The R&D World Index (RDWI) for the week ending March 19, 2021 closed at 4,449.78 for the 25 companies in the R&D World Index. The Index was up 0.06% (or 2.85 basis points) from the week ending March 12, 2021. The stock of 18 R&D World Index members gained value from 0.28% (Johnson & Johnson) to 22.97% (Volkswagen). The stock of seven R&D World Index members lost value from -0.86% (Apple) to -11.43% (Eli Lilly & Co.).
Last week, U.S. Senators Chris Coons and Dick Durbin reintroduced the Innovation Centers Acceleration Act which is intended to expand R&D to compete with China economically by placing renewed emphasis on biomedical technology, advanced manufacturing and others. The bill would authorize investment of $80 billion over nine years in nine Innovation Centers selected by the National Science Foundation while supporting private sector-led technology growth through tax credits, loan financing and SBIC debentures. The bill is sponsored by the American Chemical Society, the Information Technology & Innovation Foundation and the Association of American Colleges & Universities. Another bill (S.749) introduced last week by Senators Todd Young and Rob Portman would amend current law to enhance tax benefits for R&D activities undertaken by innovative small businesses and startups.
Finland’s Nokia announced last week that it would cut 5,000 to 10,000 jobs over the next two years (up to 11% of its global workforce) to lower its cost base by about $700 million and make it more competitive with its telecom competitors Huawei Technologies and Ericsson AB. The savings would be offset by an increased investment in R&D, especially in the development of 5G technologies. The company stated that its $17 billion integration of Alcatel-Lucent in 2015 took longer than anticipated and it now needs to catch up to its competitors in the 5G telecom antenna marketplace.
RDWI-member Volkswagen announced last week that it plans to switch the type of battery that will be used in its electric vehicles (EVs) from the pouch-type batteries manufactured by South Korea’s LG Energy Solution and SK Innovation to a prismatic type manufactured by China’s Contemporary Amperex Technology. Volkswagen will thus eliminate the current battery supply deals they have with LG and SK to focus on a more proprietary technology. Volkswagen stated it would invest in six large battery factories and build out an extensive charging infrastructure. The company will also increase its stake in Sweden’s Northvolt AB and order an additional $14 billion in batteries through 2030. The company plans to have 75% of its new car sales be EVs by 2030. The company will also expand its partnerships to build 3,500 fast charging stations in North America, 17,000 in China and 18,000 in Europe.
China’s Geely automaker announced last week that it plans to launch a new premium EV brand called Zeekr in China that will compete with the likes of Tesla. Geely owns Volvo group, which manufactures Volvo and Polestar EVs and they also acquired about 10% of RDWI-member Daimler in 2018. They also manufacture another EV entity called Lingling Technologies which manufactures Geely’s EV models on an open-source EV chassis introduced in 2020. Geely also announced last week that it will invest nearly $5 billion to build a new battery plant in the Ganzhou southern region of China. The plant is expected to have an annual capacity of 42 GWh.
The International Energy Agency (IEA) reported last week that the global demand for gasoline has peaked and is not likely to return to pre-pandemic levels. The global shift to EVs and a rise in energy efficiency of internal combustion (IC) vehicles is expected to offset growing gasoline consumption in developing countries through 2030. IEA forecasts annual global EV production to reach 12 million vehicles by 2026, which will daily displace about a million barrels of oil.
RDWI-member Johnson & Johnson announced last week that it was working on several next-generation COVID-19 vaccines targeted at the emerging coronavirus variants. The company is hopeful that the modified vaccines or booster shots will be effective against the variants. Approved vaccine developer Moderna also announced last week that it was testing its vaccine in children aged 6 months to 11 years in the U.S. and Canada. The company is conducting the study in collaboration with the NIH’s National Institute of Allergy and Infectious Diseases (NIAID). NIH officials have stated that if the results are positive, that junior and senior high school students could receive the vaccines by Fall 2021.
BioNTech SE, the German collaborator with RDWI-member Pfizer for their approved COVID-19 vaccine, has built an alliance of 13 companies, including Novartis AG, Merck KGaA and Sanofi SA, to reach their target of making two billion vaccine doses by the end of 2021. Their vaccine was approved in Europe and the U.S. in December 2020 following clinical trials that showed it was effective at preventing infections in adults. Follow-up studies in Israel revealed that the vaccine was 94% effective in stopping asymptomatic transmission, the results of which were released last week.
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2019 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies) and ICT (9 companies) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ. NYSE and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.