Daily Chemical Reaction
Greased Lightening: As Tesla Flexes its Scale Muscles, Competitors Should Worry, But So Should Suppliers
- 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.
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