Morningstar - Q1 2024 - 25

against the delivery and collection of shipments,
letters, packages, and pallets made by PostNord
(Sweden's postal service) and CityMail to all
of Tesla's facilities in Sweden. In other words, new
Teslas can't even get Swedish license plates.
Tesla's CEO and largest individual shareholder,
Elon Musk, took to social-media platform X,
which he owns, to denounce the blockade against
mail deliveries as " insane. " The automaker filed
two separate lawsuits against the Swedish
Transport Agency and PostNord. While one court
favored Tesla, another rejected it for so-called
interim security measures. No final verdict
has been presented as of early December, and
Teslas are still missing their license plates.
The battle between Tesla and the unions has
sparked a polarized debate in Sweden.
Independent economist Claes Hemberg argues
that the trade union IF Metall has lost the
plot in its fight against Tesla.
" I don't think it is the union's role to chase
companies out of Sweden. I think they have
misunderstood their role and have identity
problems, " he told financial daily Dagens Industri.
Meanwhile, AMF, one of Sweden's biggest
occupational pension companies with SEK 755
billion under management, has sent a letter
to Tesla's American board demanding that it
" adopt to the customs of the country. " AMF
is one of the largest Swedish institutional owners
of Tesla, with shares worth around $337 million
at the start of December, according to Morningstar
Direct data.
Despite its union battle, Tesla had the secondhighest
sales in Sweden in November, with
1,236 new Tesla Model Y registrations. For the year
through November, the Model Y dominated the
new-car market, scoring 3,675 more registrations
than the country's second-most popular model,
the Volvo XC40 compact SUV.
Swedes may love Teslas, but the company's
annual sales there are dwarfed by those in the
U.S., China, and Germany. That said, the
current union standoff could prove a bellwether
for its labor relations globally.
Success for the Swedish unions would put
pressure on Tesla in other markets where unions
have been fighting the same battle for years.
On the other hand, if Tesla remains steadfast,
the Swedish unions are likely to intensify efforts to
drive Tesla out of the country. Morningstar
analyst Seth Goldstein is optimistic it won't come
to that: " I'd imagine Tesla is negotiating with its
union in Sweden to come to a resolution, and
I would expect the two sides will eventually reach
an agreement. As a result, I don't see a huge
impact to Tesla. "
Johanna Englundh is an editor for Morningstar in Sweden.
parties (GL/PvdA) and the liberal D66. In view of
marked programmatic differences across
major parties, it is currently difficult to assess
which of these diverging coalition scenarios is
more likely.
While most recent polls had predicted a neck-toneck
race, the PVV secured significantly
more parliamentary seats than other major parties,
winning 37 out of 150 seats in the House of
Representatives, the main legislative body. This
puts the party well ahead of the GL/PvdA (25
seats) and the VVD (24 seats). The NSC, which was
founded in August 2023 and led the election
polls for several weeks, secured 20 seats. In
contrast, the pro-farmer BBB, which had won the
provincial elections in March 2023, landed
only at seven seats. The PVV benefited from public
discontent about higher consumer prices, a
housing crisis, and rising numbers of refugees.
Sovereign Ratings
Withstand Political
Uncertainty
GREATER EUROPE
Netherlands
The snap elections in the Netherlands in November
led to a surprise victory for the far-right Freedom
Party, or PVV, and are likely to be followed by
lengthy and difficult negotiations on the formation
of a coalition government. In Morningstar DBRS'
view, the landslide election outcome has increased
policy uncertainties in various areas, including
foreign affairs, climate policies, and immigration.
The PVV received by far the most seats in
parliament but would need to form a coalition
government with other parties to obtain a
parliamentary majority. The PVV's preferred
coalition partners likely include the center-right
People's Party for Freedom and Democracy,
or VVD, of outgoing Prime Minister Mark Rutte
and the newly founded centrist New Social
Contract, or NSC. However, if the latter two parties
refuse to partner with the PVV, they could
also form a four-party coalition government with
the joint list of the Green and the Labour
The most likely coalition scenarios are a center-tofar-right
government under the leadership of
the PVV or, alternatively, a four-party government
of more centrist parties. However, finding
common ground for a center-to-far-right coalition
government between the PVV, the VVD, and the
NSC is likely to be complicated by several
contentious positions in the PVV's election
manifesto. These include holding a referendum on
European Union membership, a reversal of climate
policies, and a ban on mosques. At the same time,
bridging differences in a potential four-party
coalition among the GL/PvdA, VVD, NSC, and BBB
is also likely to be challenging given different
views on the nitrogen crisis and migration policies.
While we expect policy uncertainty to be elevated
over the next months, the Morningstar DBRS
AAA sovereign ratings on the Kingdom of the
Netherlands continue to be supported by
important credit strengths. These include high
institutional quality, a highly productive
and competitive economy, moderate government
debt levels, and a strong external position.
Yesenn El-Radhi is vice president, global sovereign ratings,
at Morningstar DBRS.
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Morningstar - Q1 2024

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