BYD North American VP talking about mega trend in Electric vehicles.
I was on a concall with a US based solar company yesterday. The CEO said that there is severe shortage of certain electronic components used by the solar industry. The reason he says is - There are large requirements from EV charging industry which uses the same components. And he says his company’s output is sold out for the quarter.
The take away is - EVs may get in the world faster than expected and so is solar power…Interesting times. I am curious to know how the stocks of ICE auto cos like Maruti shall perform going forward.
Mahindra and now Tata Motors have their EVs on road whereas Maruti doesn’t. Any path breaking disruption typically replaces market leader.
Actually it depends. I personally don’t call EVs a disruption but an evolution, had a post somewhere on the forum on this. Also I doubt Maruti will be asleep at the steering wheel.
Anyways, Maruti already has been fleet testing their mass market cars for electric versions. They are working on vertical integration from a battery perspective whereas an M&M will not be so much.
Headout to teambhp and you can see the discussion there.
p.s. all pic credits to teambhp forums
And they (suzuki) have plans to setup their own EV battery factory too.
Maruti’s strength is distribution and trust that they have built over past few decades. This is their moat and not their technology. Even now their bestseller engine has been the Fiat-sourced 1.3 MJD which does service in Swift/Ritz/Ciaz/Brezza, so much so that many people consider it the national engine. So we can’t write-off Maruti that easily, especially when the competition is Tata and M&M (People simply don’t trust their vehicles or service network). As @deevee pointed out, Maruti is not asleep at the wheel.
Maruti could lead in passenger segment but I feel real push atleast in the start would come from low hanging fruit like erickshaw, buses and trucks…passenger cars may come later…figure out key auto players in bus segment who could benefit from ev push…
“The more we learned, the more excited we got about #electric” - John Olin, CFO at @harleydavidson on the launch of their first commercial e-bike, coming mid-2019. “We can take out the combustion engine and make it much cleaner & sleeker” #battery
#BYD is happy to announce the completion of our new $5 million warehouse, the 4th expansion of our manufacturing plant in Los Angeles County, California.
“We have the capacity to produce up to 1,500 battery-electric buses a year” - @BobbyHillBYD
Ev is getting bigger and better with China and US leading the space.
Maruti - it is not about Maruti not selling EVs. It is all about profitability going into the future. Now, EVs will have less than 20 moving parts vs an ICE vehicle having 2000 moving parts. So, a well made EV has no need for a service station for years. The issue with Maruti is exactly its huge network. Which will be of little use if someone wants to buy an EV. In an EV world, one cannot advertise that there is a maruti station anywhere in India. Infact, running a station when not many cars will show up for service will be a big economical issue for Maruti.
And Maruti is not an EV leader unlike all other majors who have poured Billions into EV research. And there is only one issue for a new EV manufacturer. Which is to make and sell a good EV. For Maruti, M&M and Tatas - the problem is two fold. In addition to make and sell a good EV, they need to also maintain their existing ICE assets which could become commercially unviable with lower volumes.
If Volkswagen acquires some EV marketshare, Motherson Sumi might benefit.
Components for EV cars… Just because Motherson gets a supply contract to sell components to EV cars, does not mean it will be as profitable as current… The bargaining power of end individual users and car oems will be very high… If the oem decides to lose money for market share they will squeeze their suppliers too…
Checkout this video where the elements that go into a Li battery are explained very well.
the first step of e diesel generation is electrolysis which requires a lot of power. So if power does not come from renewable sources e diesel will not make sense.
Interesting new battery technology unveiled by Honda. May be too out in the future but holds promise to be ten times as powerful as todays Li ion batteries. Interesting for EV market going forward.
Thanks for sharing, good insights.
- If what is stated in this video happens ie massive drop in crude oil, this could unleash a massive equity bull run in India - the whole equation of CAD would change and rupee would stabilize… so all interest rate and crude sensitives would participate in that bull run.
- Electric vehicles in India is still a distant dream… there is no viable alternative below 12lacs… that could delay the adoption of electric vehicles in India to 10 years or more… till the cheaper alternatives are developed.
The fastest growing imports are electronics today and when EV come over - it will be batteries … India is at disadvantage as India does not enough mineral resources to produce batteries … So I am not sure on CAD …
But if you believe Ev are going to be big , this will require lot of electricity … Electric demand will go up becos of industrial growth , telecom growth , new electronic devices explosion and transportation growth … for example one company NTPC has 18GW and its corporate plan is to have capacity of 130 GW by 2032 … Man that is near 7X capacity in next 15 odd years …
Now look at utilities and power transmission companies , even with today’s demand they are available at 10 PE odd and pay 4% - 7% dividend . There is no growth factored unlike FMCG and financials …
Lets take another view … What happens to OMC - if they don’t transform in CGD and electric charging companies
Oil gets cheaper and there is no need of subsidy + there is no electric charging network yet say in Rural and tier 2 cities - this will make Rural and tier 2 cities still depend on ICE used cars - OMCs may earn good money for next 10 / 12 years … They are to be treated like bonds that expire with near zero valued in 20 / 30 years like say IRB REITs - Road toll -
You can easily calculate NPV for these stocks - and they may offer high dividend options till finally their real estate may be sold off in 2030 odd …
But one thing is clear in all this losers will be Auto and Auto ancillaries …
To produce electricity - Solar , Coal , W