Remove ads

Introducing the LemonFools Personal Finance Calculators

Cars are all going electric

The Big Picture Place
funduffer
2 Lemon pips
Posts: 214
Joined: November 4th, 2016, 12:11 pm
Has thanked: 22 times
Been thanked: 74 times

Cars are all going electric

#80683

Postby funduffer » September 12th, 2017, 5:01 pm

There has been a recent raft of announcements from the car manufacturers on phasing out petrol and Diesel engines over the next 20 to 30 years in favour of electric.

Surely this means that the manufacturers are confident that battery technology will improve and infrastructure will expand to switch us all over to electric.

This is a game changer as I see it, and there must be winners and losers.

Losers

Big oil
Maybe the traditional car manufacturers themselves with the likes of Tesla displacing them

Winners

Battery suppliers
Electricity generators
Electricity grid infrastructure companies
Maybe rare earth element miners, for the next generation of batteries?

Disruptive game changing technologies often see old industries die, and new companies emerge. Think Kodak and digital cameras.Also, often one sees a number of start ups, strong competition and then just a few winners. Maybe this time will be different.

If you were investing with a 20 year horizon, are there any likely winners in this new game?

FD

Bena48
Posts: 23
Joined: August 13th, 2017, 5:02 pm
Has thanked: 13 times
Been thanked: 3 times

Re: Cars are all going electric

#80686

Postby Bena48 » September 12th, 2017, 5:20 pm

I agree with much of what your say. Companies such as this https://www.cornishlithium.com/ will be prospects for the future. Difficult to spot the eventual winners in these emergent markets though.

Clitheroekid
Lemon Quarter
Posts: 1207
Joined: November 6th, 2016, 9:58 pm
Has thanked: 398 times
Been thanked: 746 times

Re: Cars are all going electric

#80730

Postby Clitheroekid » September 12th, 2017, 9:32 pm

Bena48 wrote:I agree with much of what your say. Companies such as this https://www.cornishlithium.com/ will be prospects for the future. Difficult to spot the eventual winners in these emergent markets though.

I'd be very wary of buying into lithium miners.

I believe that the huge amount of research that's now being put into batteries is likely to produce a cheaper battery that doesn't need lithium at all, leaving these companies with an awful lot of lithium that nobody wants.

TUK020
Lemon Slice
Posts: 284
Joined: November 5th, 2016, 7:41 am
Has thanked: 39 times
Been thanked: 86 times

Re: Cars are all going electric

#80771

Postby TUK020 » September 13th, 2017, 7:09 am

Civil Engineering contractors.
For digging up the pavements to install charging points and infrastructure for the significant percentage of cars that are parked on street.
Unless our politicos wake up to a bout of reality. In which case 'not petrol or diesel' will start to look like hybrid cars, and the electric bit becomes regenerative braking.

funduffer
2 Lemon pips
Posts: 214
Joined: November 4th, 2016, 12:11 pm
Has thanked: 22 times
Been thanked: 74 times

Re: Cars are all going electric

#80774

Postby funduffer » September 13th, 2017, 7:21 am

Clitheroekid wrote:
Bena48 wrote:I agree with much of what your say. Companies such as this https://www.cornishlithium.com/ will be prospects for the future. Difficult to spot the eventual winners in these emergent markets though.

I'd be very wary of buying into lithium miners.

I believe that the huge amount of research that's now being put into batteries is likely to produce a cheaper battery that doesn't need lithium at all, leaving these companies with an awful lot of lithium that nobody wants.


Maybe...........maybe not!

http://www.pocket-lint.com/news/130380- ... er-the-air

funduffer
2 Lemon pips
Posts: 214
Joined: November 4th, 2016, 12:11 pm
Has thanked: 22 times
Been thanked: 74 times

Re: Cars are all going electric

#80775

Postby funduffer » September 13th, 2017, 7:23 am

TUK020 wrote:Civil Engineering contractors.
For digging up the pavements to install charging points and infrastructure for the significant percentage of cars that are parked on street.
Unless our politicos wake up to a bout of reality. In which case 'not petrol or diesel' will start to look like hybrid cars, and the electric bit becomes regenerative braking.


You mean like Carillion :lol: :lol: :o

Urbandreamer
Lemon Slice
Posts: 355
Joined: December 7th, 2016, 9:09 pm
Has thanked: 16 times
Been thanked: 55 times

Re: Cars are all going electric

#80777

Postby Urbandreamer » September 13th, 2017, 7:33 am

funduffer wrote: If you were investing with a 20 year horizon, are there any likely winners in this new game?
FD


I'd start by being a bit cautious about the "mood magic". Don't get me wrong, personally I'm a fan of EV's and personally I do think that a significant move in that direction would be a good thing.

However as you point out everyone in the business seems to be attempting to possition themselves to cope with future changed. I'd also be very very dubious about drawing conclusions along the lines that because politicians and marketeers say that the electric car is the way forward, they must be confident in XYZ and hence it must be so.

Ok so on to what I'm currently doing baised upon my opinions on the subject.

I hold SSE. You could go NG or others. There is no doubt in my mind that we will see a significant increase in demand for electricity in the next 20 years. There are of course significant political risks, but I think that they can be managed. NG in particular is now a multinational and we are likely talking global changes.

I currently hold GKN and Ricardo. Currently they are both heavily embedded in the existing motor vehicle system, but both are well known in the industry for research work into EV drive tranes.

Would you believe that I'm impressed by what Shell are doing. Yes, currently an oil company. It's selling electricity and let us not forget that if they change what they sell it won't be the first time. After all they are called Shell, because they use to sell shells!

Finally, I deligate some choices to others. I hold SMT, who seem to like tech investment. I believe that they have some shares in Tesla.

skewwy
Posts: 13
Joined: November 16th, 2016, 12:38 pm
Been thanked: 4 times

Re: Cars are all going electric

#80793

Postby skewwy » September 13th, 2017, 9:22 am

I think it will all depend on Battery technology, both in terms of how quickly we move to EVs and also where the winners and losers will be. There is a technology race at the moment with regards battery research and there will be lots of losers and probably 1 or 2 very large winners!
Progress has been slower than expected. Another key issue is the mass production capability of the 'winning' Battery technology (both with regards the cost and the availability of whatever rare earth commodity is in the 'winning' technology) which will also be very tricky and again where a big winner could come from.

I guess the 'worst' case for the investor is that the winners are China (where most of the Rare Commodities are) and someone like Dyson (very active in this area) who are a private company !!

Urbandreamer
Lemon Slice
Posts: 355
Joined: December 7th, 2016, 9:09 pm
Has thanked: 16 times
Been thanked: 55 times

Re: Cars are all going electric

#80813

Postby Urbandreamer » September 13th, 2017, 10:15 am

skewwy wrote:Another key issue is the mass production capability of the 'winning' Battery technology (both with regards the cost and the availability of whatever rare earth commodity is in the 'winning' technology) which will also be very tricky and again where a big winner could come from.


If I were betting, rather than investing, I'd bet on lithium. Because of mass production.

Tesla claims that their Gigafactory is already producing more battereies than any other plant in the world and they haven't finished building it yet. It would seem that, ignoring cars for the moment, they are intending to make as many batteries as cheaply as possible and are seeking markets for the batteries. Hence their power wall idea.
Their aim for next year is to produce 35 GWh of batteries. I don't know what their current production rate is but apparently published figures for others are about 4 GWh.

https://electrek.co/2017/08/08/tesla-gi ... elon-musk/

NOTE that I said a bet. Investing in lithium mining in any particular geographic region does not appeal to me. Nor would I want to plunge heavy into Tesla, much as I might hope that their dreams make their investors rich.

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80820

Postby odysseus2000 » September 13th, 2017, 10:34 am

Lots of misunderstandings & wrong directions here.

For a successful new product you need something that folk want or better need to buy & you need a business run by someone who knows how to sell.

In the electric vehicle market you have lots of stuff like the Nissan Leaf, Chev Volt which are not aspirational, slow, low range, massively discounted. Then you have Tesla, fast, long range, crash tested to be safest cars made, sought after & selling at good margins. Meanwhile there is the “me too” market, the big companies desperate to both preserve existing sales & sell electric which is a nice trick if you can pull it off, but…

Running in parallel with electric traction is self drive & so far Tesla again have a huge lead.

Yes, there may be better battery technologies, but it is not just about technology, it is about cost to make, supply chain & income while you expand. 18650 lithium cells that are like the AA cell of lithium are now capable of storing enough energy to move a car over 300 miles. The batteries & the induction motors are low cost & don’t have any rare earth magnets. Yes I know there are lots of folk saying they do, but I have researched the subject. Musk & his engineers built all of the Tesla range which includes transport, storage, solar panels etc on the premise that lithium ion was cheap & good enough. So far nothing is remotely comparable. New technology may come, but there is a lot of money to be made now: One doesn’t want to bet on Betamax & lose ones lunch to vhs.

Yes, the generators & infra structure companies should be the big winners, but they are managed by folk who have demonstrated cluelessness. National Grid recently put out a big paper on electric use etc which was a total yawn, written by lawyers, for lawyers (sorry lawyers, but secular growth just ain’t your expertise) & indicative that they need new management quickly. What one needs is someone talking about the unprecedented opportunity, getting off a bunch of new equity & bonds to fund it & then going with the technology now including loads of low production cost renewables. Sadly don’t see that with uk elec suppliers etc. Not just here, we have similar stuff from Buffett in the US. Meanwhile the winners of the secular growth in social media, electronics etc get what is going on & are busy developing new stuff & going 100% renewable. Anyone who has looked at Apple’s new Steve Jobs lecture theatre gets some idea of what is possible now, ditto for Google, Facebook, Amazon et al. Politicians can easily get vexed by slow & myopic thinking by uk electric & open things up to these new suppliers which are building energy supply business.

So where are the investment opportunities? Most investors can’t handle the valuation of Tesla & so won’t own it. I can & regularly do, but I am more active than most. Many want the picks & shovel suppliers, but I am not too keen as having researched the Apple supplier base I don’t see much that has made the sort of returns that Apple investors have made. One issue being that Apple operates at high margins, most suppliers don’t. Meanwhile Tesla have taken battery production out of the hands of third parties & do it in house boosting margins & securing supply.

Car companies struggle with trying to get a return on the capex for hybrids they have made, the fear of hurting their existing customers & are not in a good place.

A lot of big money has already been made in electric cars, but much more will come to the business that get it right, & for the moment I like the big players, but so do many others & that makes it hard for investors who like value. To whom I would say that perhaps this just isn’t an area you should mess with. The rewards may be huge, but so are the risks.

Regards,

FredBloggs
Lemon Quarter
Posts: 2037
Joined: November 12th, 2016, 8:42 am
Has thanked: 594 times
Been thanked: 374 times

Re: Cars are all going electric

#80821

Postby FredBloggs » September 13th, 2017, 10:38 am

Perhaps Siemens and GE. They have a huge footprint in all aspects of energy generation and distribution. Then we could maybe consider cable manufacturers? Copper miners perhaps?

I suspect the "big winner" will be a company we haven't heard of yet. And it will be Chinese.

Much along the lines of 20 years ago nobody heard of Google.

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80834

Postby odysseus2000 » September 13th, 2017, 12:10 pm

FredBloggs
Perhaps Siemens and GE. They have a huge footprint in all aspects of energy generation and distribution. Then we could maybe consider cable manufacturers? Copper miners perhaps?

I suspect the "big winner" will be a company we haven't heard of yet. And it will be Chinese.

Much along the lines of 20 years ago nobody heard of Google.


Siemens et al are mostly commodity type suppliers, meaning low margins and fierce China/India/... competition

Copper miners are no longer able to supply the plumbing trade like they used to as plastic replaces copper for pipes. Also lots of electrical wiring is being made in aluminium, not as good, but cheaper.

To be a big winner you have to do something that the wealthy folk like Google, Apple, Amzn etc can't do and which can quickly generate its own large income stream, otherwise the big and hungry new guys will take your lunch. It will be a long time before these new business get complacent and lazy and allow someone to take their lunch like the auto companies, electric supply companies, Kodak etc etc have.

Regards,

baldchap
2 Lemon pips
Posts: 115
Joined: February 5th, 2017, 11:06 am
Has thanked: 25 times
Been thanked: 17 times

Re: Cars are all going electric

#80838

Postby baldchap » September 13th, 2017, 12:38 pm

You make the mistake of thinking that the rest of the world is like the 'civilised' West.
The rest of the World with its rising population and wealth (whilst both of ours decline) want oil, and lots of it.

30 years from now?....who knows but until then my cash is in oil.

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80840

Postby odysseus2000 » September 13th, 2017, 12:51 pm

baldchapYou make the mistake of thinking that the rest of the world is like the 'civilised' West.
The rest of the World with its rising population and wealth (whilst both of ours decline) want oil, and lots of it.

30 years from now?....who knows but until then my cash is in oil.


Not so sure, kind of think you make the mistake.

The rest of the world wants prosperity, wants to Iive better, longer more happy lives.

Sure there will be a market for oil in manufacturing, but in the transport it is more like leaving the stone age: We left not because of a shortage of stone but because metal was better.

Electric cars are cheaper to make, far simpler construction, can be powered from any kind of electricity generation, have much better performance and don't produce lots of tail pipe emissions.

The future is electric transportation.

Regards,

ThirdWay
Posts: 34
Joined: November 5th, 2016, 1:39 pm

Re: Cars are all going electric

#80937

Postby ThirdWay » September 13th, 2017, 7:51 pm

"Running in parallel with electric traction is self drive & so far Tesla again have a huge lead."

Yes well Nokia had a huge lead in mobile phones and look what happened to them!

The cars of the future are going to split into two camps: those that are aspirational to own and drive, and those that you'd rent to self-drive you from A to B.

I would suggest Teslas are too dull for the former and too expensive for the latter.

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80941

Postby odysseus2000 » September 13th, 2017, 8:51 pm

Thirdway
The cars of the future are going to split into two camps: those that are aspirational to own and drive, and those that you'd rent to self-drive you from A to B.

I would suggest Teslas are too dull for the former and too expensive for the latter.


For the former I suggest you test drive a model S or model X or just look at some on-line reviews. The number of folk who have done so and who then feel these are not exceedingly fast world class top range executive class is vanishingly small.

For the latter, I suggest you look at the pricing of a model 3. Remarkably low cost for the performance, economy, safety and service (on-line) and F1 style at your home or work plus the potential for car driving you to where ever you want to go.

Of course there are no guarantees and Tesla could fail for many reasons, but for now it looks good to me, although many others can't handle the valuation, while others don't think electric traction is the future. For this latter group I note that the taking up of electric traction by many more makers and the coming bans on petrol and diesel don't support their belief.

Regards,

ThirdWay
Posts: 34
Joined: November 5th, 2016, 1:39 pm

Re: Cars are all going electric

#80949

Postby ThirdWay » September 13th, 2017, 9:19 pm

odysseus,

This is just my humble opinion, but I reckon that few brands can succeed at being both high end and aspirational, and sensible/value at the same time. Care to name a few?

I also don't see how ultra high speed is compatible with a self-driving future. There is no way a self-driving car is ever going to programmed by the manufacturer to break the speed limit.

Different manufacturers will find different niches. You seem to be suggesting Tesla will be all things to all people, but I don't think the world works like that.

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80952

Postby odysseus2000 » September 13th, 2017, 9:32 pm

ThirdWay

This is just my humble opinion, but I reckon that few brands can succeed at being both high end and aspirational, and sensible/value at the same time. Care to name a few?

I also don't see how ultra high speed is compatible with a self-driving future. There is no way a self-driving car is ever going to programmed by the manufacturer to break the speed limit.

Different manufacturers will find different niches. You seem to be suggesting Tesla will be all things to all people, but I don't think the world works like that.


This are interesting point and make sense in many ways, but I am not sure they work that well in the modern era.

The history of the internet age has been the consolidation of power into leading players:

Retail its Amazon,
Search its Google,
Social Media its Facebook,
Auctions its Ebay,
Payments its PayPal.
Software its Msft and Apple

In all cases there are still some competitors, but the dominant players have been the ones to invest in. This tendency is not completely new, we had similar with Rockerfella, Carnegie, Edison, Ford, Wedgewood all now diluted, Rockerfella by Federal action, but for many years these folk were near monopolies.

As things now stand Tesla looks like it will be similar as it has a lead in many aspects and the competitors are imho weak and badly managed.

We have still no clarity of what car-self drive will be like, but the results so far suggest that computer driven cars will be able to operate more quickly and far more safely. As it is we kill something like 10 folk a day on UK roads. Anything that gets that number down is likely to be smiled upon by politicians.

Regards,

ThirdWay
Posts: 34
Joined: November 5th, 2016, 1:39 pm

Re: Cars are all going electric

#80958

Postby ThirdWay » September 13th, 2017, 10:11 pm

The history of the internet age has been the consolidation of power into leading players:

Retail its Amazon,
Search its Google,
Social Media its Facebook,
Auctions its Ebay,
Payments its PayPal.
Software its Msft and Apple


There's a fair bit of survivor bias in that list though.

I already mentioned the once dominant Nokia.

Similarly I remember when Yahoo was the big search engine.

Does Musk have a view on the future of cars re. silly speed versus sensible swarm behaviour? Seems like he's hedging his bets on this one - perfectly sensible of course!

odysseus2000
Lemon Slice
Posts: 487
Joined: November 8th, 2016, 11:33 pm
Has thanked: 90 times
Been thanked: 69 times

Re: Cars are all going electric

#80963

Postby odysseus2000 » September 13th, 2017, 10:22 pm

There's a fair bit of survivor bias in that list though.



Yes, of course, but the art of investment, at least as I see it, is to work out who you feel is likely to win & bet on them, but one can't then ignore everything, one has to stay alert & not get complacent. If things change the investor also has to change.

Regards,


Return to “Macro and Global Topics”

Who is online

Users browsing this forum: No registered users and 1 guest