AI Has a Power Problem: Why the U.S. Power Grid Can't Keep Up | The Real Eisman Playbook Ep 69

[music] Hey, this is Steve Eisman, and welcome to another episode of the Real Eisman Playbook. So today we are going to talk about sustainable energy and mobility. And a couple of weeks ago we had Stacey Raskin on from Bernstein, and we were joking that I was joking with him that his group, Semikonductors, is the center of the universe. Our guest today, Ben Callow, of Baird, I don't know if it's the center of the universe, but it's certainly adjacent. And the reason is that if this AI story is going to come to fruition, the binding constraint clearly is both the construction of data centers and the power that the data centers require. And Ben covers a real hodgepodge of companies that deal with those issues. And he also covers electronic vehicles, and we're going to explore those companies, and we're going to do it in depth. And then afterwards I'll come back with some lessons learned. [music] Hi, this is Steve Eisman, and this is another episode of the Real Eisman Playbook. So if the center of the universe is Semikonductors and Nvidia, and maybe hyperscalers, or that lets the beta bull right now, the next circle would be what I would call a hodgepodge of companies that provide alternative energy, to data centers that also do electronic vehicles. So call it center of the universe once removed. And today to explore this really interesting group, we have Ben Callow, who is the sustainable energy and mobility analyst at Baird. Yes. Thanks for having me on. This is going to be very interesting. So before we dig down into the themes and companies, because you really cover a hodgepodge of different companies, I mean you cover Tesla, you cover G even Nova, the two really don't have much to do with one another, other than that you cover them. Yes. We were at a cocktail party, and we just met, and you tell me what you did, and I said to you, you know, I invest, I have a general idea of things. Could you kid me like a two minute summation about what's going on in your world, because it seems to me from what I read so much is going on in your world. I would say we cover companies are key to electrifying the grid, and companies that will use that electricity, whether it's a Tesla with electric vehicles, or it's, you know, electricity to power data centers. But more and more we're seeing more strains on the grid, and so any companies helping to solve that problem, not just the United States, but globally as well. So there's a great problem largely because of data centers, but also because electricity was growing before then too. Yeah, I think a lot of times we think it's only data centers. That's the one because it's so chunky load sources coming on that gets the most of attention, and it's become a, you know, a political boogie man in some states. It gets a lot of headlines, but on short, manufacturing in the United States, aging infrastructure, so shutting down coal plants, not just because of environmental reasons or not because of environmental reasons, because they're old 75 years. Plants need to be shut down inefficient. So you combine that with on shorting and then electrification of homes, vehicles. That's more of a Europe type phenomenon, but also impacting the US and globally as well. All that put together in word and a tough spot with our electricity grid. We're going to come to that. Yeah, that's a controversial topic. But before we even get to that, let's just try to scale it. Yeah. Would it be more or less accurate to say that the electronic grid in the United States is growing roughly 3% per year, or is it more or is it less? It's more the range you could drive a truck through of what people say that we need in terms of, because it's not like the data so great. No, the range of estimates could be 100 gigawatts of new capacity needed by 2035, which would up to 350, 350 year more than doubling all of the electricity generation in the United States. How much electricity generation is there today? So today, there's about over 150 gigawatts of gas. Yes. Okay. Now you measure that in terawatt hours of production because you have all different sorts of capacity factors where you wind at the lowest. It only produces 20% capacity of the time. And then nuclear at the highest, where it's producing 99% of the time. Producing 99% of the time. Okay. And what about gas turbines? Aren't they producing most of the time? Gas turbines are running at high 80% of combined cycle turbines. How much gigawatts are we growing every single year more or less? Over the next five years, we'll be growing at like a 30 gigawatt type of clip per year. 30 gigawatts per year. So scale that for me. How much electricity does New York City use in a year? So you could think about like a one megawatt, which is one megawatt who could turn into a thousand gigawatts. But one megawatt could produce enough electricity for roughly a thousand homes. A thousand homes. Yeah. Okay. So you're talking 30 gigawatts per year, which it's an enormous number. It's not easy. It's not easy to produce enough electricity to create 30 gigawatts per year. And this is only, this is like base load demand of electricity, too. What does that mean base load? So on 24/7 basically like the nuclear side or on the renewable side geothermal is the best. So the geothermal is the best source of base load in addition to nuclear or hydro. And that's really what has to be powered by data centers. And so firm power, that's how much capacity. So you actually have incremental capacity need beyond that. So in other words, there's the map that's basically used normally. Yes. That's base load. Yes. And then is it really, really, really hot summer or really, really cold winter? Then you have the peak. And you have to have more than base load. Yeah. Because otherwise people freeze to death or cook. What we're seeing here in New York just anecdotally, my office is down the street here in Midtown. And our building will have curtailment days. And this is an old fashioned way of freeing up the grid. So in a hot day like this, they might send a note to all the tenants. No, no air could just be between 12 and 4 o'clock at night. Right. And it's the frequency of those events are becoming more. And it just shows the kind of stress on the grid. And this is before data says because really they get all the attention, but there haven't really been gigawatt data centers. That built. Yeah. But let's talk about that first. I'm on like every single sub stack you could possibly imagine. Yeah. Okay. And this is not rational argumentation. Yeah. You'll have one person. I'll name who that person is who basically says there are no data centers being developed. It's all bullshit. Yeah. And then you have other people who say here, though, the data centers that are being built. And for someone like me with this is not my area of expertise. I'm like, I don't know what to make with that because you know, you're talking about two people who basically hate each other's guts. Yes. Literally. So from where you sit, because even the people who are very bullish on AI, even they will admit that if, if data centers don't get built at the pace, they need to build them. AI has to slow down. So, you know, I'm thinking about Dan Hives, for example, who's been on our show, great guy. He's very bullish. God bless him. But even he admits that the binding constraint of his thesis is power. You cover basically all the people who supply the energy to the data centers. You know, kind of the people who build the data centers, but those data centers don't function without your companies. So what are you hearing from your companies about the pace of the build out of data centers? Sure. The pace is constrained by labor and energy. Projects are going forward. We'll point to one project of Wyoming. It's a Google project. Reportedly. It had Crusoe as the developer. Google fired Crusoe. Crusoe was the construction company. And it created a vacuum of information in the market where that happened because Crusoe was walked away. People thought the project stopped. They thought the governor stopped the project. And people, parts of the development chain have come out and said the project's going forward. I think that it's complicated because there are so many different counter parties in these data centers. Right. That you have cross selling across all the place. And so Anne, I think you have projects like any kind of development where a developer is developing multiple tracks of projects. The one that's in the lead will go forward and the others will be scrapped, just meaning that they have to do permitting, land selection. Right. And then they have to find an interconnect. This is a developer has 10 different data centers. In the end, it might not be 10 data centers. There might be only two. So there is some double counting going on, I believe. That's my view on it. Now I do think that things are pushing ahead. Now, the only real gigawatt scale data center that's been built is by SpaceX. There's others that will claim that there's been add-ons to get you to that level. But we're still in the very early phases and just to throw another complexity to it. The industry is moving to this 800 volt architecture with the new Nvidia chips, which basically requires more power. More power. And it requires more of a grid equipment like from a GV. What do you mean more of a grid equipment? So the different type of power electronics to change the voltage of power that goes into the data center, both on the outside and the inside. Most of the power is produced at AC. So we hear AC/DC and then the direct current is what the DAS center runs. So somebody has to convert something has to convert. Yeah, or like blue energy produces 800 volt DC power. Right. Naturally, but you have a lot of power like choice, but that's in the even earlier phases. So now there's also this another potential pause in development as those new chips come to market because if I'm just like early days now planning a DAS center, do I rush ahead with the old video chips or do I wait till the new ones come on? And so there are, it's going to be very lumpy. I mean, if you think about it, it's going to be lumpy and under the best of circumstances. Under the best of circumstances. Okay, that's interesting. All right, so let's talk to about some companies because some of the companies you cover are very interesting. Let's start with what I'll admit is my favorite company that you that you cover because I own it, which is GE Vernova. So for those of you that don't know, G Vernova used to be part of GE while it was part of GE, it was going through terrible times. I remember people put out research notes where they would do like the breakup value of GE and GE Vernova had negative value. And today it's over 100 billion, like 100 billion, I lose track, 150 billion. So this oxon incredibly well. Just give us a, you have a buy recommendation on it. Just give it a little background like, why is GEV such an interesting company in this time? It also would like is because I don't actually don't know, talk about their nuclear stuff. Yeah. So they operate out three segments to get the most attention. One really has got the most attention previously in this changing now, but the power segment gets the most attention. They primarily sell natural gas turbines. Which are huge. Which are huge. We're talking multiple hundreds of megawatts. And they're not. I don't think people understand like a gas turbine. It's massive. Yeah. It's really massive. Yeah. And so that accounts for 90% of that of the equipment sales in that part of the business. They also sell, they buy GE aerospace turbines for planes. Well, they buy to power the grid too. And so now there's companies doing this like FTI aviation is talking about taking their old engines and putting them onto the grid. Wow. So that's just everybody knows a jet engine looks just like a gas turbine. It's just that the gas turbine is a lot bigger. Yeah. And I use that to point out the there's to repurposing jet engines for the grid because it shows you how the time the power is such a big need. So being able to hook up fast for that center because there are, and I can see an arms race. The DASA is a build out and they don't want to wait around. This is why you know, we talking about Bloom too, but that's why they've been able to enter the market too because they can get product out there quickly. And then they service these these power turbines. The thing about that segment that's so interesting is that they've been able to book out until 2030 with price. So they're being able to get GEV. GEV they've been raising that long tail business. Yeah. So in other words, something that's booked today is not actually going to get into utility plan until 2030. Yeah, that's why 31. That's how that's how long tail this is. Yes. The other segment. So basically, you're saying you don't build the stuff like Tidley Winks. No, no, no, you don't build like Tidley Winks and you know, the permity phase and that's a problem too from environmental permits. At the federal level, we don't care about CO2 anymore. But the hyperscalers still do have their targets on CO2 and they want flexibility going forward, but the knocks and socks, whether it's just airplanes at a city level or a regional level, state level are very important. And so that can take six months to get those air permits for that. The other big segment is electrification. And what is that? That is selling high voltage equipment. So I think about big transformers things to hook up to the grid. You know, as either the kind of like the nuts and bolts and nuts and bolts of the grid. And whether you're building out transmission lines or hooking up new load pieces like whether it's a manufacturing plant or it's a data center, you need this equipment, transformers. The one thing that they're doing is as they sell more into data centers, they're cross-selling that equipment into the data centers. So right now, so they sell the turbine with the transformers? With the transformers? I saw they had a deal with Chevron when they did that last week. And I read you now. It creases their content there. And they're also getting priced in that business. They have wind, but nobody cares. No one cares about wind sucks. The way I look at it is like the wind is like a call option. They're doing some self help on that business. They have these offshore wind projects. They won't do again. As it work off. Let's talk about nuclear. What? Yes. One part of the business that I actually don't know. What is their nuclear business? So they're partnered with Hitachi. And this is a, you know, this is an old partnership where they are, they've created their own small module reactors. You get, there's a lot of attention around small module reactors. There are companies like Oaklow, Newscale that with public via SPAC and in other ways, they are focused on developing SMRs. What's SMRs? Small modular reactors. What does that mean? I've heard this. What is a small modular reactor? Sure. It's not as small as you think it is. I was wondering. It's bigger than this room. Yeah, yeah. Definitely bigger than this room. It's not quite as big as, you know, like three miles. Three mile line. Okay. Where you're talking multiple gigawatts in many cases. These tend to be 300, 400 megawatts, 250 megawatts, so smaller size. Okay. But the supply chain for one, it's a new product. So the supply chain has to be built. No. Yeah, this is new. Okay. So, you know, financing is an issue. The projects, you really need to have the same one, like seven of them before you can start really financing them through traditional methods. Well, what would someone buy a small modular reactor for? So, I mean, because I'm not hook it up to my own home. No. You would hook it up to a data center or a more city. So, a power data center or a small city. Yeah. And so, GV, they're building their first one in Ontario. Ontario? Yeah, in Ontario. And they have plans to build several other ones there. They have plans in Europe. Tessie Valley at 40. I heard Germany may go back to the clear after they got rid of it. Yeah. Just in time for the Ukraine war. Exactly. When you have the pinch on natural gas, like they do, I think, the, the, the, the, the, the room in that direction. But then also like in different parts of the United States, say, and Tessie Valley Authority in the southeast, they're, they're going to build out something. This is part of the Japanese investment in the US. And I think if anyone can do this and there's lots of skepticism, I'd say I'm more skeptical on the timeline of some of these companies, smaller companies, and they have very aggressive timelines around like 2035 and having, you know, dozens of these, these, these plants out there. I think GV is, is targeting, you know, late 2030s to bring on, you know, enough where it moves the needle. Late 2030. Yeah. The first one will come on by 2035. But it's still going to be to, yeah, 2035 is the first one. Yeah. God knows what will all be in 2035. Exactly. Exactly. But you know, one good thing about that, I had an investor that was a client that was short GV of, and the last earnings print. And he asked me a very good question when I thought peak earnings for GV would be. And because they have a service tail in the business, you could stretch it to the mid-next decade, I think, in my opinion, before you see peak earnings. So I think there's a long runway for the stock there. So I think the next switch to, you cover Tesla, you cover Rivian, you cover, what was it? Lucid. So call it electronic vehicles. Before we even get into any of the company's specific stuff, like just tell me what's going on in electronic vehicles because I have no position in this group. Okay. But one of the things that I find puzzling, I was joked with someone about Tesla. I imagine it's 2020, and you work at a hedge fund and you're an analyst. And you go to your boss and you say, we got a short Tesla. And the boss says, what are you crazy? And you say, no, no, I'm not crazy. Here's my model. And my model says that over the next four years, Tesla's earnings will go straight down every single of the year. So that by the time you get to the end of 2025, the earnings will be less than half. And the portfolio manager says, well, that's a pretty compelling thesis. But short it. And it happened exactly as this guy predicts. And you didn't make any money. Okay. So what's happening? Let's talk just pure fundamentals. What is happening? Forget about the robots and forget about the moment. Self driving cars. Just the electronic vehicle business that Lucid's in, that Rivians in, that Tesla's in. What's that business like? Hi, Steve Eisman here. You spent money to get that customer's call. Ads, referrals, word of mouth. Doesn't matter. The moment it rings out unanswered, that's not just a missed opportunity. That's a sunk cost walking out the door. That's why today's episode is brought to you by, quote, spelled Q, U, O. The business phone system built so you never miss a call. All your calls, texts and voice mail live in one place. 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If you're rising cancer costs for your company feel out of control, you have to check out color because there is a better way to get strong member use. Better health outcomes and real control of cancer costs. Even more about color as a partner to overhaul your cancer strategy at color.com/eisman and while you're at it, get screened. So EV business right now, EV sales, US, still growing. It's single digit numbers here in the US. Tesla's business in the US, a flatish at best. Flatish. Yeah. In the US. Yeah. So, basically in their EV business or a flat year overall, this core should be strong across all regions. But the big things there, I think there's still growth in overall electrical vehicle sales. I would say China is the strongest, then Europe, and then the US. Can you talk a little bit about the China competition? It's real. It's real. They make decent cars and they make them for a lot less. So how are these companies going to compete outside the US? It's very difficult. Tesla has been competing in that market and that's why it's hard to compete with Tesla in the US markets because they make good cars, relatively affordable prices. The Chinese though, I was just in Europe for two weeks and almost every major city has at least two BYD showrooms in Europe. Every city. Yeah, and you actually see the cars out there. BYD is the biggest electronic vehicle company in China. Yeah. But then there's also like NEOs. I saw NEOs in Germany. The German market is very at risk because you see these half-fleece or Chinese electric vehicles are moving in that direction. That's an incredible what the destruction that has just happened in the German car market. I mean, the German auto, they let the electronic vehicle business get completely away from them. And if I went back and I go to Europe probably twice a year to visit clients and if I go back just three years, four years maybe at the most ago, and you talk to a client about this, they say no one here will buy Chinese cars. But it started off very slowly, chipping away. Right. And now market share is picking up and I think it will continue to accelerate and we'll see that in other regions as well, whether it's CAD or elsewhere. Just talk to me about Tesla for a little bit. We're going to talk about whether you think SpaceX is going to buy them. That's, we'll push that aside just for a second. You're recommending it. Why are you recommending it? Sure. I think at the core, it's one of the most innovative companies in our country in the world. And at the foundation of that, their ability to hire the best engineers out there. It's often ranked top one of two places go work from the major engineering schools and other places SpaceX. Do you agree with the statement that if the only business that Tesla had was the electronic vehicle business, this talks way over valid. Yes. Okay. So yeah, that you concur. Yes. Okay. So let's talk about self-driving cars and robots. Like, I mean, Elon makes promises about self-driving cars the last several years that he hasn't even come close to fulfilling. So what gives you confidence that this is going to work? Sure. And then because that's the only reason all this talk. Let's circle back to the energy portion of the business as opposed to because that's important. Yes. I think for the last, well, almost 10 years, he said next year. Next year, and Jerusalem. Next year, next year. And so it's taken longer. I think that what we'll see from here is that it will accelerate. And that means the number of cars in the road for the robot taxi will accelerate. And specifically in Texas, we'll see that happen first in Austin region, Houston Dallas. They're fully permitted there with the rollout of the robot tax or with the cyber cab, which is the purpose built vehicle, the two-seater gold car. That will help. It's purpose built. No steering wheel, no brakes now under the new federal rules that they don't have to have that. And then we'll see it accelerate into other regions. Whereas in California or in Phoenix right now, San Francisco specifically, it seems like every fifth car is a way more. And then you have suks there as well. What's that? Suks is an Amazon back company that's also doing driver out services. And it's going to be a competitive market. It's not going to be a winner-take-mort all-market. But I think that we're going to see a handful of players call five in the market. But Tesla having a vision only. So only using cameras, not light or radar. I think it can scale more quickly once they. People have criticized it because they said it's not adequate technology. But why do you think it could scale more easily? With. There's less of the groundwork that needs to be done because they're constantly pulling all of the data from all their vehicle fleet because they own the manufacturing part of the value chain. They can. The feedback loop is quicker for them to make changes to the vehicle. And like they don't need to do all. Like you'll see now in New York way most has. They're testing the area. They're mapping the area. That is done by the current vehicle fleet of Tesla on the road right now. And it's feeding back into full machine learning. I don't know because of people who actually own a Tesla, just as driving around New York, whatever they're doing. That feeds back to Tesla. They'll all have that data whether or not they bought full self-driving. That data goes back to Tesla. I see. Okay. You wanted to talk about energy when Tesla is doing energy. Yeah. Sure. This is. It's important now because it's. 20% of their operating income comes from the energy business. And it's. Describe the energy business. Most people don't even know that they have anything there. So they bought Solar City. Now, I covered Solar City too and that was somewhat of a bailout. Yes. Not somewhat. Not somewhat. (laughter) That was. Yeah. It's nice to bail out your cousins. Yeah, exactly. And all of you. You have cross-port members all over the place. Yeah, it's no give. But we can talk about this with SpaceX too and how it's similar and dissimilar too. That business is primarily what they call mega-packs and these are big batteries for the grid. Whether it's coupled with renewables like solar or now more and more, they're being put. Stand alone to balance the grid in periods of fluctuation. And this is a global business. They have three plants. One in California, they're building one in Texas and they have one in Shanghai at the service China and other parts of the world. This business is growing over 30% a year on the top line. This is pretty stable, healthy margins and it's contributing really a meaningful portion of the cash flow that is going to be reinvested into some of the future stuff like robotaxi and optimist robots. So I just. I consider this the auto business and that business as kind of the core here and now business. So let's talk about looks. SpaceX is one public. I mean, I'm a public about this. I think the valuation is insane. You put out a piece arguing that you thought SpaceX was going to buy Tesla. It regi-piece. My response to that and I'll be curious what you think is we live in an era where of deconglomerization if that's a word. SpaceX already is complicated enough and it's got space, it's got satellite business and it's got AI. Now you're going to add on if this were to happen. Electronic vehicles, the energy business, autonomous driving robots. That be seven businesses for one company. That's awfully complicated. So why do you think it's a good idea? So I'll start with Elon. I think because it's an important piece. I don't think it's only piece but he's argued that he needs to have 25% ownership of Tesla because he doesn't want anyone else to control the AI. He wants to have that much control of the company. This is a backdoor way for him to do it because of the mix of his ownership and SpaceX. So what is his objection to not owning 25% of Tesla? He doesn't feel comfortable developing the AI where he doesn't have. What is developing AI in SpaceX? Yeah, well, he could be thrown out though. Where he does have enough ownership of the business. Okay. Because what he said in the past. So I think that's one way from the backdoor to that percentage. Two, like with the Google equity offering, capital is a big part of this whole equation for this arms race of Tesla. I think having the company together makes that easier for him to raise capital to keep up with the Joneses of the other big seven or mag seven. He started priming the market with doing these, it's not structured as a joint venture, but they're projects for the two companies. Number one, he's going to build a solar model, a module or solar panel manufacturing facility of 100 gigawatts. That's a massive-- And that would be for whom? That is a partnership between SpaceX and Tesla. And that would be for what? What for what purpose? Oh, for utility scale, solar and residential solar. To sell it? Yeah. So in other words, like by being coming a first solar. Yeah, by becoming a first solar. Okay. Which we'll talk about. And it's 100 gigawatts is like that's China scale. It's huge. If he gets a fifth of the way there, that's bigger than first solar. They also have this tariff app. So building chips, whether it's for the self-driving vehicles or it's something to compete with in video, they're a joint partner. And on his last call, he said something to the effect of, I'm tired of going to each board and having to get this self-approved when we do a joint project with each other. So this is one board? Yeah. So make it one board. And I think just overall speed of making decisions, it makes sense from that as well. So you think this is going to happen? I do think it's going to happen. When do you think it'll happen? I think that the way things are moving right now speed is very important. I said 18 months by thinking it could be this year event. The other problem is if you let's say the deal got announced in a year, then it's another year before it's actually gone. Yeah, I think that's two years. I think that's even more reason to do it sooner or later. There's nothing with the fact that it just IPO that would stop them from doing it at this point. If I can make one point about SpaceX, because I think it's, when we talk about energy being the bottleneck to data centers or key element data centers, one thing I emphasize is that because a lot of people laugh off his making data centers in space and saying there's not the equipment or technology here already, I use it as an example to show how important it is, how energy is, because that's really the driver there is that energy is not scarce there. You'll get solar energy up in that space. You'll have to use cooling for the data center as well. But that's just an extreme example to show you how important energy is. How important energy is. I had a, when this is a point of humor, when I read the S1, there was a whole section about things that SpaceX could do, which was quite a list. Mine asteroids. Mine asteroids. Mine asteroids. Mine asteroids. And I said, you know, because I'm a real science sci-fi buff. I said, you know, mining asteroids is actually a major theme on this Apple sci-fi show called For All Man Kind. So maybe you want to write for the show. Now it's interesting because there's a whole element too, like if you think about the merger of the two is like, Optimus would be very important in space exploration and going to environments like that. And those versus saying, if you want to mine, you can still mine on planet Earth. Just real quickly, on the mining asteroid points we cover MP materials, which is rare Earth. They own the largest mine in the US. And then they're making a magnet facility. The first one is sold out to GM and to Apple. They're building another facility that's two and a half times as big. But those magnets will be even more important because they go into any kind of motors. So as these astronauts get built out like fans in HVACs, they all have magnets in there. In China controls, 90% of all the virus. 99% in the magnets that get sick behind it. Got it. Let's finish up with solar. A group I've covered for a long time. You don't cover residential solar. No. Thank God. I did it long enough. It's several different relations. It's very. It's very tough. It's a tough one. The mail business in the cell. Like, you know, this is door-to-door sales. Right. You're putting little panels on people's roofs and you're selling in house to house. House to house. And so you have customer acquisition costs or $10,000. House to complain. Yeah. Yeah. And so that's tough. And I've always thought that, you know, utility scale solar makes more sense just from a scale perspective, from a cost perspective. Okay. But you're not. So the two companies that you cover that are pure plays here are first solar and array. In next power. Oh, in next power. So like array cop that's. Right. It's a cop. So you're not recommending any of them. I recommend in next power. Let's leave aside next power for seconds. And let's just talk about first solar because it's a good array makes the devices that turn the solar panel so that you're constantly in the sun. But first solar actually makes the solar panels for utility and you're not recommending it. And. And yet, if I knew nothing, I'd say the grid's going like crazy. Yeah. We need power from every, every possible source. First solar is the biggest producer of solar panels in the United States. We need them. Why aren't you recommending it? Sure. Obviously. I've used keeper for years. Why? Because between work, banking and shopping, I have too many logins to keep track of. My passwords were scattered across my notes app, browser and memory. And I was always hitting forgot password. One stores everything securely in one place and organizes it so I can log in within seconds. Keeper is a password manager that creates strong unique passwords for all your accounts, stores them securely in one place and logs you in automatically across all your devices. 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Until that gets settled, they can't book business because they don't know what the charge of the customers and their customers don't know what to pay for it. So the panels that they make mostly everything in Malaysia. They have three factories also in the United States. In the United States. But some of it's outside the United States. Yeah, some of it, they have a factory in there. And they, so they can't tell you what they could charge for the stuff that's outside the United States. Well, they're waiting to see how much more of a premium they can get because of the tariffs that are coming from China, but those haven't been decided yet. Okay. And is there any timeline? We're supposed to hear by July 4th. I mean, we were supposed to hear about January 2. So some of this stuff is slipping. The stock will trade with, you know, easing or more tense trade with war with China. So what are the people who on the stock want? So they want a specific percentage, like a specific penny tariff on the panels because if you put a percentage on the panels from China, they just lower the price and the percentage is smaller. So it's a kind of a way around the, around the tariff. So they want stricter tariffs and just visibility on the tariffs. So if there was, where is first solar now, the stock? Two, two, two, two, 50s. Been hanging here for a while. So if the tariff situation went the way the company wants, how much upside do you think that they're going to stop? I think there is a hundred, a hundred dollar upside on it. A hundred dollars off of two fifty. There's a lot of leverage. Every penny ASP is two dollars in earnings about. This is making one of them say they're twelve dollars in earnings this year. But I, so if they, so the stocks two, fifteen, they're going to do like twelve dollars in earnings. But next year they could do what if everything came out right? If everything came out right, it could do us as high as seventeen, eighteen. Okay. Got it. Back to electronic vehicles. No. Lucid, Rivian, they kind of make very high end cars. Like, is there a story or not really? I think Rivian more so than Lucid. Lucid has a backing of the Saudi investors there. Lucid does. Yes, Lucid does. That's kept them afloat. Okay. There's a new CEO there. I think if anything, they become more of a technology provider. They do have good underlying technology that just hasn't been scaled. So like they do, they had a partnership with Ashton Martin. But this new CEO is coming in kind of to an restart of the business right now. I'm more confident in Rivian's brand and being the first follower of Tesla in the United States. They're moving. I make a nice looking car. And they're moving to their next generation vehicle, which will get down to kind of forty to forty five thousand dollar range. The initial vehicles of more expensive is called R2. It's a smaller SUV. I drove it three weeks ago at their launch. How was it? That was awesome. It was great. It looks, but I think it looks personally the Model Y. I think there's a saturation issue with the Model Y. What's the Model Y? The Model Y, the Tesla Model Y, the crossover, the small one. But like if you go in most parts, a lot of parts of New York, that's all you see are these vehicles, definitely on California. And so, you know, people want to have a choice. And this is going to be like the first compelling choice to the Model Y out there. Got it. What have I, what have I asked you? Lots of good questions there. I think one of the worries about the power side is just like over capacity because a lot of these companies are ramping up more capacity. And as a solar analyst, it's like dog years covering solar of the up and downs. The solar group is just as a big group is an insane group. It's hard to be a bull because you've seen the story before and times get good. They end very quickly and badly. I think that the runway though, for energy, the visibility here, we got a decade of it. I believe the CEO of GV Scott talks about it being a super cycle that they expect to be sold out to 2035 at least. And I wasn't there starting in this year and like the more we've done our work and talked to developers. We have a lot of visibility here for the next decade. Now, labor is going to be an area which is going to become more and more of a bottleneck out there, whether it's for data centers or just energy overall. To get the labor. Yeah, electricians, everything. Everything. Okay. I heard, because I've never owned an electronic vehicle, that the value of electronic vehicles collapses after a few years. Is that true and if it's true, why? It depends on what car. Impact use car. The use car market is just the rate of innovation overall. And because companies like Tesla and Rivion, they don't necessarily have model years per say. Like for example, if they need a new, the steering wheel needs as a new vendor, they'll just rip out that model and the next one of the line and put the new steering wheel in. They're traditional auto weight to the following year. And so they make constant changes to it, which makes them obsolete quicker or quickly, even though they can actually upgrade the vehicle's via over there updates versus not many auto manufacturers can do it to the same level. But I think it's just the rate of innovation right now. I personally, I would, like, I would rather lease a car now, even though people say never lease a car, then to buy a car just because of that residual value across that's EVs to. I heard that the battery starts to lose efficacy. And most of the value of the car is in the battery that that's that hurt. It depends where you are. If you're in cold environments, if you're in Minneapolis, it's more impact on it for Canada, but they have war teeth around their batteries. A lot of that are corner cases of this rapid degradation of batteries. Ben, thank you. Thank you for having me. It was really great. And we're back. A lot of information in that interview, first of all, the United States is building something on the order of 30 megawatts of power per year, which, I mean, is the equivalent of a couple of cities is how much power we're talking about here. And it's not all data center related, but a lot of it is data center related. So we started with that and then we went on to GE Vernova, where we talked about how GE makes gas turbines that are crucial in terms of utilities, providing power to data centers. Gas turbines are massive and they require years to make. And so when they get an order, when they report an order, like through this quarter, when they'll report an order, that turbine is not going to actually be built and then put into utility until 2030, 2031. That's how long tail this business is. And GEV has visibility on that business for well into the 2030s. It also has electrification business, which is related. And it has a nuclear business, which is not going to be an important part of earnings till at least 2035, but it could become a big part of the company. And then we moved on to Tesla, where Ben is positive because he thinks that the autonomous vehicle business is going to do well. We'll see. Elon's been promising that for 10 years. Count me a skeptic. But Ben also thinks that SpaceX is going to buy Tesla. And if he was a betting man, he thinks it will happen relatively soon because Elon wants to have total control. We also spoke about some solar companies, none of which he's all that positive on because of tariffs. And we just finished up talking about how one of the biggest constraints is going to be labor because there's such demand for all of these plants and construction that there is an enormous demand for labor. And it's going to be interesting to see if the United States can supply sufficient labor to build all the things that need to be built. Hope you enjoyed that episode. I certainly enjoyed doing it and see you soon. This podcast is for informational purposes only and does not constitute investment advice. A host and guests may hold positions in stocks discussed. But King's Express are their own and not recommendations. Please do your own due diligence to consult a license financial advisor before making any investment decisions. [CLICK]