Sustainable Energy, USA and worldwide

Oof, yeah, I couldn't believe my eyes when I saw photos of the nuclear power plant turbines totally exposed in the cold.

Speaking of clean energy, Warren Buffett isn't. Ha, you like that wordplay? Seriously, Buffett recently plonked $4.1 billion into Chevron in a move that has puzzled onlookers given his putative stance on renewables.

CleanTechnica offers an opinion piece calling out just how odd the Chevron investment is, and also how fucked Buffett is if self-driving cars make it big.

$46 billion of Berkshire-Hathaway's 2016 annual revenue came from insurance products, and over half of that is from GEICO. Buffett himself admitted that self-driving cars would destroy the auto insurance industry, yet his company is heavily involved in that industry. Tesla is the biggest fish in that ocean with over a million vehicles equipped for autonomy — vehicles that are also fully electric. Its solar roof product is also a challenge to big energy.

Back on target, Buffett's investment in Chevron is baffling given that Berkshire itself has a stake in renewables (approx. 1/3 of its energy business in 2016) and knows that they are the future of energy. His money would be better spent investing in Tesla.

Edited by Fighteer on Feb 24th 2021 at 10:15:26 AM

Absolutely not. Buffet is famously a fundamentals investor - that is, he invests in firms that have earnings out of proportion to their stock price. Tesla is hovering somewhere way in outer space utterly divorced from any connection to its fundamentals. Only reason I am not currently actively shorting it is that the market can, as they say, stay crazy longer than I can stay solvent. I mean, I also would not touch an oil firm with someone elses barge pole, but Tesla is clearly into "greater fool" investments territory.

Edited by Izeinsummer on Feb 24th 2021 at 7:38:52 AM

Suggesting that Chevron has any sort of future in which its value goes up?

Goddess no. As an investment it is nearly as doomed as tesla. Tesla just is not in any sense "better". Park your money in a finnish lumber company or something.

You're tripping. Tesla is growing 50% per year indefinitely. Ignoring cars for the time being, its solar business is rebounding thanks to the success of the Solar Roof product and its storage business continues to set new records.

In Texas last week, homes with Powerwalls were the only ones that had their lights on in many neighborhoods. Grid-scale batteries could have soaked up some of the load from failed fossil fuel plants and saved consumers massive electricity bills. They're already doing just that in Australia. Look up the Hornsdale plant. Demand for Megapacks is far above Tesla's capacity to build them.

During these recent winter storms, you could tell the difference between homes with Solar Roof and those without because the hydrophobic surface causes snow to slide off.

Edited by Fighteer on Feb 24th 2021 at 10:45:58 AM

VW just ate its lunch in Europe. With one model on the market. One. VW can, and will, scale up production a whole lot faster than Tesla can, and it just massively outspends it on development, approximately all of which is going into "better electric cars".

Tesla was thriving because it was the only player taking electric seriously. As more traditional auto makers wake up and smell the roses, it is going to have to compete on price, build quality ect. I do not expect Tesla to go under, sure, but expecting it to grow to a point where its current valuation makes sense is. Uhm, yhea, not happening.

And no. Batteries would not have kept the grid up. You are committing a pretty gross scale error here.

Not to mention that Tesla is going to have its lunch money taken in the battery sector too. It is not invested in solid state tech at all, and well. That is happening.

Edited by Izeinsummer on Feb 24th 2021 at 7:57:34 AM

33% of VW's ID.3 cars were self-purchased. This made international news. It only won by cheating, as usual. All of Tesla's European sales are imports, currently, but it is building a plant in Germany with a planned annual capacity of 500,000 or more. That should start production this year. VW is a welcome entrant into the market but it cannot compete on price or specifications.

Tesla owns 80% of the battery-electric vehicle market in the U.S. and it has a second factory being built there that will nearly double its capacity. The competition is 8-10 years behind and getting farther, largely because of stranded assets.

Tesla is also one of the leading global battery producers (depending on how you count its deal with Panasonic) and is at the forefront of battery innovation, including dry-electrode and solid-state. Solid state is not nearly as mature as you think, certainly not for mass-scale production, but you can believe that Tesla will be all over that when it is.

Grid-scale battery storage wouldn't have saved Texas last week completely — not at the scale involved, but it would have substantially eased the problem. It can almost entirely eliminate the need for natural gas "peaker" plants, which are expensive and dirty. Those plants contributed heavily to the grid failure.

Certainly, home solar combined with home battery storage would allow individual homeowners to more or less ignore the blackouts and if done at a large enough scale would allow decentralized grids that are not as vulnerable to the kind of mass failure that we saw.

Edited by Fighteer on Feb 24th 2021 at 11:29:28 AM

There's no way that sort of growth is sustainable indefinitely, so you're also tripping.

That's true, but the time horizon for most valuations of its stock is around five years and it's more than capable of sustaining it over that period, not counting external factors that can't be anticipated, like pandemics.

On cars alone, Tesla made 500K vehicles last year in a global market of ~78 million. That gives room for seven years of 50% growth before it hits 10% market share, which is probably on the conservative side. The company's long-term target is 20 million per year.

The most critical limiting factor is the supply of raw materials for batteries, but that applies to everyone in the electric vehicle market.

Edited by Fighteer on Feb 24th 2021 at 11:50:32 AM

Ten percent market share is not happening, because Tesla is simply not building the factories to manufacture that many cars on that time Horizon. And worse. If it did, that would not justify its current valuation! That is what Toyota has. Tesla is currently valued at more than 3 times Toyota. That is, the stock market has taken complete absence of sanity.

Toyota is going to go out of business if it doesn't step up. It's banking on hydrogen fuel cell technology which can't be scaled nearly as rapidly as batteries.

Also, Tesla isn't just about electric cars. That valuation includes self-driving robo-taxis (a huge untapped market), energy generation, and energy storage.

Robo-taxi service alone is worth hundreds of billions of dollars and there will be a huge advantage to the first mover. When (not if) Tesla solves it, it'll have millions of vehicles in service already equipped for it, unlike anyone else.

Edited by Fighteer on Feb 24th 2021 at 12:26:25 PM

... This is the theory that tesla can make bank operating vehicles it has already sold to private owners as taxis. Yes?

Excuse me while I laugh myself sick.

No.

Also, nobody makes money in rideshare. Making them robotic will not suddenly make fat margins appear, it will just drive the price way, way down.

Edited by Izeinsummer on Feb 24th 2021 at 9:33:34 AM

Toyota's not likely to go bust as it's part of a larger conglomerate, like most Japanese auto manufacturers.

Look, if you want to have an argument about the economic incentives for robo-taxis, we can take it to a more suitable thread like the Self-Driving Cars one. I'm not going to sit here and trade barbs, merely suggest that you expand your sources of information. There is a huge amount of bad-faith reporting about this subject perpetrated by people with an interest in seeing the status quo maintained and an active social media disinformation campaign that relies on blocking everyone with a different viewpoint.

You aren't doing yourself or the world any favors by ignoring any points of view that don't agree with yours. Believe me, I've seen and heard all the arguments. There's nothing you can tell me that I can't trace back to someone who wants to see the technology fail.

Be that as it may, Toyota with its current paradigm is driving full-speed into a dead-end with an embankment and a hundred-foot cliff on the other side. Battery-electric vehicles are coming into their heyday with all the signs of a classic S-curve adoption rate, and the only ones standing at the end will be the ones who get on the train now.

Hydrogen is a technology that just isn't ready yet, and even when it is, will mainly be useful for heavy vehicles and long-haul trucking.

It doesn't even really matter if Tesla stays at the head of the pack. If it goads the other automakers into getting off their asses and delivering compelling, mass-market BEVs, then we all win.

Calling back to a previous topic, think of all the deaths around the world that will be prevented annually by the complete removal of internal combustion engines from roads. Warren Buffett is a fool to invest in Chevron.

Edited by Fighteer on Feb 24th 2021 at 7:32:39 AM

I think what Izeinsummer is saying is that, even if everything you claim about Tesla is true (and I have no reason to doubt it) it still wouldn't justify the current stock price.

Well, I'm neither a market analyst nor a Tesla investor, so I can't offer an expert opinion on its valuation. It's got a heck of a lot more future than Chevron though.

I wouldn't assume that. Energy policy has at least as much to do with corporate profits as technology does, and Chevron has invested a lot of money into political lobbyists.

That doesn't mean it can survive if its revenue goes to zero. Of course the energy corporations will transition to renewables sooner or later, but it's like the Toyota vs. Tesla thing. In an environment of technological disruption, markets shift in favor of first movers.

Maybe, but I think the difference is that while Chevron's demise will take a very long time to play out (it wouldn't surprise me to see them still around in 50 years), someday one of the major car manufacturers is finally going to get it right and start selling EV's in earnest, at which point Tesla's stock price is going to suddenly plummet (for reasons that are not entirely rational). While I obviously dont know the future, still, I wouldn't be surprised if people who buy in now lose their shirt in 5 years.

People hate Tesla. Film at eleven. It's still got a huge lead, even if the major autos "wake up". They freely admit it — at least the honest ones do. The lead can't last forever, of course - at some point the rate of technological improvement will plateau, allowing everyone else to catch up. At that point it's about economies of scale, added features, loyalty, monopoly/monopsony power, and all the other factors that we're familiar with.

Who's to say Tesla wouldn't be a major automaker at that point - one of the Big Ten or Big Three?

Anyway, its current share price inarguably does not obey rational market forces. This isn't because of its fundamental value as a company but because there is such a wide range of disagreement about that fundamental value.

Its share price is, what, five times Toyota's? And 15 times GM?

"It could be one of the biggest companies in the market then" still wouldn't support this. Which seems largely the point.

Edited by RainehDaze on Feb 24th 2021 at 3:02:52 PM

And the reason for that disagreement is because a lot of the value people ascribe to Tesla isn’t due to what it has or is doing, but due to what it has the potential/desire to do.

Robo-taxis are a key example of that. Tesla has a market position, a willingness and the capital to get into the robo-taxi market, as soon as that market exists and is profitable.

If you think robo-taxis will be a profitable business in the near-future then that adds to Tesla’s value, if you think self-driving cars will take another decade to be legalised and it’ll be another dozen years after that before you can legally run a robo-taxi buisnses then Tesla doesn’t get a value boost from its high potential in that potential market.

Edited by Silasw on Feb 24th 2021 at 3:16:37 PM

Jam tomorrow, eh?

These investors are pricing in the likelihood that its competitors will be dramatically diminished or bankrupt. Also, you can't ignore the energy business, which has the potential to generate more revenue than automobiles.

That is correct, but personally I find it hard to credit that anyone genuinely thinks that robo-taxis can't work at an economic level. Adoption and regulation are of course open questions, but the biggest objection seems to be to Tesla's approach to self-driving, which I have to believe is ideological more than technical.

The number of people who think that "a machine vision approach cannot compete with a lidar approach" is vastly higher than the number of people who are technically qualified to have that opinion.

As another point, given the by now well over a million FSD-equipped Tesla vehicles on the road, many of which have purchased the FSD upgrade, you'd think the "horrific safety problems" would be getting more attention. There's an interesting article discussing how Tesla gives drivers a motivation to be engaged in monitoring Autopilot and thus there are fewer negligent crashes. Anyway, with the media amplification of every problem with self-driving, where are all the stories? I've seen more news articles devoted to Model Y roofs falling off.

Edited by Fighteer on Feb 24th 2021 at 11:16:45 AM