Roxy wrote:OS, you still haven’t explained why battery prices will continue to fall in this inflationary environment.
1). Battery prices re BEV technology are falling faster on a YOY trend over time than the moderate real world inflation we're experiencing.
https://www.economist.com/graphic-detai ... ee-decades
https://www.greencarreports.com/news/11 ... combustion
https://www.nrel.gov/docs/fy21osti/79236.pdf
2). Most of the current inflation spike is from the supply chain mess and mismatch between supply and demand for products generally, caused by Covid. Within a year or two, most of that will go away as companies and the economy adapt over time.
3). The overall longer term forces are deflationary (like automation and technology improving productivity), so the longer term inflation rate should return to the low rates or even disinflationary trend we saw overall from the 2008 mess through 2019.
Just because so many of the usual suspects on the internet generally are claiming that inflation will become hyperinflation and we're doomed doesn't make that so.
5%ish inflation is annoying, but it's really not that bad. It was pretty normal for much of the 60's, 80's and 90's. It's MILD compared to what we experienced through the 70's.
Overall, the rate of US inflation has been in the %3.5ish rate on average for a long time. As a sanity check on that:
https://www.nrel.gov/docs/fy21osti/79236.pdf
60 years of US inflation (a round number that includes the highly inflationary 60's and 70's) from 1961 to 2021 has total inflation of under 820%.
So that's a little over 3 doublings of prices. Using the rule of 72, if it takes 20 years to double prices, that's an average inflation rate of 3.6% (72 / 20). So certainly below 4%.
The 5.5% inflation rate we've been seeing for much of 2021 is only about 1.5 times the more typical average historical US rate for at least a couple of generations (call it 3.7% or so). I think people tend to get so wound up about this inflationary blip because we're so spoiled by how low inflation has been for a couple decades (recency bias). (As someone who retired in 2007, I consider low inflation a real nice break, having grown up with 70's inflation wreaking relative havoc).