ILCB - The Ongoing Chip Shortage May Limit EV Production

• In addition to battery element shortages, the chip shortage has limited electric vehicle production. At the auto show in Munich last week, several auto executives commented on the chip shortage.
• Overall, the electrification of vehicles may be characterized by perpetual shortages for years, due to the lack of semiconductor chips, lithium, nickel and cobalt.
• In the past 12 months, PPI and core PPI have risen 8.3% and 6.3%, respectively, so wholesale inflation continues to run at the fastest pace in several years. The most amazing inflation trend is that wholesale inflation in China is even worse than it is in the U.S.

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