China’s Clean-Tech Glut Undercuts US Onshoring Hopes

is producing. Many China based clean tech manufacturers are experiencing razor thin profit margins all the while, six hundred and forty nine billion dollars of new factories are set to come online between twenty twenty four and twenty twenty seven, which would bring prices even lower. On today's show, I speak with bnaf's head of Trade and Supply Chains and

Twan Wagner Jones. We talk about how China and other parts of the world are addressing over supply through policy, and whether the US's Inflation Reduction Act and the European Union's net zero Industry are going to be enough to stimulate more local manufacturing. BNF subscribers will be able to find Antoine's research note titled China's clean Tech overcapacity threatens on Shoring Dreams at BNF dot com or at BNF

on the Bloomberg terminal. Make sure to subscribe to switched on if you want a reminder when we publish future episodes. And if you like this show, if you give us a review on Apple Podcasts or on Spotify, it's going to make it easier for others to find us. Right now, though, let's talk to Antoine about overcapacity in the clean tech

manufacturing sector. Anton thank you for joining today. We're going to be talking about oversupply and some of the most important parts of the energy transition AIDIA.

world in the sectors that you just mentioned. Since there's been a bit of a shift and right now the Chinese economy is in a very different position, and we're seeing basically an implosion of the housing sector, which is a real drag on growth, and that's a situation that

sort of persisted. So the Chinese government's thinking about what are some of the other levers that can be pulled on, and going back to this idea of export lead growth and identifying a few priority areas has been part of the solution, and electric vehicles, solar modules, and lithium ion batteries are the three sectors that have been picked out as especially full of potential when it comes to being sectors that are expanding rapidly and for their being growing

markets outside of China for those goods. And what's really interesting is we've seen a shift recently where this has been a priority that's been identified by the Chinese government in terms of exporting these different goods, but we're also starting to see the likes of Bloomberg News Goldman Sachs the Financial Times start to draw comparisons looking at those sectors and their contribution towards Chinese GDP at a time where things are slowing down a bit, and comparing it

explicitly with the real estate sector and its contribution to GDP. So really a repositioning of the energy transition, not just talking about China's role in sectors that could be labeled as strategic or key to the energy transition, but also talking about the macroeconomic weight of those different sectors and their contribution to the Chinese economy, which is a pretty new shift and one that's quite exciting. Now.

of that was from battery cell factories coming online. So huge part of what's being invested what we think will we be invested across all clean energy factories are in the battery value chain because of the fact that that specific supply chain is so capital intensive. Now, when we look at where stuff's coming online, that's where things get

really interesting. So when we look at clean energy supply chain investments written large, there's a lot of excitement about onshoring and localizing things outside of China, But when we look at where new factories are actually coming online and still doing so, things are still more than ninety percent concentrated in one place, and that's China. So we're seeing we're still seeing a lot of momentum bekind new factories coming online in one part of the wor world, and

they're doing so at a massive scale. In the past, a lot of the reasons for why Chinese manufacturers were starting to try and find footholds in certain sectors was

due to low labor costs or significant public support. But now we've reached a situation where those battery manufacturers are at the technological frontier of what's being done in that space, where we've reached levels of scale and sort of the accompanying networks of providers in certain regions that just allow them to outcompete basically any other sort of nascent battery

making industries outside of China. And that's a real big part of why China is so competitive is really down to scale at this stage and down to investments in supply chains that stretch back quite a few years now.

So right now we've actually got a situation where in twenty twenty two, by the end of the year, China had more than enough manufacturing capacity, and whether it was in the upper bit of the value chain in polosilicon manufacturing or whether it's all the way down downstream to module making, it had enough manufacturing capacity within its own borders to supply the whole of the world's demand. But what we saw over the last year is a pretty

unexpected boom in continued investments in new factories. They're built so quickly in China that many of them came online in twenty twenty three. And right now, when we look at Chinese manufacturing capacity and we compare it to global demand, so China's nameplate manufacturing capacity is more than twice what

would be required to meet global demand. And based on what's been announced, and many Chinese manufacturers don't announce manufacturing capacity investments that far ahead of time, but just based on announcements that will continue to be the case even as demand grows according to our optimistic scenario over the next two years. So pretty shocking levels of over capacity.

That's the case for solar modules. It's also the case for polysilicon, where there's over one point one terrawatts of polysilicon manufacturing online in China today, and then if we're looking at our demand numbers for the world, we're at somewhere around six hundred and seventy giga what's required for twenty twenty four, according again to optimistic scenario, So just to give you an idea of the scale of overcapacity

is really pretty shocking. And it's also the case for battery manufacturing where similarly, battery cell manufacturing capacity in China is basically more than twice global demand. That will remain the case going forwards based on announced facilities, and it means that China's able to pull off pretty impressive feats like building enough lift your mind battery cells love year

to supply all of the world's demand. So we're at levels of continued over investment in battery manufacturing, in solar manufacturing, we're seeing that continue and we actually track the numbers and we identified about four hundred and sixty nine billion dollars of overinvestment above what would be required to meet demand under our net zero scenario over the next four years in battery manufacturing and solar manufacturing.

complicated to set up and get running. A module factory is a little bit less complicated, relatively speaking, and can be put up in a few months if you're retrofitting, if there's an existing production process which is more aligned with the one that you're putting in place, then it can be done relatively quickly, within sort of I've heard three months, but six months being something that's routinely cited as the amount of lead time required to put up a new module factory.

didn't match what they projected their demand to be. But these came online regardless of where current demand was, almost reaching then for future demand that maybe they see coming, it's sort of if you have the supply, then the demand will exist because the economics will be so low. So they're kind of creating the market where maybe even closer to being paras aligned to thinking about bringing down emissions and making the renewable energy transition even faster if you think about it.

energy crashing down. It's brought the cost of electric vehicles, of batteries, of solar modules, for example, and even within China, and this is a bit different to the rest of the world's wind industry, the cost of wind turbines falling pretty rapidly, so we've seen, for example, the spot market rate for a Chinese solar module is now around eleven dollars cents per what a year ago it was double that, So it's really rapidly falling, and that means the world

gets to profit, especially at a time when, for example, in the West, like the energy transition has never been submitted to the levels of political scrutiny that it's under, whether that's in Europe, whether that's in North America. And now we're at a time where the economic case for the energy transition is stronger than ever, and a big part of that is due to the fact that we've got this massive surplus glut in good quality, low cost

technology coming from China right now. That is a positive story and it's one that should lead to an acceleration of the energy transition. We've even seen sort of reports of people now in Europe putting up solar modules along fences, for example, because you can do that now it's cheap enough.

companies themselves that are the producers, is electric vehicles. So when we're talking about electric vehicles, the number of vehicles that are actually coming online from China, are those actually then being also exported or are those being focused on their domestic market.

for example. There's a question now is whether or not we're sort of at a historical turning point where we're starting to see very explicitly a lot of Chinese EV manufacturers BYD being the most commonly cited one, but there are many others turn their gaze beyond China in a much more serious sense than they were in the past when it comes to looking at growing markets. Chinese market is becoming increasingly oversaturated, it's incredibly competitive, so there's a

lot of looking abroad. So again, BYD, the world's largest producer of EV's also produces a lot of its own batteries, has now been commissioning large carrier ships that are specifically designed to carry vehicles, and it's sort of leading the charge along with another couple of EV manufacturers like Great War Motive, for example, in trying to sell more to emerging economies, set up manufacturing there, but also sell cars from out of China into Europe, and that's something that

we've seen recently, a bit of an emerging trend where we saw about nine percent of evs sold within the EU last year come from Chinese headquartered manufacturers, and that's a share that we expect to see growing and that's in turn led to a bit of a pivot from the European Commission, which is now a little bit concerned about that penetration and is thinking about whether or not

to put in place new tariffs. So there's currently an anti subsidy investigation that's been launched by the European Commission looking explicitly at whether or not there'd be an argument that could be made that Chinese manufacturers are benefiting from unfair subsidies and that would provide the backing or the cover to put in place new trade measures which is something that the EUS shine away from in the past.

It's got pretty minimal tariffs on most clean technology, especially when you compare it to other regions of the world that are also aligned with the EU in terms of trying to build out local supply chains at local manufacturing, like the US, like India, both of which are much more comfortable with using protectionist tools as part of their industrial strategy. Arsenal.

not there just yet. So the question is are these Chinese vehicles that are coming online in places like Europe, are they getting closer faster?

for example, you're around forty to fifty thousand dollars. Now, the picture in China's very different, And just within China you've got things like BYD's cgull hatchback, which is a model that's regularly cited now just because of the fact that it's being sold at pretty shockingly low prices of under ten thousand dollars per car. Now, when BYD is sort of setting those cars and exporting them abroad, we're

typically seeing prices around double that. But even if you're stacking on top tariffs and shipping costs and all these other things, you're still seeing cars that are sold at

extremely competitive rates. So the outcome of that will be that the tipping points that we'd be seeing would be reached more quickly because we're starting to see a wave of again, good quality, cheaper cars come into these markets where traditionally speaking exactly that economic tipping point was holding back adoption and leaving it as the preserve of countries that are able to dole out extremely generous upfront grants for buyers, or countries that a richer and able to

afford those cars. We might see a bit of a change there, and it's something that will be quite interesting. Again, there will be differences based on region and based on how comfortable different parts of the world are with employing measures around market access. And for example, the US seems like a bit of a less of a promising market

for Chinese auto manufacturers than Europe. So byd and these other companies are much less bullish when it comes to their ability to set into the US market as opposed to other parts of the world.

global oversupply and domestic oversupply in these industries. Can you talk a little bit about the role of the Chinese government in how solar batteries and electric vehicles are really working From the manufacturing side.

financial institutions. There are subsidies offered at a local level when it comes to power or land, just as happens in much of the rest of the world that's trying to pursue growth via industrial strategy. But really something that goes unsaid is the extent to which this is the

result of market forces, and to quite a shocking extent. Actually, when you look at the margins that we're seeing in the solar industry, in the battery making space, in ev manufacturing, even among wind turbine makers within China, margins have shrunk considerably due to the fact that competition's gone from red

hot to white hot recently. It's an incredibly tough space to operate in and actually a lot of the overcapacity that we're seeing is not so much the result of an intentional policy to try and flood the world markets with this kind of technology, it's more the result of companies playing a big game of chicken, and basically the first to blink in terms of not constantly updating your

manufacturing facilities is instantly rendered irrelevant. And what I mean by that is that we're seeing very fast technology cycles. In solar for example, we're seeing a shift to ND type modules called top con modules, away from PERK, which was the previous dominant technology. That's happened in just a couple of years, and that means that you're constantly having

to invest in new manufacturing capacity to stay relevant. And we're also seeing that in the battery making space, where we're seeing rapid shifts from nickel heavy chemistries to ones that are more iron based. And again we're seeing the picture change extremely dynamically from year to year, and that results in the same sort of thing, massive investments in

just trying to stay relevant in the space. And actually proof of this has a big dynamic that we're seeing is the fact that these companies' share prices have really not been doing great. They've been underperforming the Shanghai Stock

Market index. That's been a persistent trend that we've seen over the last few months and is directly linked to this idea of massive overcapacity, pressure on prices, pressure on margins, and that is part of the reason why these manufacturers are now looking abroad and looking to try and sell their products outside of China because of the fact that their home market is so oversaturated, and that oversaturation is the result of relentless extreme competition.

lot of the areas that they actually go into. So have these nearshore and onshore manufacturing facilities have they been able to get anywhere close to being competitive?

So we're basically on the cusp when we look at what's been announced of a pretty big wave of not just breaking ground or starting to make investments, but factories actually coming online for clean technologies across North America and

across Europe. That's a real big shift, and that's really driven by a lot of those policies that you mentioned, which are things like the Inflation Reduction Act in the US, which is incredibly generous when it comes to subsidies for manufacturers, many of which are in the form of production based tax credits, but also in the form of the Federal

loan program, for example. And in Europe we're starting to see the Net Zero Industry Act, which is still in a proposal stage, but sets out these incredibly ambitious targets for local manufacturing, and it's being increasingly backed up by member states starting to give company specific support to certain firms willing to manufacture in Europe, but also in the form of countries trying to put in place their own versions of the inflation reduction acts, such as France, for example,

which is very keen to start to provide tax credits to manufacturers setting up shop there. So this is a big shift that we're seeing. The question is is that competitive. The answer is no, not from an economic perspective, but on shoring, localizing supply chains was never really about making

the case that it was economically competitive. There was always this idea, at least among those who are honestly presenting these ideas, that there would be a premium to be paid as a result of this, but that that would be worth the co benefits in terms of resiliency, in

terms of local value creation, in terms of jobs. And that's a calculus that has changed a little bit due to the current overcapacity situation and the current low prices that we're seeing do mean that that economic gap is greater than ever before, and that manufacturing in Europe and manufacturing in the US comes at a greater cost compared to the current cheap technology that we could be relying

on then was the case in the past. So it does reshuffle the cards a bit in terms of the implied cost of trying to make good on all of these onshoring plans, and we're starting to see that trickle down through decisions made by companies such as meyer Burger, for example, which is a Swiss company. It operates out of Germany, but it's Europe's only real claim for solar manufacturing to be happening at scale when it comes to the downstream bits of the value chain, so cells and modules.

That company has recently said that it's basically winding down its European operations and shifting to the US where there's better access to subsidies. And the real driving force for that is the current crash in module prices that we've seen that is directly resulting from Chinese oversupply. And that's at a time where the EU is saying we want to have forty percent of our solar demand sourced from

locally made solar modules by twenty thirty. If it's unable to keep existing manufacturers from decamping elsewhere, how is it going to achieve those objectives is a big question that is unanswered at present when it comes to the EU's current policy making environment. There's similar pressures on manufacturers in the US, where even if you have more generous subsidies

in the form of the IRA's tax credits. You're still seeing manufacturers like Cubic PV, which had a big eight to ten gigawatts per year plant for making PV wafers in the US as basically announced it's canceling those plans due to the overcapacity situation, rendering its planned operations unfeasible

from an economic standpoint. So this is a real pressure and it's really weighing on these onsuring plans, and it's meaning that policymakers are going to have to do one of two things, either give up or double down and get serious, but probably in a more focused and targeted way than in the past, where there was a vague thought that if you pursued localization it would sort of work out, and in the EU it wouldn't involve hard decisions around trade barriers or around thinking more about how

to restructure subsidies. It would just sort of happened if it was identified as a priority. That doesn't seem realistic now, and it seems like there's going to be real pressure on policymakers to either do what the French government is doing and go extremely hard in one direction and say no,

we're going to double down on this. We're going to put in place market access barriers for Chinese companies willing to sell evs into France or benefit from ev subsidies in France, or for example, go the way of Germany, where a member of the coalition government is really not keen on any kind of measures that could be deemed to be sort of market interference or distortive in nature, and where we're seeing real pushback against the idea of

putting in place concrete measures for incentivizing local solar manufacturing. So there's real hard discussions that are already happening in these countries because of this overall global situation that we've got as a backdrop, And that's going to mean that the next year is going to be really key to understanding the extent to which all of this vague talk of onshuring and localization is actually going to bear out in reality.

and changed the market for the US specifically. What impact has that had on other countries that perhaps aren't as proactive about getting involved with pricing and manufacturing and where and for how much?

But that's why we've seen so much of the policy making around this be quite fuzzy and inexact, and where many of the conversations have been happening have avoided making these hard choices about doubling down and what the actual objectives are is exactly because of the fact that a lot of these policies have been reactive by nature, have been drawn up in a bit of a scramble to provide something to compare what's being offered in the US against.

And the upshot is proposals that have come out of the EU which are still at a very early stage and still being brought into question. There's still a lot of skepticism about the extent to which these extremely ambitious onshowing targets that are being put forward by the European Commission,

whether or not there to be taken seriously. And that's a direct result of the fact that the Iras really put pressure in a very short timeframe on redrawing the map when it comes to industrial strategies across the world.

And are we having a conversation regarding timing which will more or less sort itself out over the next decade or so.

across all of these different sexes. There's overcapacity now it's providing extra low prices is going to speed deployment and uptake, and that's something that is quite clear. The cause of

relationship there is very simple. There's also another part of the story as well, where because of the fact that we're seeing extremely fast cycles when it comes to technology and the needs to update factories that I mentioned earlier, is that many of these factories that are built now will be redundant in a few years if they're not constantly invested in. That's part of the cause for a lot of this overinvestment, and we're already seeing a lot

of planned over investment going forward. But it's also relevant to the overall picture because of this incredibly dynamic space that we're seeing, whether it's with solar technology and the shifts between different types of technology that we're seeing there, or whether it's rapid advances in new battery chemistries in the littumon space. So those are also things to sort

of bear in mind. But overall. What's really interesting, and again this is part of the work that we did just looking at sort of energy transition investment trends earlier this year, is that even as we tracked one point three trillion in energy transition spending last year, that was maybe three or four times less than what was actually needed according to our net zero scenario, we're really seeing

a big shortfall. But that small share that we saw in energy transition supply chains investment was the one or one of the very few areas where investment was on track, whereas a part of the puzzle that we have solved. And yes there are issues in terms of concentration and resiliency of those supply chains written large, and how aligned it is with different political objectives that very enormously based

by region. But the fact is is one part of the equation that has been solved for and where we're not seeing a systematic shortfall investment, which is sadly the case across much of the world's energy transition. And that is something to find solis in when.

the next few months. What we've seen in the past is we've seen tariffs on certain products coming directly from China, leading to Chinese manufacturers basically upping sticks and setting up factories in regions where they have equally low costs for manufacturing and where they're able to sell into the US. And the big example there is PV with Southeast Asia, where you've seen an influx of the major Chinese manufacturers into places like Malaysia and Vietnam specifically to get around

the US tariffs on Chinese imports. That's been a bit of a game of cat and mouse. There's been a bit of a ping pong match with different sort of officials within the Commerce Department in the US, lobbying sometimes successfully. We've seen some relaxation of those rules for restrictions on modules coming from Southeast Asia. But it's a clear example of the kind of reactions and strategies that we've seen employed by companies affected by these policies. The question is

will that happen to other sectors. Now, Mexico is an interesting example. We're about to publish, well, we will have published a note by the time this podcast comes out

on specifically addressing this issue. And what's the issue in question is that US policymakers have talked about exports, specifically of Chinese electric vehicles manufactured in Mexico being sold into the US, where because of the USMCA favorable trade terms between Mexico and the US, they're avoiding the twenty seven point five percent tariffs that are applied to Chinese EV's

coming from China into the United States. So it could be sort of a back door where you could start to see because of low Mexican manufacturing costs, so factory workers in Mexico are actually paid less than in China. Now it's pretty shocking fact, but there's a real case to be made for manufacturing in Mexico, and Chinese EV manufacturers could profit from that and set into the US. However,

there's a few big howevers. One is that there's no real existing lithumind battery supply chain in Mexico right now, so the current government has been quite interventionist and hasn't had the most relaxed approach to foreign or private investment into the lithium ion battery space. That's sort of held back a lot of investments, whether or not it is on the exploration side of things for mineral extraction for lithium extraction, or whether or not it's an actual setting

up battery factories and EV production lines. It's acted as a bit of a drag on those investments there. And we're seeing an election coming up sort of midyear where the likely front runner, Cloudy of Shinbaum, also stems from the same sort of school of thoughts. So even though we're hearing a lot as she's on the campaign trail about opportunities for Mexico to become a big hub for battery manufacturing and benefiting from the US's focus on near assuring,

a lot of its supply chains. There's a lack of clarity about whether or not she'll be willing to put in place the reforms that would actually enable that to happen because of how politically charged they are within the current Mexico political ecosystem. Now, the other thing is that there are a couple of Chinese EV manufacturers active in Mexico, only two that we've tracked. Jac is one of them, and it's pretty minor footprint when you compare it in

the grand scheme of things. We've seen a lot of talk of BYD again of a number of Chinese EV manufacturers talking about setting up in Mexico, but we've not really seen anything confirmed, nothing concrete as of present. And actually, what's really interesting too is that a lot of the fears or concerns that are cited by US policy makers are around, Okay, we've put in place these IRA subsidies that also benefit North American EV assembly and manufacturing writ large,

Chinese manufacturers could benefit from that. Well. Actually, a lot of the fine print within those subsidies and the thirty D EV or Clean Vehicle Tax credit that provides a sort of upfront purchase grant for EV buyers in the US, which is incredibly important, receives a lot of media attention that isn't available in most cases if a Chinese company is involved in the manufacturing process. So already you're seeing an environment in Mexico that isn't super favorable to setting

up a battery manufacturing hub anytime soon. You're seeing a lack of real concrete investments by Chinese manufacturers, and you're also seeing an environment in the US where market access for Chinese firms isn't a given. So our conclusion is that those concerns are overblown and overstated. But we are going to enter a new era of tariffs potentially in

the US if Donald Trump wins. We've heard talk of sixty percent tariffs on everything coming into the US, and we've also heard talk of one hundred percent tariffs, is something that was recently mentioned by Donald Trump at a speech on specifically Chinese made vehicles coming from Mexico. So again, Chinese manufacturers, they're not particularly looking to sell into the US because the current environment seems to be incredibly difficult.

But the big question is what happens to Europe. Europe still remains incredibly open when it comes to citing Chinese manufacturers or East Asian manufacturers in general, tariffs are still low. The big question there is will that change, And that's when things will get quite interesting when it comes to re examining how that would play out in practice and whether or not we could see circumvention implored as a strategy and response.

in terms of energy access. What is happening there and how does all of this global economic interplay for these industries, how does it impact them.

on where you're looking. Southeast Asia is becoming a pretty big hub for manufacturing clean technology, and that's something where we've seen massive investments from Chinese manufacturers, but also an increasing focus when it comes to engagement from the US or from the EU on having a role to play there too. The situation in sub Hian Africa is very different.

We've seen a lot of excitement around potential sort of battery manufacturing or even exports of things like hydrogen for example, from subs Hiana, but when it comes to realizing projects to tapping into local demand, things are much more complicated and difficult. One country that's quite interesting is India. So since twenty nineteen and even before, but really twenty nineteen was the point where things intensified, we've seen a real

push from the Indian government to onchore solar manufacturing. Specifically, it's deployed all kinds of different tools, from import tariffs, from approving a certain list of manufacturers to take part in bids. When it comes to soda auctions, it also takes the form of local content requirements. There's been a real battery of measures that's been deployed for onshoring soda,

and it's gone well, it's not gone great. There's been a degree of uncertainty from investors and developers complaining a lot about increased costs, about the lower availability of modules at a low prices, increased the cost of doing business for developers in India large it's been quite inflatory, just in the same way as any of these sort of

protectionist measures would be. But we've really seen it as a sort of sandbox for trying out these measures in an environment that's very different to the US, that's very different from Europe. What we have seen is limited success in growing out four years on from when this started out in serious limited success when it comes to growing out supply chains up and down the solar value chain.

But we have seen some pretty big investments in solar module manufacturing, and there's increasing interest and detailed talk about doing the same for manufacturing cells and even going up towards wafers. It's still early days, but it's still a really interesting experiment that we're seeing and that would be good to track, just because of the fact that local demand is set to increase incredibly rapidly, and we've already

seen a real credible commitment from the Indian government. When it comes to clean energy, manufacturing in India is held back by all kinds of structural factors. It accounts for a smaller share of GDP that you might expect given its developmental trajectory, but there's still a big case to be made for some of the fact that production costs could be quite low, and it could serve as quite a useful base when it comes to diversifact fighting manufacturing

away from relying on China, for example. There's a lot of excitement around cooperating with India, as there is with places like Indonesia, for example, and playing a more important role within those battery or solar value chains. So it's still relatively early days in a part of the world where the amount of budgetary headroom for achieving these kind of objectives is a lot more limited than say the US.

But I would sort of continue to look at India quite closely just because of the fact that the government is extremely comfortable with taking quite an aggressive stance on onsuring. It's been doing so since much before, several years before

the IRA came into force. And it's showing a level of determination that sort of hints that it might not just do that for solar it might also do that for say, battery manufacturing when that starts to grow out in a more serious way in India, which we expect to be the case over the next few years.

This time again, these overcapacity concerns have been brought up by Janet Yellen in the Treasury Department. They've been brought up by Catherine tie in the Commerce Department during a recent trip to Brussels, where those talk around Chinese overcapacity as a structural issue echoes with many of the views that are being cited in the European Commission and across member states. So there's a general consensus that something needs

to be done. There's a desire to engage with China about ways in which to resolve this issue, and the Chinese government has identified overcapacity as a concern, but I think it's just it's still quite difficult for it to act at a time when those sectors are potential sources of growth, when the Chinese government's ability to sort of slow down investment even as it limits IPOs for example, and tries to weigh on the decisions to expand manufacturing

are surprisingly limited when a lot of the incentives are given at a local level in China, and at a time when things aren't as coordinated as they might seem.

Those sectors are priority sexers that have been identified by the Chinese government, But as I've mentioned, a lot of those investments, a lot of that over capacity are the results of market forces, are the results of firms trying to outcompete each other, trying to outinnovate each other, and that's why we're seeing completely bonkers level of overinvestments in solar and in batteries and across evs, and that's unlikely to change in the short term as a result of

this kind of engagement that we're seeing at present.

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