Well, we were just talking about rare earth uh and the that discussion point between the US and China. The stocks here in the US are taking a tumble as those trade tensions ease between the two nations. We saw those names rally on reports that China was considering export controls on their rare earth materials, pushing President Trump to threaten 100% tariffs on Chinese goods and focus on US development in the space.So, what is now the investment case for those stocks. Joining me now in this, Neil Dingman, ...

Industry Focus - China has employed aggressive strategies since the 1990s to establish and maintain its dominance over rare-earth minerals [1] - Rare-earth minerals are crucial for manufacturing magnets used in various products, including cars, wind turbines, and jet fighters [1]

Financial Performance - Lucid achieved its sixth consecutive record quarter in deliveries and record production in Q2 [2] - Trade policies and tariffs negatively impacted Lucid's gross margin in Q2, but the company expects it to even out for the remainder of the year [2] - Lucid's adjusted IBITDA is negative $632 million, with $4.86 billion in liquidity, expected to last until the second half of next year [8][9] Supply Chain & Raw Materials - Lucid overcame challenges related to magnet availability in Q2, securing licenses for rare earth materials for the remainder of the year [3][5] - Lucid is diversifying its raw material sourcing, including changing magnet chemistry, exploring alternative rare earth sources, and sourcing from different markets [5] - While still utilizing a global supply chain, Lucid sources a small percentage of parts for Gravity and Air from China [12][13] - Lucid is increasing its resilience by sourcing battery cells from the US, with the majority coming from the new Panasonic plant in Kansas [14] - Lucid has also secured deals with graphite suppliers to ensure raw material availability for battery cell production [15] Partnerships & Future Plans - Lucid is partnering with Uber and Neuro to develop autonomous vehicles, with plans to roll them out starting in late 2026 [6][7] - Lucid is confident in its ability to integrate autonomous driving technology into its vehicles, particularly the Gravity model [7] Capital & Funding - Lucid is funded until the second half of next year and will opportunistically raise capital if needed [9][10]

National Security Concerns & Trade Negotiations - Dependence on critical minerals and permanent magnets from China poses national security risks, especially regarding dual-use items like air chips and aerospace engine technologies [1] - The US faces a dilemma where import vulnerabilities from China's supply chains could force concessions on national security concerns [2][4] - China seeks tariff reductions, relaxation of export controls, and potentially concessions related to Taiwan [3] - The US administration may consider loosening export controls on semiconductors to maintain revenue for American companies heavily reliant on the Chinese market [12] - Technology transfer to China is a significant concern, as it can lead to China's long-term technological advancement and potential disruption of supply chains for critical goods like magnets and pharmaceuticals [6][15] Supply Chain & Manufacturing - China has a strong hold on the supply chain for rare earths and permanent magnets, impacting the defense and commercial sectors [4] - The US has domestic magnet supply chains growing, including light rare earths in California and heavy rare earths in Canada, and can reuse magnets from existing products [9][10] - Building domestic supply chains takes time, but the ability to reuse magnets provides leverage in negotiations with China [10] Trade War & Tariffs - The Trump administration aimed to maintain tariffs to pressure China, but this also adversely impacted American industries [2][21] - Reducing export controls on certain technologies like chips and commercial aircraft engines may be part of a potential deal with China [18] - China may offer increased access to its magnet market but restrict supply to the US military sector [18] - The likelihood of a lasting, reliable deal with China is questionable, given China's history of not adhering to agreements [18] - High tariffs had a significant negative impact on the Chinese economy [21]