Battery Electric Vehicles Must Overcome the Trump Era Before We Can Use the Word 'Chasm'

Since mid-last year, the stock prices of electric vehicle-related stocks that were previously hot, especially those related to battery (secondary battery) materials such as Ecopro, which were the core of electric vehicles, have not been able to achieve a significant reversal, remaining weak to this day.

However, around the middle of last year, many articles were posted about secondary battery-related stocks with the sentiment that, "We have seen the brightest future. Now, it seems all that remains is how to reflect future risks."

The main reasons were as follows.

- Even with increased driving range after charging and reduced charging times, it seems difficult to maintain charging facilities in cities with many multi-story buildings and apartment complexes. And unlike phone charging, people may find it tiresome.

- In the situation where China, which lacks technological prowess and brand power in internal combustion engines, is overtaking in electric vehicles and is reaching a leading technological level, (there is no reason why future vehicles must be only electric vehicles?), the US and Europe continue to push electric vehicles, creating a situation favorable to China in terms of the automotive industry (in the midst of a power struggle), which they have no reason to do.

- And if the next US administration (if Trump becomes president) comes in, it will not be very favorable to electric vehicles. Therefore, during the hurdle of the next administration's term, alternatives other than electric vehicles should not be created in the eco-friendly vehicle platform (then the US will push the new alternatives instead of electric vehicles).

- Why is it considered that battery-based electric vehicles are the only option for the future eco-friendly vehicle platform? (For example, internal combustion engines based on e-fuels, a hydrogen-based petroleum substitute, or hydrogen fuel cell electric vehicles).

Personally, because I have this thought, I think that even though electric vehicles will continue to grow in the future, if I were to use the word "chasm," which implies a temporary stagnation in growth, it would be appropriate only after the Trump administration's term begins, and even then, only if battery-based electric vehicles are still considered the most competitive eco-friendly vehicle platform.

When I see news articles about electric vehicles casually attaching the term "chasm," as in the article below, I believe it is nothing more than wishful thinking until the Trump era passes.

As I observed market trends after Trump's election victory, I stated that the main scenario for the short-term, or at most medium-term perspective, had changed. For example, my thoughts on Ecopro's stock price trend changed, similar to Samsung Electronics.

To conceptually illustrate the change in expectations, it would be a shift from the red line to the blue line in the chart below. I thought that if we endured this adjustment a little longer, a significant technical rebound would be possible. However, now even if a rebound occurs, it will likely be a small rebound, followed by a long decline...

Under the Biden administration, there was the IRA (Inflation Reduction Act), which supported eco-friendly industries such as electric vehicles. However, with the start of the Trump administration, there is a possibility of its reduction or even abolition. Therefore, even if the government provides support, it is questionable whether the chasm (if the present is considered a chasm later) can be easily overcome. If even the existing support measures are eliminated, the time to recover will likely be further delayed.

The battery-based electric vehicle industry itself needs to survive the Trump administration's term, I think...

It's expected that Elon Musk, who is expected to be the biggest beneficiary under Trump, and his company Tesla, might actually see electric vehicles benefitting during Trump's term. It doesn't seem strange to think so generally.

However, even if the electric vehicle industry itself shrinks or stagnates during Trump's term, Tesla, as the No.1 premium electric vehicle company, has strong brand power and is likely to survive even if other electric vehicle companies fail.

I believe Tesla has already started transitioning from an electric vehicle company to an artificial intelligence (autonomous driving, robotics) company, and Elon Musk is intentionally moving in that direction.

Musk believes that if he can deregulate autonomous vehicles during Trump's term, establish Tesla's FSD as a subscription service, and officially launch the Cybertruck (robotaxi) business, then even if battery-based electric vehicles become a stranded platform in the US and Europe, it won't be a major problem.

This is because, based on my limited knowledge and somewhat naive imagination, I believe that in the future eco-friendly vehicle platform domain, hydrogen fuel cell vehicles and e-fuel hybrid vehicles will compete alongside battery-based electric vehicles.

Hydrogen fuel cell vehicles are naturally electric vehicles, and e-fuel hybrid vehicles are fundamentally based on internal combustion engine powertrains. However, with further research and development, they can be controlled like electric vehicles, and autonomous driving technology can also be applied. This is my thought.

In short, if Tesla can achieve "autonomous driving technology advancement and related deregulation" during Trump's term, then even if the powertrain of the vehicle changes, it will eventually be adaptable. For Tesla, the core issue is the amount of autonomous driving data and the level of AI training. The current battery-based electric vehicle is merely a temporary stepping stone to achieve that; this is Musk's thinking, I believe.

Furthermore, whether it's a hydrogen fuel cell vehicle or an e-fuel vehicle, it all depends on whether economically viable hydrogen can be produced. For the past year or two, famous US investors such as Bill Gates and Jeff Bezos, as well as Jewish capital, have been continuously investing in exploration projects for natural hydrogen extraction.

I think they must be seeing something. Especially in Bill Gates' case...

The news above is from three weeks ago. It reports that Mitsubishi of Japan has started investing in "Coloma," an energy startup related to natural hydrogen that Bill Gates and Bezos had already earmarked and invested in.

If, during Trump's term, technology for extracting natural hydrogen (white hydrogen) like oil drilling is developed, and economically viable quantities of hydrogen deposits are discovered and extraction begins, I believe the battery-based electric vehicle platform will likely be completely overtaken by the hydrogen-related platform.

In any case, I think battery-based electric vehicles must first survive Trump's term before the word "chasm" can be used. Otherwise, it could become a technology/product that briefly shines and then disappears like the old city phones.