Why Biden Can’t Deliver on Green Promises

 

It all made total sense right up until the moment the USPS announced it would in fact be buying 90% gas-powered vehicles.

Welcome to another new administration continuing the same old and change being slow.

It was only a few weeks ago that Biden pledged to replace the entire government fleet with electric vehicles. He said they would be “net zero emissions”!

Sounds marvelous.

If you want to make electric vehicles adopted in the government... and if electric vehicles are well suited to short delivery routes like mail trucks go on... and if you want to lead by example, and you want to usher in the future, and you've already started all this chatter about climate solutions, and rejoining the Paris Agreement...

That you would want to award the contract for all these new vehicles and get them electric.

But as we’ve now learned, the government will buy up to 165,000 new postal trucks from NYSE: OSK) Oshkosh with an upfront payment of $500 million. Ninety percent of them will be gas-powered.

 

So why didn’t the government start it’s entire fleet conversion with the post office?

Because as the world is slowly realizing... switching to electric is hard, and takes complex material supply chains that are currently dependent on countries we don’t want to be dependent on.

A few weeks ago a trade dispute led the U.S. International Trade Commission to halt the importation of battery components from South Korea’s SK Innovation for ten years. Those components are necessary to build batteries for the Ford F-150 and Volkswagen crossover electric models.

Those components were supposed to be shipped to a plant in Georgia that is currently being built and was slated to employ 2,600 people.

Oops.

Biden has since ordered a review of the supply chain of high-tech defense and clean tech components, including rare earths and other things.

It's harder than a lot of people would have you believe to convert to electric vehicles and clean infrastructure.

This is the theme I try to get across when I talk about solar roads and wave energy, and things like that.

It's not that I'm opposed to it. It's just when I see these big sweeping targets, like we're going to be decarbonized by 2030, or we're going to be this or that... I think it's harder than just saying it...

 

And I think there's a lot of opportunity in there that's overlooked in this theme.

If you want the batteries to be American... and you want the cars to be American... and you want to review the supply chain...

Well guess what?

There's not that many resources available to source those components from, whether it's rare earths, or antimony, or lithium or whatever it is.

So I think that's what's lost in these stories.

All the headlines you read about, "Oh, GM's going to stop manufacturing gas cars by 2030."

I hope they do.

But they’re going to need a lot of raw material to get there.

That’s part of why copper prices are at ten-year highs, rare earth supply chains are back in the news...

And readers of my Foundational Profits are sitting up hundreds of percent on related names like MP Materials (NYSE: MP) and Rio Tinto (NYSE: RIO).

 

Call it like you see it,