Short Term Trading Week Starting: 20 November, page-3

I was going to reply to your comments regarding electric trucks but remembered I'd posted about it at far more length around a year and a half ago and advanced search has saved me some time. Excuse the essay but I've included it below. The long and the short of it is that people were talking about electric cars at that time but there were far more skeptics in regards to how rapid the changeover would be and there was a general consensus that electric trucks either couldn't be done or would be decades away, because trucks have heavy loads to haul and travel long distances. It's definitely doable and it'll happen at an even faster rate than the changeover to electric cars.

https://hotcopper.com.au/threads/sh...749120/page-192?post_id=17524994#.WhG_x0qWZdg

Ok, I’ve been meaning to give my input on the weekend discussions for the past few weeks but haven’t had time. My background was as a mechanical engineer, mostly just designing various machines that usually ended up on mine sites but I also had some involvement with green energy, road freight, automotive, etc. I'd intended to move into green energy entirely but didn't want to live in the locations where any of the decent jobs were so I started trading instead. I’m far from an expert on any field in particular but I may be able to add some insight to just how rapidly the move to electric cars and trucks will happen. I’ll add a couple of caveats here though:

1. I'm aware that most here understand we're moving to electric and I may come across as stating the obvious in some areas but I still see many comments on these forums that display some doubts as to where we're headed and at what pace.
2. This is not a ramp for lithium stocks. I currently have limited understanding of the supply side of the equation and we have already had a very substantial run in pretty much all lithium stocks. A short term breather or pullback is undoubtedly on the way.
3. It is important that we don’t view the move to electric vehicles from an Australian perspective. We drive far longer distances than the average, say, European or American and our population density is tiny, meaning setup of infrastructure will always be a larger hurdle. Furthermore, our government will likely continue to be comparatively slow moving in regards to electric car subsidies, legislation, etc.

To start with, hydrogen fuel cells and hybrids are fundamentally flawed and should not be considered in any view of the future landscape. An electric motor and a battery pack will be the common theme among most vehicles on the road a couple of decades from now.

Despite the constant barrage of alternative battery technologies touting higher energy density or faster charging, the advantages of lithium continue to make it the clear winner and there is still quite a good chance that decades from now, we will be using lithium batteries for the majority of mobile energy storage. Batteries currently improve their energy density 5-8% per year and this is expected to continue in a similar manner for at least a decade or two. In 5 years, the energy density should increase by 28% to 48%. Add to this the fact that as battery production ramps up, economies of scale come into play and the better batteries will also be far cheaper, assuming raw material supply can keep up.

Within the next few years we will approach the tipping point where electric vehicles surpass internal combustion engine cars in pretty much every aspect, including value for money. This changeover will happen at a pace more staggering than most (even in the forward-thinking realm of the STT) realise. Once a few are on the road, it will become public knowledge that electric vehicles are not just cheaper to run because of fuel costs but also servicing. With this knowledge, the second the premium for the electric vehicle is small enough that it is glaringly obvious to the general public that it’s the cheaper option, the majority of the population could swing their preference to electric within the space of a few months.

This will not just be for passenger vehicles, the enormous savings in fuel and servicing costs will have the road freight companies scrambling for every electric truck the manufactures can get through production. Fuel and servicing costs for road transport are much higher, compared to the initial cost of the vehicle. Road freight companies will also be faster to crunch the sums on the savings, compared to the average consumer. The tipping point here is coming very soon and the changeover will happen faster than passenger vehicles.

Will recharging times be an issue for trucks? Well for starters, if there was no possible way to get charge times to a reasonable level, they’d just make the battery packs easily removable and you’d have a machine swap it with a fully-charged pack at the service station. If you think that companies may drag their feet with setting up suitable infrastructure, take a look at the hundreds of supercharging stations Tesla have already built. This is just one relatively small car company and they’re offering the service for FREE. Get a few multi-billion dollar road freight and truck companies starting to swing their weight and things can happen real fast.

Teslas can currently reach 80% of charge in just 40 minutes at a supercharger station. In the case of a truck, there would be ways the larger, longer range battery pack could be partitioned into smaller sections for charging and each partition charged separately in the same amount of time. It should not be long until trucks are being manufactured with enough range to drive for longer than a trucky is legally allowed to in one hit.

To give you an idea on why servicing costs will be substantially less, here is a very simplified list of just some of the parts which you get rid of when going electric: radiator, radiator fans, a bunch of coolant hoses, water temp sensors, 5-10L of coolant that needs to be periodically replaced, a few litres of engine oil that needs to be periodically replaced, oil pump, oil pressure and temperature sensors, oil breather system, fuel tank, fuel pump, multiple fuel filters, multiple fuel injectors, multiple spark plugs that need to be periodically replaced, multiple ignition coils, air intake piping, air filter that needs to be periodically replaced, throttle body, intake manifold, exhaust manifold, multiple mufflers, multiple catalytic converters, multiple O2 sensors, starter motor, alternator and one big, heavy, extremely complicated and inefficient engine. All this is being replaced by an electric motor, a battery pack and a bunch of controls with far less potential points of failure..

Lower running costs aren’t the only benefits:

1. Far lower environmental impact, regardless of whether the electricity comes from coal or sustainable energy.
2. You don’t have a tailshaft or exhaust running down the centre of the vehicle, so the floor can be flat with no hump in the centre, meaning more space.
3. You don’t have a large, heavy chunk of engine sitting in the front that not only takes up storage space but is one of the biggest hurdles with crash safety. It’s infinitely easier to have a good crumple zone when you don’t have a very solid chunk of steel and aluminium in the middle of it.

I personally believe that well within 10 years, some countries will have more electric vehicles on sale than combustion engine vehicles. If this is correct, there will be fortunes to be made in the next decade on a lot more than just lithium.