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A very timely topic with Tesla’s delivery just yesterday of the large-scale battery storage unit to Australia that you mention! [1] I see this issue as the biggest hindrance to the future of renewable energy. The fact is, at this point renewable energy can only supply up to a certain threshold of the energy needs of a country given the variability in supply of solar and wind energy. Without storage, fossil fuel infrastructure must still be maintained and kept running in order to provide supply at times when renewables are not producing.

This business line should be one of Tesla’s key areas of focus not just as a way to promote climate change and improve its electric vehicles, but also as a way to diversify its business. Battery technology is applicable outside of the energy space in essentially every electronic device, and the Company should look for new industry verticals in which to enter.

[1] https://www.nytimes.com/2017/11/30/world/australia/elon-musk-south-australia-battery.html

On December 1, 2017, CE commented on Solar Wars: the Battle for the US Solar Industry :

Your article does a great job laying out the key issues the government faces around regulating a nascent industry: that of stimulating demand for a good that many see as having positive externalities vs. protecting US manufacturing interests. Whatever the government does, it should take a holistic approach to regulation – it does not make sense to both offer tax subsidies driving demand for the PVs, only to offset those subsidies with tariffs which would increase the cost again.

My gut reaction is that the government should not do anything to lessen demand for solar technology at this stage in its growth by applying tariffs, especially when it still struggles to compete with other forms of energy from a pure cost perspective. However, the fact that other countries such as Turkey, India, and the EU have had the same issues competing with subsidies in China lends credence to Suniva’s argument. As a way to kill two birds with one stone, could the government shift its tax breaks over to subsidies to the US manufacturers that would then allow them to compete on an even footing with China, without affecting demand in the US?

As with any company that utilizes natural resources on a large scale, I can imagine that there is significant push and pull between implementing the energy efficient production methods that customers desire and the costs to do so. My main concern for Saint Gobain is around the ability to maintain its customer relationships, and contract in a way that customers understand the attribution of increased costs to their climate change efforts. While many customers are increasingly demanding a clean and sustainable supply chain, not all of them are, and implementing these efficiencies requires transforming the entire manufacturing process and cost structure. Increased costs could affect not just those who are willing to pay a higher price for energy efficiency, but also those who simply seek the lowest cost manufacturer.

Is the Company effectively communicating with its customers the changes it is making around climate change? Is the Company working with governments to apply manufacturing standards across its competitors, so that it does not put itself at a disadvantage?

I found this article interesting from a macroeconomic policy perspective. While the intent of the tire tariff was to increase “the volume, market share, and employment of the US tire industry,” I don’t see how it has been effective in its goals in any way, shape, or form. US employment has not been affected, given that manufacturers simply shifted to other Asian countries (not the US); the volume and demand levels in the US likely went down given higher prices; and the additional cost was passed through to the American consumer, who paid $1.1 billion more for tires.

While I certainly wouldn’t sit on my heels given the changing nature of the cost of doing business in various countries such as the US or the UK, if I were Goodyear I would continue to take a nimble approach to manufacturing with a localized approach where necessary. That being said, I may also be laughing my way to the bank, as higher tariffs in isolationist countries only stand to benefit the largest manufacturers that have the ability to shift their production to other facilities around the world (as Goodyear did in this case).

I find this space really interesting given that modular construction has been around for as long as I can remember, yet is still seen as “lower quality” and has failed to generate meaningful buy-in despite what would seemingly be clear efficiencies. I wonder at which consumer level a switch to modular housing would be the most effective. Rather than skyscrapers, is it better to target the family-housing market, in which there are fewer parties that need to buy-in and coordinate? Given the experience with FCR at Dean Street, it appears that modular constructiong companies must balance between the level of customization needed (perhaps less on the commercial side vs. family housing side) with the number of parties that must coordinate with each other (more on the commercial side vs. family housing).

On December 1, 2017, CE commented on Digitalization in the pharmaceutical industry: Pfizer :

PCMMs, if implemented effectively, have the potential to completely transform the drug distribution model as it exists today. My first inclination was that the regulatory headache and risk for Pfizer would be too immense to operate a distributed manufacturing model, given varying standards across geographies and the internal controls necessary to monitor a large number of facilities. However, in many regards a manufacturing model such as this could in fact de-risk the process. Not only does Pfizer realize the benefits of producing goods close to the demand centers, but to the extent that regulatory issues do arise, they can be nimble in switching manufacturing sites. I do wonder, though, at the changes they will need to make to their contracts with both the large distributors as well as end customers such as hospitals.

Additionally, I found the PCMM model interesting in regards to clinical trials as you state in your essay. Acurian, with the increasing prevalence of rare disease treatments and trials, is important in seeking out clinical trial participants and bringing the trial sites to the people. Pfizer, in the same way, is bringing the drugs to the people, rather than attempting to bring the people to the drug.