WSJ : London Needs 1.1 Million Homes. Its 1940s Planning Rules Stand in the Way.

London Needs 1.1 Million Homes. Its 1940s Planning Rules Stand in the Way.
Home construction is nearing a standstill, thanks to a toxic mix of Byzantine regulations, increased building costs and politics; ‘It’s strangling the city’

LONDON—Shoreditch Works is the kind of real-estate project big cities say they need: It aims to revitalize a rundown block in east London, delivering about 80 new homes, retail space for several thousand workers, a green tech incubator and new pedestrian lanes and public space.

Developers have spent four years trying to convince authorities to approve their plan, submitting more than 9,000 pages in documentation. Local planning officers denied the bid earlier this year, saying it lacked detail. Among the other reasons noted: Tearing down two drab office buildings would “erase an interesting period in industrial history.”

The U.K. capital is at a crisis point. Home construction is nearing a standstill, thanks to a toxic mix of Byzantine regulations, increased building costs, high interest rates and politics.

London has an official annual target of 88,000 new homes. It broke ground on just 4,170 housing units in 2024-25, according to data from the Centre for Policy Studies, a center-right think tank. During that period, the population grew by around 100,000.

Even among older cities in industrialized nations, where it’s often hard to find the space to build, London stands out. It would need to build 1.1 million more homes to reach the western European average of homes per capita, according to the CPS. Last year, Vienna built three times more houses than London, despite being a much smaller city.


The failure to build doesn’t just hold consequences for the livability of a city. It has knock-on effects that can distort the economy, politics and social mobility. The capital city, one of the few bright spots in the U.K. economy, is dimming under the strain.

Economic growth and productivity have taken a hit. Construction employment in London has weakened by 21% since 2017, according to government data. In the last quarter of 2025, work stopped on more than 5,000 homes at some 50 development sites, often because the building contractor went bust. Sky-high prices have weakened demand, while construction costs continue to climb.

“It’s holding London back, which is holding back the entire country,” said Anthony Breach, director of policy and research at the Centre for Cities think tank.

‘Strangling the city’
Cities across the Western world are struggling to address housing and affordability crises, squeezing residents and developers alike and breeding discontent.

Swelling anger in New York over rising living costs propelled the city’s first Democratic socialist mayor into office. Barcelona residents took to spraying tourists with water guns as Airbnb rentals exacerbated a housing shortage.

In London, the crisis has had far-reaching consequences. “It’s strangling the city,” said Paul Rickard, CEO of property developer Pocket Living.

London once attracted young graduates with good career opportunities and the chance to scale the property ladder, starting with a tiny apartment and upgrading when a promotion or baby arrived. For many, that’s now unattainable. More 20-somethings are choosing to move to more affordable cities like Manchester, which has a pro-development approach, Rickard said.

Housing prices in London have trended lower over the past year thanks to higher interest rates, but the lack of new supply is keeping prices higher than they should be.

First-time home buyers now pay an average of half a million pounds, or around $672,000—that’s 10 times the average annual salary, up from about 7.5 times in 2010. And the amount of space they get to enjoy ranks last among wealthy Western cities, with fewer square feet per person than Manhattan.

Those who can’t afford to buy spend years paying artificially high rent—renters today spend 42% of their income on housing costs, up from 15% in the 1950s and ’60s—delaying their ability to save or start a family, leaving many feeling alienated and disillusioned. The U.K., meanwhile, spends roughly £18 billion a year subsidizing rents for low-income families in London, according to the CPS.

Like many people his age, 34-year-old Nye Jones shares an apartment in London, and sees little prospect of being able to buy a place of his own. He pays around £1,000 in rent each month, excluding bills, and has to be careful about how he spends his money if he wants to save anything.

“In the winter it means trying to avoid putting the heating on to help with bills,” he said.

Jones, who grew up in London, always thought he’d own a home by the time he reached his 30s. Instead, he worries about a sudden rent increase. “I can’t really afford to pay any more.”

High rents have forced Laurence Fredricks, 25, to move six times in three years.

“I was briefly homeless because there was nowhere available to rent that I could afford,” said Fredricks, a Cambridge graduate who works as a researcher. Friends, meanwhile, are considering leaving the U.K. because they’re priced out.

The discontent over housing and broader economic malaise is also pushing voters away from the political mainstream. The populist Green Party has surged in popularity among London’s youth, in part by pitching strict rent controls. Older voters, meanwhile, are flocking to Reform UK, which blames immigration for increasing housing demand in an already tight market.

Intensifying that generational divide, longtime homeowners are staying put in their homes as they increase in value.

Jones says most of his peers feel demotivated. “Why should we work hard when we get to keep so little?”

Stalled sites and stagnation
The root of London’s stagnation lies in a 1940s-era system designed specifically to curb the city’s expansion.

Unlike the zoning-based models used elsewhere across the developed world, London planning operates on a case-by-case system that is largely up to a small group of bureaucrats in each of the capital’s 32 boroughs and the City of London. They consider a range of subjective criteria: whether a proposed project is out of character with existing buildings, or out of scale, or blocks too much light.

Local authorities set their own framework for development, designed to set the tone for all planning decisions. “But in practice, on the ground planning systems are often made by elected councillors whose main objective is usually to get re-elected, not to follow the plan,” said Sam Long, senior analyst at research firm Molior.

On top of that, rising construction costs have made it difficult to build a profitable high-rise, he said. A shortage of planning officers, meanwhile, means local authorities can’t keep up with the backlog.

“It’s Kafkaesque,” said Nicholas Boys Smith, chairman of Create Streets, a London-based think tank specializing in urban design.

He attended the February council meeting on Shoreditch Works, which went late into the evening. The majority of council members tried to persuade the planning officers it was a good development, he said, but to no avail.

“The development was better than most I’ve seen in London,” said Boys Smith. “I still don’t understand why they disliked it so much.”

A Hackney Council spokesperson said large projects like Shoreditch Works require careful consideration to ensure they meet policies around affordable housing, workspaces and impacts on neighboring buildings. “It is important these are properly assessed so that we can secure the best outcome for Hackney’s economy and our residents.”

The bid, after another raft of changes, now sits in the mayor’s office awaiting a final decision.

Fredricks, the researcher, says building in the city needs to be easier. “We treat developers like public services instead of businesses, layering on expectation after expectation,” he said.

The rate of refusal for residential projects across the U.K. has increased over the past two decades from 20% in 2000 to more than 30% in 2024, according to research published by the University of Warwick.

In London, 37 building projects with more than 20 units have been rejected since the start of 2025, according to data from Molior. After an application is turned down, the developer can choose to adjust the proposal and resubmit it, or submit an appeal. Three of the 37 subsequently made it through the appeals process.

Some London councils, like Croydon, briefly experimented with deregulation to spark a building boom, only to retreat following a political backlash from residents. “One distinctive feature of the British planning system is the degree to which it empowers local opposition,” said economist Christian Hilber.

In Lewisham, one recent development in Blackheath (population 17,000) was derailed by 1,000 objections, including a public campaign fronted by celebrities such as Jude Law.

The regulation has undoubtedly preserved London’s charm and character. One 1937 policy, known as St. Paul’s Heights, forbids any building from obstructing views of the cathedral’s dome from vantage points up to 10 miles away. The protected vistas have forced modern developers to shave the tops off skyscrapers or adopt slanted silhouettes. The city today consistently ranks among the world’s most visited, drawing millions with its historic buildings, abundant parks and rich culture.

But the lack of new homes hurts its residents. Waiting lists for social housing are at their highest level in more than a decade, with 336,000 households registered—a quarter of the national total. One not-for-profit social-housing provider said an eight-month delay to one of its regeneration projects resulted in a £2.2 million increase in building costs. Another developer said current approval rates have increased the financing costs of a £100 million project by £5 million.

Many blame the growing crisis on a lack of support from national and local leaders.

Andy Burnham, set to become the U.K.’s sixth prime minister in seven years, said he would launch the biggest social-housing building program in 70 years.

In late March, the government unveiled an emergency plan to spur home construction in London, including fast-track planning for sites delivering at least 20% affordable housing and removing guidelines holding up delivery of homes already earmarked for development.

Berkeley Group, London’s biggest house builder, welcomed the changes—but still warned it was scaling back its business in response to the “unprecedented increase in cost and regulation” in recent years.

As if to emphasize the point, a month later, the company’s application to convert a shopping center in southeast London into almost 900 homes was rejected for a second time. The planning officer acknowledged the critical need for new homes in London but ruled the harm to heritage buildings in the area outweighed the benefits of the development.

The local authority celebrated a “great day for Peckham” when the verdict came out. Berkeley Group is considering seeking a judicial review.

Still, the company hasn’t given up on the capital. “It offers security, heritage, and innovation in an uncertain global environment,” it wrote in an April letter.

There are success stories London could follow.

Auckland, New Zealand, made its planning rules more flexible in 2016, and doubled the rate of construction, which decreased rents and home prices over the following decade, according to the Centre for Cities. Vancouver, British Columbia, after revamping its regulation, exceeded its annual target by 54% last year. Austin, Texas, recently loosened its planning system and is now building 32,000 homes a year—the per capita equivalent of London building 113,000 a year, according to the CPS.

But getting there won’t be easy or quick.

Rules and more rules
The last time London got close to meeting its official target of 88,000 new homes a year was in the 1930s, when planning rules were simple.

Back then, planning permission took just three weeks to obtain and usually involved a dozen or so pages, according to Sam Dumitriu, head of policy at Britain Remade, a campaign group focused on promoting economic growth. Now, it usually takes years.

Some planning experts argue that slow construction is the result of nonregulatory complications, such as skill shortages, high material costs from postpandemic inflation and supply-chain shortages and higher interest rates that make financing more difficult.

“Regulation is one part of a complicated process, but a part that everyone seems to focus on,” said Hugh Ellis, director of policy at the Town and Country Planning Association. He says that without regulation, you end up with homes that flood, overheat, have space challenges or, worse, lead to another Grenfell disaster.

The 2017 Grenfell Tower fire, which killed 72 people, is the deadliest blaze in modern British history. It was blamed in part on the building’s highly flammable cladding and lack of alarms, sprinklers and a fire escape. Checks on other housing around England revealed hundreds of fire-safety failures.

Planning rules implemented in London after the fire, however, are so detailed that seven in 10 projects have since failed to get a green light, creating a bottleneck, according to the CPS.

One rule introduced this year requires any building taller than 18 meters, or about six stories, to have two independent staircases to improve fire safety and evacuation. Even projects that were close to being completed had to be redone to comply retroactively. The government’s own analysis found that the costs were 294 times greater than the safety benefits.

A spokesperson for Mayor Sadiq Khan said he is “using every power available to accelerate housebuilding despite the perfect storm of Brexit, high interest rates, increased building costs and global instability.”

Britain’s departure from the European Union, which promised to free the country of additional regulation, hasn’t eased the burden on developers. The U.K. has instead retained some of the most stringent EU environmental directives even as it added more of its own. Britain requires detailed environmental assessments for projects of just 150 homes, while in many EU nations, the threshold is 2,000.

“It’s a huge risk to get something through the planning process, and many projects become unviable,” said Phil Irwin, a London-based developer. In 2025, London had 281,000 unbuilt homes—houses that were conditionally accepted but never built, often because the developer decided the conditions were too arduous.

Irwin spent £40,000 on a planning application in 2024 to convert a small derelict building in east London’s Hackney into two modern apartments. The council said the decision would be made within eight weeks. It’s been two years.

The council repeatedly asked for new reports—arboricultural, sustainability, sunlight analysis. Each time, the project had to go back to public consultation, Irwin said.

“Councils can drag everything to a glacial pace, just going round and round in circles,” he said.

The delay cost him nearly £100,000, covering the interest on the loan to pay for the site, security and insurance.

Irwin said he’s been chasing the council on a weekly basis. Twice his application was given to a council officer who proceeded to leave during the process, which cost months. He estimates that by the time he gets the green light, it will have cost him more than £200,000.

FT : The AI revolution takes on the world’s most cyclical industry Massive inves

The AI revolution takes on the world’s most cyclical industry
Massive investment plans lead to investor fears of a new boom and bust in memory chips

A relentless run in semiconductor stocks has ground to a halt as investors begin to debate an old hazard: the risk of another glut in the notoriously cyclical memory chip industry.

Samsung Electronics is down by a third from its June high, despite stronger than expected quarterly guidance; SK Hynix had a successful US stock offering, but its South Korean shares are off nearly 40 per cent; and Micron has dropped more than 30 per cent.

The share price volatility illustrates the high-stakes race playing out between demand for memory chips from AI data centres on one hand and the colossal investments being made to increase supply on the other.

With semiconductor companies now some of the largest in the world by market capitalisation — as well as the best performing over the past year — the outcome of that race will affect returns for millions of investors.

Kwon Seok-joon, a professor at Sungkyunkwan University in Seoul, said expansion plans from the big memory chipmakers could push the industry into oversupply by 2028 if AI demand disappointed.

“Chipmakers are making these plans on the assumption that demand from AI data centres will remain strong for the next two to three years,” he said. “But memory demand will fall if returns on AI investments fail to meet expectations.”

Michael Burry, the investor made famous by The Big Short, said the spending surge was “the beginning of the end” of the current upcycle.

Writing on his Substack account, he disclosed a short position in Micron, arguing the company remained a textbook cyclical stock.

“When times are good, the stock gets pumped more than it should,” he wrote. “When times are bad, it gets dumped more than it should.”

Dynamic random-access memory, or DRam, is the short-term memory computers use to hold information as they carry out calculations.

Memory chips have emerged as an important bottleneck in AI data centres, with demand running ahead of supply and big short-term profits at the main producers.


But DRam is a highly cyclical industry, prone to booms and busts. Today’s three dominant suppliers are the survivors of a market that had about 20 players in the 1990s. Most fell by the wayside as the capital investments needed to stay competitive ballooned.

In recent weeks, all three companies have announced some of the largest investments the industry has ever seen, including what the South Korean government dubbed a “Great Leap Forward” — a combined investment by Samsung and SK Hynix that aims to double South Korea’s DRam output within five years.

Although most of the new facilities are unlikely to come online before 2030, the expansion would involve investments of more than Won2,000tn ($1.5tn) over the next 15 years, stoking fears of another boom and bust.

As well as these additions to supply, the sustainability of DRam demand has come under question, with investors wondering whether so-called hyperscalers can sustain their aggressive AI spending.

Reports that Meta plans to sell excess computing capacity have fuelled concern that demand could slow once the first wave of AI infrastructure is built.


Some analysts, however, argue this cycle differs from previous ones. “Experience is your number one enemy because every cycle is different,” said Daniel Kim, an analyst at Macquarie in Seoul.

“HBM’s wafer consumption penalty is getting worse, while DRam scaling is becoming more difficult technically,” he said, referring to the larger number of silicon wafers needed to make high-bandwidth memory, the variety most in demand for AI.

DRam shortages have been so great that customers have signed multiyear supply agreements with Samsung, SK Hynix and Micron, reflecting a focus on securing supply.

An executive in the memory industry said these new types of contracts, involving upfront payments that lock customers into multiyear commitments and pricing floors, reflected a mutual interest in avoiding the “volatility of an industry where we end up with massive oversupply and undersupply”.


Analysts note that new factories typically take years to build. Construction of SK Hynix’s Yongin project was announced in 2019; it is expected to begin limited production only at the end of 2027. Nomura estimates any acceleration of existing construction plans would still take at least five years to affect supply meaningfully.

Building new factories is not merely a question of investment, but securing permits, skilled engineers and construction workers. In the US in particular, Micron is competing for resources with the very AI infrastructure clients it serves.

Kwon of Sungkyunkwan University said oversupply was less likely in HBM because the chips were highly customised. Conventional DRam, however, could face excess capacity from 2029, he said.

The biggest uncertainty is China. ChangXin Memory Technologies is preparing for a $9.8bn listing that could fund further capacity expansion, helping it break the longstanding dominance of the three main players.

Morgan Stanley estimates China will account for about 30 per cent of net DRam wafer additions through 2028, second only to South Korea.

“China will be the decisive variable,” said Kwon. “Korean companies say they will adjust their investments depending on market conditions. But they will find it harder to control supply if CXMT expands more aggressively than expected.”

WSJ :The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating

The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating
Beijing pushes technology transformation of its grid and Chinese suppliers take 90% of U.S. market, generating geopolitical concerns

  • The world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese in the first quarter of this year.
  • China’s nonconventional energy-storage capacity soared to about 155 gigawatts from under 4 gigawatts five years ago, with Beijing targeting 300 gigawatts by 2030.
  • U.S. storage projects using Chinese-supplier components are barred from tax credits under the One Big Beautiful Bill Act, and Trump tariffs have eroded Chinese batteries’ cost advantage.

Imagine a group of battery banks that together have enough power to keep all of Texas and California going on a peak summer day. That is what China has built in the space of just five years—and it is just getting started.

With the artificial-intelligence boom straining power grids, Beijing is betting on large-scale battery storage banks the size of shipping containers to help manage the load. The technology is particularly valuable in China because the country is heavily investing in solar and wind power, which can’t produce 24-hour-a-day power. Battery storage soaks up excess electricity during sunny and windy days and releases the juice later when it is needed.

As recently as five years ago, all the storage batteries in China had capacity of less than 4 gigawatts, little more than a rounding error in the country’s huge grid. As of the first quarter of this year, the country’s nonconventional energy-storage capacity—mostly batteries—soared to around 155 gigawatts, and Beijing said in June that it was targeting 300 gigawatts by 2030.


And Chinese batteries dominate the U.S. energy-storage market too, generating concern in Washington about how to avoid reliance on its rival.

With the help of battery storage, solar and wind power account for 22% of China’s electricity supply. Still, China generates more than half its power by burning coal.

Beijing wants non-fossil energy to become the primary source of electricity generation by 2030. The government is requiring all new data centers to derive at least 80% of their power from renewables.

In the late 2010s, local governments in China began mandating that power producers pair renewable projects with energy storage. Thousands of companies piled into the business. That has driven down costs but also pushed some companies to the brink in another instance of the hypercompetition sometimes blamed for afflicting China’s economic health.


Last September, Robin Zeng, founder of the world’s biggest battery maker, took aim at what he called “vicious price competition.” He said hard-pressed suppliers were cutting corners on quality.

Zeng’s company, China-based Contemporary Amperex Technology, or CATL, expects its energy-storage business to account for half of its global revenue by 2030, up from 15% in 2025, according to people familiar with the company.

Where the U.S. stands
The U.S. is second in battery storage after China, with 57 gigawatts as of the end of last year—a figure that Wood Mackenzie estimates could reach 200 gigawatts in five years.

The U.S. has also been ramping up investments. States including California and New York have set storage targets, and the Inflation Reduction Act passed in 2022 expanded federal tax credits for investing in energy-storage systems.


The challenge for Washington is that Chinese companies dominate the supply chain for energy-storage batteries. They control the processing of key raw materials including lithium, cobalt and graphite. And the world’s largest battery-cell makers and storage-system sellers are almost all Chinese.

Since 2023, Beijing has tightened export limits on some battery materials and advanced battery technologies in the wake of geopolitical tensions with Washington.

In the first quarter of this year, the world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese, capturing 90% of the global market, according to Benchmark Mineral Intelligence. The No. 2 company on the list, Hithium, opened a factory last year in Mesquite, Texas.

Last year, more than 90% of the battery-storage systems installed in the U.S. used Chinese cells, according to Benchmark.

Even Tesla, the leading U.S. storage-system seller, is enmeshed in the China supply chain. At its Shanghai factory, Tesla produces Megapack energy-storage systems for markets outside the U.S., using battery cells and components from CATL among others.


Ford licenses CATL’s technology to produce energy-storage products in the U.S.

Iola Hughes, head of research at Benchmark, said Chinese battery makers have focused on lithium ferrophosphate, or LFP, batteries that use inexpensive iron and are suited to energy storage.

“No matter which market you’re in the world, the obvious choice would be to go for these batteries which the Chinese players had mastered,” she said.

The U.S. is expanding domestic manufacturing with help from companies based in allied nations such as South Korea’s LG Energy Solution and Samsung SDI.

President Trump’s tariffs on Chinese imports have eroded the cost advantage long enjoyed by made-in-China batteries. Under the One Big Beautiful Bill Act, passed by Congress last year after a push by Trump, storage projects that use components from Chinese suppliers can’t receive tax credits.

“If it weren’t for these policy constraints, Chinese companies would still be gaining market share,” said Zheng Jiayue, an analyst at Wood Mackenzie.

WSJ :The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating

The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating
Beijing pushes technology transformation of its grid and Chinese suppliers take 90% of U.S. market, generating geopolitical concerns

  • The world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese in the first quarter of this year.
  • China’s nonconventional energy-storage capacity soared to about 155 gigawatts from under 4 gigawatts five years ago, with Beijing targeting 300 gigawatts by 2030.
  • U.S. storage projects using Chinese-supplier components are barred from tax credits under the One Big Beautiful Bill Act, and Trump tariffs have eroded Chinese batteries’ cost advantage.

Imagine a group of battery banks that together have enough power to keep all of Texas and California going on a peak summer day. That is what China has built in the space of just five years—and it is just getting started.

With the artificial-intelligence boom straining power grids, Beijing is betting on large-scale battery storage banks the size of shipping containers to help manage the load. The technology is particularly valuable in China because the country is heavily investing in solar and wind power, which can’t produce 24-hour-a-day power. Battery storage soaks up excess electricity during sunny and windy days and releases the juice later when it is needed.

As recently as five years ago, all the storage batteries in China had capacity of less than 4 gigawatts, little more than a rounding error in the country’s huge grid. As of the first quarter of this year, the country’s nonconventional energy-storage capacity—mostly batteries—soared to around 155 gigawatts, and Beijing said in June that it was targeting 300 gigawatts by 2030.


And Chinese batteries dominate the U.S. energy-storage market too, generating concern in Washington about how to avoid reliance on its rival.

With the help of battery storage, solar and wind power account for 22% of China’s electricity supply. Still, China generates more than half its power by burning coal.

Beijing wants non-fossil energy to become the primary source of electricity generation by 2030. The government is requiring all new data centers to derive at least 80% of their power from renewables.

In the late 2010s, local governments in China began mandating that power producers pair renewable projects with energy storage. Thousands of companies piled into the business. That has driven down costs but also pushed some companies to the brink in another instance of the hypercompetition sometimes blamed for afflicting China’s economic health.


Last September, Robin Zeng, founder of the world’s biggest battery maker, took aim at what he called “vicious price competition.” He said hard-pressed suppliers were cutting corners on quality.

Zeng’s company, China-based Contemporary Amperex Technology, or CATL, expects its energy-storage business to account for half of its global revenue by 2030, up from 15% in 2025, according to people familiar with the company.

Where the U.S. stands
The U.S. is second in battery storage after China, with 57 gigawatts as of the end of last year—a figure that Wood Mackenzie estimates could reach 200 gigawatts in five years.

The U.S. has also been ramping up investments. States including California and New York have set storage targets, and the Inflation Reduction Act passed in 2022 expanded federal tax credits for investing in energy-storage systems.


The challenge for Washington is that Chinese companies dominate the supply chain for energy-storage batteries. They control the processing of key raw materials including lithium, cobalt and graphite. And the world’s largest battery-cell makers and storage-system sellers are almost all Chinese.

Since 2023, Beijing has tightened export limits on some battery materials and advanced battery technologies in the wake of geopolitical tensions with Washington.

In the first quarter of this year, the world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese, capturing 90% of the global market, according to Benchmark Mineral Intelligence. The No. 2 company on the list, Hithium, opened a factory last year in Mesquite, Texas.

Last year, more than 90% of the battery-storage systems installed in the U.S. used Chinese cells, according to Benchmark.

Even Tesla, the leading U.S. storage-system seller, is enmeshed in the China supply chain. At its Shanghai factory, Tesla produces Megapack energy-storage systems for markets outside the U.S., using battery cells and components from CATL among others.


Ford licenses CATL’s technology to produce energy-storage products in the U.S.

Iola Hughes, head of research at Benchmark, said Chinese battery makers have focused on lithium ferrophosphate, or LFP, batteries that use inexpensive iron and are suited to energy storage.

“No matter which market you’re in the world, the obvious choice would be to go for these batteries which the Chinese players had mastered,” she said.

The U.S. is expanding domestic manufacturing with help from companies based in allied nations such as South Korea’s LG Energy Solution and Samsung SDI.

President Trump’s tariffs on Chinese imports have eroded the cost advantage long enjoyed by made-in-China batteries. Under the One Big Beautiful Bill Act, passed by Congress last year after a push by Trump, storage projects that use components from Chinese suppliers can’t receive tax credits.

“If it weren’t for these policy constraints, Chinese companies would still be gaining market share,” said Zheng Jiayue, an analyst at Wood Mackenzie.

WSJ :The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating

The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating
Beijing pushes technology transformation of its grid and Chinese suppliers take 90% of U.S. market, generating geopolitical concerns

  • The world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese in the first quarter of this year.
  • China’s nonconventional energy-storage capacity soared to about 155 gigawatts from under 4 gigawatts five years ago, with Beijing targeting 300 gigawatts by 2030.
  • U.S. storage projects using Chinese-supplier components are barred from tax credits under the One Big Beautiful Bill Act, and Trump tariffs have eroded Chinese batteries’ cost advantage.

Imagine a group of battery banks that together have enough power to keep all of Texas and California going on a peak summer day. That is what China has built in the space of just five years—and it is just getting started.

With the artificial-intelligence boom straining power grids, Beijing is betting on large-scale battery storage banks the size of shipping containers to help manage the load. The technology is particularly valuable in China because the country is heavily investing in solar and wind power, which can’t produce 24-hour-a-day power. Battery storage soaks up excess electricity during sunny and windy days and releases the juice later when it is needed.

As recently as five years ago, all the storage batteries in China had capacity of less than 4 gigawatts, little more than a rounding error in the country’s huge grid. As of the first quarter of this year, the country’s nonconventional energy-storage capacity—mostly batteries—soared to around 155 gigawatts, and Beijing said in June that it was targeting 300 gigawatts by 2030.


And Chinese batteries dominate the U.S. energy-storage market too, generating concern in Washington about how to avoid reliance on its rival.

With the help of battery storage, solar and wind power account for 22% of China’s electricity supply. Still, China generates more than half its power by burning coal.

Beijing wants non-fossil energy to become the primary source of electricity generation by 2030. The government is requiring all new data centers to derive at least 80% of their power from renewables.

In the late 2010s, local governments in China began mandating that power producers pair renewable projects with energy storage. Thousands of companies piled into the business. That has driven down costs but also pushed some companies to the brink in another instance of the hypercompetition sometimes blamed for afflicting China’s economic health.


Last September, Robin Zeng, founder of the world’s biggest battery maker, took aim at what he called “vicious price competition.” He said hard-pressed suppliers were cutting corners on quality.

Zeng’s company, China-based Contemporary Amperex Technology, or CATL, expects its energy-storage business to account for half of its global revenue by 2030, up from 15% in 2025, according to people familiar with the company.

Where the U.S. stands
The U.S. is second in battery storage after China, with 57 gigawatts as of the end of last year—a figure that Wood Mackenzie estimates could reach 200 gigawatts in five years.

The U.S. has also been ramping up investments. States including California and New York have set storage targets, and the Inflation Reduction Act passed in 2022 expanded federal tax credits for investing in energy-storage systems.


The challenge for Washington is that Chinese companies dominate the supply chain for energy-storage batteries. They control the processing of key raw materials including lithium, cobalt and graphite. And the world’s largest battery-cell makers and storage-system sellers are almost all Chinese.

Since 2023, Beijing has tightened export limits on some battery materials and advanced battery technologies in the wake of geopolitical tensions with Washington.

In the first quarter of this year, the world’s top 10 battery-cell suppliers of energy-storage systems were all Chinese, capturing 90% of the global market, according to Benchmark Mineral Intelligence. The No. 2 company on the list, Hithium, opened a factory last year in Mesquite, Texas.

Last year, more than 90% of the battery-storage systems installed in the U.S. used Chinese cells, according to Benchmark.

Even Tesla, the leading U.S. storage-system seller, is enmeshed in the China supply chain. At its Shanghai factory, Tesla produces Megapack energy-storage systems for markets outside the U.S., using battery cells and components from CATL among others.


ord licenses CATL’s technology to produce energy-storage products in the U.S.

Iola Hughes, head of research at Benchmark, said Chinese battery makers have focused on lithium ferrophosphate, or LFP, batteries that use inexpensive iron and are suited to energy storage.

“No matter which market you’re in the world, the obvious choice would be to go for these batteries which the Chinese players had mastered,” she said.

The U.S. is expanding domestic manufacturing with help from companies based in allied nations such as South Korea’s LG Energy Solution and Samsung SDI.

President Trump’s tariffs on Chinese imports have eroded the cost advantage long enjoyed by made-in-China batteries. Under the One Big Beautiful Bill Act, passed by Congress last year after a push by Trump, storage projects that use components from Chinese suppliers can’t receive tax credits.

“If it weren’t for these policy constraints, Chinese companies would still be gaining market share,” said Zheng Jiayue, an analyst at Wood Mackenzie.

FT : Burnham to maintain ban on North Sea exploration licences Decision criticis

Burnham to maintain ban on North Sea exploration licences
Decision criticised by oil and gas industry as well as trade union

Andy Burnham will stick to Labour’s contentious ban on new exploration licences in the North Sea, dashing oil and gas industry hopes for a radical change in government policy towards fossil fuels.

With the incoming administration under pressure to cut household bills, deputy party leader Lucy Powell said on Sunday that fossil fuels from the North Sea would be part of Britain’s energy mix.

But she insisted that Burnham would not overturn Labour’s manifesto pledge to end new exploration licences in the North Sea. “Andy has been clear he stands by the policies in our manifesto in relation to that,” she told the BBC. 

One industry figure told the FT: “If they don’t reverse the ban on new exploration then the industry will be very unhappy indeed.”

Reports in recent days had suggested that Burnham would pivot towards a “drill baby drill” approach to the North Sea, an oil and gas basin approaching the end of its life. 

US President Donald Trump responded to those reports on Sunday by posting on Truth Social: “The People of Aberdeen, in Scotland, are dancing in the streets because the new Prime Minister, Andy Burnham, has stated that he will be opening up, all the way, the invaluable North Sea Oil!”

But Powell appeared to reject the notion that there would be a radical shift in approach, saying: “I don’t think it is a change of policy, more a change of emphasis.” 

The deputy Labour leader said the government still believed that the best way to achieve lower bills and greater fuel security was through “clean” renewable and nuclear energy. 

“We’ve been absolutely clear that North Sea gas and oil is an important part of that transition,” she said. 

“And I think what Andy is talking about is taking a more pragmatic approach and working with the industry to make sure that it can contribute to that transition and to the mix that is needed over the long term.”

Powell made the comments after Burnham promised to help households with the rising cost of living, which has been exacerbated by the surge in energy prices unleashed by the Iran war.

One of his first acts after becoming prime minister on Monday will be to scrap the Labour government’s digital ID scheme in a “reset of priorities” while the water sector is braced for the administration to seize control of struggling utility Thames Water.

Some oil and gas industry figures still hope that Burnham could ease companies’ tax and regulatory burdens in other ways, such as softening the windfall levy on the sector.

Burnham is planning a trip to Aberdeen, the centre of the North Sea oil and gas industry, to reassure local workers and trade unions about Labour’s energy policies as part of a tour of the country after taking office. 

Although he will adhere to the moratorium on new exploration licences, he is expected to emphasise Labour’s support for greater use of “tiebacks”, which allow further drilling next to existing fields. Industry leaders feel a different administration could allow more flexibility on tiebacks. 

Enrique Cornejo, policy director of Offshore Energies UK said: “The incoming prime minister needs to deliver a genuine change in policy. He must clearly recognise the value of domestic energy production and back North Sea oil and gas over imports.”

The government must soon decide whether to approve the Jackdaw gasfield and Rosebank oilfield off the coast of Scotland, whose futures were thrown into doubt by a court ruling last year.

Sir Keir Starmer had wanted energy secretary Ed Miliband to approve the projects — which do not breach Labour’s manifesto promise as they received their licences years ago — but both have long been entangled in a complex judicial process.

While officials expect Burnham to approve Jackdaw and possibly Rosebank, the incoming administration has confirmed neither.

Polling last week from Opinium found 71 per cent of respondents backed domestic production of oil and gas. The idea of ending the moratorium on new exploration was backed by a margin of 49 per cent to 24 per cent.

Gary Smith, general secretary of the GMB trade union, which is an affiliate of Labour, said the party’s policy was not sustainable and it was essential to have a secure domestic energy supply in a dangerous world. 

“Increasing our reliance on imported energy from overseas also has a damaging impact on the nation’s finances,” he said. “It’s high time to put a stop to the current reckless and damaging policy of choosing imports over UK energy production.”

But Tessa Khan, executive director of campaign group Uplift, said it would be a “terrible look if the first thing Andy Burnham does is cave to the demands of oil and gas profiteers”.

(ZeroHedge) State Department Issues "Worldwide Caution" As US-Iran Tit-For-Tat

State Department Issues "Worldwide Caution" As US-Iran Tit-For-Tat Spirals Into Regional Crisis

Summary
  • CENTCOM Says US Forces Launch New Strike On Iran
  • State Dept. Issues Worldwide Warning
  • CENTCOM says two US troops killed in Iranian attack on Jordan base.
  • Iran formally suspends MoU with the US, declaring agreement is over & commitments will no longer be fulfilled.
  • Fighting escalates into seventh straight day of heavy bombings.
  • Iran reportedly struck a US base in Saudi Arabia for the first time in four months.
  • US strikes disrupt southern Iran's telecom network, knocking out 116 communication towers amid new infrastructure war.
  • Iran pounds Kuwait's energy infrastructure, damaging power & desalination facilities.


CENTCOM Says US Forces Launch New Strike On Iran
CENTCOM said US forces struck Iranian missile and radar systems stationed along the Strait of Hormuz, further dismantling Tehran's surveillance and strike capabilities while eroding its ability to control the maritime chokepoint.
"Today at 6 p.m. ET, U.S. forces began launching new airstrikes against Iran at the Commander in Chief's direction," CENTCOM wrote on X.
CENTCOM added, "The strikes are designed to further degrade Iran's ability to threaten commercial shipping in the Strait of Hormuz and swiftly punish Islamic Revolutionary Guard Corps forces who launched attacks against American service members in Jordan last night."
State Department Issues "Worldwide Caution"
Iranian ballistic missile strikes on Jordan's Muwaffaq Salti Air Base, which killed two U.S. service members and injured others, are likely to trigger a major U.S. retaliation.
Israel's Channel 14 reported late Saturday that President Trump instructed CENTCOM to "open the gates of hell" on Iran.
The U.S. State Department issued a worldwide caution, warning: "Due to heightened tensions in the Middle East, the security environment remains complex, with the potential for unforeseen escalation."
Will tensions ease before the NY futures open on Sunday evening?

Americans Killed by Iranian Missiles on Jordan
Footage has been widely circulating over the past half-day showing massive Iranian ballistic missile strikes on Jordan. Iran said it targeted a US base there, and took out various aerial and radar assets, and caused casualties among American troops.
But the Pentagon has been radio silent on the extent of potential damage, until now: US officials are reporting that two American service members were killed in the overnight Iranian attack. According to emerging details in Axios:
Two U.S. service members were killed and more wounded in an Iranian ballistic missile attack on an airbase in Jordan on Saturday, military officials said.
This is the first time U.S. troops have been killed since the fighting resumed two weeks ago. The incident raises the number of U.S. service members killed in the war to 16.
On Saturday at least two Iranian ballistic missiles hit the Muwaffaq Salti Air Base in Jordan, which hosts U.S. troops and fighter jets.
CENTCOM posted to X, officially confirming the news: "On July 17, two U.S. service members in Jordan were killed in action as U.S. Central Command (CENTCOM) and partner forces defended against Iranian ballistic missile and drone attacks. Additionally, one service member is currently missing in action."
The statement has noted additional injuries: "Four American service members were medically evacuated to Jordanian hospitals. They have since been discharged. Other personnel who were evaluated for minor injuries have returned to duty," CENTCOM said.

Iran Formally Suspends MoU
It is now "official": the Iranians have declared that the signed Memorandum of Understanding (MoU) with the United States is dead. Tasnim is reporting Saturday that Iran will no longer fulfill its MoU obligations amid alleged repeat US violations. The past weeks have seen each side hurl warnings and threats to pull out, while attaching conditions that must be fulfilled.
But after what is now a full week of renewed fighting, it has been effectively torn up, with negotiations no longer happening. Al Jazeera is citing a top Iran official's precise statement on suspending the MoU in the following:
Previously, we have seen again and again Iranian officials accusing the US of violating the MoU and also putting some conditions if the aggression continues.
What we’re seeing is Kazem Gharibabadi, Iran’s deputy foreign minister, who is also head of the Iranian technical negotiating team, saying that in practice, the US has violated all the commitments and suspended the MoU entirely.
“We also likewise have suspended all of our commitments as a result; we are no longer implementing those commitments,” he added.
So, officially, this is the first time the Iranians are saying the MoU is over and they’re not going to implement any clause.
Given President Trump has apparently just ordered dozens more aerial refueling planes to the region, the conflict looks to continue going up the escalation ladder for at least the next week or longer. Each side will seek to impose more economic and military pain, while waiting for the other to blink. Battle of narratives over damage and retaliation:
Saudi Base Attacked for First Time in 4 Months
Saudi Arabia has come under attack by Iranian missiles in the last 24 hours, the kingdom is confirming on Saturday, in a major escalation given that this is a first since near the start of the war several months ago. According to Reuters:
The Saudi civil defense early on Saturday issued two early warnings for Al-Kharj city and Yanbu to be alert to “potential danger,” but it later says the danger has passed in both areas, without providing details on the danger that triggered the warnings.
A US official tells the Axios news site that Iran targeted an American military base in Saudi Arabia with a ballistic missile, the first time that the Islamic Republic has directly attacked the kingdom in four months.
Locations in Jordan and even Syria have also been hit in recent salvos, but the US military has downplayed these attacks - and there's a battle of narratives over just how destructive these have been amid the fog of war.
Kuwait also reeling from stepped-up attacks...
116 Telecoms Towers In Southern Iran Taken Out
As we featured earlier, Iranian communications and even the supply of drinking water have been severely impacted in some places of southern Iran, amid continuing US airstrikes on civic and national infrastructure, amid the seventh consecutive day of war. "Hormozgan's chief of communications and information technology says the US's overnight attacks disrupted telecommunications in Bandar Abbas and Hajiabad, in the northern part of the province," Al Jazeera reports
Authorities there have tallied at least 116 telecommunication towers which were taken out of service due to the US onslaught. This has resulted in outages and disruptions of fixed-line, mobile, and internet services, per Tasnim news agency.
This suggests the US is returning to a strategy which seeks to create destabilization within, targeting the ability of the public to communicate and access information, returning the situation to the early weeks of the war, which saw Tehran authorities themselves curb internet and some telecoms access for the citizenry.

Kuwait Power & Desalination Plant Hit
Kuwait was bombarded overnight in one of the fiercest Iranian retaliatory strikes since the US-Iran conflict erupted in late February, with missiles and one-way drones targeting power infrastructure and other critical energy assets.
Local outlet Kuwait News Agency reports an unspecified site of the Kuwait Petroleum Corporation suffered "significant material losses" as the week-long flare-up in Gulf tensions has derailed any near-term normalization of tanker flows through the Strait of Hormuz.
There was a report that the Al-Subiya power station was struck. This marks the second attack on Kuwaiti power infrastructure in just days, after a transformer at the Zour South electricity and desalination complex was hit on Friday.
Authorities disconnected several power-generating units as a precaution and urged residents to conserve electricity. A Kuwaiti army base was also struck during the latest escalation, injuring several personnel.
Infrastructure War in Full Swing
On March 2, we warned:
Bahrain and Jordan intercepted Iranian missiles and drones. The overnight barrage followed a seventh consecutive night of US strikes targeting Iranian surveillance sites, weapons storage, logistics infrastructure and maritime offensive capabilities as the Department of War seeks to erode Tehran's leverage on the Hormuz waterway.
As of late Friday, the previous US-Iran wrap stated:
  • Surge in more large US refueling planes headed to Mideast, signaling likely expansion of strikes on Iran.
  • US attacks hit Iranian energy and transport infrastructure.
  • Iran threatens stronger retaliation and claims strike on US base in Qatar - and deepens attacks to include US outposts in Jordan, Syria.
  • Iran urges power conservation; Hormuz shipping traffic declines further.
  • Oil prices rise to session highs on fears of broader regional conflict.
Brent chart
The latest Hormuz tanker transit data via Bloomberg shows that activity at the maritime chokepoint has all but ceased. This data is based on ships activating their transponders and doesn't account for ships that 'go dark'...

WSJ : Big Food Is Running Out of Moves with Shoppers and Investors Investors are

Big Food Is Running Out of Moves with Shoppers and Investors
Investors are rightly giving up on companies like General Mills and Kraft Heinz, which are squeezed by everything from inflation to GLP-1s

America’s biggest food companies have tried everything to win shoppers back. They’ve cut prices, ramped up marketing and added protein to everything from Cheerios to Goldfish.

It hasn’t worked.

Profits are falling at flagship names such as General Mills GIS -1.89%decrease; down pointing triangle and Kraft Heinz KHC -1.33%decrease; down pointing triangle as consumers turn away from their legacy products. Management mostly blames a strained consumer and insists conditions will improve. The market has reached a harsher verdict: These businesses are shrinking and don’t know how to stop.

Big Food stocks are now trading at their widest discount to the market in at least two decades. Dividend yields are unsustainably high.

Investors hunting for bargains should be careful. These stocks are like stale food on a grocery shelf with a big discount sticker: cheap for a reason. And with the Iran war pushing costs higher, the industry’s problems might get worse.

Why have things gotten so bad? Weight-loss drugs are the most visible reason. More than 1 in 10 American adults now take a GLP-1, and that number keeps climbing. But the drugs are only part of a broader shift.


Americans are reading ingredient labels more closely. GLP-1 users and everyone else are gravitating toward protein, fresh ingredients and cleaner labels. They are fleeing calorie-dense, ultraprocessed staples that fill the center of the store.

Then there’s the K-shaped economy, which squeezes from both ends. Affluent shoppers are getting more health-conscious and trading up, often to smaller brands. Meanwhile, lower-income households are counting every dollar and trading down, increasingly to private labels. (Premium private label is also a competitive threat at the higher end.) The pressure has only intensified as food-stamp aid has been cut.

Even U.S. population growth, the one tailwind these companies could always count on, has slowed to a crawl as the Trump administration cracks down on border crossings and steps up deportations. “What had been an advantage for this group throughout its history is now gone,” says Max Gumport of BNP Paribas.

General Mills has resorted to cutting prices even when it hurts earnings, just to stop consumers from walking away. Organic sales—which strip out the effects of acquisitions and currency swings—fell 2% in fiscal 2026, and the company is guiding to another year of flat-to-declining sales.

Last week, Conagra halved its dividend and guided to an earnings decline in the new fiscal year that was steeper than Wall Street expected. Kraft Heinz and Campbell’s are under similar pressure.

The group now trades at its lowest multiples in years. Conagra fetches about 9.8 times forward earnings, a nearly 60% discount to the S&P 500. General Mills, Campbell’s and Kraft Heinz all trade around 11 to 12 times. Over the past decade, each has lost roughly 50% to 70% of its respective value even as the S&P more than tripled.

At these levels, the worst might well be priced in. But the setup still looks worrisome. The prolonged Iran conflict has pushed oil higher, dragging fertilizer, packaging resin and freight up with it, notes Alexia Howard, an analyst at Bernstein.

Traditionally food makers pass those costs on, as they did in 2021, when shoppers had stimulus checks from the government. This time, Howard expects Walmart and its peers to refuse.


Retailers have increasing leverage through their own brands, and they don’t want to hit a struggling consumer with higher prices. Store brands now make up about 24% of grocery-unit share, according to the Private Label Manufacturers Association. The figure is higher at the chains that matter most: Store brands consist of 31% of units at Walmart and 34% at Costco, according to Numerator.

When shoppers are stretched, retailers “push the food companies even harder on price,” says Kunaal Kanagal, a portfolio manager at Bahl & Gaynor. That leaves food makers with two bad options: lose volume or lose margin. Better, he argues, to own stock in the retailers than the brands.

The fixes are real, but slow and expensive. These companies have little choice but to invest in brands people actually want, whether by building them or buying them. Gumport points to the fresh refrigerated dog food General Mills recently launched under Blue Buffalo, the pet-food brand it bought in 2018, as the kind of thing that works. What doesn’t work are gimmicks like slapping protein into old brands.

Bigger deals—breakups and combinations alike—have a mixed record. But they’re also on the menu because they can force focus or add scale, as with McCormick’s tie-up with Unilever’s food business announced earlier this year. Take-private deals to remove more of the troubled sector from public markets are also a possibility.

Real innovation takes years and money, though, and most of these companies carry heavy debt while their payout ratios sit at unsustainably high levels, Howard notes. Conagra’s dividend cut last week is what that pressure looks like.

This all leaves Big Food facing a long road back to the American shopper. Getting back into investors’ good graces will be an even longer journey.