1) General Motors boldly announced plans to make only battery-powered vehicles by 2035, breaking from more than a century of internal combustion engines. However, the future for 50,000 GM workers, whose jobs could become obsolete far sooner than they realize, was not considered. The manufacturing of electric cars is simpler than conventional cars, which means fewer man-hours to make and therefore fewer jobs. Ford and Volkswagen executives estimate that EVs will reduce labor hours per vehicle by 30%. Electric vehicles contain 30% to 40% fewer moving parts than petroleum-run vehicles, which also translates into fewer failures, and in turn that also will mean fewer jobs for auto mechanics. Most vulnerable in the transition will be roughly 100,000 workers at plants that make transmissions and engines for gas and diesel vehicles.

2) Apple Inc is increasingly serious about entering the auto market because even though the smartphone is large, it is dwarfed by the opportunities in transportation. The smartphone market is worth about $450 billion dollars, while analyst estimates the global market for new vehicles, including cars, light trucks, commercial vehicles, and semi-trucks to be about $2.8 trillion dollars. There are three criteria that must be met for Apple to enter a market: vertical integration ability, a massive market, and a profitable market. While the vertical integration and massive market conditions are met, profitability is uncertain as the automotive industry has thin operating margins, indeed they’re in the mid-single digits. The electric car maker Tesla Inc is suppose to have margins in the 20% range, but with so many other companies getting into the market, competition will most likely narrow those margins.

3) With the big push to electric vehicles, with their exotic batteries having a finite useful life, new businesses are emerging to deal with salvaging used batteries. Li-Cycle Corp is one of those recyclers who is going public through a merger with the blank-check acquisition company Peridot Acquisition Corp in a deal valued at $1.67 billion dollars. This is a bet on the growing need to recycle used batteries as well increasing demand for lithium-ion power sources for emerging products like electric vehicles. Li-Cycle plans to use $615 million in additional funding to build more facilities to recycle and repurpose batteries. About 1.2 million tons of batteries are expected to end their life cycle in 2025, followed by 3.5 million tons in 2030. Investors are showing increasing interests in companies involved with lithium-ion technology, especially in recycling components which are harmful to the environment.

4) Stock market closings for – 16 FEB 21:

Dow 31,522.75 up by 64.35
Nasdaq 14,047.50 down by 47.98
S&P 500 3,932.59 down by 2.24

10 Year Yield: up at 1.30%

Oil: down at $59.76

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