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The global shortage of semiconductors will cut worldwide auto production by as many as 7.1 million vehicles this year, and pandemic-related supply disruptions will hobble the industry well into next year, IHS Markit said.
The lack of chips won’t stabilize until the second quarter of next year, with recovery coming in the second half, IHS said in a report Thursday. The grim outlook is further proof that the chip crisis is far from over. And the research firm’s forecast doesn’t include the latest cuts from Toyota Motor Corp., which plans to briefly pause output at 14 plants next month and slash production 40 per cent.
“The situation is still fraught with challenges,”
IHS analysts Mark Fulthorpe and Phil Amsrud wrote in their report. “We are also seeing additional volatility due to COVID-19 lockdown measures in Malaysia where many back-end chip packaging and testing operations are performed.”…read more.
Four days ago, we reported a shipping container-sized Tesla Megapack battery unit at the world’s largest energy storage project, operated by France’s Neoen SA, in Australia’s Victoria, dubbed “Victorian Big Battery,” caught fire during a test-run.
Victoria Country Fire Authority (CFA) published a statement Monday that said the 13-ton battery was finally extinguished after four days, according to Bloomberg.
“There was one battery pack on fire to start with, but it did spread to a second pack that was very close to it,” Chief CFA Fire Officer Ian Beswicke said in a statement. CFA has yet to determine the origins of what caused the Tesla battery to combust spontaneously.
On Friday, when the fire was first reported, CFA officials were so concerned about toxic fumes spewing from the battery unit that they issued air quality warnings for surrounding suburbs and urged people to move indoors…read more.
Tilray Surges On Reporting First Results Since Merger With Rival Aphria, Reveals $33.6M Profit In Q4
Canadian cannabis giant Tilray, Inc. (NASDAQ:TLRY) (TSX:TLRY) posted its latest financial earnings report Wednesday, touting a spike in both fourth quarter and full fiscal 2021 revenue and a proclamation from CEO Irwin D. Simon that Tilray is “leading the global cannabis industry with low cost of production, leading brands, a well-developed distribution network, and unique partnerships.”
Based in New York and Leamington, Ontario, Tilray reported the fourth quarter 2021 revenue increase of 25% to $142.2 million from $113.5 million in the prior-year quarter. Net cannabis revenue totaled $53.7 million, representing a 36% growth.
Net revenue grew by 27% to $513.1 million during 2021, from $405.3 million in 2020, driven mainly by a 55% growth in net cannabis revenue, which amounted to $201.4 million.
The company highlighted that the financial results include a full quarter of the old Aphria (through May) and one month of the old Tilray. The two Canadian cannabis companies merged in May, after months of negotiations…read more.
The fintech funding continues to roll in at a rapid pace, a result of the huge shift underway in how consumers spend and manage their money. In the latest development, Revolut — the London-based financial “superapp” that provides banking, investing, currency transfer and other money management services to some 16 million users globally — this morning confirmed that it has raised $800 million. The company said that this Series E round of funding values Revolut at $33 billion.
This makes Revolut the most valuable fintech out of the U.K., as well as one of the biggest of the privately backed scaled-up startups not just in Europe, but the world. It’s also following in the footsteps of Klarna, the buy-now-pay-later startup out of Sweden that is also diversifying into a wider range of other services for consumers and the businesses that integrate it. Klarna last month raised $639 million valued at just under $46 billion. Stripe in the U.S. earlier this year raised at a $95 billion valuation.
This latest Series E is being co-led by Softbank Vision Fund 2 and Tiger Global, which appear to be the only backers in this round. It comes on the heels of rumors earlier this month Revolut was raising big. Revolut last raised about a year ago, when it closed out a Series D at $580 million, but what is stunning is how much its valuation has changed since then, growing 6x (it was $5.5 billion last year)…read more.
Inflation is getting so bad Arizona might have to raise the price of its iced tea above $0.99.
Okay, it’s not that horrific yet, but consumer prices did surge 5.4% in June from a year ago, the biggest increase in 13 years.
What happened: As the US reopened for business, consumers swiped their credit cards with fury. Combine that with supply shortages across the economy and massive government stimulus, and you get sweeping price increases.
But there are nuances
The WSJ’s David Harrison divided the inflation report into four categories to show that price hikes aren’t occurring uniformly across the economy. In some sectors…
- Prices that plummeted early in the pandemic and are surging to catch up. Think airfares (24.6% annual increase in June) and hotels (16.9%).
- Prices that are booming thanks to supply shortages. Used cars are the star of this category, with their price increases accounting for more than a third of June’s total price hikes. Economists expect prices to return to normal levels when supply chain wrinkles are ironed out.
- Prices that will remain higher permanently. You could be paying more at restaurants over the long term thanks to an extended labor shortage and higher wages.
- Prices that aren’t increasing that much. Rents are inching upward at a rate of 1.9% per month. For comparison, rents on a primary residence rose at a nearly 4% rate before the pandemic.
As always with inflation stories, we must close by turning to the Fed, whose main job is to keep prices stable. Will June’s inflation boom change Chair Jerome Powell’s view that price hikes are transitory?
Probably not. As we mentioned, the bulk of the price increases were in sectors battered by the pandemic (hospitality) or those battling supply shortages (used cars). Higher inflation might stick around a little longer than initially expected, but investors are betting more typical price growth will return, just like the handshake.
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