Plug-in Vehicles

John Petersen A few days ago Alex Planes published an extraordinary article on The Motley Fool titled the "Real Costs of Alternative Energy" that summarized direct US subsidies for our principal energy sources, restated annual energy consumption from each of those sources using equivalent barrels of oil as a standard measure, and calculated the direct Federal subsidy per unit of useful energy consumed. The following table condenses and reorders the data from the lowest to the highest direct Federal subsidy per unit of useful energy consumed. As I pondered Mr. Planes' work and methodology, the...

Doug Young Electric vehicle maker BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF) has been zipping in and out of the headlines this past week, including its latest announcement that it will open a manufacturing plant in Brazil to service the BRICS country and the broader Latin American market. The company’s EV business, a major factor that attracted billionaire investor Warren Buffett as a major backer, also got good news from Beijing this week with word of a major government drive to boost new energy vehicle buying. Despite those positive moves, the company still has yet to received its...

by Debra Fiakas CFA The market for lithium ion batteries is expected to reach $46 billion by 2022.  That represents 11% compound annual growth over the next six years.  Few other markets if any are growing at such a feverish pace.  The adoption of electric cars is the center of the excitement, but the proliferation of smartphones, tablets and other electronic devices also plays a part.  Suppliers of critical battery materials such as lithium, cobalt and graphite are salivating over potential sales to battery manufacturers. Graphite with its strong conductivity and heat-resistant qualities is a perfect material...

Denny Schlesinger Machiavelli's The Prince and Sun Tzu's The Art of War are the two best known classic treatises on strategies to conquer and to govern. As Kandi Technology Group's electric vehicle strategy unfolds, I'm reminded of these masterpieces. The Challenges There are many of them. To start with, the current personal land transportation paradigm, the internal combustion engine, is not just well entrenched, it is becoming more efficient as time goes by. The fears of peak oil are vastly exaggerated specially now that fracking technology has added billions of barrels of recoverable...

John Petersen The first thing every securities lawyer learns is that technology is a two edged sword. On the leading edge, developers of cheap innovations that ramp rapidly over a few years build thriving businesses that deliver market beating returns for investors. On the bleeding edge, developers of expensive technologies that can't be implemented at relevant scale for years morph into financial black holes that suck the lifeblood out of portfolios and teach a new generation of investors about an insidious market phenomenon the Gartner Group refers to as the hype cycle. The second thing...

Clean Energy Intel BYD at the Central China High-Tech Fair, Shenzhen, November 2009.  Source: Wikipedia / Brucke-Osteuropa. Over the course of the past few weeks we have seen a couple of noteworthy developments at Chinese auto maker BYD (BYDDF.PK). I have previously discussed the troubles at BYD, which by mid-September had taken the stock down 72% year to date. However, a couple of developments suggest that the Warren Buffet-backed automaker is at least worth keeping an eye on in the period ahead. In late October, the company opened its US ...

Doug Young Bottom line: BYD’s latest asset sale, combined with its new auto finance joint venture, are both aimed at boosting its struggling EV business, but it may have to sell off more assets before the market finally starts to gain some momentum. Struggling electric car maker BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF)  is starting to look a bit desperate, announcing a major asset sale just days after it received approval for a stalled finance joint venture aimed at boosting its sputtering sales. The approval this week for its auto finance joint venture comes as rival...

John Petersen Thanks to a recent comment from JLBR, I've found a new hero in Dr. Peter Z. Grossman, an economics professor from Butler University who cogently argues that government attempts to force alternative energy technologies into an R&D model that was created for the Manhattan Project and refined for the Space Program will always result in commercial disaster because "the goal of the Apollo Program was the demonstration of engineering prowess while any alternative energy technology must succeed in the marketplace." In a recent article titled "The Apollo Fallacy and its Effect on U.S. Energy Policy" Dr....

Doug Young  Bottom line: Tesla will announce a joint venture production facility in Shanghai within the next 1-2 months, and could see its China sales pick up sharply after its more affordable Model 3 reaches the market next year. Just a week after Disney (NYSE: DIS) launched its newest theme park in Shanghai, media are saying that new energy car superstar Tesla (Nasdaq: TSLA) is also eyeing China’s commercial capital as the location for a new production base costing up to $9 billion. We should note from the start that the potential partner mentioned in the reports, the Shanghai...

Tom Konrad CFA Once again, John Petersen  has gone too far with his petrol-head arguments against Electric Vehicles (EVs.) In a recent article fetchingly titled, Why The Electric Vehicle House of Cards Must Fall, he argues that because "the incremental cost of vehicle electrification an up-front capital investment of $190 for each equivalent barrel of oil saved." Since the oil price currently barely tops $100, he considers this (to put it mildly) a bad investment.  He concludes, Electric drive proponents are selling a house of cards based on fundamentally flawed assumptions and glittering...

John Petersen Last Friday I received my copy of the presentations from September's European Lead Battery Conference in Istanbul. Most of the presentations were written for a technically astute audience and don't offer much in the way of concrete guidance for investors, but an overview presentation from Ricardo PLC, a global leader in engineering solutions for low carbon, fuel-efficient transportation, included three slides that merit serious investor consideration and show why I'm convinced cheap will beat cool for the next decade of vehicle electrification. I've posted a copy of the Ricardo presentation here. Technology Timeline The...

Part I Arthur Porcari. Ever hear of China based NASDAQ listed Kandi Technologies (KNDI)? If you haven't, you're not alone. No financial writers, no analysts, and no significant institutions or funds are interested.  But they should be.  This series will go into the reasons why. In part II, we'll look at the company's business and history : Kandi is already selling EV mini-cars by the thousands.   Kandi landed a joint venture with three multi-billion dollar Companies for quick-change battery charging, with the first stations opening in November. Owns a mortgage free modern ten...

John Petersen The hardest part of blogging on subjects like energy storage and vehicle electrification is synthesizing the mass of data that's generated every year. While I'm not an engineer and don't have any special technical expertise beyond the lessons I learned as a director and officer of a small battery technology developer, my training as a lawyer and accountant stand me in pretty good stead when it comes to reviewing statistical forecasts and comparing the current version of a forecast with earlier versions of the same forecast. Every year the US Energy Information Administration, a unit...

John Petersen I usually write a quarterly recap to summarize what happened in the energy storage and vehicle electrification sectors, but Q2 was a tough enough period that I don't see much sense in dwelling on the bloodletting. So instead of focusing on the past, I'll offer a quick summary table with lots of red ink and turn my attention to Q3, which is shaping up as a time of bright opportunity for some companies and profound risk for others. I expect three companies in my tracking group to perform very well in Q3 –...

by Debra Fiakas CFA Near the end of February 2014, Highpower International (HPJ:  Nasdaq) announced its first order for large-format lithium ion batteries to use in electric vehicles. Its customer, Huizhou Yipeng Energy Technology will be integrating the batteries into buses destined for the sales outlets of China-based manufacturers. The boost in sales for Highpower is likely to be meaningful.  Management estimates each bus will use as many as 288 of the company’s 20-ampere-hour battery.  Guidance for annual sales from Huizhou Yipeng alone is in a range of $4 million to $5 million.  In the most...

John Petersen Congratulations! You've been appointed Energy Czar for the island of Self Sufficiency; a wonderful place that can satisfy the bulk of its energy needs from domestic resources, but needs to import gasoline for a 10,000-unit automobile fleet that gets replaced at a rate of 1,000 cars a year. The island's battery factory can manufacture 45,000 watt-hours of lithium-ion batteries each year and depending on how they set the machines; the factory can make high-power batteries for HEVs or high-energy batteries for EVs. Your mandate as Energy Czar is to minimize Self Sufficiency's fuel imports and...