Donald Trump says US could ‘take the oil in Iran’
US president tells the FT he is considering seizing strategic Kharg Island even as negotiations continue
Donald Trump has said he wants to “take the oil in Iran” and could seize the export hub of Kharg Island, as the US sends thousands of troops to the Middle East.
The US president told the FT in an interview on Sunday that his “preference would be to take the oil”, comparing the potential move to Venezuela where the US intends to control the oil industry “indefinitely” following its capture of strongman leader Nicolás Maduro in January.
The president’s comments come as the US-Israeli war against Iran has thrust the Middle East into crisis and sent the price of oil surging by more than 50 per cent in a month. Brent crude rose above $116 a barrel on Monday morning in Asia, near its highest level since the conflict began.
Trump said: “To be honest with you, my favourite thing is to take the oil in Iran but some stupid people back in the US say: ‘why are you doing that?’ But they’re stupid people.”
Such a move would involve seizing Kharg Island through which most of Iran’s oil is exported.
Trump has been beefing up US forces in the region, with the Pentagon ordering the deployment of 10,000 troops trained to seize and hold land. About 3,500 troops arrived in the region on Friday, including roughly 2,200 Marines. Another 2,200 Marines are en route, while thousands of troops from the 82nd Airborne Division have also been ordered to the region.
But an assault on the export hub would be risky, raising the chances of more US casualties and extending the cost and duration of the war.
“Maybe we take Kharg Island, maybe we don’t. We have a lot of options,” Trump told the FT. “It would also mean we had to be there [in Kharg Island] for a while.”
Asked about the state of Iranian defence on Kharg Island he said: “I don’t think they have any defence. We could take it very easily.”
The conflict has broadened in recent days, with an attack on an air base in Saudi Arabia on Friday wounding 12 American troops and damaging a $270mn US E-3 Sentry surveillance aircraft. Houthi rebels in Yemen also fired a ballistic missile at Israel, threatening a new phase of escalation that analysts said could worsen the global energy crisis.
However, despite his threats to seize Iranian oil production, Trump stressed that indirect talks between the US and Iran via Pakistani “emissaries” were progressing well. Trump has set a deadline of April 6 for Iran to accept a deal ending the war or face US strikes on its energy sector.
When asked whether a ceasefire deal could be reached in the coming days that would reopen the Strait of Hormuz, the waterway through which a fifth of the world’s oil usually flows, Trump declined to offer specific details.
“We’ve got about 3,000 targets left — we’ve bombed 13,000 targets — and another couple of thousand targets to go,” he said. “A deal could be made fairly quickly.”
Last week, he said that Iran had permitted 10 Pakistan-flagged oil tankers through the Strait of Hormuz as a “present” to the White House. The number of tankers had now been doubled to 20, he told the FT, which was not possible to immediately verify.
“They gave us 10,” he said. “Now they’re giving 20 and the 20 have already started and they’re going right up the middle of the Strait.”
Trump added that Mohammad Bagher Ghalibaf, Iran’s parliamentary speaker and one of the country’s top wartime leaders, had authorised the additional tankers.
“He’s the one who authorised the ships to me,” Trump said. “Remember I said they’re giving me a present? And everyone said: ‘What’s the present? Bullshit.’ When they heard about that they kept their mouth shut and the negotiations are going very well.”
Trump also claimed that Iran had already had “regime change” after Iran’s longtime supreme leader Ayatollah Ali Khamenei and many other senior officials were killed at the start of the war and in strikes that followed.
“The people we’re dealing with are a totally different group of people . . . [They] are very professional,” Trump said.
Trump also reiterated his claims that Mojtaba Khameini, Khamenei’s son and Iran’s new supreme leader, could be either dead or severely injured.
“The son is either dead or in extremely bad shape,” Trump said. “We’ve not heard from him at all. He’s gone.”
Tehran has insisted the head of state is safe and well after his absence from the public eye fuelled speculation he had been badly injured.
Distressed-debt funds target private credit downturn as ‘greatest opportunity’ since 2008
Investors anticipate money-making bonanza as sector comes under strain
Investors who specialise in scooping up distressed assets at bargain prices have identified a downturn in private credit as their best opportunity since the 2008 financial crisis.
These funds, which typically invest in companies with bad balance sheets but viable underlying businesses, have been largely sidelined for a decade as markets surged but are now betting on making money from strains in private credit.
“Biggest opportunity since 2008,” said Victor Khosla, founder of Strategic Value Partners, which manages $21bn in assets.
Andrew Milgram, founder of Greenwich-based Marblegate Asset Management, said: “This is not about a few bad loans . . . We’re out in the market right now raising a new fund because this is the greatest opportunity I’ve ever seen in my lifetime. I couldn’t imagine God would smile on me like this.”
Private credit has become one of Wall Street’s top worries this year, as several funds, managed by the likes of Apollo Global Management, Blackstone and Ares, have faced billions of dollars in redemptions amid questions about their exposure to software companies at risk of losing out to AI.
“These outflows have reached a tipping point, whereby everybody on a rational basis has to ask for their money back,” said John Aylward, the founder of Sona Asset Management. “You have a large amount of distress, and you have forced selling, and it’s going to provide great opportunities that we’re already seeing.”
The proportion of US leveraged loans with an interest coverage ratio — a measure of ability to service debt — weaker than a level that is considered stressed has more than doubled to 20 per cent since 2019, according to recent research by credit investor Davidson Kempner.
At the same time, more borrowers are opting to defer repayments and increase their loan balance. This combination has led some investors and analysts to argue the true corporate default rate is far higher than reported.
Distressed investors bristle at being called “vulture funds” — a sobriquet that gained traction in the 1980s for hedge funds that swoop in when companies run into trouble — arguing they are far more sophisticated than the industry’s early bottom feeders. Many are no longer purely distressed investors, having diversified into buying higher-quality credit and equity.
Milgram at Marblegate said he and his team go on “regional swings” — short trips to cities such as Cincinnati and Charlotte to get a sense of the mood there. He takes local bankers out to steak dinners to learn what keeps them up at night.
For the past several months, the picture has grown increasingly grim. Milgram said the head of restructuring at a large regional bank recently told him private equity firms were abandoning deals and handing over portfolio companies at an “alarming rate”.
SVP specialises in hard assets such as Texas toll roads and Europe’s largest car park business. But recently Khosla directed a small team to study software. “We can’t for the life of us figure out who the losers and winners will be yet,” he said. “It’s too early.”
Since the start of 2025, the firm has invested $3.8bn but sold assets worth more than double that amount, far more than usual, suggesting it wants to have cash reserves as distressed opportunities emerge.
“Our view is that the [distressed] situations will overwhelm the amount of dry powder that’s out there,” said David Walch, partner and co-portfolio manager at asset manager King Street, referring to available capital.
Even the biggest players in private credit are preparing for the worst. Apollo’s chief executive, Marc Rowan, told investors in December that he needed to position the firm to make money “when something bad happens”.
This is not the first time in recent memory distressed investors have predicted a downturn. When Silicon Valley Bank imploded in 2023, there was a similar buzz that many more companies might buckle under the fatal combination of high interest rates and heavy debt loads.
Yet that wave of failures never came about. One executive of a top private capital firm said distressed investors were trying to drum up excitement.
“Hedge fund managers . . . have to create a sense of like, ‘the house is on fire, the house is on fire’. What they’re trying to do is to get banks to pull [credit] lines. They’re trying to create a frenzy because otherwise it’s going to be like watching paint dry,” they added.
Subprime Crisis 2.0: Will Private Credit Be The Trigger?
After 30 years of watching credit cycles expand, distort, and collapse, I’ve learned one reliable rule:
“When enough people start drawing comparisons to 2008, it’s worth stopping to check whether the analogy holds up — or whether fear is doing the analytical work for them.”
Right now, judging by the amount of commentary on social media, the stress in the private credit market has everyone’s attention. Most of the commentary being generated makes the immediate jump from private credit firms “gating” exits to the onset of the next subprime crisis in the financial system. Those claims are certainly alarming and generate many clicks and views, but the question is whether those claims are based on facts rather than opinions.
Just recently, Goldman Sachs CEO David Solomon flagged the risk of private credit in his annual shareholder letter. Lloyd Blankfein, who piloted Goldman through the Global Financial Crisis, warned publicly that the financial system appears to be “inching toward another potential catastrophe.” Meanwhile, Goldman’s own research arm published a note concluding that private credit stress is “unlikely to generate large macroeconomic spillovers on its own.”
So which is it? A repeat of the subprime crisis of 2008, or a painful but contained credit cycle? The honest answer most likely sits somewhere in between, and understanding exactly where private credit differs from subprime tells you a great deal about how worried you should actually be.
Let’s revisit 2008.
What Made The Subprime Crisis So Catastrophic
It is hard to believe that we are rapidly approaching the 20-year anniversary of the “Great Financial Crisis” that nearly destroyed the financial system as we knew it. There are many investors and commentators in the markets today who only know about the event from reading history books. Having lived through it, it is a different reality.
Crucially, the 2008 subprime crisis wasn’t simply a mortgage problem. It was a leverage-and-derivatives problem that started in mortgages. That distinction matters enormously when you’re sizing up today’s private credit stress.
At the heart of the crisis was a product called the collateralized debt obligation, or CDO. Banks packaged pools of subprime mortgages into tranches, which were rated by agencies using flawed models. Those CDOs were then re-sliced into “CDO squared” structures, layering additional complexity and opacity on top of already opaque assets. The real acceleration came when synthetic CDOs entered the picture. Unlike cash CDOs, which required actual mortgages, synthetic CDOs referenced mortgages through credit default swaps. Journalist Gregory Zuckerman found that while roughly $1.2 trillion in subprime loans existed in 2006, synthetic structures created more than $5 trillion in exposure referencing those same loans. The CDS market alone reached a peak notional value of $62.2 trillion by year-end 2007. That is not a typo.
But the derivatives machine required raw material to function, and Wall Street’s insatiable hunger for collateral triggered what historians of the crisis now call the “race to the bottom” in mortgage underwriting. To keep the CDO assembly line running, originators needed volume. That demand for volume led to a collapse in underwriting standards. By 2006, no-money-down mortgages were commonplace.
- NINJA loans, “No Income, No Job, No Assets,” were extended to borrowers who could not remotely service the debt once introductory teaser rates reset.
- Stated-income loans, in which borrowers self-reported earnings with no verification, became the industry norm rather than the exception.
- Adjustable-rate mortgages were sold to buyers who qualified only at the teaser rate and had no capacity to absorb resets of 3 to 4 percentage points two years later.
The Mortgage Bankers Association later estimated that subprime originations reached $600 billion in 2006 alone, up from roughly $160 billion in 2001. Most importantly, the loans were designed to be sold, not held. In other words, the originator of the loan bore no long-term risk and had every incentive to close as many transactions as possible, regardless of quality.
That single misalignment of incentives was the original sin of the entire subprime crisis.
What compounded the damage beyond even that was systematic, institutionalized fraud at the origination and securitization level. The Financial Crisis Inquiry Commission documented widespread “robo-signing,” where bank employees executed thousands of mortgage documents per day without reviewing them. They affixed signatures and notarizations to paperwork they had never read. Countrywide Financial, Washington Mutual, and others were found to have misrepresented loan quality in the representations and warranties they made to investors purchasing MBS tranches, fraudulently inflating the apparent collateral quality of the pools they sold.
Appraisers faced pressure, and in many cases direct financial incentive, to hit predetermined valuations that supported loan amounts the underlying properties could never justify. The FBI reported that mortgage fraud suspicious activity reports increased by more than 1,400% between 2000 and 2007. When losses eventually surfaced, investors discovered they had purchased securities backed not just by bad loans, but by fraudulently documented ones. That distinction made recovery values nearly impossible to model and turned settlement litigation into an industry unto itself for a decade afterward. JPMorgan alone paid $13 billion in 2013 to resolve government claims over mortgage securities, and that figure represented only a fraction of industry-wide settlements.
When housing prices began falling, that entire structure detonated in both directions simultaneously. Banks that held CDO tranches faced mark-to-market losses. Banks that sold CDS protection, AIG being the most famous, faced collateral calls they couldn’t meet. Here is the most crucial point. These instruments traded freely in liquid markets, so price discovery occurred in real time, compressing the panic into a matter of weeks. The interconnection was total. Twelve of the thirteen largest U.S. financial institutions were at risk of failure, according to then-Fed Chair Ben Bernanke.
That’s what systemic risk actually looks like.
Private Credit Stress Is A Different Animal
The private credit market now stands at roughly $1.7 to $2 trillion in deployed capital, a figure that has grown rapidly since banks retreated from middle-market lending after the Global Financial Crisis. That growth is precisely what generated the current stress. Redemption requests have surged across major platforms. Blackstone’s BCRED fund saw record redemptions of $3.8 billion in Q1 2026, exceeding its 5% quarterly buyback limit. Apollo, Blue Owl, and Morgan Stanley’s North Haven fund have all imposed withdrawal restrictions. That gating of withdrawals led to an obvious decline in inflows across retail private credit funds. Those inflows fell to roughly half their 2025 pace, according to Goldman Sachs estimates.
So far, the catalyst is concentrated in software companies, which represent an estimated 15% to 25% of many private credit portfolios. They are under pressure as AI disruption fears potentially erode their earnings power and their ability to service debt. The headline default rate sits around 2% as of 2025, but Goldman Sachs Asset Management’s own research acknowledges that figure understates the true level of stress. When you include liability management exercises and distressed exchanges, the real rate approaches 4% to 5%. That’s meaningful deterioration. It’s not catastrophic, but it’s real.
J.P. Morgan’s analysis showed that for senior direct lending to produce negative total returns, default rates would need to exceed 6% while recovery rates would collapse below 40% simultaneously. Those numbers have historically appeared only during COVID and the Global Financial Crisis itself. That’s a high bar — but it’s not an impossible one. However, that would require a deterioration in macroeconomic conditions, a continuation of the Iran conflict oil shocks, and a contraction of consumer spending, which could certainly amplify risks. As shown below, the current structural comparison between the subprime crisis and the private credit sector today is markedly different.
The Importance of the Gating System
The most structurally significant difference between 2008 and today is also the one that generates the most debate. Unlike the subprime crisis, private credit funds can gate their exits. When Blackstone caps BCRED redemptions at 5% per quarter, it’s not a failure of the fund; it’s the mechanism working as designed. In 2008, there was no such circuit breaker. MBS and CDOs traded continuously in secondary markets, meaning every forced seller found a bid at a lower price, triggering more mark-to-market losses, which in turn triggered more forced selling. The feedback loop was instantaneous and brutal.
Gating slows that process considerably. LPL Research noted that while gating makes for terrible headlines, it prevents the forced liquidation that accelerated subprime losses. Goldman Sachs estimates that retail private credit inflows will remain in net outflow throughout 2026 and likely into 2027, a slow bleed, not a cliff. That’s a very different contagion profile.
That said, gating is not a cure. It transfers the problem in time, not away from investors. Those sitting in redemption queues face a multi-year wait to exit positions that may continue to deteriorate. The opacity of private credit portfolios and manager-reported valuations means stress can accumulate invisibly until it can’t.
“The key risk in private credit is not what is visible, but what remains hidden.” – The Daily Economy
Goldman Sachs economist Manuel Abecasis concluded that, even in an adverse scenario, private credit stress would only drag on GDP by 0.2% to 0.5%. His reasoning is straightforward: the private credit sector holds about $1.7 trillion in levered loans, or roughly 4% of all credit to the private non-financial sector. That’s is not nothing, but it’s not the $62 trillion CDS market either. Goldman also notes that bank lending to businesses has actually accelerated recently, providing a partial offset if private credit tightens.
Blankfein’s view carries different weight precisely because he’s been through the real thing. He warned that private credit assets “can be hard to analyze, may feature hidden leverage, and can become tough to sell.” He’s right that opacity and illiquidity create conditions where problems compound before they surface. The question is whether those conditions, combined with a still-manageable scale, produce systemic contagion or simply painful losses for a subset of investors.
“Private credit stress is unlikely to generate large macroeconomic spillovers on its own.” — Goldman Sachs Economist Manuel Abecasis, March 2026
I’m inclined to side with Goldman’s macro conclusion. However, with a caveat that matters. The base case holds only so long as private credit problems don’t compound with a broader recession, a sustained oil shock from the Iran conflict, and a sharper-than-expected deterioration in software company cash flows. Any two of those three conditions occurring simultaneously change the calculus. Goldman’s own research acknowledges this. The bigger risk isn’tprivate credit alone. It’s private credit stress coinciding with the wider tightening of financial conditions.
What Investors Should Pay Attention To
The structural differences between today and the subprime crisis are real and important. There’s no synthetic subprime CDO chain multiplying private credit losses to a $5 trillion notional exposure. Most critically, the investor base is primarily institutional, not retail money market funds holding fraudulently rated paper. Fund-level leverage is modest, and the gating mechanism, whatever its imperfections, prevents the instantaneous price cascade that made the subprime crisis so destructive.
What this most closely resembles is a normal credit cycle playing out in an untested asset class. Not a systemic collapse, but not a benign correction either. Goldman Sachs Asset Management’s own European research found that “stress events are likely to remain elevated relative to the last decade,” concentrated in smaller companies and cyclical sectors. That pattern will probably hold in the U.S. as well.
Three things would change my view and warrant genuine alarm.
- First, if default rates push past 8% in tech-heavy private credit portfolios as AI disruption accelerates.
- Second, if bank credit facilities to private credit managers get pulled at scale, triggering forced asset sales.
- Third, retail penetration of private credit grows, as institutional investors sell, leaving less-sophisticated money to hold the bag.
None of those conditions is inevitable. All of them are possible.
The subprime crisis analogy fails on the specifics. But the lesson from the subprime crisis isn’t about CDOs. It’s about what happens when credit markets expand rapidly, underwriting discipline erodes under competitive pressure, and opacity masks deteriorating loan quality. On those broader conditions, the warning is more relevant than the Goldman bulls would like to admit.
That is why we continue to underweight risk for now until we have better clarity about the future.
Key Catalysts Next Week
This is the most structurally loaded week of the quarter. The calendar stacks a Q1 close, a Q2 open, and a full employment gauntlet into five sessions, with markets still metabolizing whatever the Fed just delivered..
Tuesday is the pivot. Consumer Confidence is the marquee release, and it’s the first full-month reading that captures the Iran conflict, the tariff widening, and February’s payroll shock in a single survey. The prior print of 91.2 was already soft. The Expectations component, which the Conference Board flags as a recession signal below 80, is the number to watch. A sharp drop would validate the stagflation fears the Fed just tried to navigate around. Chicago PMI and Case-Shiller Home Prices round out the morning, and then Q1 closes at the bell. Expect elevated volume as pension funds and mutual funds finalize window dressing and mark final positions, totaling roughly $62 billion on the buy side.
Wednesday flips the calendar to Q2 and immediately delivers a triple shot: ADP private payrolls, ISM Manufacturing, and JOLTS. After February’s -92,000 NFP shock, the ADP print will either stabilize the labor narrative or accelerate the deterioration thesis. ISM Manufacturing is the tariff passthrough read, the Prices Paid subindex will tell us whether producers are eating costs or passing them through, while New Orders reveal whether demand is contracting under policy uncertainty. JOLTS completes the picture with the openings-to-unemployed ratio that the Fed uses to assess labor market slack.
Friday is the week’s anchor: March Nonfarm Payrolls. February was distorted by a Kaiser Permanente strike and severe weather, giving bulls a one-month excuse. If March payrolls bounce back above 100,000, the “transitory weakness” camp wins. If they print flat or negative again, the labor market deterioration becomes undeniable, and the pressure on the Fed to act, despite sticky inflation, becomes immense. ISM Services PMI that morning adds the services-sector inflation read alongside Wednesday’s manufacturing data.
Why the Cost of Your Coffee Has Soared—and Isn’t Going Down Soon
One roaster’s ride on the roller coaster of coffee pricing helps explain the many reasons consumers keep paying more for a cup of joe
Fans of Reverie Roasters’ Boneshaker Espresso blend are familiar with the sticker shock that has hit coffee prices nationwide.
For years, a 12-ounce bag of the bestseller cost $15 at its Kansas roastery and two coffee shops. As of last spring, it is $17. And Reverie’s owner, Andrew Gough, is raising the price again next month, to $18.
That reflects just a share of the often-hidden factors driving up the cost of doing business for artisanal purveyors like Reverie. Tariffs inflated his expenses, but so have crop failures, higher rents and rising labor costs.
Now, after commodity coffee prices dipped in recent months, concerns about the Iran war and stepped-up trading in coffee futures markets are driving them up again.
To drill down into why retail coffee prices have risen—and keep going up—The Wall Street Journal took a deep dive into Reverie Roasters’ expenses. Gough says he has absorbed roughly half the cost surge because passing it to consumers is risky, too.
“You always worry that if you raise your prices you are going to lose a customer,” Gough said.
Gough founded Reverie Roasters in Wichita, Kan., in 2013. In addition to its shop and online sales, it sells coffee to about 160 wholesale clients like churches, offices, schools and grocery stores. For more than decade, he didn’t have to think much about the price of the coffee.
But when it came time to order beans early last year, he got a shock: The unroasted green coffee Reverie buys had jumped to $4.30 a pound from $2.41 just a few months before. That cost includes the price of the beans themselves, plus freight, insurance and any duties.
That alone would have meant a nearly $200,000 cost increase for the roughly 95,000 pounds of coffee Reverie roasts annually. “It kind of freaked us out,” Gough said.
Behind the jump: Extreme weather, including droughts in Brazil and Vietnam, had hit coffee crops. And even before any tariff increases, hedge-fund bets anticipating the levies were pushing commodity prices higher.
Then in July, President Trump slapped an additional 40% tariff on goods from Brazil, which produces more than a third of the world’s coffee, citing legal action against its former President Jair Bolsonaro and U.S. tech firms as justification. Altogether, Gough says, he paid a little over $14,000 in tariffs in 2025.
Across the country, retail coffee prices soared as many coffee sellers passed on costs to customers. Coffee outpaced other grocery items in the inflation-tracking consumer-price index last year.
In hindsight, Gough said, he didn’t raise prices as much or as fast as he should have. He opened an account with the aim of stashing away $50,000 to eventually buy futures contracts and lock in cheaper, longer-term prices, as bigger roasters do. But the account now has $5.02.
As for his cash flow? “It’s been spiraling downwards every week,” Gough said.
Coffee commodity prices began sliding again in November after Trump pulled back the 40% tariff on Brazilian food items, including coffee, to address affordability issues. But Reverie’s green-coffee costs have risen even higher than they were in the early fall.
Small roasters don’t have the pricing power to buy coffee in massive volumes like the Starbucks of the world. Gough said he has to buy coffee at the price available to him in the moment, and Reverie isn’t big enough to hire a dedicated buyer who can scour for deals.
Another reason commodity prices are surging again? The same speculative trading that contributed to price surges early last year is ramping up again.
Back then, traders piled into coffee contracts—betting the price would go up—after an Agriculture Department report warned of a coffee-supply shortage. By February 2025, hedge funds controlled about a third of all coffee contracts—a $10.4 billion bet that helped fuel a surge in the C-price.
As a result, commodity prices have “just been roller coaster stupid,” said Emory University professor Peter Roberts, who developed the Specialty Coffee Retail Price Index. The index tracks prices for roasted coffee sold by about 60 companies in North America, including Starbucks, Stumptown and Peet’s. “Hedge funds are just liking the gamed uncertainty.”
Hedge funds sold off a big chunk of their positions early in 2026 after Brazilian authorities said they expected a record year in coffee production. Now, surging fuel and freight costs caused by the closure of the Strait of Hormuz have triggered a new round of coffee-contract purchases and rise in commodity coffee prices.
Gough says those fluctuations are too much to keep on top of when he’s running every aspect of Reverie’s operations.
“There’s too many variables for us to follow,” he said. “I’ve got to fix the toilet. I’ve got to do the broken doorknob.”
Will This ‘Miracle’ Battery Finally Change Your Mind About EVs?
A Finnish startup claims to have perfected a revolutionary new battery. Whether the hype is to be believed, solid-state technology is coming—and it’s a potential disruptor for the entire EV industry.
I hate being right all the time.
For the past 30 years I have championed the adoption of electric cars—not because the technology was perfect but because it offered clear advantages over the fossil-fueled alternative. Among those is what’s known as the economic security argument. To wit: The continued reliance on oil leaves American consumers vulnerable to spikes in the price of gasoline—as might be expected when, for example, the Strait of Hormuz becomes a war zone.
Now that I think about it, I might have a kind of bunker mentality when it comes to gas prices. I currently own two electric cars, which I charge at home, with energy from my solar panels and home battery pack. After all, this isn’t my first Middle East crisis.
But I feel zero vindication. EV haters were certainly not wrong to say the technology was underbaked, overpriced and often inconvenient. All too right, in my experience. Range anxiety was real. For drivers accustomed to the splash-and-dash of gasoline, sitting around for a half-hour at a public charger looked like an act of madness.
Always at the heart of these discontents was the battery—or batteries, because there has been a succession of them, an alchemist’s closet of energy-storing potions in weirdly shaped bottles. None have been nearly good enough to achieve mass-market acceptance. But that isn’t keeping people from trying.
Meet Donut Lab, a Finnish startup that claims to have created the first production-ready solid-state battery (SSB) for electric vehicle production. The talk of the CES 2026 in Las Vegas, in January, Donut Lab says its battery has an energy density of 400Wh per kilogram—roughly twice that of typical lithium iron phosphate (LFP) batteries in production. The Donut batt can charge to full in five minutes, says the company; has a practically unlimited lifespan (100,000 charging cycles); is unaffected by heat and cold (-30C to 100C); and contains no rare earth, precious metals or flammable liquid electrolytes. With all that, Donut Lab says it will be cheaper to produce than conventional lithium-ion batteries.
It’s fair to say the entire car-making world is deeply skeptical. How did an obscure startup in Finland beat Toyota, Stellantis and the entire nation of China to the holy grail of energy storage? Early polling heavily favors they didn’t.
“If I’ve learned one thing,” said Kurt Kelty, GM’s vice president of batteries and sustainability, “it’s that most ‘eye-popping’ announcements are more buzz than substance.”
In February Donut Lab created a website called idonutbelieve.com to publish third-party testing results and technical documentation—“not to argue online and not to trade opinions,” said CEO and co-founder Marko Lehtimäki, “but to put measurable evidence in public view.”
“The resistance won’t disappear when we present the proof,” Lehtimäki said in a video presentation. “It will just intensify because this new technology is a threat to the established players in the industry.”
It sure would be. If, as a thought experiment, we plug Donut’s nominal values into the battery pack of a current-model year Tesla Model 3 RWD Long Range, for example, we get a midsize EV sedan with a nominal range of 870 miles, compared to 363 miles for the Donut-free version.
While we’re gedenken, imagine if the canceled Ford F-150 Lightning had a floor pan full of magic Donuts. All else remaining equal, the resulting range would pencil out to a bladder-busting 700 miles. But all things wouldn’t be equal, because solid-state batteries wouldn’t need the extravagant cooling systems required by NMCs. And, because the system would have double the voltage—800V—the wiring loom can use thinner, lighter wire. Between this and that, here and there, the Lightning might weigh as much as 1,000 pounds less with Donuts.
Imagine an electric pickup that could tow a boat from Los Angeles to Lake Tahoe; that could charge in the dead of winter in the time it takes for you to get back from the loo; a pickup that would never die. Would that be worth something to ya, Boyo?
Rest assured, SSBs are coming—if not from Donut Lab then somebody, and soon-ish. A report published in June 2025 by Vantage Market Research forecasts the global market for SSBs will grow from just over $1 billion in 2024 to $56 billion by 2035. But as for Donut Lab’s claims of being first, the world’s biggest battery maker begs to differ. This month the news broke that CATL, which commands nearly 40% of the global market, had filed a detailed patent application for solid-state batteries with the World Intellectual Property Organization, with a reported 500Wh density.
According to the outlet CarNewsChina, CATL has already begun rehearsing small-scale production. In February, the Chinese automaker FAW announced its initial vehicle integration of a “liquid-solid-state” lithium-rich manganese cell, also claiming 500 Wh/kg.
If it seems like Chinese battery-makers are cramming for final exams, they are. In July regulators will publish new standards, including definitions for what constitutes a semisolid, a “solid-liquid” or all solid-state battery. A government-sponsored consortium formed in 2024 has been aiming for an orderly build-out of the supply chains by 2030, by which time SSB technology will have matured. But the recent outburst of innovation, combined with the heated rivalries among the nation’s battery makers, seems to be moving up the clock.
With Chinese interests reportedly claiming 44% of patents relating to the SSBs, the pace of global commercialization may be set by China and its trading partners. Given the geopolitical terrain, North American buyers may see their first solid-state BEVs badged as Toyotas. In October the Japanese giant announced plans for “the world’s first practical use of all-solid-state batteries in BEVs,” by 2027 or 2028. We’ll see. Toyota—one of the few legacy automakers developing the technology in-house—has been pursuing SSBs since 2010 but has missed a few self-imposed deadlines along the way.
It’s also possible the first SSBs we see will be made in the U.S.A. and arrive wrapped in German luxury. In November 2021, Mercedes-Benz announced a partnership with Massachusetts-based Factorial Energy. In September 2025, engineers fitted a Mercedes-Benz EQS sedan with cells from Factorial. The test car achieved a real-world range of 749 miles, reportedly with juice still left in it.
A few are pumping the brakes on SSBs. Speaking at this month’s China EV100 institute, Ouyang Minggao, a member of the Chinese Academy of Sciences, cautioned against the “impetuous mentality” in China’s battery industry. While some models with SSBs will enter the testing phase late this year or next, Ouyang acknowledged, testing and mass production are very different matters.
In the meantime, Ouyang said, current LFP technology already meets the needs of most users, calling LFPs a “gift from heaven.” “Today’s LFP batteries can achieve a 1,000-kilometer range, are low-cost, and support 10-minute fast charging. What more is there to ask for?”
In their domestic market, both BYD and archrival Geely have debuted high-performance LFP super batteries capable of charging at up to 1,500 kW, or 1.5 megawatt. BYD says its premium sports wagon, the Denza Z9GT, can charge from 10% to 97% of battery capacity in nine minutes.
In very cold conditions (down to -30C) a full charge requires an additional three minutes, BYD says. Thus the company’s compelling strapline, “Ready in 5, full in 9, cold add 3.” Compare that to the strapline you’d have to write for the erstwhile VW ID. Buzz: “Ready in a half-hour, full in an hour, cold add forever.”
Unfortunately, megawatt charging will probably take its own sweet time reaching the U.S. markets. To use it, a vehicle needs to have a high-voltage battery system, something on the order of 800V; as well as high-capacity silicon-based semiconductors—switches—in the power electronics. That adds cost.
Also needed: a very big piece of charging equipment. With over 4,200 flash chargers already operating in the home market, BYD wants to add 20,000 more in China in 2026 and another 300 in the United Kingdom. In the U.S., most public charging infrastructure tops out around 350 kW.
As promised, the second Trump administration did throttle sales of EVs as well as investment in domestic battery manufacturing in 2025, prompting automakers and their battery partners to put on hold a number of giga-scale battery plants. Several, including Honda, canceled high-profile EV introductions, citing the ill-wind coming from Washington, D.C.
But consumer demand is bouncing back, as is the demand for a better deal. Ford’s current Universal Electric Vehicle platform—designed to render a midsize EV pickup starting around $30,000 in 2027—will use LFP tech licensed from CATL. The licensing “allowed us an accelerated timeline to manufacture batteries ourselves in the U.S.,” said Charles Poon, vice president of Vehicle Hardware Engineering at Ford.
GM’s battery gurus are of largely the same mind. “Solid-state has been one or two years away for decades now,” Kelty said. “I’m confident other battery advancements will reach the market first, including our own lithium manganese rich chemistry, which achieves LFP-level costs but with 30 percent better energy density.”
For those wanting more, there’s always next year.
Eli Lilly to sign $2bn deal for AI drug development with Hong Kong biotech
Global pharmaceutical companies are aggressively searching for new medicines in China
US drugmaker Eli Lilly will sign a $2bn deal with a Hong Kong-listed company that uses artificial intelligence for drug discovery, according to sources familiar with the matter, highlighting the global pharmaceutical sector’s increasing reliance on medicines developed in China.
Indianapolis-based Lilly will acquire exclusive rights to sell a GLP-1 drug for diabetes from Insilico Medicine, a biotech that went public on the Hong Kong stock exchange in December. Eli Lilly’s Asian venture arm is one of Insilico’s 10 largest shareholders.
The deal, which is expected to be announced later on Sunday, includes a $115mn upfront payment and could total more than $2bn if future regulatory and sales milestones are hit, sources said.
Lilly and Insilico declined to comment. Additional details about the deal could not immediately be learned.
Lilly, like its rivals in the global pharmaceutical sector, is aggressively hunting in China for new drugs.
A record number of pharmaceutical companies from outside China licensed drugs made by Chinese businesses in 2025, totalling $5.6bn in upfront payments, according to data from Evaluate, a data provider.
In February, Lilly signed a licensing agreement for cancer and immune drugs with Chinese pharmaceutical company Innovent Biologics that included a $350mn upfront payment and an $8bn potential deal value. Lilly’s Asian venture arm also invested in March in Shanghai-based biotech start-up Excalipoint.
AstraZeneca in January signed a licensing deal worth up to $4.7bn with Chinese group CSPC Pharmaceuticals to develop weight-loss and diabetes drugs.
Lilly’s deal also casts a spotlight on the pharmaceutical sector’s interest in AI for drug development. In November, Lilly announced a $345mn deal with a subsidiary of XtalPi, a Shanghai-based biotech. The deal gives Lilly access to the company’s AI platform.
Speaking at a conference in March, Lilly chief financial officer Lucas Montarce said the company “[is] investing heavily” in AI for research and development. “But it will take more time” to get AI drugs from a research phase to clinical testing, he said.
In its annual report in February, Lilly added new language warning that “there are significant risks involved in developing and deploying AI”. The company said it cannot assure its investments in AI will be effective or profitable.
Additionally, “AI may enable new competitors in drug discovery and enhance the capabilities of existing competitors, thereby broadening and intensifying competitive dynamics”, Lilly said.
Lilly’s diabetes drug Mounjaro was the world’s second-biggest by sales in 2025. Sales of Lilly’s diabetes and obesity drugs surged last year, propelling the company’s market capitalisation to $1tn.
But Lilly’s shares have pared gains this year and its stock is down 17 per cent so far in 2026. Lilly is facing new competition from Novo, which launched its first pill for weight loss earlier this year.
Founded in 2014 at Johns Hopkins University in Baltimore, Insilico was an early leader in developing drugs with artificial intelligence before OpenAI and Anthropic ignited a frenzy for AI technology.
Insilico disclosed in December it is unprofitable, but sees licensing deals as a key source of revenue.