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Bloomberg Opinion

22 Nov, 10 tweets, 5 min read

🚘 The race to build and capture large swathes of the global electric vehicle supply chain is gathering pace.

It won’t be about who comes in first but who can do it best trib.al/6kSXefF

China is well ahead of the U.S. on EV battery supply chains.

While it has developed disparate parts of the supply chain, the U.S. is a long way from being ready to churn out hundreds of thousands of batteries that will power all of the vehicles forecast trib.al/XavnYnY

⚡️ What should manufacturers of batteries and cars commit to? It’s a tough call. Either you ...

A) Go with the best and safest technology to date
B) Wait it out and focus on the future without investing too much in what’s commercially viable today trib.al/XavnYnY

China’s Contemporary Amperex Technology (CATL), the world’s largest battery maker, shows that the only profitable way forward so far is to go with the safest technology to date.

Its batteries are used in many Teslas that will be exported across the world trib.al/XavnYnY

The ability to access every part of the supply chain — from raw materials to the cathodes and anodes and packaging for cells — has given CATL, and China more broadly, a head start trib.al/XavnYnY

Growing imbalances in the broader market and worries that we could face a global battery shortage mean that automakers go with whatever is available right now.

That’s where the risk is trib.al/XavnYnY

The supply chains of the future will have to look different.

We’ll need flexible manufacturing systems that can adapt to:

➡️ Evolving chemistries
➡️ Production processes
➡️ A variety of sources for raw materials trib.al/XavnYnY

Supply chains need to be built with the knowledge that things will change — very soon.

Companies that aren't ready will face problems that look like those of traditional carmakers right now, which are struggling to start churning out EVs trib.al/XavnYnY

The U.S. has a chance to win the technology race and make sure the best EV batteries keep coming out and are manufactured at scale.

If that process is dynamic, then supply chains will be, too.

Otherwise, China and the likes of CATL will stay ahead trib.al/XavnYnY

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21 Nov

🛍️ The bargain bonanza that is Black Friday has begun. Only there are fewer special offers this year, and those that are being advertised aren’t quite so eye-catching.

You can blame the global supply chain meltdown for the lack of doorbusters trib.al/HI6L0GB

💰 Many Americans are still flush with Covid lockdown savings, while wage gains are also boosting household spending power.

Combine that with missing out on holiday festivities in 2020, and that’s made for buoyant consumer conditions trib.al/z1we2hl

Given the higher costs that retailers are facing — from spiraling freight rates to air-shipping goods from Asia — they had little choice but to cut down on promotions this year in order to protect profit margins trib.al/z1we2hl

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20 Nov

Good news: The supply-chain crunch appears to have already peaked in the U.S.

Evidence keeps piling up to suggest that the U.S. is slowly but surely making progress in easing freight congestion and supply shortages bloom.bg/3oIZ4l3

🚢Average ocean freight rates for a 40-ft container have declined for 8 weeks
🚢Spot pricing for the Shanghai-Los Angeles trade route is down about 19% from its September peak
🚢There are fewer containers lingering for more than 9 days at the Port of L.A. bloom.bg/3oIZ4l3

The threat of fines for excessive dwell times at the port seems to have led to a meaningful improvement.

The ports of L.A. and Long Beach have delayed the penalties (which start at $100 a day and rise in $100 increments) until at least later in November bloom.bg/3oIZ4l3

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19 Nov

India may appear to be stalling on climate goals, having fought to maintain coal use at the COP26 summit.

🚗 But it is successfully building awareness about electric vehicles trib.al/m5x7IDu

In Glasgow, India unveiled a government-run portal — E-Amrit — that’s a one-stop shop for all your EV questions.

From subsidies for drivers and manufacturers to charging facility locations and financing options, the goal is to boost consumer knowledge trib.al/xhYCkxw

⚡️🚗 This will shape the EV adoption story globally.

The more drivers know about their options — and the more governments can address worries about how far EVs can travel — the less likely they are to resort to old, fossil-fuel driven habits trib.al/xhYCkxw

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19 Nov

How weak is China’s economy? Recent data suggests it has slowed sharply.

It may not even be growing at all, given the unreliable nature of China’s domestic statistics. Most observers say the slowdown is due to the government’s attempt to stamp out Covid trib.al/klMMp5J

The property sector’s travails are more a symptom than a cause of China’s problems.

The nation’s economic model is probably broken, much like Japan’s was three decades before — and for similar reasons trib.al/8hiC5nn

Japan’s problems started when markets began to be liberalized in the early 1980s.

The corporate sector’s financial deficit started to balloon, meaning it spent much more than it earned.

The gap was filled by borrowing trib.al/8hiC5nn

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13 Nov

It's conventional wisdom that the U.S. economy is built on Americans' endless appetite to buy lots of stuff.

Household consumption makes up 67% of GDP. When the economy falters, we're told spending is our patriotic duty. But it doesn't have to be this way trib.al/gIDH2vV

Suddenly, Americans can’t spend like they used to. Store shelves are emptying, and it can take months to find a car, refrigerator or sofa.

If this continues, we may need to — gasp! — live more like the Europeans. That actually might not be a bad thing trib.al/gIDH2vV

Americans haven't always acted like this.

Consumption per capita grew about 65% from 1990 to 2015, compared with about 35% growth in Europe. Household consumption makes up only about 50% of GDP in Germany trib.al/gIDH2vV

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11 Nov

The total value of all cryptocurrency assets has just exceeded $3 trillion.

This means the entire crypto sector is around 20% more valuable than the equity of the two biggest tech companies -- Apple and Microsoft -- put together trib.al/VUnXork

The previous crypto bull run peaked at the end of 2017 at about $800 billion.

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One way to analyze crypto valuation is to consider the sector like a tech company.

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