'Auto Electrification' - Obama/Schwarzenegger Plan for Millions of Plug-In Electric Cars a Boon to Chip Makers & Power Companies
January 29 2009 - 7:30AM
PR Newswire (US)
WASHINGTON, Jan. 29 /PRNewswire/ -- At his first White House press
conference Monday President Obama declared "the days of Washington
dragging its heels are over" and ordered an immediate review of the
Bush administration's refusal to give California authority to
enforce tough new emission and fuel efficiency standards on gas and
diesel powered automobiles. For more than two years California Gov.
Arnold Schwarzenegger has sought to impose stricter standards on
automobile manufacturers in an effort to spur adoption of plug-in
electric cars. The Obama administration signaled it will grant
California's request in a matter of weeks. Eighteen other States,
representing nearly half the nation's population, have indicated
they will follow California's lead - establishing the framework for
a new nationwide market for plug-in electric cars. Obama's push for
electric cars is closely linked to his $11 billion high voltage
"superhighway" passed last night by the House as part of the $819
billion economic stimulus. Obama's Chairman of the Federal Energy
Regulatory Commission (FERC), Jon Wellinghoff, stated regulators
and automobile manufacturers must integrate the new plug-in
electric vehicles into the national power grid. "If you're an
automobile company, you'd better get on the bandwagon...because
there is definitely going to be a move toward electrification,"
said Wellinghoff. Obama's bold moves on the transmission grid and
electric cars are widely viewed as a bonanza for semiconductor
makers and power companies. Stephen Ahrens of Fairchild
Semiconductors (NYSE:FCS) prophetically stated in Forbes, "even
when we get to only 5% or 10% of vehicles as hybrid - it's still a
huge deal for the power semiconductor business." This week National
Semiconductor's (NYSE:NSM) Luann Jenkins highlighted the importance
of chips in the development of electric cars. "We currently have 25
ICs in the Tesla Roadster, for example." The Tesla is a new
electric car backed by Silicon Valley investors. Wind electric
companies such as NACEL Energy (OTC:NCEN) (BULLETIN BOARD: NCEN)
and AEP (NYSE:AEP) are prime beneficiaries of an enhanced
electrical grid. Both NACEL and AEP develop wind power projects in
western states and need the increased transmission access to
metropolitan areas President Obama's $11 billion high voltage
initiative is expected to provide. Last week analysts at Barclays
Capital raised their price target on AEP to $42. AEP closed at
$31.76 yesterday. CNBC guest analyst Francis Gaskins has a $4.00
price target on NACEL Energy. Denver based NACEL closed yesterday
at $1.84. A Before the BellTM renewable energy update Before the
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