Credit deflation and the reflation cycle to come (part 9)

[crashmonitor]

GDP +0.6% Q1...slightly ahead of expectations. Service sector growth up 0.7%, construction down 0.9%.

 

GDP per capita up 0.4%, amazing  that the invasion is so fast just now it is depressing per capita growth by 0.2% per quarter.

Edited May 10 by crashmonitor

[jamtomorrow]

Matter of time before automotive battery costs permanently breach $100/kwh in China. This data is for grid storage, but auto won't be far behind:

$100/kwh is around the level where, on average, it becomes cheaper to produce an EV than an equivalent ICE.

Reasons to think this trend continues:

1/ Lithium resources are plentiful, supply seems highly responsive to price signals.

2/ The sheer quantity of alternative battery chemistries coming out of the various research groups (many of which reduce or completely eliminate the need for rare earths)

3/ China cornering the market in batteries gives them an outsize learning effect (aka: Wright's Law)

The interesting question in all of this is: where is the floor in battery costs? In other words, what is the physical law or constraint that determines the minimum energy input needed to make 1kwh of battery storage, and cannot be out-smarted?

[Ash4781b]

5 minutes ago, crashmonitor said:

GDP +0.6% Q1...slightly ahead of expectations.

 Is it mostly due to population growth ? 

[Jay]

4 minutes ago, crashmonitor said:

GDP +0.6% Q1...slightly ahead of expectations.

Yes, no more recession in uk…makes the stuff from Bailey and boe look a bit silly..June cuts no longer likely and even August seems optimistic..

 

the only reason for yesterday was that ECB will cut in June and the boe wants to follow suit quickly..

[crashmonitor]

2 minutes ago, Ash4781b said:

 Is it mostly due to population growth ? 

Hi Ash, yes I have added edited in that immigration is now depressing per capita growth by 0.2% every quarter. 

[Calcutta]

Double dip recession is a phrase I haven't heard in a long time. 

[onlyme]

37 minutes ago, jamtomorrow said:

Matter of time before automotive battery costs permanently breach $100/kwh in China. This data is for grid storage, but auto won't be far behind:

$100/kwh is around the level where, on average, it becomes cheaper to produce an EV than an equivalent ICE.

Reasons to think this trend continues:

1/ Lithium resources are plentiful, supply seems highly responsive to price signals.

2/ The sheer quantity of alternative battery chemistries coming out of the various research groups (many of which reduce or completely eliminate the need for rare earths)

3/ China cornering the market in batteries gives them an outsize learning effect (aka: Wright's Law)

The interesting question in all of this is: where is the floor in battery costs? In other words, what is the physical law or constraint that determines the minimum energy input needed to make 1kwh of battery storage, and cannot be out-smarted?

Solar panel prices, wholesale and retail have certainly dropped but when I was looking for decent spec/manufacturer 18650 cells prices are nowhere near as low as some advertised (non stocked pricing) and those available are around double those prices at £5 a pop, certainly not cheap and in no way tracking the trend that you'd expect given the  commentary in regards rapidly reducing pricing for battery tech / lithium.

Car battery sized 100ah lifepo4 are still £400+ on Ebay too.

Whoever has got access to cheap lithium batteries, it is not the consumer over here.

Edited May 10 by onlyme

[feed]

6 hours ago, Long time lurking said:

Nope one makes money for the manufacture the other costs them money but the former is not viable ,,got it 

What is so hard for you to comprehend 

The entire point of EV's is to drive the business model away from shift the metal which is not profitable.
If you can create a business model where ICE are profitable, through say limiting supply, or selling high priced low volume only.  Then EVs aren't necessary.   

There is no psyop, it's not about climate change, or net zero or 15 minute cities or changing tech or even about oil or other commodities.  

It's about corporate profits.    
 

[Errol]

44 minutes ago, Jay said:

Yes, no more recession in uk…makes the stuff from Bailey and boe look a bit silly..June cuts no longer likely and even August seems optimistic..

 

the only reason for yesterday was that ECB will cut in June and the boe wants to follow suit quickly..

Indeed. Not sure what the grounds would be for an interest rate cut now.

[Bear Hug]

23 minutes ago, feed said:

What is so hard for you to comprehend 

The entire point of EV's is to drive the business model away from shift the metal which is not profitable.
If you can create a business model where ICE are profitable, through say limiting supply, or selling high priced low volume only.  Then EVs aren't necessary.   

There is no psyop, it's not about climate change, or net zero or 15 minute cities or changing tech or even about oil or other commodities.  

It's about corporate profits.    
 

Are you saying that European EV quotas are a tool used to drop car sales volumes to make car manufacture more profitable? 

Edited May 10 by Bear Hug

[feed]

7 minutes ago, Bear Hug said:

Are you saying that European EV quotas are a tool uses to drop car sales volumes to make car manufacture more profitable? 

The point of EV's is to remove the low value market.   The model has so many issues for the auto's from the dealership, variable marketing at point of sale, longevity of the product etc....  It's unsustainable.  

People are laughing that Mercedes are moving away from EVs because of poor demand.  But take this headline from early last year. 

Mercedes Car Prices Become More Expensive After 43% Jump - Bloomberg
The average price of a Mercedes reached some €72,900 ($76,590) last year — a 43% increase over 2019 levels

Doesn't say what proportion are ICE or EV.  Doesn't matter.  

 

[belfastchild]

30 minutes ago, feed said:

What is so hard for you to comprehend 

The entire point of EV's is to drive the business model away from shift the metal which is not profitable.
If you can create a business model where ICE are profitable, through say limiting supply, or selling high priced low volume only.  Then EVs aren't necessary.   

There is no psyop, it's not about climate change, or net zero or 15 minute cities or changing tech or even about oil or other commodities.  

It's about corporate profits.    
 

Posted before about my many talks with a car salesman whilst buying my car last year. He said it was going towards a build to order model. I said oh you mean going back to that. I think he was still in nappies when I bought my car in 2000 and waited for it to be built.

He said from a personal perspective the selling on credit was dead as people couldnt afford new deals on the same car, either pay more or get a smaller car. He said the company makes more money on higher prices, smaller volume, only to order and I think in Nov when I picked it up they had been on running 90 day notice for a while. Said Monday was their busiest day, processing the weekend online orders. Very few people do what I did, just drop in and ask for a test drive.

6 hours ago, Sidd said:

In its simplistic form, Money enables a rich old man in Dubai to become a sugar daddy of a girl like this (which would otherwise not happen):

https://www.instagram.com/reel/C6gCsWIyAIU/?igsh=aWVqMnN0YmcwNWtz

 

Just in case my nephews and nieces turn out to be complete cunts to me later in life, how much are we talking?

[feed]

9 minutes ago, belfastchild said:

He said the company makes more money on higher prices, smaller volume, only to order and I think in Nov when I picked it up they had been on running 90 day notice for a while. 

Indeed

Who wants to be in business of selling a product that lasts ten years, costs you money to sell at point of sale, you get a window of profitablity for around 5 years.  Then the product acts as a low cost competition to your own entry level products.  

That's what high volume vehicles sales have been for years.  The only thing that made it work, was the cheap credit.   
 

 

Edited May 10 by feed

[snaga]

1 hour ago, jamtomorrow said:

Matter of time before automotive battery costs permanently breach $100/kwh in China. This data is for grid storage, but auto won't be far behind:

$100/kwh is around the level where, on average, it becomes cheaper to produce an EV than an equivalent ICE.

Reasons to think this trend continues:

1/ Lithium resources are plentiful, supply seems highly responsive to price signals.

2/ The sheer quantity of alternative battery chemistries coming out of the various research groups (many of which reduce or completely eliminate the need for rare earths)

3/ China cornering the market in batteries gives them an outsize learning effect (aka: Wright's Law)

The interesting question in all of this is: where is the floor in battery costs? In other words, what is the physical law or constraint that determines the minimum energy input needed to make 1kwh of battery storage, and cannot be out-smarted?

Legacy OEMs cutting EV production is causing a glut in battery supply, making batteries even cheaper for those making EVs. More battery production capacity due to come online to supply the likes of Ford/GMs etc who are cutting back, so it's going to get worse/better depending on POV before this reverses.

Edited May 10 by snaga

[sancho panza]

Ship with pissed skipper 0

Iceberg 1

 

[Heart's Ease]

Am still reading the book but thought this was good timing from Lyn given all the interesting Money Chat here which I've just caught up with.

 

[kibuc]

14 hours ago, Lightscribe said:

Took some profits on Endeavor and ABRA today and bought some MUX.

Bit of a harsh drop because of Q1 results.

Nobody ever went broke by taking profits. That being said, Abra recently received 20mil CAD investment from Kinross and immediately put it to use, commencing a 20km drill program. I think their story is only getting started.

Edited May 10 by kibuc

[Plan-b]

1 hour ago, onlyme said:

Solar panel prices, wholesale and retail have certainly dropped but when I was looking for decent spec/manufacturer 18650 cells prices are nowhere near as low as some advertised (non stocked pricing) and those available are around double those prices at £5 a pop, certainly not cheap and in no way tracking the trend that you'd expect given the  commentary in regards rapidly reducing pricing for battery tech / lithium.

Car battery sized 100ah lifepo4 are still £400+ on Ebay too.

Whoever has got access to cheap lithium batteries, it is not the consumer over here.

Different chemistry but similar price differential, 2 years ago I purchased a 100ah EFB battery for just over £100, today same battery same supplier £170. Inflation is insidious. 

[Lightscribe]

2 hours ago, crashmonitor said:

GDP +0.6% Q1...slightly ahead of expectations. Service sector growth up 0.7%, construction down 0.9%.

 

GDP per capita up 0.4%, amazing  that the invasion is so fast just now it is depressing per capita growth by 0.2% per quarter.

It’s an amazing thing statistics. GDP per head. Anyone would think it’s an election year or something.

[Lightscribe]

15 minutes ago, kibuc said:

Nobody ever went broke by taking profits. That being said, Abra recently received 20mil CAD investment from Kinross and immediately put it to use, commencing a 20km drill program. I think their story is only getting started.

It certainly is and I’ve still got some. But I need to transfer some of the risk from the reactive juniors that are already running to the underperforming majors.

By trading ABRA I’m so far up by about 200% over the last few years (2nd in line of profitability after Harmony) 

Although 2024 looks like *the* run to $50 silver so admit the upside here could be be massive.

[DurhamBorn]

2 hours ago, jamtomorrow said:

Matter of time before automotive battery costs permanently breach $100/kwh in China. This data is for grid storage, but auto won't be far behind:

$100/kwh is around the level where, on average, it becomes cheaper to produce an EV than an equivalent ICE.

Reasons to think this trend continues:

1/ Lithium resources are plentiful, supply seems highly responsive to price signals.

2/ The sheer quantity of alternative battery chemistries coming out of the various research groups (many of which reduce or completely eliminate the need for rare earths)

3/ China cornering the market in batteries gives them an outsize learning effect (aka: Wright's Law)

The interesting question in all of this is: where is the floor in battery costs? In other words, what is the physical law or constraint that determines the minimum energy input needed to make 1kwh of battery storage, and cannot be out-smarted?

Its why im tracking Albemarle to buy,but i want it lower.Lithium will be tight if EV use does grow fast within a year or so.I think we likely see the PGMs fly up though at ICE and hybrids do much better than expected for longer.Sibanye the obvious one for that playing out.

[DurhamBorn]

1 hour ago, belfastchild said:

Posted before about my many talks with a car salesman whilst buying my car last year. He said it was going towards a build to order model. I said oh you mean going back to that. I think he was still in nappies when I bought my car in 2000 and waited for it to be built.

He said from a personal perspective the selling on credit was dead as people couldnt afford new deals on the same car, either pay more or get a smaller car. He said the company makes more money on higher prices, smaller volume, only to order and I think in Nov when I picked it up they had been on running 90 day notice for a while. Said Monday was their busiest day, processing the weekend online orders. Very few people do what I did, just drop in and ask for a test drive.

Just in case my nephews and nieces turn out to be complete cunts to me later in life, how much are we talking?

For her,£5k a week,for similar in Pattaya £200 to £300 a week,and she will be able to cook.So 2oz of silver later in cycle 

[snaga]

37 minutes ago, DurhamBorn said:

Its why im tracking Albemarle to buy,but i want it lower.Lithium will be tight if EV use does grow fast within a year or so.I think we likely see the PGMs fly up though at ICE and hybrids do much better than expected for longer.Sibanye the obvious one for that playing out.

be aware that Soduim batteries are coming soon, I wouldn't bet on long term lithium prices right now.

CATL gears up for next-gen SIBs and global licensing | electrive.com

[Yadda yadda yadda]

1 hour ago, Lightscribe said:

It’s an amazing thing statistics. GDP per head. Anyone would think it’s an election year or something.

Why can't the PwC economist clearly state that UK households are poorer than two years previously? The numbers are clear. Spin the latest figures as light at the end of the tunnel if you must.

Edit to add that someone should rework the figures for workers as opposed to the inflation protected pensioners and benefits recipients. Go further and look at the position of the squeezed middle income earners who do not get percentage raises in line with minimum wage. There are a lot of people who must be 5-10% worse off over those two years.

Edited May 10 by Yadda yadda yadda

[jamtomorrow]

2 minutes ago, snaga said:

be aware that Soduim batteries are coming soon, I wouldn't bet on long term lithium prices right now.

CATL gears up for next-gen SIBs and global licensing | electrive.com

Also lithiums's supply elasticity is hard to love - price doesn't seem to move much before it drags out a lot of new supply quite quickly (compared to O&G at any rate).