Displaced and Mis-priced

18 Jul

Not a day goes by without being inundated with talk of  the electrification of the transportation sector; namely cars, buses, ships, etc..  The speed of such transformation, if you believe the hype (and we don’t) is happening at such a breakneck pace that carbon based energy will be as extinct as its own DNA. While we obviously have no insight as to the actual arc and velocity of change in the electric vehicle space, it is important to note that such anticipatory hype often produces opportunities in those sectors presumptively deemed extinct. We see value in the PGM sector as traditional catalyst metals will still be required, particularly as most growth in EV will be in hybrids. We also see growth in sources of traditional power generation; coal being one in particular, nuclear being the other.  While we are not convinced of the speed of the transformation of the drive train, we do believe it will happen and when it does the need for additional power generation will be paramount.Contrary to what the NY Times might have you believe, wind farms and solar will not be sufficient to get the job done.

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