Investing

Risks in the electric vehicle stock rally, Facebook's wind deal, and math with Bill Gates

By David Callaway, Callaway Climate Insights

. . . . Never underestimate the ingenuity of the brewing class. Last month, we told you the story of the British pubs seeking permission to dump millions of liters of stale beer from their taps into the sewers. Another sad victim of the pandemic’s war on bars and pubs.

Now comes a South Australia water and waste treatment plant, which has instead turned its local pubs’ stale beer into renewable energy, by combining the beer with organic waste to create biogas to power hundreds of homes west of Adelaide.

It’s this type of clever thinking that Bill Gates, founder of the computer age and dark lord of Covid conspiracy theories, must have been referring to in his blog post this week, when he warned climate change will be many times worse than Covid-19 if left unaddressed by innovators, investors and governments.

It would take more than a few beers for me to argue math with Bill Gates, but even I could follow along as he used it to spell out how in less than two decades, climate change’s economic impact, especially on the poor, will be like a global pandemic EVERY TEN YEARS.

Gates, who has sunk $100 million into finding a vaccine, predicted one would be available next year. He said there is no similar, two-year fix for climate change. But his Breakthrough Energy Ventures initiative is an example of what we need more of to try.

ZEUS: Tesla spawn raising millions for unmade trucks

. . . . Notes from a market top: As the S&P 500 pushes toward its February all-time high, despite withering economic fallout from Covid, the search for the next Tesla (TSLA) is creating a frenzy of activity in the nascent electric vehicle market, writes David Callaway. Names such as Nikola (NKLA), Lordstown, Fisker, and Hyliion, are but a few getting attention for their plans — just plans in some cases — to create a new world of electric cars and trucks. Investors worried about a bubble might want to look at other ways to play the evolution of EVs, including the utilities and makers of the charging stations that will power them along U.S. highways.

But don’t take our word for it: Jonathan Maxwell, whose investment company runs the SDCL Energy Efficiency Income Trust Plc, announced this morning the trust has invested 50 million pounds ($66 million) to acquire 112 “rapid and ultra-fast charging stations across the UK” from Electric Vehicle Network Ltd. The investment is designed to create a stable income stream for the trust’s institutional investors as EV use climbs in Britain.

Read the full ZEUS column

. . . . Speaking of dark lords, Facebook (FB) announced today it will buy contracts for eight wind and solar power projects in the U.S. and Ireland, adding a huge amount of renewable power to its arsenal to support its data centers, according to Bloomberg. The contracts to buy 806 megawatts will be part of 1.5 gigawatts of wind and solar power the company expects to come online by end of year. Big tech’s appetite for renewable energy is one of the things pushing a rally in wind stocks this summer. . . .

. . . . Garden sales: Beyond Meat (BYND), whose stock dove Wednesday after the company reported widening losses, told investors on its earnings call last night it was offering discounts on its plant-based burgers and other products to attract attention as beef prices continue to rise during the pandemic. Covid-19 hasn’t spared the alternative meat producers, but Beyond Meat was able to post a 69% increase in revenue because of increase in sales volumes, MarketWatch reported. . . .

. . . . Climate fund: BlackRock (BLK) and Scottish Widows announced this week the creation of a Climate Transition World Equity Fund for investors seeking companies making the change to a low-carbon environment. Focusing on energy, cleantech, and water and waste management, the fund was designed by both companies and Scottish Widows became the first investor with a £2 billion ($2.6 billion) commitment. BlackRock is trying to position itself at the forefront of asset managers in the move to drive profit from climate change innovation. . . .

Free Callaway Climate Insights Newsletter