2025-01-08
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Trumps has a free hand, but he also faces a daunting task Trump’s second term faces a tougher challenge than his first. Even though we might likely face a 12-year conservative Republican rule (Trump 4+Vance 8), the task at hand still requires consistent execution in lockstep manner. In particular, Trump faces three ‘impossible triangles’. How to cut inflation with a trade war and an immigration ban Bringing inflation down cannot happen at the same time of a major trade war AND an immigration ban so the goal must be accomplished in steps, compensated by tax cuts along the way. The solution of the Biden Administration is to subsidize renewable industries to bring the jobs home. It is too little and too late but at least the deficit is spent as an investment for the future. It is inconceivable that Trump as a shrewd businessman would subsidize sunset industries. Autonomous driving cannot grow out of ICE vehicles The engine torque response time of ICE vehicle is 1.8-2.5 seconds while that of EV is 0.1 second and thus ADS cannot grow out of ICE. Further, ADS is, in our view, the single biggest application of generative AI (GAI). Trump’s political standing will impede America’s leadership in GAI. GAI will upper the need for electricity but fossil is not the answer Today ~50% of the human energy need is heating, another 25% is transportation and 20% in electricity. GAI will upper the need for electricity, which together with EV forms the driving force behind electrification of the energy use of mankind. Returning to fossil is not impossible but will be increasingly cumbersome to execute. Trump’s energy position is indefensible, in our opinion. It is not advisable to exaggerate Elon’s clout in Trump’s team |
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