In the world of inventions, often it is easier to invent an existing method to do something better. If you invent a better mousetrap then the issue of logistics comes into play. This statement means a better mousetrap needs to be produced, shipped and sold and they may or may not be the same distribution channels. A better mousetrap might be educating the public or those that will buy the product to why it is a better product, you may see all the reasons but does the buying public?
In the world of electric vehicles, the success of Tesla has allowed it to open charging stations next to malls and other locations where the mythical average Tesla buyer travels. Elon Musk for years has said Tesla charging stations are for Tesla owners. We are the standard, let others adapt to us.
In an article by Matthew Daly of the Associated Press, Elon Musk has changed his mind and thanks to an agreement with the White House. The changing of Mr. Musk comes with federal funding or part of the infrastructure funding from the Whie House and for higher priced electric vehicles to be eligible for rebates. For the White House, they will receive access to Tesla charging systems, the way it will work, all EV drivers will be able to access the stations using the Tesla app or website.
One of the reasons the White House needed Tesla charging systems is the requirement that 55% of the components used to make EV stations must be made-in-America. The EV industry, said that is a good idea, but it will slow growth of EV stations if you wish 50% of new US auto sales to be electric by 2030.
Linking to dividend paying stocks, with many of these companies there are existing infrastructure requirements that the profitable company fits into very well. For a competitor it is not just inventing a better mousetrap but disrupting or changing the entire ecosystem. While it is possible, it does require great amounts of capital, which most start-up companies do no have. There are some industries which changing the ecosystem is easier, but the timeframe is something people in the industry can view. For the companies you have an investment in, do you have an easy method to monitor the industry?
There are more questions than answers, till the next time – to raising questions.