Will Electric Cars Soon Be Solar-Powered?
Ford will debut a concept vehicle that taps into solar charging next week at the Consumer Electronics Show, according to CNN Money. The innovation was made possible thanks to a roof covered with solar cells provided by SunPower . For investors in the solar and electric vehicle spaces, it's well known that the connection between the two macro developments is basically inseparable -- no wonder Tesla CEO and chairman Elon Musk is also the chairman of SolarCity . But such an early move to solar-powered cars is somewhat of a surprise.
The search for sustainable energy
The nice thing about a battery is that it's simply a way to store energy. How exactly the energy in the battery is created can vary. Sunshine, of course, would be the most sensible source. Sunshine has greater potential than any other source for energy -- approximately 23,000 TWy annually, actually. This potentially dwarfs the second-largest source of energy, coal, at 900 TWy in total reserves. Effectively tapping into solar power, therefore, could potentially be a goldmine for the advent of electric cars.
Unsurprisingly, SunPower's stock jumped about 5% this morning on the news. Though the concept is untested in the market, Ford sold approximately 85,000 hybrids and electric vehicles in 2013 -- that's a meaningful potential addressable market for SunPower, who just reported only $2.5 billion in revenue in the trailing 12 months. The idea of solar-powered vehicles has also appeared to encourage investors in SolarCity; shares shot up 6% this morning.
It won't happen overnight
Notice I said effectively tapping into solar power could potentially be a goldmine for the advent of electric cars. Though Ford's move to roofs covered in solar cells is impressive, the benefits are currently very few.
Ford says the solar-charging roof will be built into a version of the C-Max Energi plug-in car that is already sold by the company. Dubbed the C-Max Solar Energi, it will only go about 21 miles on an electric charge -- just like the C-Max Energi. The vehicle roof only provides an eight-kilowatt incremental charge throughout the day. The benefits from solar power, therefore, aren't enough for the model to ditch the gasoline tank.
If solar technology continues to improve, Tesla could consider a similar move at some point in the future. Musk's two publicly traded companies are already working together, in fact. On Dec. 4, SolarCity announced a partnership with Tesla to use the electric-car manufacturer's batteries as a "smart energy storage system." The battery technology combined with solar power provides two major benefits: It reduces energy costs by using stored electricity at peak demand, and it provides backup power during grid outages.
Who will benefit?
Solar power may only provide marginal benefits for the world today, but the sun's enormous potential shouldn't be ignored. Ford's vote of confidence in both solar power and electric cars certainly isn't a reason to go out and buy every electric car and solar stock. But it's important enough news to reevaluate your thoughts on the potential of the energy source and its implications on relevant industries. Remember, solar power's capabilities today will likely pale in comparison to the innovations we'll see five years from now. Just imagine 10 years from now!
Who will likely be positively affected by the advent of solar power? Many industries and companies, but a few worth taking a closer look at are SunPower, SolarCity, and Tesla Motors.
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The article Will Electric Cars Soon Be Solar-Powered? originally appeared on Fool.com.Fool contributor Daniel Sparks owns shares of SolarCity and Tesla Motors. The Motley Fool recommends Ford, SolarCity, and Tesla Motors. The Motley Fool owns shares of Ford, SolarCity, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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