Juggling Dynamite

Disruptions in global supply chains have accelerated interest in recycling materials of all kinds, especially in the electric vehicle sector.  As major economies transition to emission-free vehicles over the next decade and beyond, recycling battery components is a huge growth area, and innovation is naturally rising to the opportunity, see Northvolt produces battery cells with recycled nickel, manganese and cobalt:

Swedish battery firm Northvolt said Friday it had produced its first battery cell with what it described as “100% recycled nickel, manganese and cobalt.”

In a statement, the Stockholm-headquartered company — which has attracted investment from Goldman Sachs and Volkswagen, among others — said the lithium-ion battery cell was manufactured by its recycling program, Revolt.

The cell’s nickel-manganese-cobalt cathode had been produced using metals “recovered through the recycling of battery waste.” Tests showed that performance was on a par with cells made using metals that had been freshly mined, Northvolt said.

On Friday, the business said the design of its own recycling facility would be expanded so it could recycle 125,000 tons of batteries annually.

…It will use materials from end-of-life EV batteries as well as scrap from Northvolt Ett, the company’s gigafactory, where the first battery is expected to be produced before the end of 2021.

Like peak oil theorists since the 1950s, those adamant that a shortage of metals will prevent the migration to EVs from ICE (internal combustion engines) are ignoring the role human ingenuity plays in evolving our systems and solutions over time.

And for those convinced that EV production is worse for the environment than ICE, a study commissioned by The Wall Street Journal from The University of Toronto found that at 20,600 miles, the greenhouse gas emissions from building and driving the two cars are roughly the same. Then EVs win for the rest of their extended lifespan–even assuming the mining of virgin metals for battery manufacturing.

Recycling battery materials will improve the environmental and financial equations even more in favour of EVs.

Danielle was a guest with Jim Goddard on Talk Digital Network talking about recent developments in the world economy and markets. Here is a direct audio link.

Zillow plans to sell roughly 18,000 homes through its home-flipping algorithm, called Zillow Offers, and expects to lose about 5% to 7% on the failed venture, the company told investors last week.  Zillow says it underestimated the risks inherent in buying homes en masse to sell them for a quick profit.

The discussion below offers some lucid big picture on the mess that low rates and misguided policy incentives have made in America, and the economic and financial risks inherent.

The percentage of homes in the US purchased by investors is rising sharply. It’s now nearly 1 in 4. The average homebuyer is having a harder & harder time competing, especially as this influx of institutional capital continues to drive up prices.

Is America in danger of becoming a nation of renters, leasing their homes from hedge fund landlords? Here is a direct video link to part one.

Here is a direct video link to part two.

Similar conditions have led to similar behaviour in Canadian property markets.  As shown below, the downside is even more significant in Canada thanks to the obscene residential over-investment–more than 10% of Canada’s nominal GDP in 2021.  As charted below, since 1947, this is a ludicrous four standard deviations above the historical mean.  This suggests that the mean-reversion this cycle is likely to be gruesome for highly levered participants and Canada’s under-diversified economy.