a little out of reach, as most new EVs still aren’t quite cheap enough to be classified as mass-market consumer cars (with the exception of Chinese EVs, the cheapness of which has caused quite a bit of geopolitical wrangling).

As a result of the flinching demand, automakers have scaled back some of their plans for EV production, so 2024 has been a slightly pallid year for the industry. But auto executives in Paris were pretty upbeat, pinning their hopes on upcoming affordable vehicles:

• “We may be getting close to a tipping point,” Thierry Koskas, head of Stellantis-owned Citroën, told reporters. Citroën debuted a €23,300 ($25,411) EV in September, and says it will introduce a cheaper model that costs around €19,000 next year.
• Meanwhile, Stellantis CEO Carlos Tavares told the Financial Times that companies pulling back on their EV investment could be walking into a “cost trap,” as drawing out the energy transition would just cost them more in the long run.

While automakers wait for the demand pendulum to swing back on new EVs, the used EV market has done a complete U-turn on pricing. In August, used EV prices actually fell below the average for used gas-guzzling cars, whereas just two years ago used EVs cost roughly the same as a brand-new EV. 

Undercut: This is great news for the energy transition, but less-great news for people who’ve leased EVs only to find that dropping prices — for example instigated by companies like Tesla, which has been slashing all year — have punched a hole in their car’s value. One Tesla owner told the WSJ he bought a new Model 3 in 2023 for $35,000, but Tesla’s discounts meant that at the start of this year it was worth $10,000 less than what he owed on his lease. Ultimately, he traded it in for a Kia.

Here’s a lens into the state of M&A. 

After kicking off a sales process roughly a month ago, eye-health firm Bausch + Lomb has stirred up significant interest from private equity giants TPG and Blackstone. On Monday, the Financial Times reported the firms have teamed up for a joint bid to take the company private in what may just be the biggest PE deal of the year.

Contact Sport

It’s been a long road for Bausch + Lomb, which has been spinning its wheels amid a messy four-year spin-off attempt from parent company Bausch Health, formerly known as Valeant. Back in 2020, the mothership carved out the lucrative Bausch + Lomb division, and, in 2022, took it public while retaining a roughly 88% stake.

While Bausch + Lomb, one of the world’s largest contact lens suppliers, has remained a successful enterprise, its parent company has struggled — it now sits on a roughly $21 billion debt load, with some $10 billion coming due by the end of 2027. That’s put the spin-off of Bausch + Lomb on indefinite delay, as creditors have gone to war with Bausch Health shareholders (including famed activist investor Carl Icahn, who would become one of Bausch + Lomb’s top shareholders following a complete spin-off) over the future of the parent company. A sale to the two PE giants may end up being a compromise:

• Creditors, including Apollo Global Management and Elliott Management, have warned that a spin-off of the eyecare subsidiary would cut off the parent company from a key revenue source, and they fear it could go insolvent. Some creditors would prefer it if Bausch Health filed for Chapter 11 bankruptcy and restructured its debt load, The Wall Street Journal reported in August.
• The proceeds of a sale to PE — likely at a premium to its current enterprise value of $11.5 billion including debt — could be used to help the parent company shore up its balance sheet.

Eyes on the Prize: Shares of Bausch + Lomb have climbed roughly 18% in the past month amid rumors of a private equity sale; on Monday, they spiked 7%. The eyecare giant also received approval from the US Food and Drug Administration for its enVista Envy full range of vision intraocular contact lenses, likely assisting in the share price boost. Meanwhile, Bausch Health is staring down a debt-laden future without the sales power of its lead drug, the gastrointestinal medication Xifaxan, which will see its patent expire in 2029.

In the latest hand of policy poker, UK officials are reportedly weighing hiking taxes on gambling, which sent shares in the industry tumbling like dice at a craps table on Monday. Meanwhile, gambling hub Macau plans to cash out some of its chips as it continues to wean itself off the industry.

A Budget Getting Out of Hand

The UK’s new Labour government, little more than three months into office, has said for weeks that it was left with a £22 billion ($28.7 billion) shortfall in public finances covered up by its predecessors. To close the gap, Chancellor Rachel Reeves has already begun making difficult decisions — most notably a controversial move to cut off 10 million retirees from a tax-free payment to help with winter heating costs.

The Guardian reported on Friday that hiking gambling taxes — which the Institute for Public Policy Research (IPPR) estimates could raise £2.9 billion next year and £3.4 billion by 2030 — is also being considered. The think tank has argued for doubling the duty on brick-and-mortar betting shops to 30% and hiking the duty on online casino gaming to 50% from 21%. Neighboring France already has a 55% tax on online bookmakers, and may soon go higher. The news hit markets Monday like a bad Vegas hangover:

• Entain, the Isle of Man company that owns UK betting shop Ladbrokes Coral, fell 8% on the London Stock Exchange. Ireland-headquartered Flutter, which owns Paddy Power and Sky Betting & Gaming, fell 6% in London.
• Roberta Ciaccia, an analyst at Investec, told the Financial Times that the IPPR proposal the UK is reportedly considering would hit the crackpot rather than the jackpot. She said it is “not realistic at all, as it will not allow any operator to be profitable,” and noted the profit margins of betting firms in the UK top out at 25% for online gambling and 20% from physical locations.

Hedging on Betting: While the UK is thinking about tapping its gambling market, Macau wants to cash in some chips for good. Sam Hou Fai, who was elected the next leader of the Chinese autonomous region in an uncontested election Sunday, plans to chip away at the gambling industry’s former stronghold on the local economy: It fell to 36% of GDP last year, down from over 50% in 2019. He reportedly has Beijing’s backing for a plan to invest in tourism, finance, commerce, and high tech — ah, tech, definitely not a gambler’s industry.