The Rising Influence of Rising Affluence

[Mufaso]

Barron's - "Cars Are Finally Getting More Affordable. Here’s Why."

https://www.marketwatch.com/articles/cars-are-getting-more-affordable-heres-why-44925aaa
Published: March 1, 2024 at 8:30 p.m. ET
By Al Root

The high cost of new cars has bugged buyers—and investors—since the pandemic. Now they’re looking more affordable. The average cost of a new car is roughly $47,000, up about $10,000, or 33%, from 2019. But interest rates are off highs and the average price is down almost $3,000 from the peak.

Since late 2019, wages are up about 21%, while new-car prices are up 29%. Barron’s took wages, interest rates, and new-car prices to calculate a vehicle affordability index. The index averaged about 56 in 2019’s second half, hit almost 66 in December 2022, and today is at 61—in the middle. (For new car buyers, the lower the reading of the Barron's New Car Affordability Index the better [.)

Another 3%, or $1,500, off the new-car price—with wages up 3% and a percentage-point drop in rates—would restore affordability to 2019 levels. Still, things aren’t “normal.” Fewer vehicles are coming off leases because fewer cars were sold from 2020 to 2022. Some 10 million cars are “missing,” says Lindland. Lower used inventory means used-car pricing might persist longer—and, since the two are linked, so might new-car prices./quote]

[Mufaso]

Barron's - "Confused About EV Tax Credits? Read This."

This is all part of the Inflation Reduction Act of 2022. I'm presenting this with no comment as I'm speechless.

https://www.barrons.com/articles/ev-tax-credits-c206d9b9

By Karen Hube, March 02, 2024

Excerpts:

The tax credit for an electric vehicle can be sizable, but the rules just changed and are more confusing than ever...A web of new and often confusing eligibility requirements was passed under the Inflation Reduction Act in late 2022 and went into effect last year.

...Now whether you can claim some or all of the $7,500 credit will depend on your income, various vehicle and battery details, and when you took possession of your electric car, SUV or truck.

...The new rules got rid of an older provision that only allowed the credit for the first 200,000 models sold of any qualifying vehicle and nixed the benefit for many buyers of popular Tesla, General Motors and Toyota models.

...To be eligible for the 2023 credit, you must have taken possession of the vehicle in 2023, but it isn’t enough to simply note your year of possession, Montoya says. The size of the credit may be different depending on whether you took possession before or after April 18 of last year when new rules kicked in.

...If you purchased an electric vehicle in 2023 but it wasn’t delivered until this year, you will have to wait until next year to claim the credit on your 2024 taxes.

...The credit is potentially only available for buyers of new or used EVs or plug-in hybrids. If you leased a model, you can’t qualify for a tax credit—only the financing company may be eligible.

Income thresholds->
You may be eligible to claim a 2023 EV credit for a new car if your modified adjusted gross income doesn’t exceed $300,000 for married couples filing jointly, $225,000 for heads of households and $150,000 for single and other individual filers. For a used car, the thresholds are halved: $150,000, $112,500 and $75,000.You can consider either your 2023 or 2022 income for eligibility purposes. As long as your income was below your threshold in one of the two years, you can potentially claim some or all of the 2023 credit.

New vehicle requirements->
The manufacturer’s suggested retail price may not exceed $80,000 for new vans, sport-utility vehicles and trucks or $55,000 for cars to be eligible for a tax credit.
A vehicle’s final assembly must be in North America, a rule that bumps Toyota and Hyundai models out of consideration for the credit, at least for 2023. Both manufacturers are working on opening plants in the U.S.

...If you took delivery of your vehicle between April 18 and the end of last year, your vehicle must also meet two battery requirements: At least 50% of battery components must be manufactured or assembled in North America, and at least 40% of critical minerals must have been extracted or processed in the U.S. or one of its free trade partners, or recycled in North America.

If your vehicle only meets one battery requirement, it is eligible for half the credit, $3,750. If it meets both, it is eligible for the full credit.

As a result of the battery rules, some or all models by Audi, BMW, Ford, Jeep, Nissan and Rivian that were eligible for the full credit in early 2023 became eligible for half starting on April 18. EVs by Tesla, Chevrolet, Cadillac, Chrysler and Volkswagen are eligible for the full credit for all of 2023.

You can find lists of eligible vehicles during different time frames on the U.S. Department of Energy’s website.

Rules for used vehicles->
For used clean vehicles, the maximum EV credit is 30% of the price with a $4,000 cap. The EV or plug-in hybrid must be sold by a dealer for $25,000 or less. It must also be at least two years old. If you bought a vehicle in 2023, it must have a model year of 2021 or older.

“It’s a little easier to qualify with a used vehicle because you don’t have to worry about where the vehicle is made,” Montoya says. The battery parts and minerals requirements also don’t apply.

[Mufaso]

I'll add to BYDDY, PILBF, ALTM and consider starting a position in LINRF.

At one time I had a large position in PILBF and Cobalt Blue around several other smaller positions. Just as soon as shortages of lithium, or cobalt came about (and the stock price appreciated), new supply came out to crush the price of the metal along with the stocks I held. I always worried about new battery technologies as well for my Cobalt Blue position with Elon saying his goal was to eliminate the use of cobalt in EV batteries. I learned the hard way that investing in mining can be both rewarding and treacherous. (for me mining investments always seemed to end badly if I held for the long term)

Curious why you are adding to your PILBF, ALTM now especially in light of your BYD. BYD is building a huge sodium-ion battery plant and while the energy density is not there compared to Ni-Li-Cobalt batteries. SIBs (Sodium Ion Batteries) are safer and perform better in the cold. Their use in low end cheap commuter EVs would seem to put a massive dent in needed Li supply forecasts if they become popular.

Is there an opportunity in lithium today that you see and why?

TIA

[DewDiligence]

I couldn't be happier with the RAV4 hybrid.

[semi_infinite]

PHEV battery range ~20mi ~10kw battery reverse engineering the displayed figures. Not worth the added cost and trouble unless you don't drive much. Overall <30 mpg which is ok for a 6 seater SUV. Charging is frequent and takes 2 hrs on level 2 charger. For a little more money, IMO Ionic 7 or EV9 probably better.

[DewDiligence]

My RAV4 is a non-plug-in hybrid. I get 30-40 mpg in city driving, so I can go about 500 miles on a tank of gas.

[semi_infinite]

Dew, what's your experience with battery range on Rav4? Just curious and comparing notes since I'm testing one. So far very underwhelming.

[n4807g]

Going into the end of 2023 the news was decidedly negative on EV's across the board. Couldn't argue with the situation because sales growth has stalled and the future prospects are uncertain. But the news has begun to change on the commitment and the future of EV's. Still a problem of current sales but governments and CEO's are still saying EV's will be a significant percentage of sales by 2030. One of the reasons I feel confident is the growing chorus of concerned voices that China will dominate the space unless the EU and USA step up. I don't think it's a coincidence that BYD has said they aren't interested in selling cars directly into the US market, their establishing sales and manufacturing in countries that are behind in EV adoption that need BYD's expertise to establish a cost competitive industry. EV cost constraints are a world wide issue, BYD has already announced a collection of low priced cars available today. they're going to leverage their advantage and build their brand across the globe regardless of the USA and EU stance, and it will force the USA and EU to double the effort or watch China, Japan and S. Korea dominate the EV space. My opinion; this is a pause in EV adoption and the next phase is the move into lower priced volume sales and BYD is probably the best positioned to drive that segment. If you rank management effectiveness in navigating the change from ICE to EV I'd place BYD #1, Toyota #2 and Tesla #3. #1 and #2 because they saw the value of hybrids and #3 for 1st mover in EV's, but Tesla better hurry up with that low priced EV or even they will fall behind. The rest of the pack of legacy manufacturers have to really get moving or they'll look more like the AMC of the EV space.

Italy has been trying to woo Tesla-beating BYD as the second auto giant on its shores
https://fortune.com/europe/2024/02/26/italy-approaches-byd-manufacture-electric-vehicles/

This headline is becoming more commonplace as countries look at who is able to help develop a cost effective industry today

BYD Shortlisted in the Top Three for the 2024 World Car Awards
https://finance.yahoo.com/news/byd-shortlisted-top-three-2024-152000303.html

BYD EV sales grew nearly 50% in January as exports reached a new high
https://electrek.co/2024/02/01/byd-ev-sales-up-48-january-exports-new-high/

Looks to me like BYD is pulling away and their MC is only $78B, if you look to the future BYD is beginning to look unbeatable.

[DewDiligence]

News flow for EV's has turned decidedly more positive the last 60 days.

Please elaborate. TIA

[n4807g]

EV hype. Looks like the EV "winter" may be heading for a spring thaw. I'll add to BYDDY, PILBF, ALTM and consider starting a position in LINRF. LINRF for it's acquisition potential after the share price reset, it's still the best option in Australia for immediate returns for an acquiring firm. News flow for EV's has turned decidedly more positive the last 60 days.

The only negative for Liontown is their financing needs going forward.

[DewDiligence]

RVNC is +26% today, even though the 4Q23 financials reported yesterday afternoon were pre-announced in January. I don’t know the reason for today’s big move, but I did find something strongly positive in yesterday’s conference call:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173940194

p.s. RVNC is a thematic stock for this message board. As emerging middle classes gain disposable income, one of the things they spend it on is looking good.

[DewDiligence]

I would be inclined to agree, but HES' spokesperson (#msg-173935429) did not exactly convey confidence, LOL.

[semi_infinite]

CVX/HES - doubt that this wasn't evaluated inside-out and upside-down before HES set up their data room for CVX audit.

[DewDiligence]

Guyana is neutral toward XOM-CVX dispute re HES stake:

https://finance.yahoo.com/news/1-guyana-takes-no-side-214952110.html

[DewDiligence]

FDA bans PFAS in food packaging:

https://www.prnewswire.com/news-releases/fda-industry-actions-end-sales-of-pfas-used-in-us-food-packaging-302074609.html

[DewDiligence]

SOLV sells $6.9B of debt in six tranches:

• $1B of 3yr notes @5.45%

• $1.5B of 5yr notes @5.40%

• $1B of 7yr notes @5.45%

• $1.65B of 10yr notes @5.60%

• $1.25B of 30yr notes @5.90%

• $0.5B of 40yr notes @6.00%

The total debt issuance was supposed to $8.4B (according to 3M's recent webcast), but I don't know where the other $1.5B is coming from.

All but $600M of the proceeds will be paid to 3M as consideration for the spin-off of 3M’s healthcare business to SOLV.

p.s. It’s eerie how flat the yield curve is all the way out to 40 years.

[DewDiligence]

AAPL cancels EV program, according to sources:

https://www.reuters.com/technology/apple-cancels-work-ev-moves-staff-ai-project-bloomberg-reports-2024-02-27/

Apple has canceled work on its electric car, a source familiar with the matter told Reuters on Tuesday, a decade after the iPhone maker kicked off the project.

…Several employees working on the electric car project will be shifted to the firm's artificial intelligence (AI) division, according to Bloomberg News, which first reported the development.

[DewDiligence]

HES says XOM’s right-of-first-refusal does_not_apply_to Guyana, but if it does apply then HES is not entitled to a breakup fee from CVX:

https://finance.yahoo.com/news/1-hess-says-pre-emption-230342569.html

If you find the above incongruous, you’re not alone, LOL.

[DewDiligence]

WY inks carbon-sequestration deal—financial terms not disclosed:

https://finance.yahoo.com/news/weyerhaeuser-lapis-energy-announce-carbon-213000734.html

[DewDiligence]

CAT independent director bought $110K of stock on the open market last Friday:

https://www.sec.gov/Archives/edgar/data/18230/000110465924027620/xslF345X05/tm247306-1_4seq1.xml

You don’t often see insider buying when a stock is trading within a hair of its all-time high.

[jbog]

I figured something was up when I read this early today{

Hess Corp. price target raised to $200 from $170 at Mizuho
05:14 HES
Mizuho raised the firm's price target on Hess Corp. to $200 from $170 and keeps a Neutral rating on the shares. The analyst adjusted price targets for oil and gas companies pending acquisitions to reflect proposed exchange ratios.

Read more at:
https://thefly.com/n.php?id=3869726

[DewDiligence]

CVX-HES merger has a possible glitch:

https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000093410/000119312524046223/d576159ds4.htm (p.80)

Hess Guyana Exploration Limited (HGEL), a wholly owned subsidiary of Hess, is party to an operating agreement (the Stabroek JOA) with affiliates of Exxon Mobil Corporation (Exxon) and China National Offshore Oil Corporation (CNOOC), which governs the rights and obligations of such parties (the Stabroek Parties) with respect to the exploration and development of their respective interests in the Stabroek Block offshore Guyana (the Stabroek Block).

The Stabroek JOA contains a right of first refusal (the Stabroek ROFR) provision that, if applicable to a change of control transaction and properly exercised, provides the Stabroek Parties with a right to acquire the participating interest in the Stabroek Block held by the Stabroek Party subject to such transaction (at a value that is based on the portion of the value of the change of control transaction that reasonably should be allocated to such participating interest and is increased to reflect a tax gross-up) only after, and conditioned on, the closing of such transaction.

Chevron and Hess believe that the Stabroek ROFR does not apply to the merger due to the structure of the merger and the language of the Stabroek ROFR provisions. Following the announcement of the merger, Exxon and CNOOC informed Hess and Chevron that they disagree with this view and believe the Stabroek ROFR applies to the merger.

Hess, Chevron, Exxon and CNOOC have been engaged in constructive discussions regarding the Stabroek ROFR, and Chevron and Hess believe these discussions will result in an outcome that will not delay, impede or prevent the consummation of the merger. In the event such discussions do not result in an acceptable resolution, either Hess or Chevron could elect for HGEL to pursue arbitration to resolve the matter.

If the discussions with Exxon and CNOOC do not result in an acceptable resolution and arbitration (if pursued) does not result in a confirmation that the Stabroek ROFR is inapplicable to the merger, then there would be a failure of a closing condition under the Merger Agreement, in which case the merger would not close and, pursuant to the terms of the Stabroek JOA, Exxon and CNOOC would cease to have rights under the Stabroek ROFR with respect to the merger. In that event, Hess would remain an independent public company and would continue to own its participating interest in the Stabroek Block.

Based on their discussions with Exxon and CNOOC and the terms of the Stabroek JOA, Chevron and Hess do not believe there is any material likelihood that the circumstances described in this paragraph will occur.

Really? I find it hard to accept this (bottommost) assertion at face value.

HES is -4% in AH trading.

[semi_infinite]

TSLA Cybertruck - a review with retired GM Silverado program manager and now gentleman rancher.

[DewDiligence]

Further details of 3M/SOLV capitalization:

SOLV will sell $8.4B of new debt, keeping $600M of the proceeds and paying $7.7B as a one-time (tax-free) dividend to 3M. (~$100M of the debt proceeds will go to underwriting fees.)

After the debt issuance and one-time payment to 3M, SOLV will have a debt/EBITDA ratio of ~3.5.

[n4807g]

appreciate the input...I have no idea what a reasonable MC is? But with GOOGL throwing off $80B a year in free cash flow, seems like NVDA is well ahead of the reasonable level.

[semi_infinite]

I can see them setting the pace for perhaps a couple of decades like Intel did with 8086 and the latter lasted almost 4 decades. Not chasing it though.

[DewDiligence]

3M’s Solventum spin slated for 4/1/24—Nasdaq symbol=‘SOLV’—Investor Day 3/19/24:

https://finance.yahoo.com/news/3m-announces-filing-form-10-150000365.html

See #msg-173870424, #msg-173870432, #msg-173870470, and #msg-173871045 for related info.

[n4807g]

It's difficult to imagine (or justify) NVDA's MC. Sure they are going to grow, and yes the near term looks fantastic, but compared to other companies like GOOGL they looked well ahead of reality. If the estimated sales for the quarter are accurate at $20B they are running at a $100B + annual rate. Can sales growth continue to at the current rate? Would you buy shares of NVDA over GOOGL today? Will NVDA be the unchallenged MSFT of AI processors?

[n4807g]

BYD’s New $11,000 Plug-in Hybrid Sedan Crushes VW Lavida, Toyota Corolla Prices
https://www.carscoops.com/2024/02/byd-launches-11000-qin-plus-dm-i-phev-in-china/

They're setting the industry standard. All their competitors are way behind their ability to design and build a wide cross section of cars for every market segment. The only segment they haven't addressed are pickups. But pickups aren't as popular outside the USA.

[fung_derf]

The infrastructure Bill would kill him. It's just not feasible. Rolling blackouts in poor neighborhoods is a shame, but blackouts in wealthy neighborhoods will be unacceptable.
It would be like building all the roads all over again in the U.S.

[n4807g]

Looks like panic is on the rise in the EV industry. Realization that legacy manufacturers are years behind with no real chance to catch up. Pile on government mandates and the future for them looks bleak.

The Big Miss on Electric Cars Is Remaking Europe’s Auto Industry
https://finance.yahoo.com/news/europe-being-forced-reboot-car-050013872.html

In 2025, tighter emissions rules come into effect in the European Union, meaning manufacturers need to sell more battery-powered cars or face hefty fines. In an unlikely worst-case scenario, Volkswagen AG could face penalties of more than €2 billion ($2.2 billion) if it fails to sufficiently reduce fleet emissions, according to Bloomberg calculations based on company and regulatory data.

As pressure builds on European carmakers to sell more EVs, China’s state-supported manufacturers are entering the cooling market with models that are often better and cheaper.

[Bluewingcap]

In a world where people are crafting whatever "factual" baseline they choose to support their intellectual position, it is nice to see the difference in presentation as nuance.
WSJ points out the actual growth forecast in LNG demand from China, and Bloomberg points out that the forecast has reduced from prior indications due to decarbonization efforts. The positions reflect editorial positioning (bias?), but get the underlying facts correct.

[Mufaso]

Thank you for sharing your comments. I learn something new everytime I log in as well.

[Mufaso]

jbog - Your explanation is better than mine! (I'm afraid you've awoken long dormant brain cells associated with taking physical chemistry and material science in college that used to cause me to have nightmares.) Hopefully no one will use steel wool on their Cybertruck to get out any rust that does appear!

I didn't know that the rust/corrosion resistance of SST came mostly from passivation and only partly from the grade. (My only experience with passivation is that it was something to have an instrument tech do to a "leaky valve seat"- now I understand why and that is really good info to me).

I don't know either why Tesla cold rolled whatever grade of SST they start with to get more strength and importantly rigidity. As I understand it, the design precludes the use of crumple zones which have historically been needed to attain a 5-star safety rating. The National Highway Transportation Safety Administration (NHTSA), and the Insurance Institute of Highway Safety (IIHS) hasn't tested the Cybertruck because there haven't been that many made or in circulation. I wonder what rating it would get if they did test it. (Automakers do need to do internal test to assure meeting federal minimum standards but that doesn't mean you would get a "5-star" rating from NHTSA/IIHS.) It would be another blow to the Cybertruck mystique if it got less than a 5-star rating.

[n4807g]

BYD busy pounding the competition........
BYD launches $15,000 Qin Plus EV Honor Edition kicking off price war with gas cars
https://electrek.co/2024/02/19/byd-launches-15k-qin-plus-ev-kicking-off-price-war-gas-cars/

[jbog]

Correction:

Comparing today's auto's the standard material would be 1 mm thick, 1.5lbs sf while Tesla's Stainless is 3 mm thick, 4.5 lbs sf.

I previously said 1mm

[jbog]

Mufaso,

You did a great job on your explanation. For the last 52 years I built a company that solely builds systems for the Food and Pharma Industries Worldwide. We use somewhere in the area of 260,000 lbs. of ,Stainless per month building Vessels, Tanks or Systems.

What I have understood so far is that Tesla is using 301 SS which is close to the lowest grade available (we wouldn't allow that in our facility)which is cold rolled. To understand, Cold Roll is actually a Hot Rolled product that has been formed xxx. thousands thicker than specs, them allowed to reach room temperature a finally is squeezed to it's final dimensions. To Compare DeLorean used 304L and Autocar Trucks used 302. The final rolling will actually create a denser material.

Why Tesla is doing that is beyond me. Comparing today's auto's the standard material would be 1 mm thick, 1.5lbs sf while Tesla's Stainless is 1 mm thick, 4.5 lbs sf. This vehicle is a rock. Secondly, because of the cold rolling this metal doesn't want to be formed, that's why the truck looks so different, only straight lines by bending, not forming. No contours or flairs, only straight lines. 301 SS is austenitic as made but when bent it'll get much closer to Martensitic because of the micro structure change. I anyone ever gets a chance a magnet will not stick to the straight panels but will adhere to the bend lines.

Now getting to rust. Every metal will oxidize in the atmosphere. With Steel we would observe 'rust' if it weren't painted etc, Stainless Steel also creates a invisible 'passive' coating which protects itself. The problem comes that when the passive coating is scratched off, it any free iron is in the atmosphere the spot will rust, no matter which Stainless is picked, After any work, production etc of Stainless it needs to be passivated in a Nitric Acid solution which dissolves the existing passive layer along with any free iron near the surface. This Solution is then rinsed off with distilled water and the item is in a protected area for 18 hours while a new film is created.

As a warning, if you want to clean your stove top, if use get steel wool or a steel wire brush near it your toast. You can use a Stainless brush or wool all you want. Same thing with sandpaper, no carbon elements.
'

[n4807g]

Yup...are they also, "crash proof".....too?

[santafe2]

Yes, and when your auto pilot fails, hey, you've got a bullet proof truck.

[n4807g]

Personally if I had one of these Cybertrucks I would be pretty angry

But...they're, "bullet proof"....LOL up to a point I suppose.

[n4807g]

Politicians formulate policies based upon...well...politics. They don't understand, or probably care, that mandating without understanding the problems of meeting those mandates are monumental and unachievable as outlined. The timeline was always impossible to make, by 10-15 years, so they flounder around wasting money, glad slapping each other on the back, while in this case China, Korea, Japan, Australia, Chile, Argentina actually advance the production and technology. The USA and europe just fall further behind. There's a reason Musk fears BYD as he and the other major car brands should. By the end of 2025 BYD will be the uncontested leader in EV and hybrid production, and in the top three of battery production worldwide.

[spongepaul]

I appreciate your knowledge on this. Thanks for sharing it. I learn something new on these boards every time I log in.

[Mufaso]

Stainless steel does not readily corrode, rust, or stain with water as ordinary steel does, but it is not stain-proof, especially with low oxygen, high salinity (salt water), or poor circulation in the environment.

Yes and no. There are different grades of SST. I do a lot of work in the process industries in corrosive environments with corrosive chemicals. In one environment I had experience with there were a lot of airborne contaminants (including chlorine) present. I would always specify 316 SST for instruments housings etc. which contains 2% Molybdenum (316SST is more costly than 304SST). 316 SST has much better corrosion resistance than does 304 or 301 Stainless. In this environment a lesser grade just would not hold up and was worse than epoxy painted aluminum. (painted aluminum was a poor choice as CL2 reacts with aluminum and paint chips/scratches would invariably expose the aluminum). Tesla uses something they call 30X stainless in the Cybertruck. According to Barron's ( https://www.barrons.com/articles/tesla-cybertrucks-rusting-fixes-f10209fb )

The Cybertruck is made from what Tesla calls a 30X cold-rolled stainless steel. Breaking that down a little, cold rolling is a steel processing term that imparts strength. It’s a reason the Cybertruck is bulletproof.

The 30X stainless term is a shorthand, most likely, for a 300 series stainless steel. That’s a variety of stainless with set ranges of chromium and nickel that often include elements such as manganese. All steels have a base of iron and carbon. Tesla didn’t respond to a request for comment about the grade, processing, or rust issues.

Here is more info on various grades Stainless steel and I wouldn't be surprised to learn Tesla is using the cheapest form of stainless steel possible or possibly some new non standard version:

https://www.evapco.com/sites/evapco.com/files/2019-08/EVAPCO%20-%20Stainless%20Steel%20White%20Paper%20FINAL%205.2019.pdf

I do think Tesla missed the boat on this one. They get the strength from the steel being cold rolled not it being stainless. (Does the 30X grade mean it's rolled 30 times?) Supposedly the Stainless steel was to provide corrosion resistance but the grade they picked is clearly causing issues. Personally if I had one of these Cybertrucks I would be pretty angry. Tesla should have known about this corrosion issue. Any traditional car manufacturer warranties against rust. Tesla marketing led one to believe the truck was not only strong but corrosion resistant. I bet you see a class action suit get some traction. Or maybe this is one more reason why Cybertruck production will becomes short lived.

[wow_happens28]

U-TURN?: Biden admin throws electric vehicle mandate in reverse.

[santafe2]

And maybe design?

[DewDiligence]

At least they are dealing with the actual set of facts!!!

I’m not sure what you are saying—please clarify.

[Bluewingcap]

I would think American Rare Earths is the better play versus TMC.
Their holdings include a slug of Wyoming State Acreage that should see expedited permitting versus federal lands (which include offshore seabeds, yes?). If the Supreme Court strikes down most of the Federal agency regulatory authority as expected, this could change. Environmental protections are way too complex for Congress to spell out in passed laws, yet that's what conservative jurists are demanding.
The bottleneck for rare earths is domestic processing capacity. An inherently dirty business. I have not done a deep dive into progress made on this front.
But very exciting news from both a national security and clean tech perspective!
Investment worthy? Hard to say. Speculative for sure...

[semi_infinite]

Waymo - first driverless robotaxi I've witnessed at SF fisherman's wharf. Quite impressive actually. Noticed while walking towards a restaurant at the wharf. Robocar was going around a tourist bus that was stopped and used the lane going in the opposite direction. I assumed it was manned as it did this quite naturally with pedestrians all around. It gingerly passed the parked bus before I realized it was driverless. It went on to park at a safer spot where a couple caught up to it (walking) and got in the back seats. Impressive for an area that is busy with cars and pedestrians. It looks like the typical Waymo modified Jaguar CUV. Both Waymo and Toyota Research are testing with drivers in Mountain View area. Toyota's version is Lexus of course.

[gfp927z]

n4807g, Thanks, TMC looks interesting, though some dicey aspects for sure -

>>> Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga <<<


>>> TMC the metals company Inc. (TMC) , a deep-sea minerals exploration company, focuses on the collection, processing, and refining of polymetallic nodules found on the seafloor in the Clarion Clipperton Zone (CCZ) in the south-west of San Diego, California. It primarily explores for nickel, cobalt, copper, and manganese products. The company holds exploration and commercial rights in three polymetallic nodule contract areas in the CCZ of the Pacific Ocean. Its products are used in electric vehicles (EV), renewable energy storage markets, EV wiring, clean energy transmission, manganese alloy production required for steel production, and other applications. The company was formerly known as Sustainable Opportunities Acquisition Corporation and changed its name to TMC the metals company Inc. TMC the metals company Inc. was incorporated in 2019 and is based in Vancouver, Canada.

<<<

The Metals Company (TMC) - >>> Pentagon to Deliver Report on Domestic Processing of Seafloor Nodules by March 1 as President Biden Signs NDAA


GlobeNewswire

The Metals Company

January 3, 2024


https://finance.yahoo.com/news/pentagon-deliver-report-domestic-processing-133000108.html


Under the National Defense Authorization Act (FY24) now signed into law by President Biden, the House Armed Services Committee directs the Assistant Secretary of Defense for Industrial Base Policy to submit a report assessing the domestic processing of seafloor polymetallic nodules by March 1, 2024.

Last month, thirty-one Members of Congress wrote a letter to the Secretary of Defense and the Pentagon urging the Department of Defense to “explore every avenue to strengthen our rare earth and critical mineral supply chains”, emphasizing “the importance of evaluating and planning for seabed mining as a new vector of competition...”.

The news comes as American and allied auto and battery makers struggle to secure supplies of critical battery metals that comply with guidelines for incentives under the Inflation Reduction Act.


NEW YORK, Jan. 03, 2024 (GLOBE NEWSWIRE) -- TMC the metals company Inc. (Nasdaq: TMC) (“TMC” or the “Company”), an explorer of the world’s largest estimated undeveloped source of critical battery metals, today welcomed the passage of the 2024 National Defense Authorization Act (NDAA) into law and the inclusion of provisions directing the Department of Defense to submit a report to the House Armed Services Committee assessing the domestic processing of seafloor polymetallic nodules by March 1, 2024.

In the language attached to the newly approved Act, the Committee acknowledged the imperative of establishing a secure supply chain of critical and strategic minerals and materials and noted, “that to meet national security requirements the United States must have the ability to source critical minerals in innovative arenas to decrease reliance on sources from foreign adversaries.” As a potential new frontier for resource extraction, the Committee directs the Pentagon to produce a report which, among other things, outlines “a roadmap recommending how the United States can have the ability to source and/or process critical minerals in innovative arenas, such as deep-sea mining.”

Through the NDAA, the House Armed Services Committee has directed the Assistant Secretary of Defense for Industrial Base Policy to submit a report to the Committee by March 1, 2024 “assessing the processing of seabed resources of polymetallic nodules domestically. The report shall include, at a minimum, the following: (1) a review of current resources and controlling parties in securing seabed resources of polymetallic nodules; (2) an assessment of current domestic deep-sea mining and material processing capabilities; and (3) a roadmap recommending how the United States can have the ability to source and/or process critical minerals in innovative arenas, such as deep-sea mining, to decrease reliance on sources from foreign adversaries and bolster domestic competencies.”

In November 2023, a bipartisan coalition led by Senator Lisa Murkowski (R-AK) re-introduced a resolution calling on the U.S. Senate to ratify the UN Convention on the Law of the Sea (UNCLOS), arguing that “the longer we sit out, the longer the rest of the world will continue to set the agenda of maritime domain, from seabed mining to critical subsea infrastructure.” That same month, five Members of the US House of Representatives from Texas urged the Department of Defense to support the use of federal resources under the NDAA towards TMC’s feasibility study for nodule processing along the Texas Gulf Coast. In a letter to the Assistant Secretary of Defense for Industrial Base Policy, Laura D. Taylor-Kale, the Members wrote: “The applicant seems to have the ability to produce battery-grade materials at commercial facilities in North America at pilot scale. The scope of the submission focuses solely on U.S. processing and appears to offer the Department of Defense the opportunity to re-shore critical mineral supply lines.”

Over recent years, TMC has welcomed letters from congressional leaders including the House Armed Services Committee as well as former military leaders urging the Biden Administration to assess domestic processing of seafloor polymetallic nodules as a means to secure key energy transition metals and “close national security vulnerabilities.” In March last year, TMC Chairman and CEO Gerard Barron wrote to the Senate Energy and Natural Resources Committee, noting, “Support from the U.S. Government for the development of the polymetallic nodule resource and TMC’s first project, NORI-D, would unlock access to the resource without overcoming legislative hurdles to ratify the United Nations Convention on the Law of the Sea.”

About The Metals Company

The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the global energy transition with the least possible negative impacts on planet and people and (2) trace, recover and recycle the metals we supply to help create a metals commons that can be used in perpetuity. The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.

<<<



---

---

[n4807g]

Yes....but as I mentioned in my post you responded to, it may be years or a decade before any mining takes place. Unless there are changes in the way permits are vetted and approved, an eye watering deposit of minerals is only a teaser. You can look around the USA and find many examples of very promising mineral deposits that companies are in the process of developing that are many years in without a $1 to show for their effort. I look at producing miners and fully permitted soon to be producing for opportunities.

If you are interested in miners you might take a look at TMC. The defense department is due to release a study on deep sea mineral mining on March 1st outlining:

thirty-one Members of Congress wrote a letter to the Secretary of Defense and the Pentagon urging the Department of Defense to “explore every avenue to strengthen our rare earth and critical mineral supply chains”, emphasizing “the importance of evaluating and planning for seabed mining as a new vector of competition...”.

TMC has said they intend to begin mining operations in 2025. https://investors.metals.co/news-releases/news-release-details/tmc-announces-corporate-update-expected-timeline-application/

There are still some potential pitfalls, but there is also the possibility that they will legally be able to mine. Speculative, yes, but at least they are at the end of the permitting process and if the defense department backs them it can only add additional pressure on the process to proceed.

I currently have no position but may take one. I look at the company as well positioned if they are allowed to mine their claim, but that is still a big, "but". They will also have to raise cash to begin operations, so share dilution is probably in their future....something to consider.