EV growth is Electric

“Now that the battery is a whole lot more affordable than at any time in history, it makes more economic sense to power your vehicle from home and then heigh ho, off you go. The thing is, in countries that still burn a lot of coal to generate electricity, are you really doing the climate a favour by plugging into the grid?”


 

To market to market to buy a fat pig Stocks Friday in Jozi gave up ground across the board, all the major indices were lower on the day. Again, some of the new 12 month lows were reflective as to what has been going on in the economy, the likes of Woolworths, Life Healthcare and Spur are all trading at year lows. Astoria reported a Dollar NAV that clearly surprised to the upside, the stock is now at a 12 month high. Astoria of course is a listed holding vehicle/fund for US stocks, based out of Mauritius, priced in Rands here in Joburg. All the assets however are foreign, making the vehicle attractive at some level. This morning we have started on a better and more even keel, the currency has juiced up a bit.


 

It was jobs Friday. That was, the Friday last, where the multiple talking heads thrash out why this jobs number is so important and more important than the last one. Of course, as is often the case and I try and test this theory, nobody remembers the numbers from two months ago. The number from the Bureau of Labor Statistics is often prone to revision. The full report is always called, The Employment Situation – June 2017. A strong jobs report at face value makes for a mixed Fed, darn that job is tough!

Stocks in New York, New York, most especially technology stocks, rallied sharply. The nerds of NASDAQ rallied over a percent by the close, the broader market S&P 500 gained just shy of two-thirds of a percent, whilst the Dow Industrials, weighed on a little by energy stocks (down 0.15 percent as a collective), managed to add just over four-tenths of a percent. Facebook added one and three-quarters of a percent, the stock is still around two odd percent from the all time highs, so much for the great technology sell off of 2017. I shouldn’t be so smug, it may well come!

In sad news over the weekend for one of the companies that we recommend, one of the founders and CEO passed away – Neal Patterson, Cerner’s Billionaire Co-Founder CEO, Dies at 67. It is sad, a reminder that we all have a finite amount of time. One can look back at the legacy that the man left, it is pretty amazing that he achieved this much and built something of this magnitude. I am sure that all and sundry will miss him.


 

Wow. The rate of adoption is just astonishing. And whilst we all believed that this would happen, the evolution of the Electric Vehicle (EV), I suspect that it has happened quicker than most people would think. There are some countries that are committed to eliminating fossil fuel powered vehicles by certain dates. I suspect that it is just a cost thing. If a consumer is presented with two vehicles, exactly the same, one is an electric one with fewer moving parts, one is the combustion engine, and more importantly they cost the same, which one do they choose? There is the important point about the outlay of a charging station at home (the installation cost) and wondering about moving through the countryside trying to find a charging station reliably.

There is a great report free from Bloomberg (you just have to enter a few details) – Electric Vehicle Outlook 2017. There is another Bloomberg article, from earlier last week titled The Electric Car Revolution Is Accelerating, with this important price per unit (for the battery):

Now that the battery is a whole lot more affordable than at any time in history, it makes more economic sense to power your vehicle from home and then heigh ho, off you go. The thing is, in countries that still burn a lot of coal to generate electricity, are you really doing the climate a favour by plugging into the grid? No. You have to spend a whole lot more money in getting the rooftop network and batteries installed. Of course, as this FT article (subscription only) points out, Electric car growth sparks environmental concerns. The inputs still need to be mined, as well as recycled. I suspect that in a modern world we are more equipped to deal with these matters.

As ever it is about the economics. Is the price affordable. At the same time, talking affordable cars, the fellow who changed all of it was Elon Musk. He took delivery of the first Model 3 – Tesla Rolls Out Its First Model 3, and It’s Elon’s. At least Musk agrees with Henry Ford, who famously said about the Model T: “Any customer can have a car painted any color that he wants so long as it is black.” There is a shortened version that is known well. Here goes, one of the first photos of the electric vehicle that may well be the vehicle that pushes more people to other models. i.e. If you want a Tesla, and cannot afford it (even the 35 K USD one), then many other manufacturers are making more affordable vehicles.

The question arrises, who wins and who loses in this scenario? The manufacturers can refit factories to build battery vehicles, humans still need transportation. Car sharing and car pooling with autonomous fleets? Does that mean lower overall demand? What does that mean for the roads, the filling stations, automobile mechanics, the big oil businesses, the countries reliant on oil production to balance their budgets. As with the industrial revolution, there is a re-skilling of people across the globe, they find their jobs elsewhere and don’t just starve and wander around like zombies. It does feel like a shakeup is coming, courtesy Artificial Intelligence, Autonomous Driving/Fleets and Battery Operated vehicles, the future is here friends.


 

Linkfest, lap it up!

Here is the annual list from BI of who to follow on Twitter, just after heavy weight Cullen Roche you will find Paul’s name – The 125 most important finance people you have to follow on Twitter.

Thanks to the likes of Instagram, traveling is high on the priority list of millennials. Which passport works the best for traveling? (What is the World’s Most Powerful Passport?). Sasha points out that African countries should consider dropping their Visa’s to high tourist nations like Germany.

If you want to eat what ever you want, cycle the Tour de France – A Tour de France cyclist burns 6,071 calories a day – here’s how many Chipotle burritos that is. Two things stood out to me, firstly the massive amount of energy needed to complete a stage but also how high the calorie count is in junk food. No wonder obesity is on the rise, it is so easy to get more than your recommended calorie count in just one meal.


 

Home again, home again, jiggety-jog. It is the start of earnings season. Which is simply great. The real business of business, the real down and dirty of the job. The coal face. The cricket? I don’t want to talk about it, ok?


 

Sent to you by Sasha, Byron and Michael on behalf of team Vestact.

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