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Key Takeaways
- I am of the opinion EV is over hyped and the buying public do not fully understand either the true carbon footprint or the practical realities regarding the provision of power
Catalysts
- How knowledgeable are buyers of EV's about the true carbon footprint to produce an EV?
- Will the discovery and reality of the actual manufacturing carbon footprint make them change their mind and therefore reduce demand?
- Most likely, EV owners will charge their car with power from the grid. Do they know which fuel or fuel mix generated this power and the implications on the carbon footprint? Do they care? If yes, demand will decrease
- Realisation on limited charging infrastructure and hence, range of vehicle.
Assumptions
- Power to support Data center's may well take precedent over individuals if the mega IT Companies contractually lock up power supply
- Power shortages kills demand for EV's
Risks
- Geopolitical interference citing anti competitive behaviour. (Since first writing this we know see high tariffs introduced by USA and EU)
- Development of alternate fuel for vehicles e.g. hydrogen fuel cells
- Renaissance of hybrid vehicles. Why has Toyota, for many years the largest maker of automobiles, not produced EV's and stuck with their hybrid strategy?
- Failure of grid infrastructure due to lack of investment, particularly true in the USA
Valuation
- Company over priced against my share purchase entry point. Likely, due to over excitement on EV's versus practical realities regarding charging infrastructure support and full understanding of environmental impacts (carbon footprint)
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Disclaimer
The user golf59orange holds no position in SEHK:1211. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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