Tesla Could Become a Literal Powerhouse, But Not in the Car Market

Ford Motor Company CEO Jim Farley has it right when he says that EV adoption comes down to charging infrastructure, and the deal it sealed with Tesla not only bodes well for Ford and Tesla, but it also bodes well for potential customers who want to consider buying a Ford electric car ultimately.

Granted, there are a lot of asides here. There is much work to be done as well to ensure we have an electric grid that can handle the capacity needed if more adoption occurs, and I think even when it comes to charging stations, the speed at which charging needs to occur has to increase.

We may never get to a point when you can charge your car nearly as fast as you can gas up. But if the time gap can be further closed, which I think technology can advance enough to eventually figure that out, it becomes more of a game changer.

The fact is that among charging technologies, Tesla leads the way and I think they will continue to do so. That makes the Ford deal even more attractive since other automakers may make similar deals with Tesla to convert their chargers to the one that Tesla was using exclusively with its cars.

Ultimately, I think Tesla can become to EV and charging what big oil became to cars.

And certainly, Tesla has the advantage. It has invested the most in the technology as well as adding charging stations across the country.

Elon Musk recently said that he thought autonomous driving was the key to Tesla stock and the company growing. I continue to believe he is wrong about that. I think the driving experience is still at the forefront of car buyer's interests and will remain so. 

People want the experience of driving.

And when it comes to most other automakers, that's the experience they are building into their offerings. Ford, for example, with it's Mach-E Mustang. It's about driving and performance and muscle. Chrysler is doing the same as it electrifies its Chargers and Challengers.

I don't think Tesla will lead in cars, but rather in EV charging. And I think that's a big deal. I also think that alone makes Tesla an attractive company to own right now, which is a major shift for me than the thoughts I had before.

I continue to prefer Ford and Rivian when it comes to automakers, and I have shied from Tesla mainly because I feel Tesla simply appeals to a different kind of car buyer than any of the other automakers appeal to.

Tesla is about technology, and it appeals to those customers interested in that as well as an environmentally conscious crowd. That's a different customer than one who wants to buy a Ford F-150 Lightning or a Rivian R1S. 

The shift to charging is what appeals to me now when it comes to Tesla as an investment. And if it shares its charging stations, it may also eventually share its technology. And that side of Tesla's business, I think, could be far more valuable than the cars it wants to sell. It could literally become an industry on its own which Tesla would likely dominate.

Can I imagine a time when most other cars on the market are adorned with a label much like many computers are, Intel Inside to simply say Powered by Tesla?

Yes. As a matter of fact, I can.

Want to keep up with my writing? Follow me on Twitter at @jimbauer601.

If Only It Were True, Ford

Those were the sentiments of a lot of fans of Ford Motor Company when an April Fool's prank was pulled earlier this year announcing that Ford would be bringing back its Ford Bronco in 2016 after being out of production for the past 20 years.

If only it were true, Ford.

If you followed the hoax, it was fairly elaborately done, complete with exterior design photos like the one you see here. But there were interior photos as well which looked fairly authentic. The SUV/SVT was dubbed a concept vehicle but would actually be produced, according to the prank report.

Ford has denied the claim, saying that they have no plans to bring back the Ford Bronco anytime soon. However, they have said that they are looking at introducing the Troller, which is a popular off-road vehicle in Brazil, which Ford Motor Company owns.

Troller was founded in 1995 and was eventually bought by Ford Motor Company in 2007.

The biggest hurdle for introduction of the Troller into the United States are getting past safety standards, which are less stringent in Brazil. But be assured, Ford Motor Company is no newcomer to the world of vehicle safety, and if they really do intend to bring the Troller to the U.S. auto market, you can bet they can get this done, and probably in relatively short order.

Even if the idea of the Ford Bronco revisited seems like it could be a good idea for the company's bottom line, it also seems to be a bit "outside of the realm" of what Ford Motor company has been trying to do with their company since the recession hit, and that is to streamline their business, and reduce their product lines. The short and skinny for me is that the Ford Bronco would not be different enough than it's current other SUV counterparts in the Ford line like the Expedition and the Explorer to make sense.

The Troller on the other hand does seem to be a bit of a smarter choice. The thing is, it kind of resembles a Jeep Wrangler, and there are two things noteworthy when it comes to Jeeps. They are wildly popular, and there are currently no real contenders in the marketplace in their space.

Right now there is no definite timeline in place as to when Troller's may roll onto U.S. shores, or even whether they will wear the Troller badge or the Ford badge. But as far as the Bronco is concerned, it's a nice idea and nothing more. For now.

Cautious Optimism for the US Markets

Today wound up being another fairly good day in the markets, and certainly the markets have been enjoying some fairly nice runups of late. And while there are definitely positive signs that the economy may slowly be in the beginning stages of coming out of the doldrums, I am still fairly cautious about the moves I make in the markets, but also optimistic going forward that certain stocks will see some nice gains.

Part of the activity in the markets was due to the start of a two-day meeting by the Feds which, for all intents and purposes appears that they will not make any immediate changes, which is positive news overall. It willalso be interesting see what the Fed will have to say about some of the predictions they made in March when they last met in which they said they saw GDP growth around 2.6% through 2013, and a nearly 1 point increase in 2014 to 3.2%. In March the Fed also suggested that unemployment numbers would continue to improve, dropping to 7.4% by the end of 2013, and down to 6.9% by 2014. I think that if the Fed reaffirms these figures, or show better numbers for GDP growth projections and unemployment figures, obviously this will cause the markets to continue to rally. If the Fed adjust these numbers to the negative, it may throw a bit of uncertainty in the markets and cause stocks to go lower. My strong suspicion is that the Fed will not adjust their figures, but rather will state that they are on track to meet these projections they made back in March. That is still a positive, to my mind, and I think the markets will react positively to that news.

I also think that, for the time being, the Fed will maintain monthly purchases of $85 billion worth of bonds. They won't start scaling this back, I believe, until some of the projected figures begin to get closer to becoming fact. Bernanke, I think, tends to be a bit cautious about acting too soon. Although a scaling back of these bond purchases would certainly be a strong signal for the economy, and the markets could see gains as a result.

Stocks I like right now are Ford Motor Company (F), Dunkin Brands Group (DNKN), Target (TGT), and Masco Corp. (MAS).

I picked Ford due to what I perceive as better auto sales figures due to improving employment, an uptick in refinancing of mortgages which may open some money up to potential buyers, and aging fleets which will need to be replaced sometime in the near future which Ford could be a beneficiary of. Dunkin Brands Group was picked due to a good earnings cycle, and strong expansion of their business and upgrading of stores. Dunkin is making a strong push for market share, and I think they have a good chance of getting some of it. Target is my choice because consumer confidence is up slightly, and because I think Target is considered by many consumers as an upgrade to other discount players like Dollar Tree and Walmart. If economic conditions improve, and employment situations improve, consumers may well treat themselves to shopping up at Target over the other discounters. Plus, their stores look great. Masco Corp. is a play on the nearly 7% uptick in new housing starts recently reported, and improving home sales overall. When people buy new or existing homes, they tend to want to spruce things up a bit, and Masco Corp. is definitely a company who offers products new homeowners can turn to to help them to do this.

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Lincoln MKZ Hybrid Will Not Be More

Gas prices are still not exactly cheap, especially if you still happen to be driving a larger vehicle that sucks up 20 or less miles per gallon or so. But we're certainly a long way from the prospect of potentially seeing $5 per gallon. Still, oil is something I think we can all agree on that we need to reduce our dependence on. Not just for reasons of national security, but also for the environment. That's why hybrid cars, which nearly every automaker now offers, are something to think about when you are in the process of considering your next automobile purchase.

I've said before that if we truly want hybrid cars to have a real shot, and if we want them to truly demonstrate what the demand for these cars are, we are going to have to offer them without the premium price that usually goes along with them. Especially in an economy such as we are in right now, people who are in a position to buy a new car very much do take into consideration the very much higher prices attached to these hybrid cars. On most models that premium is about $8,000-$12,000. Few people want to shell out more money than they have to when there's still quite a lot of shaky ground in the economy. Even if it's likely that over the long run, the additional miles per gallon may well pay for the premium in having to buy less gas overall.

That's why I'm happy to hear Ford will make its Lincoln MKZ hybrid sedan available without the extra cost. I say bravo zulu to Ford Motor Company for taking environmental concerns seriously, and for making an honest commitment to the reduction of oil usage, and improving fuel economy—which is what offering a model for the same price actually suggests they are doing. It's a much easier decision for one to make, "Do I buy the hybrid or the gas-powered version?" when the price tag for the two cars is exactly the same. And I'm inclined to believe Ford Motor Company has a hunch that without the price premium, most buyers will probably opt for the hybrid version.

This makes sense for another reason. Over time, the more demand there is for the hybrid technology, the less this technology will cost, and Ford will have a hand in increasing that demand and driving down that cost. Eventually, they may be able to offer similar choices in their cheaper models as that cost comes down. It's better than an incentive.

By the way, I should also point out this is just one more reason to own Ford stock. I've been recommending this as a buy for quite some time, and I think it is absolutely a buy.

Disclaimer: Jim Bauer currently owns shares in Ford Motor Company (F) stock.

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