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Stranded Assets

By Don Dears | Power For USA | January 10, 2023

There has been considerable conjecture that billions of dollars worth of assets in the fossil fuel industry will be stranded when fossil fuels are no longer needed because of the energy transition.

But what about the billions being spent by the automobile industry to build factories for the manufacture of batteries and battery-powered vehicles (BEVs)?

What if the market for BEVs doesn’t materialize?

The battery factories and factories to build BEVs won’t be needed. They will become stranded assets.

According to the WSJ, the automobile industry has committed, over the past two years, to invest $70 billion in factories to build batteries and BEVs.

According to the Center for Automotive Research, over half of this investment will be for battery factories.

Here is a chart from the Center of Automotive Research that provides another view of the investments being made for manufacturing BEVs.

It’s also been reported that the automobile industry worldwide will spend $526 billion on factories to build batteries and BEVs.

As noted in the WSJ article:

The capital outlays amount to a collective bet by the car industry that buyers will embrace battery-powered models in numbers large enough to support these investments.

What happens if the market for BEVs in the United States is only one-third the size being predicted?

Or, if it’s even less, say 10% of the predicted market size?

How will the automobile companies pay off their debt? Will they have losses?

Will these factories be stranded investments, unable to pay for themselves?

There is a herd mentality that’s gripped the automobile industry. As one CFO said,

You have to invest now, or you’re going to be left behind in the transition.

Toyota isn’t so sure.

Could Toyota have been right all along?

When anyone considers the volume of materials that must be mined and processed it must raise doubts about the stampede to build these factories.

The book, Clean Energy Crisis has estimated the number of new mines that must be developed to support the worldwide BEV market. One look at this aspect of the BEV market should give anyone pause.

The stranded assets may be in the automobile industry, not the fossil fuel industry.

January 15, 2023 - Posted by | Economics, Malthusian Ideology, Phony Scarcity |

3 Comments »

  1. Your doubts and questions are most certainly valid, albeit useless to a world that has shown systematic herd mentality, devoid of any and all critical thinking. Your comments are based on logic, but the global belief in climate change is an emotional following of well placed and persistent propaganda, as well as fear to challenge those who are making absurd claims and proposals. We can clearly see, then, why censoring has become so pervasive across so many news sources and human activities all over the world.
    If enough people awaken and start to examine facts and seek for logical and true answers, the whole structure would collapse in a useless heap. Instead, we will probably screw up the economies, cultural norms and liberties of the world in order to please the corrupt power and money grabbers of the world.

    Like

    Comment by Peter | January 15, 2023 | Reply

  2. Is the automobile industry so sheltered or blind that it has not heard of the intentions of the WEF and its minions (servile governments) to eliminate private transportation by creating the ’15 minute city’? Although fossil fuel powered vehicles will be the first to go, and apart from the known shortcomings of the battery powered vehicle, it is doubtful whether the ‘authorities’ will continue to permit private transport regardless of power source. If that is the case, why are car manufacturers making investments in something that governments want to eliminate? Are they completely stupid, or do they know something that we don’t?

    Like

    Comment by Bill Francis | January 15, 2023 | Reply

    • I suppose in a population decimation scenario it really does not matter which assets they have. Everything will be stranded and useless. Ten houses for every family, etc.

      Like

      Comment by aletho | January 15, 2023 | Reply


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