PART 2 Elon is going to produce a no-REE vehicle because he has...

PART 2

Elon is going to produce a no-REE vehicle because he has no choice; there are not enough esp ROW REEs being mined and refined to satisfy his very large scale production plan. He is also adjusting his electronics to enable use of any battery chemistry because having a choice enhances production sustainability. Finally he is cutting his use of semiconductors because we know they suffer from shortages as well. Elon is not a dreamer but a genius doer; he does what he must to do what he wants.

All three initiatives for the next gen TSLA platform for more affordable Teslas are intended to support mass production with fewer supply chain issues. Supply chain issues are often showstoppers. This is NOT about REEs being replaced. This is not a judgment that stands against NdFeB. NdFeB is unassailable.

Whatever REEs Tesla does not use will be used by other manufacturers. 9 out of 10 EVs currently use NdFeB and there are numerous other products which are increasingly demanding REE PM and no other will do. All REE downstream markets are continually outperforming predictions. Every current REE developer is likely to achieve production and we need that to happen. Lynas needs that to happen. ROW CEOs need that to happen. Just ask Elon. The demand for REEs will not be met in this decade and may never be; I see REE prices remaining aloft.

And let's not forget that every Tesla still has a lot of NdFeB in its cars even if they are not in the drive unit; an educated guess would be a reduction per EV from 2.00kg to 1.48kg.

Demand-created supply chain issues are also seen in the SiC and battery metals markets. Resource companies can't grow fast enough.

Bottom Line: I am unconcerned and unsurprised at the SP drop. I am buying back shares recently sold and adding about 10%. I will continue to buy every dip below $8. The fact that Tesla sees this as necessary tells me that EVs and REEs are on a faster demand growth path than most believe.