Dear Reader,
I hope all my U.S. readers had a wonderful Memorial Day weekend.
Summer is here, and with it comes COVID-19’s greatest enemies… warm weather, humidity, and lots of sunshine. That’s great news for everyone in the northern hemisphere and consistent with the declining new COVID-19 cases and deaths.
I’d like to take a look this week at how things are changing as the global economy reopens. We are already seeing early examples of how organizations and companies are beginning to do things differently.
For example, the floor of the New York Stock Exchange (NYSE) opened today for the first time since the lockdown. But it’s not the same.
Only about 25% of the traders are going to be allowed back to work on the floor. All are required to wear masks. And they are restricted from taking public transportation. Plexiglass barriers keep everyone apart.
And no different process would be complete without a legal agreement. Everyone has to sign a liability waiver. In short, if a trader gets sick, he or she can’t sue the NYSE.
In the U.S., at least, this is something that we’re going to have to get used to.
Many companies, clubs, and organizations will go the route of liability waivers as an added layer of protection.
It is almost comical, but I wouldn’t be surprised if these waivers cover anything that makes us feel ill, like unknown airborne viruses.
Will we have to sign an electronic waiver before entering a department store to shop? Many stores won’t let customers in if they are not wearing a mask. Will consumers frequent places with this level of inconvenience?
No, this is not good at all.
That brings me to the next point…
U.S. e-commerce jumped 49% in April. 49% in just one month… not a year or two years, but a month. And online grocery sales rocketed 110% in the same time period.
Sales of electronics jumped 58%, as consumers have more time to entertain themselves. Nintendo is even having production shortages for its Nintendo Switch because the handheld game consoles have become so popular.
And e-commerce is going to be more popular than ever before, even after the economy fully reopens. Why? One word… friction.
Seemingly silly points of friction inserted into our daily lives will make things less convenient and less enjoyable than they used to be.
Most will continue to opt for the simple click of a mouse from the comfort of their own homes.
Now to our insights…
We haven’t talked about The Boring Company since last year. But the company is making great progress.
For the sake of new readers, this is another one of Elon Musk’s companies. It specializes in building underground transportation tunnels… which is not something that we would normally associate with a high-tech genius like Musk.
Musk founded the company because he was frustrated with the traffic in Los Angeles… and with how long road construction took.
He figured he could improve another legacy industry… boring transport tunnels beneath a city to relieve traffic congestion. And he believed that he could build something that was better than anything else that existed on the market.
And that is exactly what he and his team have done.
The Boring Company first built its prototype tunnel underneath the streets of LA. And then it took on a $52 million contract to build tunnels beneath the Las Vegas Convention Center. The tunnel system will be nearly a mile long, and it will help shuttle people from one side of the convention center to the other.
They call it the Convention Center Loop, or “the Loop” for short.
And get this – The Boring Company just finished the second tunnel beneath Vegas. Thanks to this progress, the Loop is on track to open next January. And keep in mind, work just began at the start of this year. It’s impressive to see such a massive project completed in just 12 months.
Once complete, the Loop will be able to move more than 4,000 people per hour through the tunnels in Tesla vehicles that will eventually be 100% self-driving.
Here’s a demonstration of the Boring Company’s technology from 2018 to give us an idea of what it might look like…
The Transport Tunnel
Source: CNBC
Musk’s clever use of modified Tesla vehicles as shuttle transports will be a great way to promote the brand.
And for conference attendees, the Loop will turn a 15-minute walk across the convention center into a two-minute ride. Having been to conferences in Las Vegas more times than I can count, this will be a welcome relief.
After the Loop is complete, The Boring Company plans to connect it to the Las Vegas strip with additional tunnels. That will allow conference goers to bypass traffic to and from their hotels.
Anyone who has been to Vegas knows how big of a deal that would be. Las Vegas is sweltering in the summer. And the traffic can be bumper to bumper during major conferences… plus getting a taxi can mean waiting in very long lines.
But imagine walking to the lobby of your hotel and descending the steps to an underground Loop station. You hop in a self-driving Tesla shuttle and are whisked to the convention center in no time at all.
With underground tunnels, supersonic commercial aircraft, commercial spaceflight, and traveling at aircraft speeds through the kind of vacuum tunnels envisioned by Musk’s hyperloop, the world is finally starting to get serious about the next generation of human transportation.
And I have to say, I am looking forward to going to a conference in Vegas next year to see the Loop for myself.
This is a smart investment by Las Vegas to ensure that it remains one of the premier conference destinations in the world. Even amid the pandemic, I’m impressed that the town has the fortitude to keep the project on track for completion.
Staying within Musk’s family of companies…
Details have leaked surrounding Tesla’s new lithium-ion battery. The new battery will be officially announced at Tesla’s annual “Battery Day,” which has been pushed back to sometime in June.
And what I’m hearing is quite exciting for the electric vehicle (EV) industry.
Tesla has teamed up with several academic researchers to design a battery that can last one million miles. Think about that – most traditional car engines don’t last even a third of that mileage.
What’s more, these new batteries are made with even less cobalt than before. They may even be cobalt-free. This is important because cobalt is an expensive mineral that’s mined in unstable regions of the world. That makes it hard to secure the supply chain for affordable supplies of cobalt.
Plus, the batteries are the most expensive part of an EV, with cobalt making up the most expensive material. By reducing or eliminating the need for cobalt, Tesla can produce the most affordable batteries in the industry.
And here’s the best part – these new batteries are expected to fall below the $100 per kilowatt-hour (kWh) benchmark. That will put the cost of EVs on par with traditional cars.
That’s the point of no return. EVs already last longer and are easier to maintain than traditional cars. As soon as they cost the same or less than an internal combustion engine vehicle, we’ll see a massive consumer shift toward electric vehicles.
I predicted this would happen way back in November 2018 when I was making the case for Tesla’s stock (TSLA).
The stock was trading around $300 at the time, and people thought I was crazy. They thought Tesla was a sham that would go bankrupt. It was the most controversial issue that I have ever published in The Near Future Report.
Today, TSLA is trading at $822. It is on its way to a triple.
Tesla’s battery strategy is a big reason for this success. With its new batteries set to go into production early next year, Tesla will continue to have a leg up on the competition.
We’ll wrap up today with some very big news. TSMC just announced that it will be spending $12 billion to build a semiconductor fabrication plant in Arizona. Construction will begin next year.
For readers who may not know, TSMC is the world’s largest semiconductor manufacturer. Companies like Apple, NVIDIA, and AMD use TSMC to make their semiconductors. So it’s not an exaggeration to say that this company produces the chips for products made by the world’s best companies.
The Arizona plant will produce 5 nanometer (nm) semiconductors. 5 nm semiconductor fabrication is bleeding-edge technology today. It is the most advanced semiconductor manufacturing technology in use.
In fact, 5 nm chips will be used in Apple’s upcoming 5G-enabled iPhone. They will make the new iPhone more powerful than anything we have today. And talk about perfect timing. The new iPhone will demonstrate the convergence of bleeding-edge semiconductors and 5G wireless technology.
Why is TSMC doing this?
This is happening for two reasons. The first is simply the tensions between the U.S. and China, which are on the rise once again.
The second reason is that it now makes economic sense. Advanced automation technology has reduced the cost advantages of manufacturing in Asia significantly. And having plants closer to U.S. markets reduces the cost of shipping and fulfillment.
This is great evidence of the “American manufacturing renaissance” trend that we have been talking about. Manufacturing is coming back to America, where the finished products will be closer to the markets they serve.
This is one reason why I am predicting a new Golden Age for the American economy.
Yes, it will take some time to recover from the economic lockdown we’re experiencing. But the American economy will come roaring back. That’s why I’ve been preparing my readers with a handful of “Golden Age” investment recommendations.
To learn about my top five “Golden Age” stocks, go right here.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
