[PLUG-TALK] Electric cars and Wall Street

Keith Lofstrom keithl at kl-ic.com
Mon Sep 26 20:36:35 UTC 2011


On Fri, Sep 23, 2011 at 08:36:14PM -0700, John Jason Jordan wrote:
> I wish to make a long-term investment in companies that provide the
> batteries for these vehicles. I have been searching and have found a
> confusing array of information about companies in this business.

The EV space is ripe for a paradigm shift.  To date, EVs are
being designed as direct replacements for petroleum-powered 
automobiles, which they will never be.  Batteries are damned
expensive, heavy, low power density, and limited lifetime. 
Charging stations require a huge upgrade of the power grid.
Power density plummets in very cold weather, lifetime plummets
in very hot weather.  Batteries will never directly replace a
gas tank.   Nor should they.

Petroleum cars did not directly replace the horse.  Horses are
sentient, can forage, emit poop, and have limited range, speed,
and acceleration.  Cars are stupid (and their drivers get drunk),
require gas stations, emit poison, and can go 300 miles at 60mph.

Companies that try to sell ultra-expensive, low performance
electric vehicle using batteries will have very limited sales,
unless customers are forced to buy at gunpoint.  If you want to
invest in the current paradigm, look for companies with political
clout, who can bribe bureaucrats and get favorable legislation.
( the old white guys in suits ).  And watch them closely, 
because at some point they will screw their investors, too.  
The best technology rarely wins - look at Windows, QWERTY,
and the internal combustion engine itself.

Batteries have the worst features of both horses and cars, with
the dubious feature that their pollution is remote - power plants
and factories.  But the electric vehicles they inhabit have a
potentially very good feature - they can be semidirectly powered
by the grid (powered roadways), and they can be networked. 
A company that focuses on these advantages has a chance of
success in a customer-demand-driven market.  

My brain farts:

American cars have big engines for high acceleration merges on
too-short freeway onramps.  If someone builds grid-and-flywheel
powered motorized onramps, which can force gaps in merge lanes
and push underpowered vehicles into them, the big engine becomes
superfluous.  We could cut emissions in half with such technology.
I don't know if anyone is working on that.

The horse/carriage system is modular, and the power plants are
autonomous.  With the internet, regional awareness, and good
physical routing software, rental companies (or coops, or ...)
could distribute autonomous battery/motor "horses" on demand. 

In a modular transportation system, "consumers" buy a
passenger compartment on wheels.  Tiny maneuvering motor
and tiny battery - quarter-mile range at 5mph, enough to 
park, or travel down a driveway.  Mondo stereo system. 
Hardly anything to fix, and half the price of a petroleum
car.  The rental company buys batteries and big motors,
and keeps them moving 20 hours a day (pulling freight at
night, people in daytime).  They have warehouse depots
with big power feeds and lots of charging stalls, but
little parking - they use variable pricing and aggressive
sales to keep the "horses" busy as much as possible.

If you are going 5 miles, all you need is a "pony", perhaps
for 60 minutes a week.  If you are going to Chicago, you might
need 40 "horses" ahead of you on your route, perhaps swapping
on the fly.  Or you just drive onto a rail flatcar.  Or connect
into a platoon of 40 cars, pulled by a road locomotive, driven
by someone in Guatemala, over the internet.  Hands-free
transportation at 150 mph.

"Where's my self-driving car?" or the 21st century equivalent,
"Where's my automatically planned, supersafe trip?"   If some
approximation of that comes bundled with electric/grid-powered
technology, it will sell.  There is room for cleverness here,
and many opportunities for the computer geeks reading this list.

If we try to make batteries pretend to be something they are
not, we will lose, big time.  So, we must stop beating our
heads against the direct-automobile-substitute wall, and look
for wide open doors using the net, and the existing power
grid, and existing road networks to deliver new capabilities.

The companies opening those doors will have small, profitable
niches now, and a huge vision of what is possible.  They will
be customer/market oriented, with technology following the
needs of their customers, not attempting to control them.
They will grow like Google, scaling from closets to continents.

Clayton Christiansen teaches us that startups serving unmet
needs or neglected customers have a 40% chance of success. 
Startups attempting to push new technology into an established
space have a 4% chance of success.  If I was investing in this
sector (and indirectly I am), I would look for unmet needs,
fanatical customer orientation, and clever remixing of cheap
existing technology in service of the primary objectives.

Keith

-- 
Keith Lofstrom          keithl at keithl.com         Voice (503)-520-1993
KLIC --- Keith Lofstrom Integrated Circuits --- "Your Ideas in Silicon"
Design Contracting in Bipolar and CMOS - Analog, Digital, and Scan ICs



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