Daily Chemical Reactions

Greased Lightening: As Tesla Flexes its Scale Muscles, Competitors Should Worry, But So Should Suppliers
April 20, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Tesla, Albemarle, Livent, Ganfeng Lithium, SQM, Celanese, Mitsui, Linde, Evonik, Orion Engineered Carbons, Phillips Carbon Black, Rio Tinto, Sunnova, BP, Keppel, Kinder Morgan, ExxonMobil, PKN Orlen, Chemours, Ebb Carbon, Mitsubishi, Calpine, Puracy, Baker Hughes, Toyo Engineering, Maire Tecnimont, Amcor, Alcoa, Fluxys, Nutrien, CF Industries, LSB Industries, Borouge, Technip Energies, Berry Plastics, Sinopec

Daily Chemical Reaction

Greased Lightening: As Tesla Flexes its Scale Muscles, Competitors Should Worry, But So Should Suppliers

Key Points:

  • Tesla cuts prices to spur demand, signaling a willingness to cut margins for market share. We foresee a rising EV industry focus on costs becoming a headwind for its raw material suppliers.
  • The chemical industry should considerably benefit from an expanding global EV market – we view those with differentiated products reflecting high competitive barriers as best positioned.
  • We discuss views calling for intermittent CO2-free energy sources, such as solar and wind, to reach net zero, and why we think higher capacity factor renewables should get greater focus.
  • We highlight the significant drop in China lithium prices from 2022 highs, flag the start-up of China PDH units, and highlight recent developments in North American chemical rail traffic.
  • We highlight US E&P capital allocation trends, including their tilt dividends and share buybacks YoY, and we also question pension pressure on BP focused on climate rather than its returns.

See PDF below for all charts, tables and diagrams


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