Mobility and the Road Ahead - S4

Environment, Energy
and Investment
A greener future: Investing in cleaner and more
efficient mobility solutions
The long-term effects of climate change and mitigations have long
been topics of contention between environmentalists and those
whose livelihoods depend on the extraction, processing and use of
fossil fuels.
And while they're not directly involved in the energy industry, automotive
manufacturers and suppliers have a vested interest in how
energy is and will be produced in the future, as well as in developing
products that will help promote a more sustainable
and greener future.
The results of their efforts can be seen
throughout the world, with major manufacturers
like Ford, General Motors, Volkswagen
Group, BMW, Volvo and Stellantis rolling out
new electric and hybrid models at breakneck
paces. Meanwhile, newer competitors
such as Tesla, Rivian and Lucid started as electric-only brands and
are working to add additional models to their offerings in hopes of
becoming the household brands of the future.
Such efforts are being encouraged by governments around the
world, with a dozen U.S. states adopting California's mandate requiring
at least 5% of new cars to be EVs by 2023 and more than 6% to
be electric by 2025. Some states are going even further, moving to
end the sale of gasoline-powered vehicles by 2030. Similar efforts
are underway in Europe, where the European Union wants up to 30
million EVs on its roads by 2030.
A recent panel at the Ricardo Mobility Summit 2021 delved into
investment planning around clean mobility, the global environmental
impacts and some of the key challenges that automakers and
suppliers face to deliver efficient mobility at scale.
start with rethinking the basics of the power grids in the U.S. and
elsewhere.
" In order to have
mobility, you have to
have stability. "
- Josiah Lindsay, Fortress Investment Group
Pointing toward recent blackouts throughout Texas, Lindsay said the
extended outages underscore the problems with aging and unstable
infrastructure in the U.S. " In order to have mobility, you have to have
stability, " he said.
From an investment standpoint, Lindsay said, it's important to take
a long-term view of the market. " You want to
invest in a technology that's sustainable and
is not going to be necessarily supplanted by
some new entrants ... for that purpose, you
want to look at, 'Am I partnering with the correct
industry partners that are taking a longterm
view and not just looking for a quick flip
or a quick reward?' "
Future investment portfolio getting greener
" We want to make sure that the investments we make are a low risk,
high return, " said Josiah Lindsay. " In order to do that, you've got to
think about the environment, because fossil is an area where there's
been capital retracting, and you want to be in the growth area. If
you look at renewables, for instance, over the last 10 years globally,
there's been trillions of investments in renewables, and that is
the future. And if you're not looking forward to the future, then you
won't be able to benefit and provide returns to your investors over
the long run. "
To that end, Lindsay said investors need to look at the bigger energy
picture and not just concentrate on what auto manufacturers and
suppliers are doing to reduce emissions and limit the use of fossil
fuels. As a result, he said, rethinking the future of mobility should
4 * MOBILITY AND THE ROAD AHEAD
Green comes in many shades
While auto manufacturers, industry insiders and observers seem to
agree that alternative fuels are the future of mobility, no one seems
to share a common belief about which fuel sources will succeed.
" There's many, many, many companies and investors really chasing
the same answer, and they all can't win, " said Dominick Schiano,
" So then, you know, how do you underwrite to that? How do you ...
pick winners? "
The answer, he said, relies on investors basing their decisions on data
provided by experts and scientists. By developing a thorough understanding
of who manufacturers are partnering with and who their customers
are, Schiano said, savvy investors can target their resources
into the sectors and technologies that look the most promising.
To that point, Schiano said his organization focuses on companies
that have intellectual property and aren't basing their futures on theoretical
solutions. " I do think you have to have a portfolio effect if
you want to be successful, because a lot of these businesses are not
really economic in the sense of the word today, " he said. " They're
earning capital and investment capital to get where they want to be,
so you've got to be really able to predict where they are going to be
in five years. "
Government green
One of the biggest potential drivers of the future green economy is
the Biden administration, which is pushing a $1.7 trillion infrastructure
plan that aims to rebuild everything from crumbling roads and bridges
to failing public transportation while also investing in a new, dynamic
power grid. The key for investors in this sector, Lindsay said, is that
Mobility and the Road Ahead

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