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Mercedes and Stellantis have stopped work on their joint European EV battery factory projects, and are reassessing which direction to move forward with the possibility of shifting to cheaper lithium iron phosphate cells.

Mercedes and Stellantis first partnered to form a battery cell joint venture in 2021, calling the venture the Automotive Cells Company (ACC).

Earlier this year, ACC raised $4.7 billion to build four factories, planning to raise around 7.6 billion total Euros to build the factories.

The joint venture has already opened one factory in Douvrin, France.

But today Bloomberg reports that work has stopped on ACC’s upcoming factory in Germany, and prep work has paused on a factory site in Italy.

While this work has stopped, ACC hasn’t made a final decision what to do with these sites yet. The company says that it plans to stay flexible with its speed of investment, reacting to market trends, and will decide around the end of the year what to do with these sites.

Bloomberg reports that the head of ACC, Yann Vincent, said that demand for EVs has slowed in Europe – despite that EV sales rose 14.8% year over year in April, faster than non-electrified car sales rose, though slower than conventional (non-plug-in) hybrids. He says that growth is mostly expected in mass-market segments, something which many Western EV makers have heretofore failed to target, though Chinese automakers are starting to, especially in Europe.

Previously, Mercedes had committed to go all-electric by the end of the decade, but in February said that it would continue building poisonous, climate-change-causing gas vehicles “well into the 2030s”, despite the necessity that the world stop building those vehicles as soon as possible.

Electrek’s Take

I’m of two minds on this one. First, the decision to pause building EV battery factories makes no sense. We need more EVs, and we need them faster than we’re getting them. The transition to sustainable transport needs to be accelerated, not decelerated, and we don’t get to acceleration by pausing and waiting.

And reacting to market trends doesn’t make a lot of sense – factories take a while to build (ACC says the first cells wouldn’t come out of its Germany site until mid-late 2027), so if you wait to build one until after the trend has already started, you’ve already missed the trend. This is how Tesla gained the dominant position in EVs that it has today, because automakers refused to see the trend towards EVs for many years before finally pulling up their pants (which they’re still waffling over).

But, this pause could end up having a positive outcome anyway, as ACC is reportedly thinking about switching to cheaper LFP cells.

LFP cells have a number of benefits – lower cost, higher durability, and simpler mineral sourcing – but have lower energy density than NMC cells. As a result, most cars have focused on NMC (to feed a public that thinks they need more range than they do), but we’re starting to see more entry-level models equipped with LFP cells to help bring costs down.

These LFP cells have been used to particularly positive effect in low-cost Chinese autos, which has helped them to undercut Western automakers on price. If ACC sees growth coming from the mass market side, then LFP cells would be a reasonable choice. The battery is the most costly part of an EV, and cutting costs there can help a lot.

Further, with the EU threatening tariffs (and the US already implementing them), onshoring LFP production would be necessary if ACC wants to target mass market cells. As much as these tariffs are a dumb idea, one problem is that they might lull domestic automakers into a false sense of security. If the automakers actually do use the opportunity to build a new industrial base, then at least that negative is removed and the tariffs will have had their “intended” effect.

So ACC should continue forward with their plans, rather than pausing based on false reports of dropping sales. But a switch to LFP does seem prudent, especially when most LFPs are currently made in China, and when cost is one of the main challenges with EV production in this day and age.

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Elon Musk Tapped to Lead New ‘DOGE’ Department—Despite the Government Already Having One for Efficiency

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Elon Musk Tapped to Lead New ‘DOGE’ Department—Despite the Government Already Having One for Efficiency

Tesla CEO Elon Musk is to officially join Trump’s administration as the co-head of the new US Department of Government Efficiency – a second federal department with the goal of making government spending more efficient.

You can’t get more ironic than that.

Throughout the elections, Musk, who is already CEO of Tesla, and SpaceX, a well as the defacto head of X, xAI, Neuralink, and the Boring Company, has been floating the idea to add to his workload by joining the Trump’s administration to lead a new department aimed at making the federal government more efficient.

He has been calling it the “Department of Government Efficiency”, which spells out ‘DOGE’, a meme that Musk appears to enjoy.

Well, now Trump appears to want to be going through with this idea.

He announced the new department and Musk as head, along with Vivek Ramaswamy, in a statement today:

I am pleased to announce that the Great Elon Musk, working in conjunction with American Patriot Vivek Ramaswamy, will lead the Department of Government Efficiency (“DOGE”). Together, these two wonderful Americans will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies – Essential to the “Save America” Movement. “This will send shockwaves through the system, and anyone involved in Government waste, which is a lot of people!” stated Mr. Musk.

What’s most ironic is that there’s already a federal department with the goal of cutting government waste and ensuring efficiency: the Government Accountability Office (GAO).

The GAO’s main objectives are:

  • auditing agency operations to determine whether federal funds are being spent efficiently and effectively;
  • investigating allegations of illegal and improper activities;
  • reporting on how well government programs and policies are meeting their objectives;
  • performing policy analyses and outlining options for congressional consideration;
  • issuing legal decisions and opinions;
  • advising Congress and the heads of executive agencies about ways to make government more efficient and effective

It sounds similar to what Musk described when talking about his DOGE, but Trump hasn’t gone into many details other than it will “cut waste.”

He also has a confusing message as he compares the initiative, which is supposed to cut government spending, to “The Manhattan project”, a massive and expensive government project.

Trump said that DOGE will help the government “drive large scale structural reform”:

It will become, potentially, “The Manhattan Project” of our time. Republican politicians have dreamed about the objectives of “DOGE” for a very long time. To drive this kind of drastic change, the Department of Government Efficiency will provide advice and guidance from outside of Government, and will partner with the White House and Office of Management & Budget to drive large scale structural reform, and create an entrepreneurial approach to Government never seen before.

The statement also noted that DOGE will only operate until July 4, 2026.

Musk has previously claimed that he could cut at least $2 trillion dollars of the $6.5 trillion dollar US federal budget.

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Oil could plunge to $40 in 2025 if OPEC unwinds voluntary production cuts, analysts say

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Oil could plunge to  in 2025 if OPEC unwinds voluntary production cuts, analysts say

A pump jack in Midland, Texas, US, on Thursday, Oct. 3, 2024. 

Anthony Prieto | Bloomberg | Getty Images

Oil prices may see a drastic fall in the event that oil alliance OPEC+ unwinds its existing output cuts, said market watchers who are predicting a bearish year ahead for crude.

“There is more fear about 2025’s oil prices than there has been since years — any year I can remember, since the Arab Spring,” said Tom Kloza, global head of energy analysis at OPIS, an oil price reporting agency.

“You could get down to $30 or $40 a barrel if OPEC unwound and didn’t have any kind of real agreement to rein in production. They’ve seen their market share really dwindle through the years,” Kloza added.

A decline to $40 a barrel would mean around a 40% erasure of current crude prices. Global benchmark Brent is currently trading at $72 a barrel, while U.S. West Texas Intermediate futures are around $68 per barrel.

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Oil prices year-to-date

Given that oil demand growth next year probably won’t be much more than 1 million barrels a day, a full unwinding of OPEC+ supply cuts in 2025 would “undoubtedly see a very steep slide in crude prices, possibly toward $40 a barrel,” Henning Gloystein, head of energy, climate and resources at Eurasia Group, told CNBC. 

Similarly, MST Marquee’s senior energy analyst Saul Kavonic posited that should OPEC+ unwind cuts without regard to demand, it would “effectively amount to a price war over market share that could send oil to lows not seen since Covid.”

However, the alliance is more likely to opt for a gradual unwinding early next year, compared to a full scale and immediate one, the analysts said.

Should the producers group proceed with their production plan, the market surplus could nearly double.

Martoccia Francesco

Energy strategist at Citi

The oil cartel has been exercising discipline in maintaining its voluntary output cuts, to the point of extending them.

In September, OPEC+ postponed plans to begin gradually rolling back on the 2.2 million barrels per day of voluntary cuts by two months in an effort to stem the slide of oil prices. The 2.2 million bpd cut, which was implemented over the second and third quarters, had been due to expire at the end of September. 

At the start of this month, the oil cartel again decided to delay the planned oil output increase by another month to the end of December.

Oil prices have been weighed by a sluggish post-Covid recovery in demand from China, the world’s second-largest economy and leading crude oil importer. In its monthly report released Tuesday, OPEC lowered its 2025 global oil demand growth forecast from 1.6 million barrels per day to 1.5 million barrels per day.

The pressured prices were also conflagrated by a perceivably oversupplied market, especially as key oil producers outside the OPEC alliance like the U.S., Canada, Guyana and Brazil are also planning to add supply, Gloystein highlighted.

Bearish year ahead for oil

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Have you had a ride in a driverless vehicle?

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Have you had a ride in a driverless vehicle?

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