good afternoon China makes four times as many batteries for electric vehicles EVS as the rest of the whole world combined and as the markets for electric vehicles and also electric equipment grows naturally the demand for the batteries will grow and here is where we see yet again that China basically owns the supply chains for so much of this technology the processing of the lithium the refining and processing of the graphite it's used in the terminals and the batteries the electrodes there's not a lot of complexity here where the Chinese own this part of that one and so in order to resore this industry from China back to the United States we just need to add a couple of processes here there simply put we would need to rebuild all of it from the raw material sourcing the separation of the metals the refining of those Metals the fabrication of those into usable product the quality control testing and at every phase of course we have to have engineering teams that had to be educated then hired then trained so if all this sounds like it's going to take a very long time it will cost a lot of money and will only come at the expense of other things that also demand our time and our money and our engineers and you can already see how big these problems are here's what we mean by that we're concerned about China's monopolies and cost advantages in un name it automobile manufacturing textiles solar panels and wind Electronics computers semiconductors Furniture medical devices robotics aircraft show me any manufactured product on the planet and there is a lot of concern about how the Chinese have already either taken over the industry completely or they are well on their way to having done so and when the people inside a particular industry the industry experts and insiders they start working out the numbers and they realize the enormous challenges involved in bringing those Industries back to Europe or back to North America and this is happening in every indust Now in America and in Europe and so here this time we have a big meeting in Orlando the international battery seminar they discussed what would be involved in taking back the supply chains and manufacturing of the batteries for electric vehicles this is just one segment of one industry now and they look at this chart here and wonder what it would take to build the batteries in Europe or in the United States markets instead of in China and one reason again that China dominates this industry is that they've been so busy designing the batteries for the China Market itself 70% of the sales of these batteries are here in China anyway and these experts show here what's involved they identify $580 billion in Investments that are basically needed to build an entirely new lithium battery industry by the end of this decade and that includes $130 billion do in battery materials they need $50 billion do to develop the raw materials and 20 billion for Midstream processes by 2030 it's 2024 right now 2030 is 6 years away and we haven't even found the raw materials yet to do all this work nickel lithium Cobalt and everything else to scale up up to 10 times I guess what we have right now raw materials are at the center of industrial competitiveness he says and he goes on to ask how Ford and General Motors hopes to be competitive in a market where China owns the whole battery industry in this article they've included a quote from a senior guy at Panasonic uh Panasonic says they hope to increase their production to 200 gwatt hours in 2030 up from 50 gwatt hours a couple years ago uh Panasonic says they'll be adding another 40 gwatt hours of capacity from the US and another 10 from Japan and I guess that's supposed to be good news but but the total Global Demand by 2033 will be 2.1 terawatt hours which is more than 10 times what Japan hopes to be producing eventually and more than 80 times what they're doing now uh yeah further up in the article it says that catl which is a Chinese company delivered 40 gwatt hours just in the last quarter of 2023 so I don't even know why they included this part about Panasonic at all unless it was just to have someone with a calculator realize that we can't count on Panasonic to be doing much of anything there is a very powerful very simple economic concept called opportunity cost opportunity cost is the value lost when you choose one thing instead of another if you're a farmer and you plant 10 acres of corn that means you're not planting 10 acres of wheat if you're a college student studying literature it means you can't study medicine if you're a young girl and you marry a boy you meet in the 10th grade it means you can't marry someone else if you spend $25 on a new shirt that's $25 you can't spend at the movies if you're a factory that makes tables and chairs you're not going to be building airplanes so opportunity cost is a very important idea which describes in economics problem of scarcity we don't have nearly enough time or nearly enough money or nearly enough people to do everything we want so we make choices and decisions and hope they work out and when we apply the opportunity cost problem to each of these industries and do so with respect to China A lot of these problems become really obvious so China's got over a billion people 1.4 billion and we've got about a fourth of that China graduates seven times as many engineering students as the United States does now these Engineers these battery industry guys need to resore their part of the industry are Engineers that could not work at fora General Motors to help them build better cars or for Boeing to help them build better planes or apple for iPhones or caterpillar for bulldozers then there's the money over half a trillion dollars in this case to reshore the battery industry what about all the other industries that need $500 billion doll or more to reshore their industry Ries so that's a lot of money that we would need to spend that we cannot spend on other things and by the way this is a big problem that we face in the United States if these problems seem intractable to us if these problems seem impossible for us to overcome how do things look from Canada or from Sweden these are Advanced countries in every respect but they're just much smaller population wise so here's this chart it's an amazing chart the whole world added together times four and that's how much of the supply chains that China's got for batteries have a great weekend be good e e