Electric Cars/Bus :: Call it a Disruption?

(Vineet ) #102

Any place of Aluflouride Ltd in the above space ?. It produces Aluminium Flouride from waste which then can be used in Aluminium industry ? It will also benefit indirectly in EV production process.


(fabregas) #103

Lets also not forget the clean energy bubble, like the one which happened in the past decade about solar/wind energy projects. Suzlon, MosarBaer are some names that come to my mind.

I would be extremely apprehensive of any technology which requires long periods of government support to be sustainable (tax cuts, tax rebates, cheaper loans etc).

On the positive note:

Tata had won an order of supplying 10,000 EVs at a price of Rs11.2 lakh per car.

(ASPN) #104

A small diverging question : Looking at the bright prospects of Li Ion batteries, can we conclude that the market for Lead based batteries is fast decreasing? Consequently, this also means worsening prospects for primary lead smelter like Hindustan Zinc as well as secondary lead smelters like Pondy Oxides, Nile and Gravita ??

@vinu1707, Vineet, Aluflouride sounds like a new and interesting story. But I fail to understand its applications, market potential and customers. The stock has run up a lot in last one year. Have you done any working on this company? Would love to know.


(Agarwala) #105

Look at normal and compact fluorescent lamps. They are another example of polluting inefficient technology being replaced by a superior LED lighting devices. Government is doing a commendable job by providing cheaper LEDs under UJALA Distribution Scheme. According to the website there is INR 14460 Cr cost saving per year. The number of total LEDs distributed is 278360887. It is expected to result in 29281422 Tons of CO2 reduction per year. I have myself replaced all CFLs in my home with LEDs purchased under the GOI scheme, and I am happy. This is another example of disruption (for CFL industry), and all government schemes cannot be doubted for their efficacy.

(nayan solanki) #106

I think electric vehicle is going to be big hit in coming years because of climate change and we humans will find better technology as per my views stocks like moil Eveready Hindalco jsw energy Igarashi motors and tyre company all are going to see huge growth going forward imho regards

(Vijay) #107

The change is not due to environment alone. EVs provide very high torque on entire power band. Add it to lower running and maintenance cost. When batteries become cheaper, it is a logical option for consumers. The change is coming. When will it come is the million dollar question.

(mahabali3004) #108

Taking a contra view, as EVs become common across the world, demand for crude oil will also fall. Falling crude prices should help companies with dependency on crude oil and its derivatives. So Plastic companies, Paint companies, Petrochemical industries etc. should also be able to produce a higher margin in the upcoming years.

Since Crude oil is expected to rally for few months, before taking a major blow, it could be the best time to accumulate quality stocks in the above segments.

(azardeen) #109

In my view, falling oil price will help the companies only in short term. In long term, competition may drive product prices lower and companies may end up with average margins. Also the oil companies are going for forward integration to produce chemicals in order to diversify. It may affect indian chemical producers. Recently Aramco and Sabic signed an MOU for chemicals manufacturing.

(Vijay) #110

If crude demand reduces, then production will decrease. This means crude derivatives will also reduce in quantity. So price may not fall for the crude derivatives.

(mahabali3004) #111

This is debatable though . Because OPEC countries economies are still dependent on crude oil and they may not cut any further. High Prices with Less volume is still a loss for OPEC countries. And US Crude and Shale gas exports are growing fast. So it may not go back to $100 levels, in my opinion

(mahabali3004) #112

This is an interesting development. Forward integration will present new challenges to our own petrochemical industry. But still industries like Paint , Plastic etc would still benefit with big fall in petrochemical prices.

(nayan solanki) #113

Crude price will fall for sure but can’t say it will benefit companies as much because with fall in crude price they have to pass benefit to end user. For eg if some companies which manufacturing plastic box will then have to supply they same product at discounted rates to ther vendors as there is fall in raw material price

(Parag) #114

I think oil has it’s the best day behind, and I doubt if it will touch three digit number anytime unless war breaks out in Saudi.

One of the reason last time (2007/08) for oil to reach $140+ is a wide spread belief in the marketplaces that oil is a perishing commodity, and the world needs oil in larger quantity going forward. The price also assumes the new oil supply would come in the lower number than the demand, causing the demand-supply mismatch. The economics of the oil were so convincing that companies started drilling for oil in Arctic circles, which is tough terrain to explore and transport oil.

However, both these assumptions – limited oil supply and more oil demand in future- are more and less are invalidated.

In last 4/5 years, oil exploration using shale drilling has given people in the market confidence that oil will last much more than what people thought earlier (e.g. oil will never run out). I read in (not sure where) the US has shale supply that will last for 100’s of year. I am not an oil expert, and I do not know how long will it last, to be honest, but if the US- which consumes quarters of oil in the world- has enough shale gas for decades, then it does not augur well for oil consumption going ahead. Moreover, a shale drilling relies on technology. And as it happens with any other technology, the prices come down with time. In 2016, oil producer thoughts that oil needs to below $60 per barrel, for shale producer to survives (and hence Saudi allowed oil prices to fall below $30 to make shale producer bankrupt ). But fast technological development has ensured that US shale producers are pumping in more oil even when the oil prices are sub $50 and they are talking about being profitable at oil at $30. Now it does not matter (here for our discussion) much what price they will be profitable, but it the significance in term of availability. Now, oil producers or people pushing high oil prices cannot rationalise limited oil supply. Bear in mind that the US is the only (or maybe couple of more) that are actively extracting shale oil. So, there could be other places in the world, where the shale oil may be ample and waiting for exploration

The second thing is EV movement. The solar power is getting cheaper by the day. Even in India, new solar power contract is signed at record low prices (less than Rs 2.5/unit). The same thing is happening in Wind power, may not necessarily to the extent as happening to Solar power, but the prices are coming down rapidly, nevertheless. It is increasingly looking that the EV cars/buses/trucks will generate more sales, not 2/3 years, but in next five years. Increasing EV sales is apparently not good news for oil. Oil is likely to lose it prominence, at least from the transportation segment (and also power generation) soon. This does mean that it will become irrelevant immediately, but it means the world will require less and less oil going forward (once EV becomes mainstream).

In short, EV along with technologies improvements in solar technologies may have put a cap on oil prices in short and long term.

(Parag) #115

Regarding cheaper imports from china, the government may step in and put duties to support “Make in India”.

It depends !.
In capitalism, companies would use the cheaper (not necessarily in quality put in price) product, wherever they are produced, unless there are constraints or import ban.
Look at the solar PV manufacturers. In spite of high growth in the Solar energy sector in Indian in the last 3 years, there are not many solar PV manufactures in India. Most of the solar energy producers are buying PV panel from China. Chinese companies have scale (and cheaper cost), so they can sell them at cheaper rates in India.
The same thing could happen for EV

(Abhinav Mehrotra) #116

You mean shale gas Parag.

(Parag) #117

Thanks, Abhinav. I have corrected it.

(Agarwala) #118

As our dependence on crude gets lower, and we become solar, another disruption might be around the corner that is shown in the map. Source British Business Energy website.

The website says…

The map above shows the global solar energy potential of the various regions around the world. Unsurprisingly, those areas closer to the equator tend to have greater annual potential than those further north or south.
For example, Scandinavia, Northern Canada and Russia all have potentials below 2.0 kWh/M2 per day whereas some regions of South America and Africa have potentials above 7.5 kWh/M2. This means many of the poorest countries today, could be sitting on an energy goldmine in years to come. And the future is coming sooner than you think.

PS: We seem to be better placed than China here.

(rvetri) #119

Good input agarwala :+1::+1:

(Agarwala) #120

A FEW miles down a rutted dirt road, and many more from the nearest town, a small farmhouse stands surrounded by dense green bush. On the inside of one wall gangly wires reach down to a switch and light that are connected to a solar panel. Readers in rich countries may well consider electric lighting mundane. But in northern Rwanda, where fewer than one in ten homes has access to electricity, simple solar systems that do not rely on the grid—and use a battery to store electricity for use at night—are a leap into modernity. A service once available only to rich Africans in big towns or cities is now available for just a few dollars a week. People are able to light their rooms, charge a smartphone and listen to the radio. In a few years they will probably also be watching television, powering their irrigation pumps and cooling their homes with fans.

Read this article to know what is happening in Africa now…
Africa unplugged

PS: Could this be a solution for our electricity starved villages? Will solar make us off grid that would be another great disruption.

(Parag) #121

As mentioned in above you tube video, here is an interesting slide related to Copenhagen.

One of the schools in Copenhagen is generating 50% of annual electricity using Solar. Copenhagen is very close to Alaska (3% south), if they can produce so much electricity- one can imagine how much solar power can be generated by the region marked as red in the Europe radiation map @Agarwala

Some of the solar panel (even today) do not need a Sun to shine to generate electricity. Mere daylight is enough to make electricity.

Solar power has a massive potential.