Who wants a faster horse? · Solar Wind Coal Gas $/MWh 0 20 40 60 80 100 120 Solar Wind Coal Gas...
Transcript of Who wants a faster horse? · Solar Wind Coal Gas $/MWh 0 20 40 60 80 100 120 Solar Wind Coal Gas...
Who wants a faster horse?Living in an age of disruption
August 2020
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Gerard ReidCo-Founder & Partner, Alexa Capital
Confidential – August 2020
CONTENTS
A step back in time
A look at the future
Implications
1Confidential – August 2020
LET’S NOW GO BACK TO 2010 AND TRY TO PREDICT SOME OF THE MAJOR THINGS GOING ON TODAY IN THE WORLD OF TRANSPORT
2Confidential – August 2020
COULD YOU HAVE PREDICTED THAT MOBILITY TESLA WOULD BE THE MOST VALUABLE CAR COMPANY IN THE WORLD?
EVs Incumbents
Source: Bloomberg
$287 billion
$22 billion
$43 billion
$180 billion
$40 billion
$34 billion
$81 billion
Automobiles
3Confidential – August 2020
COULD YOU HAVE PREDICTED THAT OIL PRODUCERS WOULD HAVE TO PAY PEOPLE TO TAKE THEIR OIL?
Source: Bloomberg
Oil
4Confidential – August 2020
WHO COULD HAVE PREDICTED THAT YOU COULD COMMERCIALLY FLY AN ELECTRIC PLANE?
Planes
5Confidential – August 2020
WHO COULD HAVE PREDICTED THAT YOU COULD BUY A SELF-DRIVING CAR?
Source: Tesla
AI
6Confidential – August 2020
COULD YOU HAVE PREDICTED THAT A PRIVATE COMPANY SPACEX WOULD REVOLUTIONISE SPACE TRAVEL?
Space Travel
7Confidential – August 2020
COULD YOU HAVE PREDICTED THE EXTENT OF THE PRESSURE TO DECARBONISE?
1. The evidence on climate risk is compelling investors to reassess core
assumptions about modern finance
2. Investors are increasingly reckoning with these questions and recognizing
that climate risk is investment risk.
3. Because capital markets pull future risk forward, we will see changes in
capital allocation more quickly than we see changes to the climate itself’
Larry Fink, CEO Blackrock
Climate Risk
8Confidential – August 2020
COULD YOU HAVE PREDICTED THAT MICRO-MOBILITY WOULD BECOME SO POPULAR?
Shared Mobility
0m2m
5m
13m
18m22m
28m
35m
84m
2010 2011 2012 2013 2014 2015 2016 2017 2018
Station-based bike share Dockless bike share E-scooter share
84m of shared micromobility trips taken in the US in 2018
Source: NACTO
9Confidential – August 2020
CONTENTS
A step back in time
A look at the future
Implications
10Confidential – August 2020
ELECTRICITY IS BECOMING THE WORLD’S MOST IMPORTANT ENERGY SOURCE
1. Electricity
11Confidential – August 2020
DRIVER #1: OUR DIGITAL WORLD CAN NOT SURVIVE WITHOUT ELECTRICITY!
Electricity
12Confidential – August 2020
DRIVER #2: PHYSICS AND ECONOMICS ARE DRIVING AUTOMOBILES TOWARDS AN ELECTRIC FUTURE
77% efficiency
ICE Hybrid EV
28% efficiency25% efficiency
Engine
&
transmission
Thermodynamic
lossesPlant to
tank
Oil Engine
&
transmission
Thermodynamic
losses
Plant to
tank
Oil Li-ion
batteries
Battery
chargerGrid lossesRenewables
6 litres per 100km 4.5 litres per 100km
€6.50 €4.50$4.80 $3.64
15.5kWh per 100km
€4.65
€1.08
$1.75
$1.35Commercial
Retail
Source: Alexa Capital 13Confidential – August 2020
Electricity
DRIVER #3: ECONOMICS ARE ACCELERATING BUS FLEET ELECTRIFICATION
Electricity
Purchase price
Equipment replacement
Maintenance costs
Fuelling costs Total cost
Source: Alexa Capital
330
190
150
40
105
210
109 393
694
833
0
100
200
300
400
500
600
700
800
900
£’ 0
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Lifetime Cost of Single Deck Electric vs Diesel Bus
Electric bus
Diesel bus
Upside with
falling energy prices
14Confidential – August 2020
IN ADDITION, BATTERY COSTS ARE GOING TO FALL FURTHER IN THE NEXT YEARS AND PERFORMANCE AND LIFETIME IS GOING TO IMPROVE
15Confidential – August 2020
91.3
73.5
63.8 62.3 61.3
85.480.8 80.1 79.7
79.4
71.7 70.6 69.8
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10
20
30
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60
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80
90
Benchmark Material pricingdecrease
Energy densityincrease
Production rateincrease
Scrappagedecrease
$/kWh
by 10%
by 20%
by 30%
Source: BNEF & CATL
Electricity
1000+km range EVs are in sight!
DRIVER #4: LOW COST RENEWABLES...
Electricity
Source: Alexa Capital 16
LCOE by technology in different markets
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Confidential – August 2020
DIGITALISATION 2.0 IS THE KEY TECHNOLOGY DISRUPTOR OF THE NEXT DECADE, AND WILL TRANSFORM THE WAY WE THINK ABOUT ENERGY & MOBILITY
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Impact of Big Technology Shifts on Economic Development Cloud
computing
Big Data
AI
IoT
5G
Digitalisation 2.0
Digitalisation
Confidential – August 2020
DRIVER #1: ECONOMICS
Digitalisation
18Confidential – August 2020
DRIVER #2: EASE OF USE
Digitalisation
19Confidential – August 2020
DRIVER #3: COVID-19 IS ACTING TO ACCELERATE THE DIGITAL TRANSITION
Digitalisation
20Confidential – August 2020
INNOVATION WILL ACCELERATE
Innovation
21Confidential – August 2020
DRIVER #1: ARTIFICIAL INTELLIGENCE – SELF LEARNING COMPUTERS
Innovation
DRIVER #2A: COMPETITION FROM CHINA NOTING THAT THEY ALREADY DOMINATE THE GLOBAL EV VALUE CHAIN
23Confidential – August 2020Source: Alexa Capital /Roland Berger
0%
10%
20%
30%
40%
50%
2010 2017
Electric vehicle sales
0%
10%
20%
30%
40%
50%
60%
2010 2017
Li-ion battery capacity
0
40,000
80,000
120,000
2010 2017
Electric bus sales
0%
30%
60%
90%
2010 2017
Electric scooters sales
0%
30%
60%
90%
2010 2017
Rare earth metals
0%
20%
40%
60%
2010 2017
Graphite
Innovation
DRIVER #2B: THEY ARE LEADING THE WAY IN KEY NEXT GENERATION TECHNOLOGIES…
24Confidential – August 2020
China
Source: WIPO, Oliver Wyman
Patents applications in China and the US
CONTENTS
A step back in time
A look at the future
Implications
25Confidential – August 2020
1. THE FIRST MASS USAGE OF ARTIFICIAL INTELLIGENE WILL BE IN VEHICLES
26Confidential – August 2020
2. MY DAUGHTER WILL NOT LEARN TO DRIVE
27Confidential – August 2020
67
55
36
31
1613
3. VALUE IN TRANSPORT IS MOVING FROM PRODUCTS TO NEW MOBILITY SERVICES
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VALUATION OF THE BIGGEST EUROPEAN CAR MANUFACTURERS VS UBER
in billion $
Confidential – August 2020
4. VALUE IN THE AUTOMOBILE IS GOING TO SOFTWARE AND DIGITAL HARDWARE
TODAY TOMORROW
80/90% hardware
10/20% software
40% hardware
50% software10% digital hardware
29Confidential – August 2020
5. EVERY CAR SOLD WILL BE FULLY ELECTRIC WITHIN A DECADE
30Confidential – August 2020
6. BIG OIL AND BIG AUTO WILL BECOME MAJOR PLAYERS IN ELECTRICITY?
5. Big Oil and Autos
31Confidential – August 2020
Private & Confidential – Page 32
7. WE WILL SEE NEW FORMS OF TRANSPORT
THERE IS AN OPPORTUNITY TO CREATE GLOBAL CHAMPIONS AS AT THE START OF THE 20TH
CENTURY
33Confidential – August 2020
34Confidential – August 2020