Well, the Biden Administration is now proposing or about to propose some pretty large new electric vehicle rules. Easiest thing to do here is pop on over to the New York Times and see exactly what this sort of prey leak is regarding electric vehicles. Take a look at just the headline here: EPA Sent a proposed rules meant to drive up electric vehicle sales tenfold in what would be the nation's most ambitious climate regulation. The Proposal is designed to ensure that electric cars make up the majority of new auto sales by 2032.

Right now, electric vehicle sales are closer to maybe five six percent of total sales. Now keep in mind this is really important to remember when we want to see if this is related to this, but the Inflation Reduction Act gave us somewhere around. Let's call it 389 billion dollars for energy related Uh items. However, Goldman Sachs believes that that number is actually going to be a lot closer or to about 1.2 trillion dollars via the treasury.

Department Simply interpreting rules, uh, more. Loosely in favor of the democratic agenda. So let's see how much of uh, this, uh this New York Times piece relates. Let's see: Biden Administration is uh, planning some of the most stringent rules on auto pollution in the world to ensure that all electric cars note not hybrids here make up as much as two-thirds of new passenger vehicles sold in 2032.

A lot of companies, by the way, talking about banning electric vehicles or sorry, Banning non-electric Vehicles By 2035, California is one of those New York I believe is another. Anyway, that would represent a Quantum Leap for the United States where just 5.8 percent of vehicles sold last year were all electric and would exceed Biden's earlier Ambitions to have all electric cars account for half of those uh sold in the country by 2032. That's because now he's trying to get up to two uh, 67. So I'm curious to see how they're planning on setting this up.

Take a look at this there. The administrator of the EPA is expected to announce the proposal limits on tailpipe emissions upon on Wednesday. So in in other words, this would simply be some Uh administrative rule, not a rule that is passed by Congress but rather some form of administrative Rule and emissions. and how green Vehicles need to be.

which essentially would drive people uh, solely into electric vehicles in order to make them compliant on green energy. That's sort of step one. We got that right. That's the Inflation Reduction act.

Uh, then uh, it? Well, I should say ensure that act includes leeway for the current Administration which in this case obviously is the Biden Administration and Biden's EPA and then allow that leeway to stretch the existing budget via the IRA which is what Goldman says, which Goldman predicts will be a 3X And so in my opinion, uh, what's fascinating about these rules is what you really have is you have a game of almost what looks like 4D chess in preview, but in hindsight totally makes sense. So then step four: have your uh, democratically controlled or I should say democrat-controlled Democrat controlled uh departments uh uh, create strict rule sets that require more Inflation Reduction Reduction act leeway right? Because basically if the EPA comes out and says hey, hey, we we need we need to get to 67 by 2032. you know what that means. So the example right? Pass a small Bill a small bill with a leeway then uh, Implement Strict rules Now Uh, Treasury has to go super strong on leeway side to enable those strict rules.

So in other words, the money's already there. You don't even have to go to Congress to create more money for what they need here, which are again, significant changes to millions of new electric vehicle charging stations. Think about what the Biden Administration has already done. Hey, Elon Musk Can we partner with you and can you build us thousands of more electric vehicle charging stations and we'll pay you billions of dollars to do that? Of course the answer is going to be yes, an overhaul of lecture grids and that's fantastic.

Potentially for Mega packs as well for Tesla right? which we just heard about that New Shanghai expansion for Mega packs that could create as many as 10 000 megapacks and then of course, helping with battery materials. The proposed regulation would go through public comment. it could be altered by the government before becoming final to make sure it meets legal challenges. It could become an issue in the 2024 campaign.

Pain as a future Administration could undo or weaken it. Notice here they don't talk about Congress because Congress has already been authorized or the purse strings have already been authorized via right here. The new regulations come on the heels of the 2022 Inflation Reduction Act, which has helped Stoke demand for electric vehicles by providing the tax incentives we've seen as well as incentives for battery manufacturing and critical processing. And Mining And there's been nothing that's been made more of in America right now than factories.

Uh in 2022. that's something that's pretty incredible to think about. Uh, we um, is reading a report on this yesterday and it's a worthwhile uh argument or a point to mention that in Uh, in 2022, we saw about 120 billion dollars. Actually, it was closer to 80 at 108.

it was 108. let me see if I can pull up my note: Uh, 108 million or colleague Kevin 108 billion dollars. Oh, I Got it here. 108 billion dollars of construction related spending in manufacturing.

Uh, that contrasts the next highest level compares to the next highest level in 2015 where we spent about 83 billion dollars. Which means we spent somewhere around 25 billion dollars more on manufacturing. This was according to the Wall Street Journal. Uh, we spent more money on manufacturing than we did on on building schools Health Care Centers and Office Buildings Much of that growth was focused on EV Tac Batteries, semiconductors.

That's because that's where the stimulus checks are going. Only 10 percent of the private Workforce right now is actually in manufacturing. Uh, however. Uh, the the sector still is behind in on a level of employment by about eight hundred thousand jobs.

So if you're looking for more growth, uh, the the growth is likely to be manufacturing. Look, uh, particularly here at this chart on screen now. construction spending related to manufacturing I mean we've blown out of the water the the previous Uh sectors here. Now What's also pretty incredible though, is how much these factories are automating these new, modern Uh factories.

Stanley Black and Decker gave us an example and they said that their automated lines used to have between 50 to 75 people per line to make. Power Tools Today though, factories only require about 10 to 12 people, and in the future, Stanley Black and Decker expects that only two to three people will be required per line on their manufacturing plan. I mean that that's a decline of 95 of the amount of Labor that's required in manufacturing, which is pretty remarkable to think about. But what it really suggests is that you probably don't want to be investing in labor.

not that you directly would invest in labor anyway. But what you probably want to do with this expansion of factories oops, is do whatever you can to find out. How can we make sure that you are exposed to companies that are building these manufacturing plants and are getting these massive stimulus checks? Uh and uh. Let's see we talked about this.

Let's look at the rest of the Uh article here from: The New York Times Transportation is the largest source of greenhouse gases. Uh, okay, why are we having some interesting my problems again here? Anyway, the proposed auto emissions rule is even more demanding than the target layout by Mr Biden in 2021. Speaking on the south lawn that was back when he was talking up the Ford F-150 fine. Whatever, climate change experts say that the transition to zero Mission vehicles must move faster to avoid a planetary disaster, so they could just go into why.

Basically proposed rule would not mandate electric vehicles make up a certain percentage of sales. Instead, it would require automakers to make sure that a total number of vehicles that they sell each year did not exceed a certain total emission vehicle limit. That's interesting. That's a one way to do it.

It basically puts the onus on the companies, not on the consumer, so it makes it a little easier for consumers. So in other words, consumers could still buy an Ice car. But uh, there will start being some restrictions on I Would imagine a way a manufacturer could do that is they could just raise prices on the ice cars to limit some of the uh, the number of sales there, while maximizing their profit and then lowering the costs on electric vehicles. Which that's basically what this bill does is it drives up the cost of Ice vehicles and down the cost of electric vehicles.

Even manufacturers that chafe against the regulations would prefer to deal with one set of rules rather than meet specific rules from a bunch of different states like Cal Here's that California line about banning in by 2035.. One of the biggest Uh items needed for electric vehicles is charging stations. 2021. Infrastructure Law provided 7.5 billion dollars to build a new network of about 500 000 charging stations.

Yeah, so uh, pretty pretty incredible. Uh, that. uh that basically these massive stimulus tracks are coming to the electric vehicle. World Obviously I think that's a boon to a company like Tesla but it'll also be a boon to companies like GM GM has a fantastic uh Ultium partnership with LG to make batteries.

They're building a pretty large Uh plants actually multiple sister plants in Ohio and Tennessee. What's crazy is how much money? just to give you an example of how much money is going into some of these plans? Uh, if we just Google just for Giggles Uh, the the cost to build a factory. Usually you look at a cost to build a factory if anywhere between five to Fifteen billion dollars. Let's just say for Giggles we'll take the average.

We'll take the number of about 10 billion dollars. Well, GM and the LG partnership just got a Federal Loan which is super super sweetheart deal of 2.5 billion dollars. So about 25 percent of it. the rest they can get commercially.

Uh, and then they're getting about 666 million dollars in state grants and bargain electricity rates to actually operate those plans. Uh, and so what's remarkable is you're seeing governments at every level and the monopolies at every level. Whether it's the electrical departments, the cities, the counties, the states, the federal government, everybody's throwing money at these these factories. And it's not just going to be a company like Tassel that succeeds.

it's probably going to be the chips manufacturers is probably going to be uh, your your chip related companies. Uh, like the chip equipment manufacturers, Uh, the the companies that actually take in those chips and use them like Apple for example, by taking the chips and turning them into a consumer product. Uh, but it shows you how much money is just flowing in. It is quite remarkable and and how they're pulling it off.

Now, there has been some chips weakness over the last couple weeks in terms of a trade that's worth paying attention to. For example, if we look at Goldman Sachs on chips, this is a piece from Goldman Sachs on Chips. Let's make sure we go ahead and have this screen up here that reminds you about the expiring coupon code in two days on CPI day. Prices will be going up for those programs on building your wealth.

Link down below. you get lifetime access and you can now buy now pay later to get access to them Lifetime access to them. You pay as little as 30 bucks a month, which is pretty cool. You instantly get access to those course member live streams.

So take a look at this Hedge Funds net sold tech stocks for the third consecutive week. And if you look at just semis specifically, this is a long uh, they call it an LS chart long short race ratio chart and basically the higher the level the more short uh or sorry. Rather, the more long in this example, the more long hedge funds are and the lower the level the more short they are. And what you can see is hedge funds went into 2023 extremely bearish and uh, they.

They came out a little bullish there around February but have already started selling off again. However, look at how uncrowded the semiconductor space is right now, which happens to be where the majority of the stimulus checks are rolling and look how uncrowded it is. The long short ratio is basically even. We're basically at a one-to-one ratio here there.

In other words, for every dollar that somebody is long. right now, somebody's sure on semiconductors now. look: I Understand, there's been some news that hasn't been the greatest uh regarding Uh semiconductors and and PC shipments and you know what's going on with Apple For example: Apple personal computer shipments declined by 40.5 percent in the first quarter. Uh, this is per Bloomberg quote marking a tough stock the start to the year for PC makers still grappling with a glut of unsold inventory.

The Uh that compares to Dell which looks like it's down about 30 HP down about 28 Overall Market down about 30 percent Aces down about 33 Lenovo down about 33 as well. You've got uh. let's see here: Apple shares down about point eight percent and pre-market what this article was written. Uh, even with heavy discounting channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter.

The Silver Lining is that cooling demand is giving manufacturers time to make changes as factories begin to explore production options outside of China That is true. You are starting to get uh, sort of this. What? I call re-globalization A lot of people during the uh, you know, post Uh Covet era were saying oh, here we go. We're going to get deglobalization and we're getting massive inflation because of that.

I Don't think so I think we get re-globalization We actually get even more efficient Supply chains than we've ever had before. Tsmc also this morning announced that they missed sales estimates for the second consecutive quarter and a sign of continued weakness and Global Electronics demand First quarter revenue for the world's biggest contract manufacturer of chips was 16.7 billion. That's a sharp slowdown in March sales were down 15 last month relative to the prior year. Companies listed shares down about 1.1 percent in pre-market Global PC shipments crashed 29 in the first quarter led by Apple's Mac lineup Apple's Mac lineup uh, the one that is actually leading the decline now Apple's uh, iPhone iPad and wearable segments have been doing better uh than the the Mac line, but something to pay attention to, especially if you're an Apple investor.

Now what? I think uh about this and we could just sort of just quickly look at the market too. Let's see how they've moved Tsmc pre-market right now down about 1.54 AAPL pre-market right now down about 1.3 So what I would do is I would pay attention to see how the stock these stocks move today on these basically pre-announced sales weaknesses because I think what these companies are doing is they're providing you the bad news now and then. That way when earnings come around, the expectation is already set and it's actually a lot easier to beat on your earnings report by pre-releasing the bad news. and the pre-release bad news is only moving these stocks about one to one and a half percent.

It's probably because so many people are already short these chip and tank companies and so, uh, I actually find that uh, a a big element of I I See a lot of optimism in that I Love that. Uh, there's there's so much of a short play in uh in the chip sector right now, because when we combine that with what we're expecting to see with electric vehicles which require a lot of chips uh, superchargers, chips, uh, pretty much anything Tech Related Chips. Chips. Chips Chips Chips.

Uh. In and this is where the stimulus money is going not only via directly this chips act, but also the inflation reduction act uh, and the manufacturing economies of scale that we're expecting to see here in America Yeah, I Think in 10 years from now, we'll look back and go. How could we have not bought chips and electric vehicle stocks? It's going to be remarkable, so that's my take. If you want more of my take, make sure you join those courses on building your wealth linked down below.