TLDR: EV within the subsequent 10 years goes to turn out to be the most important trade on this planet, not due to it is inexperienced vitality however due to automation. They will result in the biggest mass unemployment rise as they make drivers pointless
I might love individuals’s opinions about my tackle the way forward for EV and whether or not I am off base or too optimistic
Disclaimer: In NIO for 140 shares @ $22
My primary argument: EV firms are presently amazon of their bookshop section
I’d argue that the valuations of each TSLA, NIO and different giant EV firms is critically undervalued – I am not basing this on the variety of automobiles they manufacture nor the effectiveness of their electrical battery potential however on the billions they’re investing within the improvement of full self driving automation.
Within the subsequent 10 years, we’re more likely to see full automation particularly with the arrival of quantum computing resulting in an enormous enhance in computational energy (https://www.sciencemag.org/news/2020/09/ibm-promises-1000-qubit-quantum-computer-milestone-2023) – The businesses which can be closely investing in growing this know-how aren’t the basic automobile manufactures reminiscent of GM, Chevrolet or Chrysler however as an alternative the big EV firms which have grown exponentially up to now 12 months. Like many individuals I am viewing firms like NIO or TSLA as tech firms and never automobile producers. They’re primary worth is within the code they develop for automation.
As soon as full autonomous driving turns into sensible, these firms can lease their code as a service and principally substitute the necessity for any job which requires drivers i.e. supply drivers, truck drivers, taxi drivers.
The primary instance I have been utilizing for that is Domino’s Pizza within the UK – They’ve about 1126 shops within the UK, to illustrate they conservatively they rent 5 supply drivers per retailer and people drivers on common work about 5 days per week and a complete of 6 hours per day (the three hours round lunch and three round dinner) – Let’s additionally assume they solely receives a commission minimal wage – This comes out to a complete expenditure of about £80mill per 12 months ($110 mill) for dominoes simply based mostly on paying their drivers wages, not countering in gas or different expenditures that they do additionally cowl – And that is just one firm within the UK.
If automation happens, which once more these firms are investing closely in and the underlying infrastructure and know-how is starting to succeed in fundamental necessities, these EV firms can create a code as service mannequin together with the revenue from really promoting the automobile and principally make drivers redundant
My argument is that principally in the meanwhile these EV firms are amazon of their bookshop section, persons are betting that they’re going to promote a lot of books (automobiles on this case as a result of they’re clear vitality) and I feel they are going to find yourself changing into juggernauts that principally take over our each day lives to the identical extent amazon now does
Obvs I is likely to be fallacious and in reality I might love to listen to some bearish arguments – I am not saying we’re not in a bubble however I feel these firms in 10 years time will probably be steals at their present costs