Raphael Stevens

Delta expects costs to rise in the first quarter and weaker-than-expected bookings because of the variant.
Airlines canceled thousands of flights around the year-end holidays as Covid sidelined crews but Delta said its operation has stabilized.
Delta executives will hold a conference call to discuss results and outlook at 10 a.m. ET.

A Delta airlines aircraft landing from Los Angeles at Kingsford Smith International airport on October 31, 2021 in Sydney, Australia.
James D. Morgan | Getty Images

Delta Air Lines said Thursday that the surge of the omicron variant of Covid-19 will drive it to a first-quarter loss, but that it still expects travel demand to rebound and to turn a profit this year.
In the fourth-quarter, Delta posted its highest revenue since late 2019, thanks in part to strong holiday bookings and more business travel. Sales of $9.47 billion beat analysts’ expectations for $9.21 billion. The company is still yet to fully recover from the Covid-19 crisis. Revenue was down 17% from $11.44 billion during the last three months of 2019, just before the coronavirus pandemic began.

Delta’s shares were up 2.7% in premarket trading after the company reported results.
CEO Ed Bastian said omicron is expected to delay the rebound in travel demand by 60 days.
President Glen Hauenstein cautioned, “The recent rise in COVID cases associated with the omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from President’s Day weekend forward.”
Here’s how Delta performed compared with what analysts expected, according to average estimates compiled by Refinitiv:

Adjusted earnings per share: 22 cents versus 14 cents expected.

Revenue: $9.47 billion versus $9.21 billion expected.

Delta posted a net loss of $408 million in the fourth quarter as fuel and other costs rose, partly driven by disruptions from omicron’s spread. Adjusting for one-time items, Delta reported per-share earnings of 22 cents, ahead of 14 cents Wall Street expected.

For the full year, Delta reported $280 million profit, its first in two years, thanks to $4.5 billion in federal aid for airline labor costs during the crisis. In 2020, after travel demand plunged, Delta its biggest-ever loss: $12.4 billion.
Delta is the first U.S. airline to report fourth-quarter results and to give a detailed forecast of the variant’s impact on its business. Omicron’s rapid spread has hit industries from theater to restaurants to retailers and grocery stores.
Airlines, including Delta, have cancelled thousands of flights since Christmas Eve as a spike in Covid infections among crews left them short-staffed.
Delta said that it’s operation has stabilized and that omicron caused it to cancel only 1% of its flights over the past week.
But omicron will keep a lid on bookings for the near-term, the airline said.
“Despite expectations for a loss in the March quarter, we remain positioned to generate a healthy profit in the June, September and December quarters, resulting in a meaningful profit in 2022,” Delta CFO Dan Janki said in the earnings release.
Investors have largely shrugged off omicron’s impact on carriers. Delta’s shares are up 3.9% this year through Wednesday, while United and American shares are up 6.3% and 3%, respectively. The S&P 500, in comparison is down 0.84%.
Delta expects first-quarter revenue to come in 24% to 28% below 2019 levels on capacity of 15% to 17% below what it flew three years earlier. It forecast a roughly 15% jump in costs from 2019, excluding fuel.
Airlines have been comparing results to 2019 to show how far the business has recovered from pre-pandemic levels.
Among Delta and other airlines’ challenges this year are ramping up hiring to cater to travel demand, a challenge in a tight labor market.
Delta executives will detail results and their outlook for 2022 on a 10 a.m. ET call.
United Airlines is scheduled to report results after the market closes on Wednesday followed by American Airlines the next morning.

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Cuba’s prestigious biotech sector has developed five different Covid vaccines to date, including Abdala, Soberana 02 and Soberana Plus — all of which Cuba has said provide upwards of 90% protection against symptomatic Covid when administered in three doses.
The country of roughly 11 million remains the only country in Latin America and the Caribbean to have produced a homegrown shot for Covid.
The WHO’s potential approval of Cuba’s nationally produced Covid vaccines would carry “enormous significance” for low-income nations, John Kirk, professor emeritus at the Latin America program of Dalhousie University in Nova Scotia, Canada, told CNBC via telephone.

Workers transport a shipment of the Cuban Soberana Plus vaccine against Covid-19, to be donated by the Cuban government to Syria, at Jose Marti International Airport in Havana, on Jan. 7, 2022.
YAMIL LAGE | AFP | Getty Images

Cuba has vaccinated a greater percentage of its population against Covid-19 than almost all of the world’s largest and richest nations. In fact, only the oil-rich United Arab Emirates boasts a stronger vaccination record.
The tiny Communist-run Caribbean island has achieved this milestone by producing its own Covid vaccine, even as it struggles to keep supermarket shelves stocked amid a decades-old U.S. trade embargo.

“It is an incredible feat,” Helen Yaffe, a Cuba expert and lecturer in economic and social history at the University of Glasgow, Scotland, told CNBC via telephone.
“Those of us who have studied biotech aren’t surprised in that sense, because it has not just come out of the blue. It is the product of a conscious government policy of state investment in the sector, in both public health and in medical science.”
To date, around 86% of the Cuban population has been fully vaccinated against Covid with three doses, and another 7% have been partly inoculated against the disease, according to official statistics compiled by Our World in Data.
These figures include children from the age of two, who began receiving the vaccine several months ago. The country’s health authorities are rolling out booster shots to the entire population this month in a bid to limit the spread of the highly transmissible omicron Covid variant.

I think it is clear that many countries and populations in the global south see the Cuban vaccine as their best hope for getting vaccinated by 2025.

Helen Yaffe
Lecturer in economic and social history at the University of Glasgow

The country of roughly 11 million remains the only country in Latin America and the Caribbean to have produced a homegrown shot for Covid.

“Just the sheer audacity of this tiny little country to produce its own vaccines and vaccinating 90% of its population is an extraordinary thing,” John Kirk, professor emeritus at the Latin America program of Dalhousie University in Nova Scotia, Canada, told CNBC via telephone.
Cuba’s prestigious biotech sector has developed five different Covid vaccines, including Abdala, Soberana 02 and Soberana Plus — all of which Cuba says provide upwards of 90% protection against symptomatic Covid when three doses are administered.
Cuba’s vaccine clinical trial data has yet to undergo international scientific peer review, although the country has engaged in two virtual exchanges of information with the World Health Organization to initiate the Emergency Use Listing process for its vaccines.
Unlike U.S. pharmaceutical giants Pfizer and Moderna, which use mRNA technology, all of Cuba’s vaccines are subunit protein vaccines — like the Novavax vaccine. Crucially for low-income countries, they are cheap to produce, can be manufactured at scale and do not require deep freezing.
It has prompted international health officials to tout the shots as a potential source of hope for the “global south,” particularly as low vaccination rates persist. For instance, while around 70% of people in the European Union have been fully vaccinated, less than 10% of the African population have been fully vaccinated.

A street in Havana, Cuba, amid the Covid-19 pandemic on Oct. 2, 2021.
Joaquin Hernandez | Xinhua News Agency | Getty Images

For this to hope to be realized, however, the WHO would likely have to approve Cuba’s vaccines. The WHO’s vetting process involves assessing the production facilities where the vaccines are developed, a point which Cuba’s health officials say has slowed progress.
Vicente Verez, head of Cuba’s Finlay Vaccine Institute, told Reuters last month that the U.N. health agency was assessing Cuba’s manufacturing facilities to a “first-world standard,” citing the costly process in upgrading theirs to that level.
Verez has said previously that the necessary documents and data would be submitted to the WHO in the first quarter of 2022. Approval from the WHO would be an important step in making the shots available throughout the world.

‘Enormous significance’

When asked what it would mean for low-income countries should the WHO approve Cuba’s Covid vaccines, Yaffe said: “I think it is clear that many countries and populations in the global south see the Cuban vaccine as their best hope for getting vaccinated by 2025.”
“And actually, it affects all of us because what we are seeing with the omicron variant is that what happens when vast populations have almost no coverage is that you have mutations and new variants developing and then they come back to haunt the advanced capitalist countries which have been hoarding vaccines,” she added.

Students, who are accompanied by their mother, are being vaccinated with a dose of the Soberana 2 vaccine against the new coronavirus disease, COVID-19, developed in Cuba, at the Bolivar educational center in Caracas, Venezuela on December 13, 2021.
Pedro Rances Mattey | Anadolu Agency | Getty Images

Kirk agreed that the WHO’s potential approval of Cuba’s nationally produced Covid vaccines would carry “enormous significance” for developing countries.
“One thing that is important to bear in mind is that the vaccines don’t require the ultra-low temperatures which Pfizer and Moderna need so there are places, in Africa in particular, where you don’t have the ability to store these global north vaccines,” Kirk said.
He also pointed out that Cuba, unlike other countries or pharmaceutical companies, had offered to engage in the transfer of technology to share its vaccine production expertise with low-income countries.
“The objective of Cuba is not to make a fast buck, unlike the multinational drug corporations, but rather to keep the planet healthy. So, yes making an honest profit but not an exorbitant profit as some of the multinationals would make,” Kirk said.

WHO chief Tedros Adhanom Ghebreyesus warned last month that a “tsunami” of Covid cases driven by the omicron variant was “so huge and so quick” that it had overwhelmed health systems worldwide.
Tedros repeated his call for greater vaccine distribution to help low-income countries vaccinate their populations, with more than 100 countries on track to miss the U.N. health agency’s target for 70% of the world to be fully vaccinated by July.
The WHO said last year that the world was likely to have enough Covid vaccine doses in 2022 to fully inoculate the entire global adult population — provided that high-income countries did not hoard vaccines to use in booster programs.
Alongside pharmaceutical industry trade associations, a number of Western countries — such as Canada and the U.K. — are among those actively blocking a patent-waiver proposal designed to boost the global production of Covid vaccines.
The urgency of waiving certain intellectual property rights amid the pandemic has repeatedly been underscored by the WHO, health experts, civil society groups, trade unions, former world leaders, international medical charities, Nobel laureates and human rights organizations.

An absence of vaccine hesitancy

The seven-day average of daily Covid cases in Cuba climbed to 2,063 as at Jan. 11, reflecting an almost 10-fold increase since the end of December as the omicron variant spreads.
This comes as the number of omicron Covid cases surges across countries and territories in the Americas region. The Pan American Health Organization, the WHO’s regional Americas office, has warned that a rise in cases may lead to an uptick in hospitalizations and deaths in the coming weeks.
PAHO has called on countries to accelerate vaccination coverage to reduce Covid transmission and has repeated its recommendation of public health measures, such as tight-fitting masks — a mandatory requirement in Cuba.
Yaffe has long been confident in Cuba’s ability to boast one of the world’s strongest vaccination records. Speaking to CNBC in February last year — before the country had even developed a homegrown vaccine — she said she could “guarantee” that Cuba would be able to administer its domestically produced Covid vaccine extremely quickly.
“It wasn’t conjecture,” Yaffe said. “It was based on understanding their public health care system and the structure of it. So, the fact that they have what they call family doctor and nurse clinics in every neighborhood.”
Many of these clinics are based in rural and hard-to-reach areas and it means health authorities can quickly deliver vaccines to the island’s population.
“The other aspect is they don’t have a movement of vaccine hesitancy, which is something that we are seeing in many countries,” Yaffe said.

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Tighter restrictions — including the closure of bars, cinemas and fitness centers — kicked in on Friday last week and are set to last until Jan. 20.
There will likely be more opposition to Hong Kong’s “draconian measures” given that the variant appears to be less dangerous, said Kurt Tong, previously U.S. consul general and chief of mission in Hong Kong and Macao.
The government is “fully committed” to zero Covid, and “really can’t back away from that approach, regardless of the economic impact, without some instruction from Beijing to do so, which I don’t see coming,” he said.

The highly transmissible omicron variant is going to be a “very difficult challenge” for Hong Kong as the city sticks to its zero-Covid policy, a former U.S. diplomat told CNBC.
There will likely be more opposition to “draconian measures” given that the variant appears to be less dangerous, said Kurt Tong, who was previously U.S. consul general and chief of mission in Hong Kong and Macao from August 2016 to July 2019.

Tighter restrictions — including the closure of bars, cinemas and fitness centers — kicked in on Friday last week and are set to last until Jan. 20.
“We are facing a very dire situation of a major community outbreak any time, and that’s why we have to take very decisive measures,” Chief Executive Carrie Lam said when announcing the new rules.
It will be very difficult to achieve zero Covid given the transmissibility of the omicron variant, and “there will be more political pressure to not have draconian measures be instituted against a relatively small risk for most of the vaccinated population,” said Tong, who is now partner at business advisory firm The Asia Group.

Hong Kong Chief Executive Carrie Lam speaks on the vaccination service to the media before a meeting on January 11, 2022 in Hong Kong.
China News Service | China News Service | Getty Images

Around 70% of Hong Kong’s population has received two doses of a Covid vaccine, according to government data. However, a “significant proportion” of elderly people are unvaccinated, Tong told CNBC’s “Squawk Box Asia” on Thursday.
The government is “fully committed” to zero Covid, and “really can’t back away from that approach, regardless of the economic impact, without some instruction from Beijing to do so — which I don’t see coming,” he added.

Unhappy but resigned

Asked about the public and business sentiment toward zero-Covid strategy, Tong said “unhappiness is the primary feeling — but also a sense of resignation.”
People understand that Hong Kong wants to reopen the border with mainland China, and that it needs to follow the same zero-Covid policy in order to achieve that, Tong said.
“That’s just the way it’s going to be,” he said.

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Tong added that he doesn’t expect the border with China to open in the first half of this year.
“The omicron challenge is just very significant, and so everyone’s going to be quite conservative in their decision making,” he said.
Allan Zeman, chairman of property developer Lan Kwai Fong Group, previously defended Hong Kong’s strict rules.
“I think in general, we are safe and it’s different to the horror stories I watch in Europe and the United States at the moment,” he said in December. Zeman was a candidate in last year’s Legislative Council elections but did not manage to win a seat.
Hong Kong has reported 12,821 confirmed Covid cases and 213 deaths since the pandemic began.

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The airport slot usage requirement, set by the European Commission, has sparked controversy and anger at a time of growing international concern over climate change and the carbon emissions created by the aviation industry.
Airlines have complained that other regions and continents are not imposing such requirements.
Airport bodies and the European Commission have pushed back against the criticism.

A Boeing 747-8 Lufthansa airplane takes off from the Airport Tegel in Berlin.
Britta Pedersen | AFP | Getty Images

Airlines in Europe this winter are flying passenger planes that are at times nearly empty in order to hold onto coveted take-off and landing spots at airports during a time of lower travel demand.
Recent publicity around this usage requirement has sparked controversy and anger at a time of growing international concern over climate change and the carbon emissions created by the aviation industry.

Airport industry representatives, meanwhile, are defending it, arguing for the need to maintain commercial viability, connectivity and competitiveness.
Airlines have expressed frustration over so-called “use it or lose it” slot rules established by the European Commission, the EU’s executive arm, which was suspended in March 2020 as the industry was floored by the Covid-19 pandemic. It has since been brought back incrementally to now require airlines to use 50% of their allocated airport slots. That figure is scheduled to increase to 80% this summer.
German carrier Lufthansa is among those airlines, and is already cutting some 33,000 flights over the winter season as the omicron variant hobbles demand. Still, it has to make 18,000 flights over the winter season to meet its slot use requirement, its CEO said. Its subsidiary Brussels Airlines is having to make 3,000 almost-empty flights by the end of March.
“Due to the weak demand in January, we would have reduced significantly more flights,” Lufthansa Group CEO Carsten Spohr told a German newspaper in late December. “But we have to make 18,000 additional, unnecessary flights in winter just to secure our take-off-and-landing rights.”He added: “While climate-friendly exemptions were found in almost all other parts of the world during the time of the pandemic, the EU does not allow this in the same way. That harms the climate and is exactly the opposite of what the EU Commission wants to achieve with its ‘Fit for 55’ program.”

A Pratt & Whitney PW1000G turbofan engine sits on the wing of an Airbus A320neo aircraft during a delivery ceremony outside the Airbus Group SE factory in Hamburg, Germany, on Friday, Feb. 12, 2016.
Bloomberg | Krisztian Bocsi

The “Fit for 55” program was adopted by Commission in July of 2021 to meet the new EU goal of reducing greenhouse gas emissions by a minimum of 55% by 2030.

In the face of criticism from airlines and environmentalists, airport industry representatives are pushing back, saying there is “no reason” why the thousands of near-empty flights should be reality.

Airports Council defends ‘vital air connectivity’

Airport industry body Airports Council International (ACI) expressed support for the European Commission’s position, arguing that its lowering of the airport slot use threshold to 50% was “designed to reflect the uncertainties of a badly hit market and fragile recovery for aviation.””A few airlines are claiming they are forced to run high volumes of empty flights in order to retain airport slot usage rights. There is absolutely no reason why this should be the reality,” Olivier Jankovec, Director General of ACI Europe, said in a statement in early January.
He rejected the notion of completely empty “ghost flights” being flown, as have the airlines themselves, who say that rather than being completely empty, the flights often have very few passengers and would otherwise be canceled if it weren’t for the slot use requirement.

“Low load factors have of course been a reality throughout the pandemic,” Jankovec said, “but the retention of vital air connectivity for both economic and societal imperatives is well documented … Balancing commercial viability alongside the need to retain essential connectivity and protect against anti-competitive consequences is a delicate task.”

Contradicting carbon reduction goals?

Environmental activists are not impressed. “‘Brussels Airlines makes 3,000 unnecessary flights to maintain airport slots’,” Swedish climate activist Greta Thunberg wrote on Twitter last week, citing a headline of a Belgian newspaper. “The EU surely is in a climate emergency mode…”
The aviation sector creates about 14% of the carbon emissions from overall transport, making it the second-biggest source of transport greenhouse gas emissions after road travel, according to the commission, which also says that if global aviation were a country, it would rank in the top 10 emitters.
The European Commission says on its own website that “aviation is one of the fastest-growing sources of greenhouse gas emissions” and that it “is taking action to reduce aviation emissions in Europe.” 
Belgian mobility minister Georges Gilkinet described the institution’s flight requirements as “environmental, economic and social nonsense.” He wrote to the European Commission this month to demand more flexibility for airlines to keep insufficiently booked planes on the ground.
But a Commission spokesman said that the current 50% threshold is a sufficient reduction that reflects consumer demand and offers “much needed continued air connectivity to citizens.”

Airlines seeking exemptions

Lufthansa spokesman Boris Ogursky told CNBC on Wednesday that he believed the commission’s slot rule of 80% use for summer 2022 is “appropriate.” However, he noted, “air traffic has however still not normalized yet. Due to the development of new virus variants and the resulting travel restrictions, the situation remains volatile, so exemptions are still necessary.”
“Not only next summer 2022, but also now in the current winter flight schedule 21/22, more flexibility would be needed in a timely manner,” Ogursky said. “Without these crisis-related flexibilities, airlines are forced to fly with almost empty planes just to secure their slots.”
He added that this practice is not in place in regions outside of Europe. “Other regions of the world are taking a more pragmatic approach here, for example by temporarily suspending slot rules due to the current pandemic situation. That benefits the climate and the airlines.”

ACI’s Jankovec highlighted a provision called “Justified Non-Use of Slots”, which allows airlines to present the case to their slot-coordinators, “allowing them to effectively use their allocated airport slots for less than 50% of the time,” he said.
For Lufthansa, this provision isn’t very helpful, as it only allows airlines to exempt single flight connections, according to Ogursky: “This option cannot be applied to the majority of our weekly booked flights, resulting in the end to 18,000 unnecessary flights during the current winter schedule (Nov 21 – Mar 22),” he said.
Brussels Airlines media relations manager Maaike Andries also clarified that the flights taking off to meet the airport slot use threshold are not empty; rather, for the coming winter season, some of the airline’s flights “are insufficiently filled to be profitable.”
“These flights would normally be cancelled by us to make sure we don’t operate unnecessary flights from both an ecological and an economical point of view,” Maaike added. “However if we would cancel all those flights, this would mean we pass under the minimum limit to keep our slots. The same issue is valid for all carriers in Europe, as this is a European law.”
“In other continents there have been made appropriate exceptions to the normal regulations, avoiding these unnecessary flights, but in Europe we are still in need of more flexibility.”

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The average apartment rent in Manhattan hit $4,440 in December, according to a report from Douglas Elliman and Miller Samuel.
The more widely watched net effective median rent rose to $3,392 — the highest level for December on record, the report said.
While many landlords are trying to work with existing tenants to limit the increases, some are being quickly priced out of a market they were finally able to afford in 2020.

Apartment buildings on the Upper East Side neighborhood of New York.
Victor J. Blue | Bloomberg | Getty Images

Manhattan rents hit their highest level ever for a December as the supply of apartments plummeted and landlords started demanding double-digit increases.
The average apartment rent in Manhattan hit $4,440 in December, while the more widely watched net effective median rent (median rent including all discounts) hit $3,392 — the highest level for December on record — according to a report from Douglas Elliman and Miller Samuel. The net effective median rent was up 21% over last year.

The surge marks a dramatic turnaround from a year ago, when there were more than 25,000 empty apartments for rent in Manhattan and even the most bullish brokers predicted a years-long recovery. Now, rents are often above pre-pandemic levels and renters are facing sticker shock on their rent increases for this year.

‘A geyser of demand’

“What started as a trickle earlier last year has become like a geyser of demand,” said Janna Raskopf, a leading rental broker in Manhattan with Douglas Elliman. “I’ve been doing this for 14 years and it’s absolutely unprecedented.”
Raskopf and other brokers say demand is being driven largely by college graduates getting new jobs in Manhattan. Many poured back to the city last spring, when Mayor Bill de Blasio announced that the city would reopen July 1. Even though only about a third of office workers are back at their desks in Manhattan, the expectation of a return-to-office continues to bring in waves of people, brokers say.
New Yorkers who sold their apartments and moved their tax residency to Florida or another low-tax state are also renting to keep a part-time foothold in the city. Raskopf said even the very wealthy are sometimes choosing to rent rather than buy in Manhattan, waiting on the sidelines until they see how the city’s economic and cultural future develops post-pandemic.
All of the demand has created a sudden shortfall of supply. A year ago, the vacancy rate — normally around 2% for Manhattan — was 11%. Inventory had plunged by 81% in December 2021 compared with December 2020, according to the report.

Now, the vacancy rate is an unusually low 1.7%, with only 4,700 apartments available. Supply is so low that overall leasing activity fell by 40% in December compared with last year, due to a shortage of rental apartments.

Bidding wars, double-digit rent hikes

Raskopf said she recently listed a two-bedroom for $12,000 a month. She immediately had 26 people tour the apartment and had a bidding war among the renters. She said it will likely rent for 15% above the asking price — like many apartments she’s listing lately.
“Forget about Covid discounts,” she said. “People know the listing price is usually just the starting point now, and they will have to bid higher to get it. I would say over half my listings in the fourth quarter went for the ask or higher.”
Existing tenants are also getting big rent hikes. Brokers say renters who got good deals in 2020 and early 2021 are starting to see their leases come due. Landlords see that they can increase rents by 20% to 30% or more based on the market — and are eager to make back their lower incomes or losses during the pandemic.
The biggest rent increases are downtown, with a 28% median rent hike, to $4,100. Rents for smaller studio and one-bedroom apartments surged the fastest, with studio rents up about 21%.
While many landlords are trying to work with existing tenants to limit the increases, some new renters are being quickly priced out of a market they were finally able to afford in 2020. The higher rents are dashing early hopes that Manhattan would become more affordable to a new generation of younger, first-time renters.
“The landlords are trying to make compromises,” she said. “But they had to keep paying their expenses and taxes during the pandemic and now they can make it back. Some tenants are just saying ‘I can’t afford a 20% increase’ and they’re leaving.”

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Tesla co-founder JB Straubel says industry sales estimates predicting EVs will account for 12.7% of all U.S. auto sales by 2025 may be too low.
EV battery-recycling company Redwood Materials is spending $1 billion to build a new plant in McCarran, Nev. 
The facility will produce anode copper foil that will ultimately go into battery packs manufactured at the Tesla Gigafactory in Nevada.

Tesla co-founder JB Straubel, founder and CEO of battery-recycling company Redwood Materials, has good news and bad news for those who believe electric vehicle sales are primed to take off. 
Straubel says demand is picking up, but the auto industry isn’t moving fast enough for production to keep up.

“This is catching people a bit off-guard,” Straubel told CNBC during an interview on TechCheck. “It’s a really strong shift. All the way from internal combustion sales dropping to EV sales increasing by almost 100% in different regions.”
Straubel says industry sales estimates predicting EVs will account for 12.7% of all U.S. auto sales by 2025 may be too low. “If you look at how fast adoption is growing in parts of Europe and other parts of the world, I think it points to a path of potentially even higher percentages than that by mid-decade” he said.
That demand is why Redwood Materials is spending $1 billion to build a new plant in McCarran, Nev., he said.  When it’s completed later this year, the facility will produce anode copper foil that’s used by Panasonic to manufacture battery cells that will ultimately go into battery packs manufactured at the Tesla Gigafactory in Nevada.

Pallets of depleted lithium-ion batteries at JB Straubel’s Redwood Materials are ready for recycling.

Redwood Materials estimates the plant, which will ultimately employ more than 500 people, will produce enough anode copper foil to supply 1 million EVs annually. The company says its plant will be the first in the U.S. to supply anode copper foil with most of the supply currently being imported from Asia, primarily China and South Korea.
Meanwhile, lithium-ion battery production is looking to keep pace with EV automakers. Last year, the global capacity for lithium-ion battery manufacturing was 713 gigawatt hours, according to AlixPartners, an automotive industry consulting firm. By 2025, AlixPartners expects that number to more than triple to 2,273 gigawatt hours, with U.S. EV battery production more than quadrupling.

With so much capacity coming on line, the conventional wisdom is the cost of battery cells and battery packs will drop in price, which would help lower the price of EVs and improve profit. 

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ESource, a consulting firm based in Boulder, Colo., which tracks battery cell prices, estimates the cost per kilowatt hour of an automotive battery cell will drop from $147 in 2022 to $98 by 2025.  While those projections are encouraging, falling prices are contingent upon the battery supply chain growing and being able to support stronger demand.   
“With such a high level of battery demand expected over the next decade or so,  the raw materials that go into those batteries are potentially going to be in short supply,” said Stephen Brown, a senior director at Fitch Ratings.
However, Straubel is not convinced the EV battery industry will be ready to meet the stepped-up demand.
“There absolutely is a risk that we could see a repeat of the semiconductor type of shortages that might reduce and hamper EV growth,” he said.
Standing next to the framework for a plant Redwood hopes to have in operation soon, Straubel admits his namesake company is in a race to catch up with the transition from gasoline-powered to battery-powered vehicles. 
“We are working 24/7, literally around the clock, building facilities like the one behind us to make that supply chain happen and to try and get ahead of that bottleneck before it happens,” he said.
CNBC’s Meghan Reeder contributed to this article

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CNBC’s Jim Cramer on Wednesday laid out an approach that he believes retail investors should adopt to help themselves cut through commentary about the stock market.
“I want you to have a list of stocks you like and prices where you think they’re worth buying,” the “Mad Money” host said.
“When your favorite stocks hit those prices, you buy them. That’s how you avoid getting scared out of your wits by people who want to make you feel like a moron for being rational,” Cramer said.

CNBC’s Jim Cramer on Wednesday laid out an approach that he believes retail investors should adopt to help themselves cut through commentary about the stock market.
“I want you to have a list of stocks you like and prices where you think they’re worth buying,” the “Mad Money” host said.

“When your favorite stocks hit those prices, you buy them. That’s how you avoid getting scared out of your wits by people who want to make you feel like a moron for being rational,” Cramer continued.
Cramer said his strategy can help guard against what he thinks is an overly bearish group of market commentators, including high-profile investors, who publicly share their views.
“It sounds like they’re out to get you. They’re not, but they sure as heck aren’t out to save you, either,” Cramer said. “Even their neutrality can frighten you away from buying something good, especially when the market’s down and it’s easy to scare anyone out of their wits.”
Despite the criticism, Cramer said he believes his recommended approach can help viewers get past negative external prognostications when stocks are struggling to move higher and instead capitalize on attractive entry points in their favorite stocks.
To be sure, Cramer said it’s possible that attempts to “buy the dip” can be executed poorly, even if t’s proven to be an effective strategy in many stocks over the past decade.

However, he stressed that his point is to illustrate that fearful remarks from other people shouldn’t keep investors from acting on their own planned out strategy. “It’s absurd that we treat dip buyers as the height of idiocy; of course you should be trying to buy stocks at lower prices,” Cramer said.
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Sen. Tommy Tuberville of Alabama, who has been a staunch critic of China and companies there, yet again bought stock in Chinese e-commerce giant Alibaba last month, a new disclosure report reveals.
Tuberville made three separate purchases of Alibaba shares valued at as much as $300,000 in total.
The buys were made less than five months after the Republican’s spokeswoman said that in mid-2000 he had ordered his financial advisors to sell off a small stake in Alibaba stock after becoming aware it was in his portfolio.
Tuberville was revealed in July as having violated a federal financial transparency law, the STOCK Act, by failing to file disclosures of about 130 stock and stock options trades from January 2021 through May 2021 within a 45-day deadline.

Sen. Tommy Tuberville, R-Ala., conducts a news conference in the senate subway to propose a vote on the January 6th commission today and delay the Endless Frontier Act and the Innovation and Competition Act until June, on Friday, May 28, 2021.
Tom Williams | CQ-Roll Call, Inc. | Getty Images

Sen. Tommy Tuberville of Alabama, who has been a staunch critic of China and companies there, yet again bought stock in Chinese e-commerce giant Alibaba last month, a new disclosure report reveals.
Tuberville’s three separate purchases of Alibaba shares valued at as much as $300,000 in total were made less than five months after the Republican’s spokeswoman told CNBC that in mid-2000 that he had ordered his financial advisors to sell off a small stake in Alibaba stock after becoming aware it was in his portfolio.

That previous sale of shares then valued at less than $5,000 occurred when the former Auburn University football coach was running for the Senate seat.
Tuberville was revealed in July as having violated a federal financial transparency law, the STOCK Act, by failing to file disclosures of about 130 stock and stock options trades from January 2021 through May 2021 within a 45-day deadline.
Those trades included a Jan. 25, 2021 sale of stock put options for Alibaba Group Holding Limited.
The sale of the put options — which would give their holders the right to sell Alibaba at a share price of $230 by Sept. 19 — was valued at $15,001 to $50,000. That sale occurred months after the divestment in Alibaba shares that his spokeswoman had described.
His spokeswoman at the time said Tuberville had not even known about the trades because they had been handled by his financial advisors.

On Wednesday, the spokeswoman again pointed to those advisors when asked about his recent Alibaba stock purchases.
“Senator Tuberville has long had financial advisors who actively manage his portfolio without his day-to-day involvement,” she said in an email.
When asked if Tuberville now plans to tell those advisors to not trade in the shares of Alibaba or other Chinese companies given his criticism of China, the spokeswoman said, “Of course.”
In his financial disclosure filed Wednesday, Tuberville said he had bought Alibaba Group Holding Limited American Depositary shares valued at between $50,001 and $100,000 on Dec. 14.

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The next day, he bought Alibaba shares valued in the same value range, according to the disclosure, which allows lawmakers to report transactions in ranges, instead of in exact amounts.
On Dec. 21, Tuberville bought Alibaba shares valued at between $15,001 and $50,000, the disclosure says.
The senator then on Dec. 23 did what was described as a “partial” sale of Alibaba stock, valued at between $50,001 and $100,00, according to the form.
The Twitter account belonging to congresstrading.com, which tracks lawmakers’ disclosure filings, notified CNBC of Tuberville’s purchases of Alibaba stock.
Tuberville in June had praised President Joe Biden for issuing an executive order that would allow the United States to prohibit U.S. investments in Chinese companies that the White House said would undermine the security or democratic values of the U.S. and its allies.
In a statement at the time, Tuberville said, “Chinese companies routinely violate U.S. sanction laws and actively enable the Chinese Communist Party’s military expansion and persecution of religious minorities.”
In May, Tuberville introduced the Prohibiting TSP Investment in China Act, which would permanently ban federal Thrift Savings Plans for retirement from being invested in a Chinese company.

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