There are other reasons why Eric’s making the global macro call to exit the EV industry. He’s forecasting overproduction in lithium over the next several years, right as capital for these projects is drying up. He’s also seeing former Investment Report recommendation Volkswagen AG’s (VWAGY) recent partnership with Rivian Automotive Inc. (RIVN) as a negative, given the latter company’s rapid cash burn.
As he puts it… The once-promising lithium market is facing daunting headwinds. Although the worst of the selloff may be over, the catalysts for higher prices might take their sweet time showing up. To stage a sustainable recovery, the lithium market must overcome the dual threat of sub-par demand growth and excessive supply growth. Both of these threats seem highly likely.
Together, that’s why Eric’s turning decidedly negative about this once-promising industry. A combination of protective EV tariffs, mining oversupply, and lack of Western competitors will make an EV-sector turnaround take far longer than we’d like.
