Market Review & Outlook 1Q2026
EV Economics are Irrefutable. Switching economics have been amplified by the oil price spike, and we don’t see a clear resolution. The Iran conflict will lead to a higher risk premium, or a de facto toll, for passage through the Strait of Hormuz; either way, EV-switching economics will be further supported. The environmental aspect of EVs now comes for free. In fact, we see the current energy crisis as the last gasp of the fuel economy. The next energy crisis will be more about electrons, driven by AI and data centers, with EVs linking oil and electricity markets, forcing a modernization that will prefer smaller power projects closer to demand and without fuel. In a Resource Crisis… We favor comparative self-sufficiency. Long supply chains have led to interconnected fates relative to inflation. This will lead to slower growth for all, except those with a comparative advantage. South America has the resources to power its future and comparatively better growth than many regions, providing a double cushion to global challenges.
