Events
- The S&P ended the week down 0.73% retracing some of the prior week’s gains and now returning 11.95% year to date. The Nasdaq OMX Water Index fell 0.09% and has now returned 14.88% year to date. The Clean Tech Index rallied 2.65% continuing its post election rally and now has returned 34.91% year to date.[i]
- Like Pfizer and BioNTech the prior week, Moderna posted positive vaccine results increasing optimism about a visible end to the Covid 19 Pandemic. Unlike the prior week, this optimism faded quickly as announced shutdowns dampened optimism pertaining to a quick economic recovery.
- Tesla’s announced inclusion into the S&P 500 caused the stock to rally nearly 20%. Other alternative energy vehicle companies unlike, such as Nikola, Workhorse and Green Power rallied as investors sought to find the next Tesla.
- Bloom Energy hosted an investor call updating the public on their strategy and entry into a market which they estimate could be $50B by 2025 and $300B by 2030.
Fuel Cells vs Fool Cells
Elon Musk famously quipped the above statement in a tweet last June. Like all of us: Musk was talking his book. Unlike any of us: he formed a company that has transformed the transportation industry. He has earned his bully pulpit.
Both the EU and China have recently announced plans to pursue a hydrogen strategy – promoting the use of hydrogen as a lower carbon alternative fuel. If one considers green hydrogen, hydrogen derived by the use of clean energy, it could be considered practically carbon free. China announced its 15 year on November 2nd. Perhaps they got the idea from AOC and her colleagues who drafted the Green New Deal[ii] – though I doubt it jokingly. Both the EU and China posited highly detailed plans with significant buy in from other actors. As Bloomberg Green recently pointed out, they are actively disregarding Musk’s credo.
The challenges of implementing a hydrogen fuel cell strategy are myriad and well beyond the scope of my weekly scribblings but the debates involved are germane to investors. Elon Musk is not utterly wrong in in his skepticism, if not his scorn, of fuel cells though the technology has been in one form or another for decades. The expense of building out a hydrogen fuel cell network of filling station is estimated in the billions, whereas recharging EVs can already be done – at some level of efficiency – on the existing grid. But as a source of transportation fuel Hydrogen is far more efficient and likely the only near term means of replacing diesel as the fuel of class 8 vehicles. It’s a simple matter of weight, Hydrogen has nearly 100x the energy content by weight of present day batteries.[iii] It is also much faster to refuel using hydrogen, or anything else, then recharge a Lithium Ion battery which can take hours. Thus, for certain transportation applications like long haul trucks, batteries just don’t make sense at present. Tesla’s inclusion into the S&P is one signal of the further acceptance of clean technology, but the future will take many forms.
Opinions are expressed are solely my own. Any investments mentioned do not constitute a recommendation to buy or sell anything. If you do act on the opinions of errant writings without doing your own research you might consider talking to an investment advisor, a psychologist, foregoing that third drink or reexamining your decision-making process. I do cite sources and use end notes but amidst other responsibilities and foci I apologize for any plagiarism or regurgitation of other’s ideas though we all know there are not many original ideas. If you disagree with my content or opinion don’t read it.
[i] Bloomberg; Index returns include imputed dividends not just price return.
[ii] 116th Congress First Session; H.RES.109
[iii] Jefferies Research & Bloomberg Green.
