| Thanks for reading Hyperdrive, Bloomberg's newsletter on the future of the auto world. Donald Trump is nothing if not unpredictable, which makes it exceedingly difficult to prognosticate about what's in store for the global auto industry once he returns to the White House. With that big caveat out of the way, let's at least do some musing about where this sector may be headed next: On Tariffs Trump surrounded himself during his first term with policymakers and advisers who cautioned him against acting on one of his biggest automotive bugaboos: that one can find an awful lot of Mercedes-Benzes on Fifth Avenue, as he puts it, and scant Cadillacs or other American brand cars on the streets of Germany or Japan.  Former German Chancellor Angela Merkel deliberating with then-US President Donald Trump at a G-7 summit in June 2018. Photographer: Jesco Denzel /Bundesregierung via Getty Images German, Japanese and Korean auto companies produce millions of vehicles a year in the US, and are only adding more production capacity. Many, ironically enough, have been investing heavily the last couple years in response to the Inflation Reduction Act's success in luring electric vehicle and battery manufacturing investment. For all the effort that the likes of Mercedes, Toyota, Hyundai and others will surely make in the coming months to tout the extent of their made-in-America bona fides, it feels more likely Trump will follow through on his trade impulses during his second go-round in Washington. This is, after all, a candidate who often conversed about imported cars out on the campaign trail. On EVs Speaking of the IRA, much of the speculation about what Trump might do from an auto-policy perspective has revolved around just how vulnerable the law is. For all the railing Trump has done against President Joe Biden's EV policies, West Virginia Senator Joe Manchin insisted on certain provisions within the IRA that rendered the environmental legislation more MAGA-friendly than meets the eye. Plug-in cars have to have been made in North America in order to qualify for purchase credits, for one. Manufacturing tax credits also were crafted expressly to get car and battery companies to produce in America and build a local supply chain, and they've responded with tens of billions of dollars in investment — the bulk of which has gone to red districts.  Former Japan Prime Minister Fumio Kishida touring Toyota's battery factory construction site in Liberty, North Carolina, in April. Photographer: Logan Cyrus/AFP Even if fears about the IRA's demise prove unfounded, there are other policy levers Trump is likely to pull that would undermine the law and what its authors aimed to accomplish. His first administration weakened fuel-economy rules that play a role in compelling manufacturers to make more EVs, and also battled California over the state's ability to set its own stricter auto-emission standards. Assuming a second Trump administration makes similar moves, automakers are unlikely to go electric with as much gusto as they otherwise would. On AVs No auto executive planted himself more firmly on the Trump train than Tesla's Elon Musk, and the two were largely simpatico. One rare bit of potential daylight between the two had to do with autonomous vehicles. "The autonomous vehicles, we're going to stop from operating on American roads, remember this," Trump said at a Detroit Economic Club event last month, hours before Musk hosted an unveiling of self-driving taxi prototypes.  Trump with Tesla CEO Elon Musk at a Butler, Pennsylvania, campaign event last month. Photographer: Bloomberg/Bloomberg Since then, Musk has said he'll try to leverage his role as an adviser to Trump on government efficiency to establish a federal approval process for autonomous vehicles. Without one, Tesla's ambition of putting millions of Cybercabs on the road faces significant regulatory hurdles. Tesla's soaring share price Wednesday points to optimism that Musk will get his way, but investors ought to proceed with caution in this regard. We've learned time and again that the public is far less forgiving of collisions involving robocars than they are of human-driven vehicles crashing. Trump, who's famously a computer skeptic, could turn on a dime in this regard, just as other politicians who previously embraced AVs have.  Cut cobalt cathodes. Photographer: Bloomberg/Bloomberg The world's No. 1 cobalt miner is sounding the over about the metal's shrinking role in electric vehicle batteries. China's CMOC Group said the importance of the raw material in the energy transition is declining rapidly. The adoption of cobalt-free lithium iron phosphate, or LFP, batteries has gained momentum in recent years, due to them being cheaper to manufacture. The proportion of EV batteries in China containing cobalt will drop to 31% in 2024, from 44% two years ago, according to consultancy CRU Group. "We predict that EV batteries will never return to the era that relies on cobalt," said Zhou Xing, a CMOC spokesman. "Cobalt is far less important than imagined," and the proportion of batteries containing the metal may eventually drop to less than a tenth, he said. | 
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