...and this winter hibernation is just the start, because global economy isn't likely to improve from here, and I think there is unanimous consensus on that.
...which is why I had indicated that EV/Lithium won't go south if we would actually get a soft landing ahead.
...by the time more new lithium mines and supplies come onstream, the EV growth which is already decelerating would be dogged by the onset of a global recessionary wave that results in demand destruction, autos being a big ticket item would be amongst the first to suffer from demand headwinds in a possible stagflationary environment.
...autos are in a troubled state. The Chinese are churning out cars to dump in the global markets to absorb their huge fixed costs (if they produce less, the cost per unit rises), while Tesla knows the game is "ending" (when I mean ending I dont mean end or no growth but ending as the good times of the past 5 years for EVs) and shifting course.
This chart provides some deep insights into what is happening in the global auto market.
1) This chart shows the aggregated (summed up) free cash flow (FCF) of 34 automakers, combined accounting for approximately 98% of global vehicle sales.
2) You can see a negative FCF trend, aka automakers keep generating less and less cash.
3) The 34 automakers included in this sample generated combined a meager $6.4 billion in FCF in Q4 2023.
4) Automakers' declining cash generation reflects the intense competition amongst automakers.
