@hack2abi
Transportation, as a whole is all set to increase, both worldwide and nationwide IMHO.
Population and per capita income will continue to rise, especially, for a fast developing country like India. This, in turn, would spur more people to need transportation services. And unless someone invents a radically different mode of short distance transport (to rival the car), we can safely deduce, that car sales would also rise.
Whether that car is an EV or otherwise is a different question altogether, also, ownership of cars is another different issue.
But first, we need to visualise the effect on car sales. Once established, the other auto-ancillaries would quickly follow, since they’re directly proportional.
IMHO, Car sales should rise, as long as population increases and Per capita income rises. Don’t you agree?
I think it is good to discuss the changes happening at Macro levels. However if you have seen the presentation by Mohnish Pabrai on Bubbles. Even though these disruptive technologies do make life easier and play out exactly as expected its is the “Fittest and the quickest who will survive the competition” i.e hardly 2-3 major players, let it be battery makers, EV car makers, Service providers etc. We cant predict exactly who…
Rest all other New Tech companies will go Bankrupt and this Bubble will also burst ( the same risk applies to Tesla ). So its best to follow Buffet and refrain from investing in these new tech companies till a clear outlook is available.
Alphin
This exercise is not motivated from a desire to directly invest in disruptive tech companies. This is about finding current BMs in AA space which will thrive and be anti fragile in presence of disruptive forces. Sometimes the best ways to invest in a sector is through their suppliers. For example, its is much better to invest in 2nd tier supplier like PCP who are essential for aircraft manufacturers and who are in turn essential for airlines. So indirectly one is invested in the space. Similarly, one could go for a logistics company to participate in ecommerce boom.
In the end it is the business economics that dictate an investment thesis and not blind growth prospects.
Nice visuals from VC…have a look at the 1st and 2nd part of the series as well.
http://www.visualcapitalist.com/explaining-surging-demand-lithium-ion-batteries/
@hack2abi thanks for sharing good article. Companies in business of Lithium rare earth and Lithium ion batteries will have good opportunities. What are Indian listed companies in bussiness of lithium ion batteries and its raw materials?
As per my information, going ahead by 10-20 years, Oil supply will decline and prices rise to such levels that worldwide transportation of goods is not economically viable.
As stated in the infographic there is yet no alternative to air and ship travel other than oil.
Tesla’s gigafactory which has sourcing of raw material to finished product of battery and EV will have a huge advantage.
It’s a very smart decision by Elon Musk to have his factory in US at high present cost. Going forward this may be the future factory models when transportion of raw materials not viable. Maybe I am wrong but that doesn’t cost me anything.
Related: Tesla’s Fatal Crash: 6 Unanswered Questions
This article is about 5 hybrid cars waiting to enter indian market.
any idea about any plan of their to source batteries from india and from which vendor?
in indian market largely there are only two automotive batteries suppliers: Exide and Amararaja.
Any one knowing about their readiness to supply to hybrid cars?
battery supply to hybrid or electric cars are not that direct relation… Panasonic, LG, are one of the two big players suppling batteries for EV vehicles…
Exide and Amararaja will not get any order in my opinion from auto makers in the near term, unless they partner with LG or panasonic to assemble the battery packs,…for assembling battery packs, they should have knowhow on sort of electronic manufacturing… BMS assembly, spot welding and injected molded plastic or metal casing… there are much better suppliers and partners for this sort work than exide or amararaja battery.
Thanks. Just one thought, Johnson control is having their stake in Amararaja. they also hv their reps on board of Amararaja. Do they have presence in this technology apart from Panasonic and LG? and if they have, possibility of Amararaja benefitting out of it?
I have read a recent report that johnson controls have set up plants for assembly of batteries for EV and trains…but they are very small and young…
If i am a purchaser of battery packs, i will rather find TVS more interesting to partner with… lead acid batteries will become the past in near future… I am sure, Exide and Amararaja will be alraedy looking into different possibilities… may be acquire a small startup and then to capitalize from there on. at the moment, I will not invest in Exide or amararaja hoping that they will master the EV battery packs.
you might want to look into HBL. They provide specalized batteries and have kind of monopoly on Ni Cd batteries.being used in industrial UPS.
I have not done detailed analysis as P/E of 37 seems to be too high for a technology dependent company.
Also as I mentioned earlier, in the present scenarios until a clear leader emerges it would be too soon to invest in a company. E.g thousands of companies lost out in the computers race before Windows and Apple emerged as the leaders.
thanks. TVS is not listed, right?
yes… they aren’t… if you looking into EV and sort of business, In india, it is a wait and watch kind of scenarios… reason being that the major players in india is yet to assemble a promising EV car in the international market. India itself is too huge, creating a backend infrastructure for car charging stations will be a of different level…
Bosch has invested heavily in EV vehicle products… they have home charging station products in their portfolio.
A very interesting article to read.
In my opinion, driverless cars is still some time away due to lack of good tech and infrastructure. I see electric cars happening much sooner. There are quite a few things working in favour of e-vehicles -
- pollution issue
- power generation is on an upswing
- power getting cheaper (solar)
- huge reduction in cost of lithium ion batteries
- china leading the way (there is someone leading the way, is always easier for others to follow)
- infrastructure for charging points can be set up at exiting gas stations/petrol pumps rather than overhauling the whole road network for auto cars.
Government (Piyush Goyal) talking about this means business. This will take time, but this is seriously going to overhaul some of the industries. As pointed in the thread, there will still be need for most of the components that go in the vehicles, what seems most interesting is the battery part. Who in India will win the race, if at all. I don’t see much of the development happening in the country’s leading battery manufacturers (Exide and Amara). Probably they are going to set up JVs to leapfrog rather than developing from scratch.
I believe leading vehicle manufacturers like Maruti, Tata Motors, Mahindra etc with deep pockets will probably re-innovate themselves with tie-ups to stay at the top? Interesting times ahead.
Sure… But would they be able to compete with Tesla, which, may enter India much sooner than expected.
Tesla would probably be in high end market. Also, before tesla enters indis with its hybrid or electric cars, india needs infra. That is some time away. We will see some JVs in coming years in this regard with current industry leaders tying up with lithium ion manufacturers and things like that. It’s tough to anticipate how things wd play out…though this wd be disruptive whenever it happens for some companies.