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Common sense returns to Virginia as California Governor Gavin Newsom Struggles to defend inane policy. Let’s start with Newsom and gasoline prices.

In a Wall Street Journal Op-Ed, Newsom says “What people pay at the pump isn’t simple supply and demand but the result of a highly concentrated and opaque market.“

Here are the facts. Price spikes—like the $6.42 a gallon in June 2022 that sparked our new price-gouging law—happened when California taxes and fees remained unchanged, and crude prices had actually decreased. What drove up prices were increases in industry profits.

California’s new law provides us with tools to investigate profit spiking by Big Oil, helping us to prevent supply disruptions and take legal action when necessary. Another potential tool to encourage the oil industry to do right by Californians is a price-gouging penalty that will be developed through a public process.

What people pay at the pump isn’t simple supply and demand but the result of a highly concentrated and opaque market that lets a handful of mega-profitable oil companies upcharge tens of millions of people. In California, four companies control 90% of the gasoline refining capacity.

Factors such as refinery maintenance and lack of planning have been shown to reduce supply and increase refinery margins by upward of 200% at a time. California has also found that traders on the open “spot market” drive up prices, benefiting oil companies.

A Concentrated and Opaque Market

OK, why is the market in California concentrated and opaque?

California has the most regulations of any state
Refiners tired of California nonsense have left the state
California seasonal blend requirements have costs. But there’s not just one summer blend. Refineries make more than 14 kinds due to different state regulations.

Two California Refiners Shut Down

…click on the above link to read the rest of the article…

‘Effectively worthless’: EV bubble bursts

June 3, 2024

‘Effectively worthless’: EV bubble bursts

The proverbial ‘arse’ has fallen out of the EV market, and it’s those who have already bought who are the biggest losers.

The electric vehicle bubble is bursting.

They were meant to be the environmental panacea – the guilt-free answer to travel.

And just think of all that money you’d save not having to buy increasingly expensive fuel (of which 49c in every litre is tax, by the way).

Cars have always been money pits. I’ve single-handedly put my mechanic’s son through private school.

But those who bought into the EV dream are fast discovering they’re the proud owners of even bigger money pits.

The arse has gone right out of the EV market.

Those who bought into the EV dream are fast discovering they’re the proud owners of even bigger money pits.

A charging handle is displayed on a charger stall at a Tesla Supercharger location. Picture: Patrick T. Fallon / AFP

Manufacturers are now heavily discounting new vehicles in an effort to get them off the showroom floor.

A brand new Tesla Model Y is now $11,400 cheaper. The Peugeot e2008 has been given a massive cut from $63,000 to $39,990. On the lower end of the market, a GWM Ora is down 20 per cent to $35,990.

This is partially indicative of more competition naturally putting downward pressure on the market, which is generally a good thing for consumers.

But it’s not much good for someone who bought an EV a year ago, now watching the resale value of their car plummet overnight.

The other cause is a softening market for electric vehicles. And is it any wonder when you take a look at the balance sheet?

…click on the above link to read the rest of the article…

“The Economics Just Don’t Work”: Demand For Electric Semis Plunges Due To High Costs

May 17, 2024

“The Economics Just Don’t Work”: Demand For Electric Semis Plunges Due To High Costs

For the last year, we’ve been writing extensively about how high costs and low demand have made EVs uneconomical – and, as a result, unpopular to produce – for the auto industry.

It turns out unionized employees extorting you on labor costs while the government mandates you produce a money-losing product isn’t a combination that leads to prosperity and profit. Go figure.

Now, it isn’t just car manufacturers that are balking from the idea of all electric vehicles: the trucking industry, once expected to eventually make the shift to all electric as well, is seeing tepid demand for new rigs, according to a new Wall Street Journal article.

“The economics just don’t work for most companies,” Robert Sanchez, the chief executive of Ryder, said earlier this month.

Ryder’s experience highlights the difficulties state and federal governments encounter in encouraging truckers to transition from polluting diesel rigs to zero-emissions vehicles, the report says.

It also indicates that significant improvements in battery weight, range, and charging times are necessary for battery-electric trucks to effectively compete with diesel rigs in the cost-sensitive freight industry.

Rakesh Aneja, head of eMobility at Daimler Truck North America, told Wall Street Journal: “Quite frankly, demand has not been as strong as what we would like.”

Aneja said orders for its Freightliner eCascadia battery-electric semi truck are about the same this year as they were in 2023.

Battery-electric trucks are about three times more expensive than diesel rigs, the Journal notes. And while federal and state programs help offset purchase costs, significant hurdles remain due to high operating costs and setup challenges.

Truckers find these electric trucks difficult and costly to run, with installation of on-site charging facilities taking years. These trucks travel less than half the distance of diesel rigs per charge and require several hours to recharge.

…click on the above link to read the rest of the article…

Unsold Tesla’s Pile Up in Mall Parking Lots, Big Discounts Likely

May 17, 2024

Unsold Tesla’s Pile Up in Mall Parking Lots, Big Discounts Likely

Tesla is renting parking lots to store thousands of vehicles. This helps explain the mass layoffs.

Tesla Cranking Out Cars, But to Where?

Please consider Tesla’s Storing Unsold Inventory In An Abandoned Mall Parking Lot

Parking lots full of Tesla vehicles are becoming impossible to ignore as the electric automaker seemingly can’t sell enough cars and trucks to match its rate of production. According to its own figures, the electric automaker produced 46,561 more vehicles than it delivered to customers during the first quarter of 2024. Where are all these cars going? Parking lots at its factories, malls and airports.

Recent drone footage from the automaker’s Fremont, California factory shows that cars are still rolling off the assembly lines at a high rate to fill the site’s lots. Things aren’t different on the other side of the Atlantic. Neuhardenberg, a small town in Germany of less than 3,000 residents, is complaining about the noise Tesla transporters are making as the company parks cars at the nearby regional airport.

Spotlight Germany

From the above link …

The residents of Neuhardenberg and the surrounding communities are annoyed by the traffic noise: many trucks loaded with Tesla cars drive across the streets to the airport where the cars are stored. It should continue like this at least until June.

Around Neuhardenberg the rural peace is over: columns of trucks from the Tesla factory in Grünheide thunder across the streets several times an hour. The reason: Since last summer, the nearby regional airport has been used as a parking area for Tesla vehicles.

The contract between Tesla and the airport operator runs until June 2024. It is still unclear whether it will be extended. The people of Neuhardenberg will have to continue to adapt to the trucks.

In Preparation for Next Phase of Growth

…click on the above link to read the rest of the article…

VW The Latest Automaker To Step Back From All-Electric Plans To Embrace Hybrids

May 17, 2024

VW The Latest Automaker To Step Back From All-Electric Plans To Embrace Hybrids

Not to be left behind by the rest of the industry, Volkswagen is the latest auto manufacturer to walk back its plans to go all-electric.

The move should come as no surprise to Zero Hedge readers, as we have been writing non-stop about the industry’s shift from BEVs back to a more common sense (and cost efficient) model, hybrids, over the last year.

Volkswagen was once heavily invested in promoting its ID line of electric vehicles as the future, Bloomberg wrote this week. But now it has admitted it needs more plug-in hybrids due to slowing EV sales.

This shift is part of a broader reworking of VW’s electrification plans, following botched model releases and falling behind in China, the report says. The company has abandoned efforts to seek outside investment for its battery unit and canceled plans for a €2 billion EV factory in Germany.

Despite its pivot to electric cars, VW is still selling many combustion engine vehicles and is likely to exceed its emissions allowance next year. CEO Oliver Blume has requested leniency from European regulators, a stark change from VW’s aggressive EV lobbying just three years ago.

VW’s electrification drive was partly a response to the fallout from its diesel emissions scandal, leading to an ambitious plan to launch 75 electric models by 2029. Former CEO Herbert Diess championed this rapid transition, causing friction with industry peers.

While not abandoning EVs, Blume is forming partnerships, like with Xpeng Inc., and preparing a new EV brand in China to attract young consumers. VW is also discussing with Renault SA to develop cheaper EVs for the mass market.

Recall back in April we noted that Ford was “re-timing” its efforts to go all electric and back in February we wrote that GM was shifting to plug-in hybrids, too.

…click on the above link to read the rest of the article…

Bidenomics At Work: Ford Slashing Battery Orders As Losses Per EV Approach $100,000

May 12, 2024

Bidenomics At Work: Ford Slashing Battery Orders As Losses Per EV Approach $100,000

Ford is cutting battery orders in yet another sign that the EV market, despite a constant tailwind from the U.S. taxpayer, is starting to slow.

The company is cutting the orders to curb electric-vehicle losses as it scales back its EV strategy in a slowing plug-in market, according to insiders who spoke to Bloomberg.

Ford CEO Jim Farley has said the company’s EV unit “is the main drag on the whole company right now” and CAT said its “cooperation with Ford is moving forward as normal”.

The company responded by saying it wouldn’t comment on relationships with suppliers.

Bloomberg notes that with plummeting EV prices and weakening demand, Ford’s losses per electric vehicle exceeded $100,000 in the first quarter, doubling last year’s deficit.

Bloomberg Intelligence estimates that Ford’s projected EV unit losses this year will nearly offset profits from its Ford Blue division, which produces traditional internal combustion engine vehicles like the Bronco SUV and gas-electric hybrids such as the Maverick truck.

BI analysts said of the results: “That raises questions about the prudence of investing heavily in EVs.”

Ford’s order reductions highlight industry challenges as U.S. automakers face weaker-than-expected EV demand and battery makers in South Korea, China, and beyond struggle with unsold inventory.

This has affected prices for key metals like lithium, cobalt, and nickel, leading to multiyear lows and stalling new projects. Ford has reduced EV production costs but had to cut prices to stay competitive with Tesla.

Ford CFO John Lawler said in April: “We’ve seen prices coming down quite dramatically and that’s why we haven’t been able to keep up from a cost reduction standpoint.”

…click on the above link to read the rest of the article…

Biden Wants EVs so Badly That He Will Quadruple Tariffs on Them

May 10, 2024

Biden Wants EVs so Badly That He Will Quadruple Tariffs on Them

Astute readers will immediately notice the title of this post makes no sense. It’s not supposed to. But it is exactly what President Biden is doing.

Biden to Quadruple Tariffs on Chinese EVs

Counter to the idea that quick EV adoption is needed to save the planet from a climate disaster, please note Biden to Quadruple Tariffs on Chinese EVs

The Biden administration is preparing to raise tariffs on clean-energy goods from China in the coming days, with the levy on Chinese electric vehicles set to roughly quadruple, according to people familiar with the matter.

Higher tariffs, which Biden administration officials are preparing to announce on Tuesday, will also hit critical minerals, solar goods and batteries sourced from China, according to the people. The decision comes at the end of a yearslong review of tariffs imposed by former President Donald Trump on roughly $300 billion in goods from China.

Officials are particularly focused on electric vehicles, and they are expected to raise the tariff rate to roughly 100% from 25%, according to the people. An additional 2.5% duty applies to all automobiles imported into the U.S. The existing 25% tariff on Chinese electric vehicles has so far effectively barred those models, often cheaper than Western-made cars, from the U.S. market. Biden administration officials, automakers and some lawmakers worry that wouldn’t be enough given the scale of Chinese manufacturing.

Conflicting Goals

We need EVs so badly that we also need a 100% tariff to stop them. That makes no sense but it is the precise message.

Stated differently, we don’t want EVs unless people are willing to pay 100% more for them. And this is despite the claim that the world as we know it will end in 12 years if we don’t act on them.

World Will End in 12 Years

…click on the above link to read the rest of the article…

Pritzker doubles down with $827 million of taxpayer money for expansion by troubled electric vehicle maker, Rivian – Wirepoints

May 8, 2024

Pritzker doubles down with $827 million of taxpayer money for expansion by troubled electric vehicle maker, Rivian – Wirepoints

At $1.5 million per job, this new incentive package from the state is at least 15 times the norm. For this much money, the state could have just handed out a million bucks to 827 people, instead of creating 550 jobs.

Gov. JB Pritzker announced Thursday that the State of Illinois will provide an $827 million incentive package for Rivian to invest $1.5 billion to expand its electric vehicle factory in Normal, Illinois. The expansion is expected to create at least 550 full-time jobs within the next five years, and will build Rivian’s next model EV, the R2. Rivian initially got $49.5 million under Gov. Bruce Rauner in 2017 to create 1,000 jobs at the same location.

The new deal gives $1.5 million per job created, which is astronomical in the world of location incentives. Estimated average location incentives paid by state and local governments around the nation range from $13,000 to $84,000 per job, though sometimes go as high as $100,000 per job for capital intensive projects. Even using that high end, Rivian’s package will be 15 times what’s typical.

Moreover, Rivian is on shaky wheels, along with the rest of the U.S. EV industry. Rivian loses over $43,000 for every vehicle it sells and has had two rounds of layoffs this year. The decision to move its R2 production to Illinois is a further reflection of the company’s need to preserve cash. R2 production was initially planned for a new $5 billion plant in Georgia, heavily subsidized by the state. But Rivian concluded that moving production to the existing Illinois facility would save cash.

Its stock price has consequently been hammered. It reached a high of $172 per share in 2021 but now trades at less than $10 per share.

…click on the above link to read the rest of the article…

Another Round of Mass Firings at Tesla, Sales Must Be Imploding

May 8, 2024

Another Round of Mass Firings at Tesla, Sales Must Be Imploding

Tesla announced yet another round of layoffs today. News came in the typical way, an email starting “Hello Employee”. It seems “Hello Ex-Employee” would be more fitting.

Another 10,000 Employees

Don’t worry, it’s just another 10,000 employees.

Almost Like Vaporware

Clearly this is 4-D chess … in an attempt to hide the vaporware.

Cash Constraints

It think it’s order constraints. Orders are crashing.

Question of the Day: 10% or 20%?

Electrek reports Tesla (TSLA) launches another round of layoffs

Three weeks ago, Tesla started a significant wave of layoffs. The automaker announced it was laying off about 10% of its workforce. However, we reported prior to the announcement that the layoffs could be closer to 20% of the workforce once everything is said and done.

Sure enough, Tesla had another significant wave of layoffs last week.Now, we hear of yet another round of layoffs at Tesla.Several sources familiar with the matter told Electrek that workers across several departments, including software, service, and engineering, have received the dreaded “employment level” email between Friday and Sunday.

The layoffs were expected after CEO Elon Musk made an example of Rebecca Tinucci, Tesla’s former head of charging, and her entire team by firing everyone last week. After the move, he emailed other executives and told them that they would also be let go if they don’t let go higher percentages of their teams.

Balls to the Walls for Autonomous Driving

“Not quite betting the company, but going balls to the wall for autonomy is a blindingly obvious move.”

That’s an admission Tesla will give up on the entry-level market after promising for decades he would make one.

Preparation for Growth

On April 15, I noted Elon Musk Fires 10 Percent of Tesla Workforce, Prepares for “Next Phase of Growth”

Preparing for Growth

…click on the above

Notes from the edge of civilization: Apr. 28, 2024

April 29, 2024

Notes from the edge of civilization: Apr. 28, 2024

No one wants EVs, but governments keep subsidizing them; Canada’s economy is being zombified; Education — higher and otherwise — is still woke, but not awake; and, cursive as cure.

TRUTH IN ADVERTISING: Even Ford’s own marketing materials admit that EVs are a product “drivers really want… but just don’t know it yet.”

Last week Ford announced its electric vehicle (EV) division, known as Model e, lost $1.3 billion in the first quarter of 2024. That translates to a loss of $132,000 per vehicle for the 10,000 units the company managed to sell. Ford anticipates the losses will continue to mount for the rest of the year, with a projected annual loss of $5 billion.

The world’s largest EV maker, Tesla, is also hemorrhaging profits. The company’s adjusted earnings for the first quarter fell by 48%, underperforming even the lowered expectations set by most Wall Street analysts.

But governments are still pouring in massive amounts of taxpayer dollars to subsidize a product that consumers don’t want to buy.

On Thursday, Canada announced a $5 billion corporate welfare package for Honda to build an EV battery plant and manufacture EVs in Ontario. When Justin Trudeau released a video about the new deal on X over the weekend, the comments were not kind:

DeTocqueville14: You bribing Honda with money stolen from taxpayers isn’t them betting on you.

govt_corrupt: Justin Trudeau bribes Honda. Buys 1k jobs for $5B and bets on an industry with declining sales and rising inventories. Govt ‘investing’ at its finest…

jpkiekens: 5 million $ per job subsidy for an industry plagued with a huge oversupply of vehicles and with insufficient electric energy supply in most provinces. Bravo. It’s genuine theatre. But a very bad play.

…click on the above link to read the rest of the article…

The Copper Supply Shortage Is Here

April 25, 2024

The Copper Supply Shortage Is Here

With the AI boom and green energy push fueling fresh copper demand, and with copper mines aging and not enough projects to match demand with supply, the forecasted copper shortage has finally arrived in earnest. Coupled with persistently high inflation in the US, EU, and elsewhere, I predict the industrial metal will surpass its 2022 top to reach a new all-time high this year:

Copper vs USD, 5-Year Graph:

Source: tradingview.com

The AI boom is stoking the need for more data centers, which will require around a million metric tons of copper by 2030. Meanwhile, this year’s deficit of 35,000 tons is expected to rocket up to a staggering 100,000 tons in 2025.

Electric car batteries and EV charging stations also depend on copper, adding to the problem of there not being enough activity at existing mines, or the development of new ones, to satisfy the industrial need. Says Bank of America analyst Michael Widmer:

“The much-discussed lack of mine projects is becoming an increasing issue for copper.”

While many mainstream forecasts depend on a solid economic rebound to keep demand for copper up, inflation is here to stay, especially as the Fed is likely going to be forced to cut interest rates at some point this year. Even with just one 2024 rate cut instead of the three that markets originally expected, higher USD prices for copper and other commodities like gold are on the way. Out-of-control inflation will drive prices higher even if the oomph gets sucked out of the AI bubble, or we see other signs of an economic “hard landing.” As Peter Schiff said last month,

“I think we’re on the verge of the biggest bull market in commodities since the 1970s…They’re cutting rates because they have to avoid a financial crisis — a banking crisis.”

…click on the above link to read the rest of the article…

Electric Vehicles for Everyone? If the Dream Was Met, Would it Help the Environment?

July 20, 2023

Electric Vehicles for Everyone? If the Dream Was Met, Would it Help the Environment?

Even if you are 100% convinced in man-made climate change, the idea the EV’s will help reduce CO₂emissions is nonsense.

The Impossible Dream

Hello climate change advocates, please open your minds and consider the Manhattan Institute report Electric Vehicles for Everyone? The Im pos sible Dream by Mark P. Mills, a Manhattan Institute senior fellow.

A dozen U.S. states, from California to New York, have joined dozens of countries, from Ireland to Spain, with plans to ban the sale of new cars with an internal combustion engine (ICE), many prohibitions taking effect within a decade. Meanwhile, the U.S. Environmental Protection Agency (EPA), in a feat of regulatory legerdemain, has proposed tailpipe emissions rules that would effectively force automakers to shift to producing mainly electric vehicles (EVs) by 2032.

To ensure compliance with ICE prohibitions and soften the economic impacts, policymakers are deploying lavish subsidies for manufacturers and consumers. Enthusiasts claim that EVs already have achieved economic and operational parity, if not superiority, with automobiles and trucks fueled by petroleum, so the bans and subsidies merely accelerate what they believe is an inevitable transition.

It is certainly true that EVs are practical and appealing for many drivers. Even without subsidies or mandates, millions more will be purchased by consumers, if mainly by wealthy ones. But the facts reveal a fatal flaw in the core motives for the prohibitions and mandates.

Executive Summary Key Points

No one knows how much, if at all, CO₂ emissions will decline as EV use rises. Every claim for EVs reducing emissions is a rough estimate or an outright guess based on averages, approximations, or aspirations. The variables and uncertainties in emissions from energy-intensive mining and processing of minerals used to make EV batteries are a big wild card in the emissions calculus…

…click on the above link to read the rest…

EVs–They’re Not Maintenance-Free, and They Don’t Save You Money

January 24, 2023

EVs–They’re Not Maintenance-Free, and They Don’t Save You Money

The planetary emergency we must avoid (spoiler alert: it’s not climate change)

November 29, 2022

Employees work on the production line of Haima 7X-E electric vehicle at Haima Automobile Haikou Base in China. Photo: Getty Images

The planetary emergency we must avoid (spoiler alert: it’s not climate change)

Rather than expanding our renewable electricity production and developing an EV fleet, a degrowth approach would be to initiate a massive energy conservation programme and investing in cities where we can live, work and play within 15 minutes’ walking or biking

Opinion: Purchasing an EV is something more people are doing to reduce the worst impacts of climate change. EVs are attractive and increasingly convenient.

But is this reaction to the climate crisis an example of the wrong solution to the wrong problem? Is climate change, as serious as it is, even the most important problem to address?

Climate change is certainly an existential threat and more needs to be done to mitigate its worst impacts. Yet even if we stopped emitting greenhouse gases today, we would still face a range of environmental existential threats.

Part of the problem is we haven’t defined the problem correctly. Rather than trying to deal with specific issues such as climate change, biodiversity loss, pollution and so on, there is an underlying cause that connects these threats. Understanding the cause could provide a new approach to dealing with many of these challenges.

First let’s step back and try to understand just what the threat is. As far as we know Earth is the only planet in the universe with complex living systems, with a biosphere covering its surface.

The biosphere is an intricately balanced network of living and non-living systems interacting with each other in a self-regulatory manner. This rare web of life provides for us physically, economically, aesthetically and spiritually.

…click on the above link to read the rest…

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