Energy & Transportation disruptions : Impact on Indian companies

Please refer to this document which talks on “Clean disruption of Energy & Transportation”, which predicts all conventional energy and transportation will be obsolete by 2030.

Based on the disruptions predicted, was wondering if one were to think really long term as value investors (say 10-15 yrs or more from now), what kind of existing businesses will be impacted and what kind of new businesses will emerge.

Few things to think about :
- “Electric Vehicles will have 100x fewer moving parts than today’s gas based ones”, which will put some of the auto-ancillary companies out of business
- Which conventional energy companies will be most impacted by Solar power disruption ?
- What will happen to the existing battery manufacturing companies ? Can Tesla Battery throw them all out ?
- With new business models like “Car-as-a-service”, they may be far fewer cars bought in future and how would that impact all car manufacturers ?
- With self-driving cars, what kind of technology companies will emerge as the leaders ?

Thought this would be a interesting thread to discuss/debate on what business will survive and which ones will lead these disruptions in India.

Document link Courtesy: Anil Kumar Tulsiram’s tweet ( @Anil_Tulsiram )

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You can watch him on youtube

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Thanks Raj for the youtube link…here’s Elon Musk’s launch video of Tesla Powerwall (for those who haven’t seen this)

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Of course, disruptive technologies in transportation are too futuristic at this point in time. Whether they will be cost-viable for mass production, performance parameters and many other factors will come into play. As and when that happens an becomes reality, conventional battery manufacturers and lubricant businesses will be out of gear.

How to buy Tesla stock :smiley:

I think GOI allows up to $200K investment abroad every year. If you are serious check with your broker :grin:

- What will happen to the existing battery manufacturing companies ? Can Tesla Battery throw them all out ?
Batteries are being developed by all and sundry, Tesla , Research universities as well as the Japanese. So like atom bomb or the calculus, a lot of people would hit a breakthrough around the same time.

  • Electric Vehicles will have 100x fewer moving parts than today’s gas based ones", which will put some of the auto-ancillary companies out of business
    It’ll be a slow death, since battery technology would have a evolution rather than revolution. Even then there are lots of places & Industry where internal combustion engine would be to be present, viz. Mining & Pakistan (or Bihar)… So people will have lots of warning.

  • Which conventional energy companies will be most impacted by Solar power disruption ?
    The nuclear power industry & it’s manufacturers would be the first casualty of plentiful (if not necessarily cheap) solar power. As a side note, Saudi Arabia, Libya & Egypt & neighbours would be greatest beneficiary.

  • With new business models like “Car-as-a-service”, they may be far fewer cars bought in future and how would that impact all car manufacturers?
    It seems to me that people … sorry MEN get a car (or any vehicle be it an animal) to move. They like to own the thing not for the utility but for the assurance that they can move without somebody else’s help. Even now, Uber is making it quite cheap & easy to move around, yet nobody thinks of examining the economics and evaluating if their locomotion needs can be fulfilled without them owning a car.

  • With self-driving cars, what kind of technology companies will emerge as the leaders ?
    The companies that make cars duh. As for who’ll have the technology, you can’t say. It can come from evolution or revolution, unlike batteries here algorithms matter more and somebody could get that in his dream.

The reason auto companies are not investing & focussing in self-driving technology is because they see it as a computing problem, not a transportation problem. As and when their customers demand self-driving technology, they’ll license it from Google/Apple/MS/Whoever has the tech.

It has already become quite normal in large cities of Japan to not own a car. Most of those don’t even have a driver’s licence. The effects of efficient public transportation, parking hazzles and overcrowded roads could lead to reduction in car ownership. And in case of India, as told in a speech by Mahindra, it could be Uber and Ola instead of public transport that could make travel cheaper… Cheaper than actually owning a car. It’s all speculation for now though :slight_smile:

–Reposting from the other thread –

Disruptive Technology is here !

System one: OMG, Sell Amara Raja batteries!

System two:

  1. Amara’s foreign stake holder and technology provider is Johnson Controls. What do they say? They say: http://www.autonews.com/article/20160704/OEM02/307049991/johnson-controls-bets-big-on-stop-start-systems11
  2. Some reality check on Tesla itself: http://seekingalpha.com/article/3994098-tesla-q2-earnings-many-questions-answer?li_source=LI&li_medium=liftigniter-widget6
  3. Quick check on oneself: I ( representing millions of car owners)
    already own a car bought in last 1/2/3/4/5 years for anywhere from 4-10L
    and why should I invest another 5-10L so my fuel cost goes down.
    Green? Yes, but if that costs me another 10L, well…can i put off going
    green for a few years please?
  4. So, fuel cells will cost lesser and lesser, but what of Opec and other
    countries that produce oil and their entire survival depends on it ?
    Will they stand by and watch this happen ? OR will they drop prices to
    survive? They may make lesser per barrel, but they survive longer.
  5. More…

Eventually the world may move to renewable sources of energy, but
when is that? Maybe as the speaker says in the video, the future is
almost upon us, but reaching that conclusion in double quick time is
System-1.
In the horses and cars pictures, it is an unthinking
assumption that all the horse owners became car-owners over 13 years.
Maybe they did. Or maybe the car owners were those that could afford
cars, and did not own horses? Would the new owners of EVs be the ones
that own petrol cars, or first time owners? The existing hundreds of
millions of cars wont go off the road overnight? The horses had no
champion. Existing cars on the other hand have the support of powerful
corporations in whose interest it is to control the rate, and direction
of change. Yes, Elon Musk and Tesla can change all that, but its far
from clear at the present time that the establishment will crumble
without a fightback.

@aniketdharamshi - please repost your content from the other thread here as well - it has some good insights.

Re posted from the other thread.

The author of the presentation regularly shows that slide about horses and cars on a New York street as an example of disruption rendering the horse obsolete. In that case, we must remember that from the get-up and go, the car was more efficient than a horse (do not think air pollution, smoking was de-rigeur then). In the present context he then claims EVs will do the same to conventional cars.

This is the first point I do not agree well with. Conventional automakers have not moved into EVs because of major technical challenges in that sector. They are waiting and watching, and will launch full electric models with better R&D while exploiting the obsolescence inherent to pioneers in any field against small EV makers such as Tesla. These companies also have the ability to under-cut on prices, since Tesla has not really been profitable despite the shareholder hoopla (am I right?).

Over arching all this is the fact that Moore’s law cannot be used in case of systems with Physics limits on them. For instance, we cannot pack ever more conventional transistors on a chip as quantum effects will become felt and quantum computing is not yet mainstream outside academia. Further, if academia is working on it, it can be a couple of decades before the technology becomes mainstream.

Regarding, solar PVs, the reduction in cost is very correct. However, coupling Solar with onsite storage is not as easy as it appears. For instance, cloud edge lensing and increase generated electricity from a PV by 25%, that has to be managed and fed back to the grid, and that effect is true for all the houses in your neighbourhood. Very precise energy management software and hardware is required for this. The challenges are not as trivial as the lecturer assumes.

So, in passing, disruptions are real, but not as simplistic as the lecturer portrays. Finally, revolution devours its own.

Must see…Analysis from Rajeev Thakkar

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