Don't look now, but electric cars just became viable.
And I don't mean just Tesla Motor's (NASDAQ:TSLA) $100,000-plus electric-powered supercar, either -- the ones that can go 300 miles on a single charge, while Nissan's LEAF and Ford's (NYSE:F) electric Focus sputter to a halt around the 100-mile mark. In fact, today's investment news out of Arizona appears to have implications for everyone who's making electric-powered passenger cars today -- and even a few folks who aren't.
The investment news in a nutshell
On Monday, the announcement went out: Over in Arizona, 18-year-old high school student Esha Khare of Saratoga, Calif., just made history by inventing a new super-battery that can:
- Hold more electric power than an ordinary battery
- Hold this power longer without going "dead"
- Change its shape to accommodate battery designs other than your basic "rectangular solid"
- Endure 10,000 recharge cycles -- 10 times more than your average rechargeable battery can
- And best of all -- charge fully in as little as 20 seconds
Impressed yet? You should be. For the time being, all Khare has powered with her revolutionary "supercapacitor" is a single light-emitting diode. Pretty small potatoes, to be sure. But considering that this young lady was working under a high school student's budget, it's still quite an accomplishment, and it's easy to see how a truly flush multinational corporation could scale up her gizmo in a jiffy. A company like...
Intel, which sponsored the International Science and Engineering Fair, and awarded Khare her $50,000 prize, has been trying to break into the mobile computing market for some time now. The fact that most investment news stories on Khare's invention are focusing on the "time to recharge a cell phone" angle suggests this is the first tech improvement we should look at. If Intel is able to secure rights to develop and scale up Khare's invention, it could simply dominate the market for electricity-hungry cell phones, tablets, and notebook PCs.
Google actually has phones, tablets, and laptops in production, and is clearly going to be interested in commercializing Khare's invention. In fact, according to press reports, Google's reached out to Khare already.
Shifting over the implications of this news for automotive investments, the key attraction for AeroVironment investors (aside from selling UAVs into an Afghan war that's winding down) has been the company's "PosiCharge" electric-car battery recharging technology. AV says it beats all comers with the ability to recharge a lithium ion battery pack in mere minutes. But if Khare's invention bears fruit, and battery recharge times begin getting measured in seconds, AV's raison d' etre could vanish.
Tesla's also in a very interesting place -- ideally placed among automakers, you might say, to profit from this investment news. It's the only car company currently powering its vehicles with an array of (many, many) cell phone batteries. As such, it's probably closer in scale already to what Khare's device will be able to accomplish, than are rivals like Ford and Nissan, whose electric cars are powered by fewer, larger car batteries.
On the other hand, this week's investment news also holds peril for Tesla. One of the company's key advantages in the electric-car market -- and one reason it's been able to charge upwards of $100,000 for its electro-buggies, while its rivals tend to circle the $40,000 price point and below -- is the fact that Tesla's battery design permits its cars to drive as far as 300 miles without recharging.
In a world where recharging a car battery was a 12-hour-long proposition, that gave Tesla a decided advantage. Factor in today's investment news, though, and the possibility of recharging an electric car's battery in less time than it takes to fill up the tank on an ordinary car... just might have taken away Tesla's biggest selling point.