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Gold/Mining/Energy : Battery Industry: Does it pay to invest in batteries? -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (12)	1/16/2009 5:21:16 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 18

<doors and windows which we zip on> You're describing a golf cart, not a car. The logic of electric-only for in-town short trips, makes sense, and I've heard it for years. But nobody is buying cars like that. When gas hit $4 in mid-2008, people bought Priuses. Like most people, most of my trips are short. But I have to deal with steep hills, snow, occasional -20 temperatures, and sharing the road with big SUVs going 50mph on posted 35mph roads. I bought a new Prius a year ago. We're very happy with it. Most trips are short, but last summer my son and I drove it from Alaska to N. Carolina and back. Gasoline and diesel were the only fuels available on the route. Most people occasionally want to take long trips, and can't afford to have separate cars for commuting and vacationing. So I'm guessing that electric-only, like hydrogen and natural-gas-fuel cars, isn't going to achieve any market acceptance, for the foreseeable future. TM has gone from 138 (2007 high) to 55 (2008 low), a 60% decline. It should be a "safe stock", in a relative sense, meaning it won't go to zero. If they are the best auto company, and own their battery supplier (vertical integration), and dominate the hybrid niche (and then the plug-in, and then the electric-only markets), who else can win? Other battery-makers will be a better investment if: 1. they win the contracts to supply other car companies, and 2. if those other car companies take market share from Toyota. (Taking market share from Toyota, is like trying to take market share from Microsoft.), and 3. the battery-maker has a proprietary technology, so they can avoid competition, and maintain profit margins. Making lots of sales doesn't help investors, if you're selling a commodity. Toyota has a brand name, and a quality advantage Detroit hasn't been able to challenge in 30 years of trying. Another of my rules, is that most industries are winner-take-all. That is, a disproportionate share of the available profits in any sector, are sucked up by one company: Microsoft in software, Intel in chips.....and Toyota in cars.