EnerSys (NYSE:ENS) Update / briefing March 26, 2026 02:00 PM ET Company ParticipantsAndrea Funk - EVP and CFOShawn O'Connell - President and CEOConference Call ParticipantsJulien Dumoulin-Smith - Research AnalystJulien Dumoulin-SmithGood afternoon. Thanks everyone for the time and the opportunity to connect with so many of you here. Really appreciate the opportunity here. Joined with Shawn O'Connell, Andrea Funk, and Charlotte Murnan over at EnerSys. Look, it's a great opportunity to chat with you guys. Rea ...

Core Insights - Germany has reintroduced a significant electric vehicle (EV) subsidy program with a budget of €3.5 billion until 2029, aiming to support up to 800,000 EV purchases and revive demand in a price-sensitive market [1][9] Subsidy Framework - The updated incentive framework includes battery electric vehicles (BEVs), plug-in hybrids (PHEVs), and extended-range electric vehicles (EREVs), providing a more flexible approach to consumer needs [2] - BEVs are eligible for a base subsidy of approximately €3,000, which can increase to €6,000 for lower-income households, while PHEVs and EREVs qualify for around €1,500 [3][2] - The subsidy applies to both purchases and leases, provided the vehicle is owned or leased for at least 36 months, and includes imported vehicles from brands like those in China [3] Social Tier System - The program features a social tier system with eligibility capped at €80,000 in taxable household income, which can rise to €90,000 with children, aligning with the median income of new-car buyers [4][5] Impact on Automakers - BYD Co. is expanding its European presence, planning to double its sales network to around 2,000 outlets by 2026, with European sales tripling in 2025 to over 80,000 vehicles [6] - The inclusion of Chinese brands in the subsidy scheme reduces competitive barriers for BYD, potentially increasing consumer adoption [7] - Volkswagen AG continues to be a major player in the EV market, reporting significant growth in all-electric deliveries, particularly in Germany [8][10] - BMW AG is expected to benefit from the renewed subsidies, which could accelerate sales of its electric models and enhance production utilization [11] - Tesla, Inc. is committed to the European market despite slowing sales, with plans to increase battery production, making its models more competitive due to the new subsidies [12] Semiconductor Industry - Infineon Technologies AG stands to benefit indirectly from the revived EV subsidy program, as rising EV demand will likely lead to increased semiconductor orders from automakers [13][14] Conclusion - Germany's renewed EV subsidy program is a strategic move to enhance demand while allowing foreign competition, potentially reshaping consumer behavior in electric vehicle purchases and attracting investor interest in the automotive sector [15]

Core Insights - TDK Ventures, the corporate venture arm of TDK Corporation, focuses on deep-tech and hardware-led startups globally, with a significant emphasis on India as a strategic market [1][4] Investment Thesis - TDK Ventures was established in 2019 to partner with early-stage founders and startups, leveraging TDK's expertise in material science and process innovation to inform its long-term product roadmap [1] Fund Structure - TDK Ventures manages a total of $500 million across four funds, including a $50 million fund from 2019 and three subsequent $150 million funds, primarily investing at Series A with initial checks up to $5 million and potential follow-ons up to $15 million per company [2] Sector Focus - The firm invests at the intersection of deep-tech and hardware, focusing on two main themes: energy transformation (including new energy generation and storage) and digital transformation (covering semiconductors, mobility, space-tech, robotics, and industrial tech) [3] Importance of India - India is a key market for TDK Ventures, with the company operating five component manufacturing facilities and large battery plants, employing nearly 5,000 people, and having made four investments in local startups [4] Portfolio Companies - TDK Ventures' Indian portfolio includes startups such as Infinite Uptime (industrial AI), Exponent Energy (ultra-fast EV charging), Ultraviolette (electric motorcycles), and a precision agritech company focused on sensor-IoT and AI technologies [4] Views on Deep-Tech Exits - The primary challenge in deep-tech is securing intermediate capital, as monetization signals appear later, although successful IPOs like Ather and Ola Electric demonstrate that hardware-led companies can scale and exit within comparable timelines [5]

Summary of Conference Call on Auto Suppliers and AI Robots Industry Overview - The conference call discusses the North American auto suppliers' landscape, particularly in relation to the emerging robotics market and AI integration into physical applications [1][4]. Key Points and Arguments 1. **Opportunity for Auto Suppliers**: US auto suppliers are positioned to fill critical gaps in the supply chain for technologies that enable AI's transition into the physical world, especially as legacy automakers face increasing challenges [1][4]. 2. **Supply Chain Challenges**: The US is the largest net importer of electric motor parts and gearing systems, with imports exceeding exports by 138% and 65% respectively, indicating a significant reliance on foreign supply chains [2][4]. 3. **Localization Efforts**: Tesla's CEO emphasizes the need to localize the supply chain to mitigate geopolitical risks, highlighting the absence of local supply chains for critical components [2][4]. 4. **Technological Overlap**: Auto suppliers have the potential to transition into the robotics supply chain due to shared technological architectures across various robotic forms, such as cars and humanoids [3][4]. 5. **Long-term Market Dynamics**: Factors pushing suppliers away from traditional automotive markets include the rise of Chinese competitors and affordability challenges, while the demand for robotics and AI technologies pulls them towards new opportunities [3][4]. 6. **Potential for Diversification**: Analysts suggest that auto suppliers could diversify into non-automotive sectors like robotics, drones, and defense, driven by long-term growth pressures in the automotive industry [16][4]. 7. **Key Players**: Companies like Aptiv (APTV), Magna (MGA), BorgWarner (BWA), and Mobileye (MBLY) are identified as well-positioned to pivot towards robotics and AI due to their technological capabilities and financial flexibility [17][19]. 8. **Emerging Trends in China**: Chinese auto suppliers are already venturing into humanoid robotics, leveraging their manufacturing expertise and technological overlaps, which could serve as a model for US companies [22][24]. 9. **Investment Implications**: The rise of embodied AI could lead to significant demand for critical minerals, with estimates suggesting an additional US$800 billion in demand by 2050, necessitating supply chain diversification for Western producers [28][29]. Additional Important Insights - **Potential Deal-Making**: The call anticipates a wave of deal-making, including spin-offs and consolidations, as companies reassess their business strategies in light of the evolving AI landscape [21][4]. - **Framework for Assessing Firms**: A framework is proposed to evaluate auto suppliers' potential in the embodied AI market based on two factors: technological/skill transferability and strategic/financial flexibility [34][39]. - **Global Supply Chain Control**: Chinese enterprises currently dominate the supply of critical minerals, controlling 65% of mined and 88% of refined rare earths, highlighting the urgency for Western companies to diversify their supply chains [28][29]. This summary encapsulates the critical insights from the conference call, focusing on the evolving role of auto suppliers in the robotics and AI sectors, the challenges they face, and the strategic opportunities available to them.