Elon Musk Electrifies the Automotive Industry

On the evening of 31st March 2016, via a video stream direct from the company’s
California design studio, CEO of Tesla, Elon Musk, announced the Tesla Model 3 to
the world.

Within 24 hours of the unveiling 180,000 orders had been received and within 3 days
over 276,000 people had placed their orders for the Tesla Model 3 Electric Vehicle.

This represents pre-orders with a value of $11.6B to Tesla.

A quite staggering success, clearly outstripping all the analysts’ expectations. The
appeal is no longer to the early adopters but to the broader base of consumers.
Retailing at €35,000, the Model 3 is Tesla’s most affordable high performance
electric car.

This is perhaps the biggest indication that the EV market is accelerating faster than
predicted and that the days of the mass market, fossil fuel burning vehicles will be
declining more rapidly as the cost of high performance EV’s become increasingly
attractive.

Every Automotive OEM in the world will have taken notice of the Tesla launch and
the implications for their ongoing investment in internal combustion engine vehicles
versus EV’s.

The success of the Tesla launch however is just part of the landscape as
Governments worldwide look towards EV’s as a means of reducing the world’s
carbon footprint.

EVs Essential for Low Carbon Economies
Norway, which is perhaps one of the more advanced EV economies, is seeking to
reduce its carbon footprint by 40% and has a clear plan to achieve that goal by 2025.
As part of this plan Norway is expecting close to 100% of new cars sold by that time
to be emission free.

Electronic Vehicle’s currently account for 2.5% of all cars sold in Norway, if the
equivalent percentage was achieved in the USA this would represent sales of 5
million EV’s, a huge increase from the 350,000 EV’s currently on the road in the USA.

The Tesla Model 3 should have a significant impact on the sale of EV’s to the wider US and global consumer markets.

The Dutch Government are considering the possibility of only allowing the sale of EV’s from 2025 and even a massive country like India is setting the ambitious goal of making all cars electric by 2030 and has established a working group to achieve this goal.

Lithium-ion Battery Technology
Continual progress in the development of Lithium-Ion battery performance is predicted over the next two decades, particularly with regards to energy density (connected with driving ranges of EV’s) and continued large cost reductions.

“From a technical point of view a complete switch to electric mobility could be made between 2030 and 2050 following a market ramp up between 2015 and 2030 based solely on an optimized lithium-ion technology”. Source: Fraunhofer Institute for Systems and Innovative Research: The Emerging Markets for Optimized Li-Batteries.

The size of the EV market is mega billions and TMH with its vehicle to grid technology and range of relationships across the automotive and energy markets is suitably positioned to be a major innovative leader in the electrification of the automotive industry.

The Mobility House
The Mobility House (‘TMH’) has developed the concept and the software to enable the commercialisation of a vehicle battery’s storage capacity. TMH also runs the operations that provide for the controlled and optimised management of stationary and mobile batteries. TMH’s ‘swarm’ software enables the monetisation at scale of mobile vehicle batteries, and by doing so TMH has created the lowest cost battery portfolio to supply storage to electricity markets at a very competitive marginal cost.

The growth of the Electric Vehicle (‘EV’) market is creating an enormous global market opportunity for the storage and release of energy by utilising stationary and mobile car batteries for more efficient short term energy markets.

The Mobility House is based in Munich.

ICON Corporate Finance
LONDON
3 April 2016