Clean Slate Newsletter #9

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ISSUE #9: September 27, 2018

Is This the Future of Trucking?

This month, Volvo introduced Vera, an autonomous, electric truck concept.  To call it a truck would be unfair to trucks as it looks more like a sled.  In a fully autonomous world, where there is no need for a driver, the design of a truck’s cab can be completely re-thought and re-engineered. Such an approach allows greater functionality and efficiency.  In Volvo’s concept, the cab of the truck has been eliminated altogether.  But is the world ready for such a truck?  Humans are likely to have a sharp, adverse reaction to seeing a completely impersonal, cyborg-like behemoth rumbling down the highway alongside the family SUV.  Then again, the traditional family SUV of the future will look a lot different as well.

https://www.trucks.com/2018/09/13/vera-volvo-trucks-electric-autonomous-truck/

 

Old Solutions…New Technology

Cost effective, large-scale storage of electricity has always been a challenge for electric grids.  Historically, there has been a great improvement in grid efficiency with the ability to store energy during periods when demand is low and discharge that stored energy when it is needed.  In recent years, the formula has been impacted by the intermittent nature of renewables that can allow storage of electricity not only when it is in low demand, but also when it is cheaper to produce (solar energy when it is sunny and wind energy when it is windy).  While new grid storage solutions are using lithium ion batteries, one of the oldest technologies has been pumped hydro storage.  This old technology is now getting new life by implementing significant digital advancements such as sensors, software and new turbines.

https://reneweconomy.com.au/a-deep-dive-into-the-evolution-of-pumped-hydro-storage-technology-72909/

 

A Busy Month for Electric Vehicles

Beyond the carnival act known as Tesla (with “funding secured” tweets, DOJ and SEC inquiries, pot smoking and near emotional breakdowns of the CEO and Model 3 ramp challenges), the electric vehicle world was abuzz with many positive developments.  Two new EV startups moved forward with significant funding for factory buildout and model launch:  China-based NIO completed an early-September IPO raising $1 billion while US based Lucid Motors secured a $1bn investment from Saudi Arabia’s sovereign wealth fund.  Elsewhere, Audi, Porsche, Jaguar, VW, and Mercedes all reiterated their significant commitments to electric vehicles and detailed specific model launches. The first to market will be the Audi e-tron, which will retail in 2019 for $74,000.

https://www.theverge.com/2018/9/17/17869450/lucid-motors-saudi-arabia-deal-tesla

https://www.cnbc.com/2018/09/04/mercedes-to-launch-an-all-electric-vehicle-in-challenge-to-tesla.html

https://www.wired.com/story/audi-etron-specs-comparison-electric-cars/

 

Transformative Tech at the Gates

Several years ago, tech titan Bill Gates formed a $1bn investment fund, Breakthrough Energy Ventures, to invest in a number of early and potentially transformative technologies that have the potential to meaningfully change the world and roll back the effects of climate change.  This month, the Fund announced one of its first investments in Fervo Energy, a California based startup that is developing technology to improve the harnessing of geo-thermal energy.  Also announced this month were investments in solid state batteries, grid storage, carbon storage, advanced fertilizers and biofuels.

https://www.technologyreview.com/s/612200/bill-gates-has-added-a-geothermal-startup-to-his-clean-energy-funds-first-bets/

https://qz.com/1402301/bill-gatess-1-billion-energy-fund-is-expanding-its-portfolio-of-startups-fighting-climate-change/

 

Steel Making…in Massachusetts?

Steel has always seemed like one of those energy intensive, highly polluting industries that would never be discussed within these pages.  Yet, a new startup, Boston Metal, is seeking to open a new steelmaking facility in our backyard that uses a new steel manufacturing technology requiring fewer inputs and reducing carbon dioxide output by half.  This could be revolutionary.

https://futurism.com/steel-pollution-technologies/


You should carefully consider the Fund's investment objectives, risks and charges and expenses before investing.  This and other important information is contained in the Fund's prospectus and summary prospectus, which should be read carefully before investing.  To obtain a fund prospectus or summary prospectus, call (800) 700-9929.  The Fund is distributed by Ultimus Fund Distributors, LLC.

Investing involves risk, including loss of principal.  There is no guarantee that the fund will meet its investment objective.  Because the Adviser's GEOS criteria exclude securities of certain issuers for non-financial reasons, the Fund may forego some market opportunities available to funds that do not follow the environmental themes inherent in the GEOS strategy.

As of 6/30/18, the Fund's top ten holdings are TPI Composites Inc. (4.26%),  Kornit Digital Ltd (4.15%), Lindsay Corp. (3.55%), Itron Inc. (3.52%), Umicore S.A. (3.47%),  Xylem Inc. (3.34%), Trimble Inc. (3.33%), Kingspan Group plc (3.26%), Raven Industries, Inc. (3.20%), and Keyence Corp. (3.18%)

Important Disclosures:

The opinions and analyses expressed in this newsletter are based on Essex Investment Management Company, LLC’s (“Essex”) research and professional experience, and are expressed as of the date of our mailing.  Certain information expressed represents Essex’s opinion and assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is it intended to speak to any future periods.  Essex makes no warranty or representation, express or implied, nor does Essex accept any liability, with respect to the information and data set forth herein, and Essex specifically disclaims any duty to update any of the information and data contained herein.
This newsletter is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product, nor does it constitute a recommendation to invest in any particular security. Any individual securities listed herein do not currently represent any securities purchased, sold, or recommended to clients.

An investment in securities is speculative and involves a high degree of risk and could result in the loss of all or a substantial portion of the amount invested. The reader should not assume that investments in the securities described were or will be profitable. Past performance is not indicative of future results.

The information and data in this newsletter does not constitute legal, tax, accounting, investment or other professional advice.  Certain information contained herein has been obtained from third party sources and such information has not been independently verified by Essex. No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such third party information

Any projections, market outlooks or estimates contained herein are forward-looking statements and are based upon certain assumptions. Other events which were not taken into account may occur. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events.