Perpetual Innovation

Category: Tesla

  • Invest in the Future of Self-Driving Cars and EVs

    When you look at the future of cars
    (and trucks) there’s a couple things that you can learn from the Jetsons. Yes,
    the cartoon characters of the future. Self-driving. Not limited by Gravity. 

    There are several things that would
    be reasonable to expect in the future of autos:

    1.     1.      Huge
    computing capabilities.
    2.      
    Mountains
    and mountains of data.
    3.      
    Lots
    of sensors.
    4.      
    Vehicles
    that can talk to each other, directly and indirectly. Kind of the Internet of
    things on (mobile) steroids.  (If the
    traffic ahead is stopped, it would be good to know before you get there.)
    5.      
    Electrification
    on the way to sustainable/renewable transportation.
    6.      
    Self-driving
    7.      
    New
    vehicle uses and business models.

    Although there is much overlap, we’ll
    focus on only two points at the moment, but from a stock-and-market
    perspective: the self-driving car and batteries (range).     Look at the article on IntellZine from 2017: Intel and Mobile Computing: An Eye on BIG Computing on the Move.

    Autos and Self-Driving. Everybody thinks of Tesla related
    to self-driving, but there are others. See excellent Wikipedia     Self-Driving article.  Lots of investors are trying to jump into the
    early stages and even the late stages of this market. But let’s start with
    Tesla.

    Tesla’s market cap at the end of
    2020 exceeded $650B, making it larger (based on stock value) than the top 10
    automakers     combined. In an industry that is expecting to sell only 14.5
    million units in 2020, it is a little hard to justify this crazy high market
    pricing. The Price-Earnings ratio is 1,300; but based on expected earnings, the
    PE is more rational for a growth stock at 160 times. However, if the rapid
    growth (130% yoy revenue growth) continues, the PEG ratio is closer to 1.3. For
    a smaller company expecting 100% or more revenue growth for several years is
    not impossible in some cases, but for a larger company going into a maturing
    industry, not so likely. So, buy tesla at these elevated levels at your own
    risk.

    The Tesla car has been referred to
    as an iPad on wheels. Much of the smarts behind the Tesla user interface is
    from Apple. Apple is by far the largest company in the world with $2.3T market
    cap. So, wouldn’t it be interesting if Apple decided to get into the Electric
    car business, as rumored (but not officially announced) in December 2020.
    Apple, in the meanwhile is developing their own chip sets so they can separate
    themselves from the big chipmakers, chips that are more efficient and faster.
    At the same time, Apple is partnering with manufactures of sensor technologies.
    Apple appears to be designing its own break-through battery technology. The
    current (announced) plan appears to be an Apple car release in 2024. (See the
    Reuter’s     article
    about this    .)

    So let’s see, the key 3 ingredients
    to the car of the future are: the software, the user interface/ecosystem, and
    the battery. Throw in the ability to market and sell. Anybody can manufacture
    the car, well, anyone with the factor and skilled factory workers. Apple looks
    like a safer buy even at a PE of 44 and 33 forward PE (back out the $100B cash,
    though). The PEG ratio is way high 3.3 because of -7% revenue growth last
    quarter, but it has historically been about 2.0 which is very reasonable for a
    mature but growth company.

    The other way to play these trends
    is to go for the break-through technology companies in the battery and sensor
    space. A couple that have gone absolutely nuts after a reverse merger this year
    are LAZR and (QS). QuantumScape (QS) has patented technologies and manufactures
    solid-state lithium-metal batteries, especially for the auto industry (up about
    1,000% over 6 months). Luminar Technologies (LAZR) designs, builds and sells
    long-range lidar products for autonomous driving (up about 300% since
    Thanksgiving). Both have stabilized a little, so consider buying them on
    weakness.

    Related to battery technology is
    fuel cell. Fuel cell technology functions like a battery or a battery backup,
    all you need is hydrogen. This year, fuel cell technology has gone absolutely
    bonkers. FuelCell (FCEL) is up from $2 to $12 in a month. Bloom (BE) is up from
    $5 in March to $30. Plug Power (PLUG) is up from $5 in June to $35 in December.
    Over the years you could have lost a lot of money owning these companies; maybe
    the time for fuel cell is finally arriving.

    In short, if you love Tesla, go buy
    the car. Lots of companies can, and will make the cars of the future, including
    electric and self-driving. The Tesla company does have room to grow in lots of
    directions (Trucks, Solar, HVAC), but there is already a MASIVE amount of
    growth already priced in.

     

  • EV on SB2020

    EVs, aka Electric Vehicles, were the big winners of the
    Super Bowl 2020. Everybody had an electric car for the occasion. Audi and even
    a new EV version of the gas-guzzling Hummer.
    Imagine the king of EVs, Tesla,
    jumping $130 per share on Super Monday! TSLA popped 20% up to almost $800 per
    share, nearing a $150B market cap firmly – 3 times the value of GM. Then on
    Super Tuesday, Tesla jumps another $100 to reach over $900 (to $164B market
    cap). Arguably, there are a few extra factors making Tesla’s stock pop: an
    upgrade and short squeeze. Maybe a little overpriced?
    Tesla has a market share of about
    1.5%, so… it does have room to run. But only if you believe that we have
    reached an inflection point where a shift to most or all cars will be electric.
    Fortunately, the charging stations are now pretty will established.
    But, the average age of cars on
    the road today are 11 years old. Even if we move to 50% EV in 10 years, it will
    take decades for half of the cars on the road to be electric. Longer, of course,
    for trucks because they are just now starting to ship.
    Still, the trend toward EVs is
    definitive. Everyone has a few. Some auto manufactures are no longer
    introducing new gas or diesel models.
    You would think that the drop of
    oil prices (down to $50 for WTI) this week on the corona virus scare might be a
    boost to gas models?
    Related to market cap, remember
    that Tesla bought sister company Solar City so it does solar systems and
    battery banks (PowerWall). Tesla GigaFactories crank out batteries (with
    partner Panasonic). With the cost of batteries dropping, both EV and storage
    become more and more affordable. The big thing to look for in battery
    technology is the move to safer and/or more powerful technology. Big break
    throughs in battery tech – cheaper, better, lighter – will be game changing.
    Tesla stands to win in every case, old lithium or new whatever.
    I could not bring myself to buy
    Tesla stock at $200 in June; over $900 is nose-bleed levels today. But, it does
    suggest a momentum shift to EVs in our future.

  • Tesla Solar Roofs. Better, Cheaper, Stronger, Longer

    Tesla Solar | Tesla:

    Here is the information to order your roof from Tesla (that has now merged with SolarCity).

    The tempered glass tiles are much stronger, much cheaper and last long (lifetime of the house or infinity warranty, whichever comes first).

    Oh, and then there’s the PV electricity generation, above that. It is 30-years warranty on the PV, it seems.

    This is something that is called an “irrefusable” value proposition. Especially if the house (building) is new, or an older roof that should be replaced within a few years.

    Here’s how it works. Most of the roof tiles are not PV. Only 30% to 40% of the roof would be in prime solar view.  The PV panels are about $40 sq ft, but the averages should be about $22. That also depends on the sizing of the system, no need to over produce in most cases (states).

    Here’s Tesal’s Specs and Sizing Calculator.

    Apparently, from the street, you can’t tell the difference between regular and PV tiles. Top view (helicopter) view you can, although it should be far less conspicuous than the usual PV panels.

    Also, remember those 5 GigaFactories for batteries and cars going up around the worlds. Well, couple in US and next one in Europe (?UK?).

    The pricing for preorder that started in May 2017, includes an installed 14kWh Powerwall  2 system. With battery backup, they entire building could go off grid, assuming the local power company and state law allow it. A generator (fuel cell) would do the trick.

    Of course, hooking to the grid provides the opportunity to sell back to the grid and assist with peaking. This type of building can help twice with peaking.  The excess electricity during peak times (heat of the day, usually) can be sold back. The batteries can be used as well at peak. They can be replenished in off times by the PV system or during low-load off-hours by the power company.
    This idea of battery pack backup can also apply to your favorite EV car as well. Dare I say Tesla or Bold. If the car will not be used today, why not use it to help with peaking loads, if needed, as needed?

    For an existing home/building, you will want to do an energy audit and reduce the energy usage first, then size and install the roof (with power system).

    Very cool.

    This appears to be a game changer.

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