All but one of the Toyota brand’s top sellers, the RAV4, posted lower volume in May: Corolla, off 18 percent; Camry, down 34 percent; Venza, off 68 percent; 4Runner, down 1.5 percent; Highlander, off 46 percent and Tacoma, down 31 percent.
U.S. sales of the Toyota RAV4, the top-selling compact crossover in 2021, rose 9.5 percent. Lexus’ top-seller, the RX crossover, posted sales of 8,749, down 2.3 percent.
Its a growth focused fund, they can’t just sell all their growth and invest in oil.
Ya a fund like this is going to blow up in this kind of regime. It happens. That doesn’t mean they are doing anything wrong. It would be like if people are paying you to wear a t-shirt every day and it’s pouring rain and you got soaked.
Hopefully we can absorb the substance of this, and the possible impact, without turning this into an argument about politics or news sources.
KEY POINTS
Chinese companies that produce raw materials for electric vehicle batteries show signs of using forced labor
Xinjiang Nonferrous Metal Industry produces minerals and metals, including lithium, nickel and copper. It has exported metals to the U.S., Germany, U.K., Japan and India
The report was published on the eve of the Uyghur Forced Labor Prevention Act taking effect in the United States. The legislation bans goods made with forced labor from entering the U.S.
The source material (NYT paywall tip for Mac/iOS devices: flip the browser into reader mode to bypass)
The implementation came together fast, we’ll see if any US battery makers or battery suppliers run afoul, or see more of a squeeze getting their raw materials.
This was the industry fear (that there is corruption in the chain). SEC companies have a duty to prevent corruption and raw materials don’t have many alternative sources. They are also very energy demanding to make. China is building over 50 coal power plants and a ton of nuclear. There really are few places that have the surplus energy and labor at the moment to manufacture this stuff. My wife took an aluminum company Public in the US that bankrupted a few years later over power supply negotiations and rate changes (largely driven by the natural gas volatility).
The raw material inputs gives me the most heartburn (lithium, rare earth metals, etc) especially with inflation. Rivian CEO and Elon comments on lithium SC not being built yet are huge red flags. Ford sees rapid large industry consolidation due to it. ESP with the battery being the highest cost part. You see the pass through costs in the rapidly rising EV pricing. Commodity’s also hedge inflation.
As EVs become more key in stabilizing the grid, the value of keeping my a/c on is exponential from just a vehicle. My personal belief is EV ownership will be the status divider for the have and have nots. I feel like I’m ridding on gold in my Mach e ATM even though it’s not bidirectional - what I trade it on will be V2G. In between the grid tie and natural gas generac.
It is a Quick pivot (including with the grid storage) to EVs all at the same time. Similar with natural gas concentrations vs substitution fuels (coal, etc). Concentration yields intense volatility which is being capitalized in high EV pricing.
Antidotally, a large union Kentucky plant that made high purity aluminum for defense use (A grade also used to make high voltage transmissions lines) was rapidly hiring in Q1, and abruptly shuttered this quarter because of energy prices. When you can’t afford the electricity to make aluminum, to transmit more electricity - concerns me for a quick out of control spiral.
You said it. Why I originally started this thread. It was easy to blame “chips” for auto production shortages, but it’s as much that as other raw materials and inputs (autos especially are finished goods made from many finished goods, all of which have raw materials).