Electric Vehicles and the Coming Disruption in the Oil Market
Below is a cool set of videos suggested by frequent commenter “Breath on the Wind,” describing the coming crash of the world oil market caused by the electrification of transportation. As could be expected, there is not a single mention of the environment, which is totally fine; as we’ve seen so many times before, so ironically, it appears that powerful forces are at work that will mitigate the enormous environmental damage we’re inflicting on this planet, even in the absence of the slightest concern for the quality of life on Earth that we leave for our children.
The glut of oil to the tune of 2 million barrels per day in 2014 sent the oil market into a temporary tailspin. Well guess what? By 2020, there will a diminution of demand of precisely that amount–only this time it will grow each month and never turn around.
The ever-improving price-performance curves on electrics will very soon mean that EVs super-cars with 200 mile+ range, near zero costs for fuel and maintenance and dragster-like torque, will be on the market at the same price as a Buick. Needless to say, it will be extremely difficult to sell new Buicks the moment that happens.
Countries like The Netherlands are writing laws that will prohibit the sale of new cars with internal combustion engines after 2025. Interesting, those laws will have no impact, because the forces of pure market economics will make this happen with or without legal restriction.
You’ll notice that in the picture of the Baker Electric, a woman is driving and the passenger is a man. In those days, that combination would have been somewhat unusual even though women did drive cars from the very beginning of them.
In his sermon this morning, Fr. Britton related what happened at a meeting he attended. The speaker asked the audience to imagine that someone had invented a device of moderate cost which would improve the enjoyment of life for everyone in the home and decide whether they would want one. Everyone decided that he / she would want one. Then the speaker went on to ask now they would feel about it if it had a down side that would result in 30,000 deaths per year whereupon the people questioned the morality of such an invention if it would impose such a high cost on human life. The device was the automobile.
Frank,
Your anecdote illustrates only how by carefully designing any question to a predetermined bias, a ‘morally correct’ answer can be elicited.
The speaker carefully omitted from his ethical conundrum the automobile has saved far more lives than it ever cost !
Just the reduction of horse encephalitis in infants in just one city alone each year more than equals auto deaths in the US despite a vastly increased population.
Hi Frank,
I’m glad to see you noticed the best selling feature of early EV’s, the ease of operation.
ICE vehicles struggled until Cadillac introduced the Electric Self-Starter in 1913. (sort of ironic).
Actually, the self-starter had existed before Cadillac introduced it on the Cadillac. The problem was that before Cadillac worked in it, it was too bulky and expensive for widespread use.
Cadillac began work on it when one of their executives died of complications of an injury suffered when, as a good Samaritan, he cranked a car for a woman whose engine had stalled on a bridge.
Here is some material on engine starters:
http://www.crankshift.com/history-starter-motor/
My mother learned to drive in 1916 when she was 10 years old. In those days, licenses were not required. Her brother taught her how to drive. The starter wasn’t working so when she killed the engine, he had to get out and crank. Later, in about 1931, she was driving her model A Ford from Jackson, TN, to Two Rivers, WI, with a friend and her friend’s mother. The distance was about 700 miles, but roads then were not what they are now. When they got to Chicago, the starter failed so from then on, when they had to start the engine, they had to get a man to crank it for them. It was some time before starters became entirely reliable. A bit later, the crank was stored in the trunk (boot, for the Brits) so it could be used if the starter failed. Now, of course, there is no provision for a crank.
Marco,
The speaker did not carefully omit anything. The subject was not automobiles. Rather, his subject was making moral judgments. Including too many factors would have undermined that subject. If the subject had been the good and bad points of automobiles, he could have spoken for at least an hour on the subject alone. He could have pointed out that our over-dependence on cars has created serious problems for people who either cannot afford cars or who cannot drive. He could have pointed out how the need for petroleum has distorted foreign police. And, I suppose he could have covered the serious problem caused by horse feces which had been widely recognized for centuries. There would have been practically no end to it thereby undermining the points he was trying to make. Attempting to cover all the problems of the world reduces the effectiveness of covering the points that one is trying to cover at the moment.
There are some people who seem unable to understand the purpose of speeches, presentations, and sermons, and you are one of them.
Frank,
With the greatest of respect, I would ask you to consider the implications of your observation ;
” (when) making moral judgments. Including too many factors would undermine….”
When taken in context with the rest of your reply, it becomes obvious that both you, and the speaker, approach moral judgements from a preconceived position and selectively use information to arrive at a preconceived position.
The the example used might have been automobiles, but the ethical question posed could apply to any issue requiring moral judgement.
Craig the key is getting the price point for EV cars low enough to pull away moderate income buyers. EV s if they can pull that off will experience a much more robust S curve of adaption in comparison to solar pv on the roof.
If they can have decent models from 20 k up to 35 k ( which the Chevy Bolt and others is at now) then they can break the Internal combustion market chains.
The marginal ownership costs for EVs versus IC engine cars are so much lower and people Need those dollars back into their stressed budgets.
In comparison Solar PV :
Most low and average income just cant afford solar pv in its current format that is a Reality.
It limits the growth. The nothing down solar leases work only if the electrical savings are great enough to offer a decent spread between the electric bill, the bill to the solar lease provider must not take up most of the savings.
This requires much higher Grid kwhr costs as the national average price is around $ 10.5 cents kwhr. now. due to reduced natural gas costs and wind and solar at utility scale prices.
So that is the other side of the coin.
EV’s offer the utilities a last chance sales opportunity but they will have to share that load with the consumer so that is another reason the utility fights solar DG growth. they want to own those large solar plants and sell charging kwhrs.
Lets see if they can get those EV prices down as the tax credits are going away and i doubt the Trumpets policy will support EV ‘s.
This is all 100% correct. Thanks. And yes, Trump’s policy will definitely support the oil industry. If that wasn’t clear before the appointment of Rex Tillerson as Sec. of State, it sure is now.
Craig,
Nearly 20 years ago I became involved in the advancement of electric propulsion for all forms of Automotive and general machinery as a replacement for fossil fuels.
While my investments have been modest in comparison to Carlos Ghosn or Elon Musk, I’ve done my best and achieved modest success.
Over the years the biggest hindrance to EV and general electrification has not been from the oil industry or even from slow advances in ESD technology.
The largest, most annoying hindrance has come from an over enthusiastic media, eager to allow all sort of wildly optimistic predictions from advocates with little on no, practical knowledge of the challenges and realities.
In nearly every case, these ideologically (and insufferably smug) advocates are amazing hypocrites ! I’ve never actually encountered a green advocate driving an EV. (Crank hobbyists excluded).
Vast sums have been wasted of impractical EV project and forcing Auto makers for political purpose to concentrate on unpopular technology, instead of supporting, more practical technologies.
Smugly predicting the “downfall” of the oil industry in three years time because of an EV “revolution” is absurd.
Currently, EV’s make up less than 0.02% of the world automotive fleet, and an infinitesimal amount of machinery powered by fossil fuels.
The world’s vehicle fleet is approximately 1.7 billion, and increasing by 1.8% per year. The total number of EV’s is possibly 1 million. To equal the increase in the ICE Fleet Ev’s would have to increase their numbers 40 million per year !)
Such increases would quickly exhaust available Lithium resources. ( certainly create price hikes).
Craig, it’s not as easy as it seems through your rose tinted glasses
In time, spread over many decades, with many advances in ESD technology and changes in infrastructure that balance will slowly change as more electrically powered machinery and vehicles become more practical, economic and competitive.
Thankfully, it will be a long, slow evolutionary process, not the dramatic, disruptive revolution of your dreams.
Over the decades the Oil industry will become even more profitable as it starts to invest less in it’s least profitable product (gasoline and diesel) and concentrates on the other high profit 350,000 product the industry produces.
The challenge for most governments will be to replace lost taxation revenues. In most Western nations these revenues are a very high proportion of economic cash flow. Without these highly valuable, and reliable tax streams, governments will experience huge difficulties in managing economies and stimulating economic growth.
The old adage,” be careful for what you wish, because it might become reality’, is very profound.
Couching everything in terms of a “crusade” against oil companies is now very hackneyed and largely ignored.
The general public has grown weary of overly optimistic environmentalists.
Each year you proudly announce the “vast majority” of people “believe ” in Climate Change and Global Warming.
In truth, the majority of people murmur agreement as long as it doesn’t cost anything personally, but that’s as far as support actually goes. The general public will agree with anything that sounds good, as long as someone else pays !
Beach front property still commands a price premium, despite 30 years of stentorian warning about rising sea levels.
Remove government subsidies and incentives and EV sales ‘tank’ (no pun intended).
The “Oil Industry” doesn’t need to covertly elicit government support in Western industrialist economies, governments are fully aware of the economic consequences of disrupting their main cash flow and largest generator of economic wealth.
It’s time environmental advocates “grew up” and started making advocating a more mature, more rational approach to environmental issues.
The best advocacy is by example. I get more opportunities to discuss EV transport and environmental issues when people see I drive an EV, than otherwise.
The discussions are also more inclusive and less defensive. People are more willing to listen if they see you practicing what you preach by putting your own hand in your pocket and making the sacrifice.
Mate Marco your quite thorough presentation of some inside the front lines of the Development for EV s over the years definitely gives you respected Credentials in this EV area.
thanks for your efforts.
Breath shared a couple of good links to some good presentations that covered many of the Variables involved.
Perhaps a review of a few would change your position some what.
I said it is depended on a Big if , too. If the promoters and Hi tech outfits can deliver cars and they do have buses now that can deliver the fuel savings, less all the other marginal costs that EV’s avoid and the buy in price or ride share price is right SAlES will take off.
Bloomberg and others have put out forecasts for the reduction in oil for gasoline demand. They too settle in around 2 million barrels a day some time in the 2020’s early part based on some conservative estimate of EV sales.
That is their target and oil demand is not rising like usual as demand destruction is in play on many levels.
then again the close out of federal tax credits may be the counter weight that stalls progress ! In Georgia over here they removed the state credits for EVS and it impacted a big reduction in EV sales.
yes indeed State tax revenues from fuel sales will get Hit hard by EV s. Already some states here are imposing a $ 150 per yr fee for driving a Ev to make up for lost gas tax. that is fair by me if you want to use the roads pay your share.
Marco dont let the arrogance of some greenie weenies turn you off, their are those types of folks in every line. Not just the environmental sector.
I hear what you saying and its true the phoniness of some it gets so old. its in solar and lots of things for sure. but it does not mean the technology is not good.
I have met over the years some very wealthy folks who bragged so much about their Big gas guzzlers that it was so boring to be around them . obnoxious is putting it mildly.
Yes you are so right the future of oil is for plastics and other products and materials for industrial processes. More and more building materials use oil based products for multiple reasons. All that good foam insulation that is going in now is from oil.
But the bigger point Marco is there is changes in the winds and they will be structural and things are not like we grew up with since our Youths. The Ships have sailed and things are not going to be like they once were , ever ever again.
Tran-formation is slower than many of us want or expect but the nature of energy is Capital intensive so it takes lots of new investment to replace existing systems. This also requires time so that assets are not stranded but phased out in a orderly transition.
But bear in mind electric demand growth in the US is practically nil! Per TiME magazine last month, if LEDS keep selling like they have the past 10 years the demand for 50 more so called base load power plants is not needed.
Demand destruction is in high gear in electric sector.
Shell and Statoil and Eni total and BP Oil all announced major push back into off Shore wind as vertical players. shell lowered their cross over date from late 2080 or 2090 to now 2030’s and they say oil demand peaks and flattens out into decline.
The Switch is On ! How big is the Switch that is the question ?????
later on
Craig while there are many who say the EV market will collapse as soon as the 30 % fed and what ever State tax credits Expire. they are focusing only on Status Quo. Not realizing the other dynamics at work.
If all these major large companies that are developing EV models and other forms of advanced vehicles did not think they could produce those vehicles at the the below $ 30,000 price point and the needed volume; then perhaps they would not be making the massive level of Investment that they have done.GM just bought out a start up co and Ford is into it as well. the mainstream is adapting while the Trumperians are holding and clinging to the past model! ideological
restrictions and Love of Revenue will trump Good Policy is the Sword they may FALL On!
There are going to be some labor reaction drivers that drive people to ride share. less jobs, less income so they cant afford a self owned vehicle but they want to also avoid the marginal costs of ownership. insurance , registration and parking and it adds up to a big Savings Stack over Ownership. How things may change???
One can still see the USA in a Chevrolet but in one you don’t own! Dinah Shore lives on!
They can do this on demand so it will be different than the traditional mass transit option that in America ran into the individualistic nature of US consumers. On Demand services meets the individualistic wants of US consumers so that is a driver.
The labor market disruption will result in less income so ownership w to go down.
It will be a good thing for the Global environment if the transportation sectors dependency on fossil fuels is greatly reduced.
then we have Two major sources for Carbon in our economy getting under control.1. Electricity production which is a 30 % or more of our Carbon CO 2 and then 2. Transportation which is close to 30 % also . This will aggregate to major reductions of CO 2.
Certain countries in Europe are going to restrict internal combustion vehicles by 2025 it looks like. They will use excess Wind and they have it to do the charging.
The thing about the Green energy sector is it takes a modular different pieces of the puzzle to make it happen.
This contrasts greatly with the bigger is the better – 1 Size fits all centralized model – huge Carbon spewing production facilities or large scale nukes in scale. Then we get locked into cost structures that dont reflect real savings etc.
The nature of base load changes and the bigger is better crowd has trouble visualizing these iterations between complimentary technologies that combine to make the puzzle work. A Good Mix.
SMR s could fit in if they get their Act together. Nuke powered cars ! for Bragging Rights in certain upscale neighborhoods Ha ha ha
Just depends if these big players can deliver on their Vision and the market responds. we shall see
Easter Wishes to all later
Silent,
Since many people may not know about “See the USA in your Chevrolet”, I am providing the following links:
https://www.youtube.com/watch?v=cYX1ewPJrFU
https://www.youtube.com/watch?v=lrFxaJxMyGA&t=10s
http://www.pophistorydig.com/topics/tag/see-the-usa-in-your-chevrolet/
These reports suggest some additional speculation. We can expect that oil executives would be very familiar with oil markets on both the supply and the demand side. Somewhere in their archives would then likely be an analysis of how a change in world supply or demand would affect prices.
A monopoly or perhaps 5 major oil companies working together could then have a strong influence on economic policy. Using such political and economic pressure they could then have worked throughout history to make sure that electric vehicles did not become a major force in the marketplace. Some might consider it just good business practice. But this is based upon the speculation of oil companies colluding.
If you accept such wild speculation they what is different about the present times?
Breath,
Sometimes you amaze me !
The history of electric vehicles has nothing to do with “political and economic pressure by oil companies” !
In fact, the development of Lithium batteries was made possible by Exxon !
Over the last 100 years, many attempts to build EV’s have occurred with varying degrees of success. The lack of public acceptance had nothing to do with “oil companies”, but simply inferior technology to ICE vehicles.
It’s taken the development of a lot different technologies to produce even the current range of EV’s, most of which still lack the performance and convenience of ICE technology.
Inventing conspiracies is just counter-productive.
Seriously? There wasn’t a germ of truth in “Who Killed the Electric Car?”
Craig,
Seriously? No !
Or that is too say, some obvious information distorted by a lot of conjecture and misinformation.
The myth created by WKTEC is so compelling and the film was so entertaining that the myth has passed into folklore and is impossible to shift the opinions held by “true believers”.
It’s a great example of ‘ something should be true, therefore it is true’, reasoning.
GM’s EV1 was a very impractical, undesirable little vehicle.
The vehicle was designed as an experiment with very immature technology. It could never have found a mass market and if sold as a commercial product would have been prohibitively expensive.
It was crushed at the end of the lease periods, in accordance with US Federal Government requirement regarding the production of experimental ‘non-compliant vehicle’ programs existing at that time.
At the same time Ford produced an EV experimental Ranger (driven for many years by Bill Ford jnr,)while both Toyota and Honda continued to us NiMH batteries to launch a range of Hybrids, which in Toyota’s case eventually proved successful.
The main flaw in the film ignores the rapid advances in BMS controllers, advances in computer technology, and lithium batteries which made the modern EV possible.
None of these technical advantages were available when EV1 was conceived.
It’s not hard to build an EV, but it’s very difficult to build and EV that people will buy ! That the flaw in WKTEC’s thinking.
None of this has anything to do with oil companies !
Marco,
You wrote, “The main flaw in the film ignores the rapid advances in BMS controllers, advances in computer technology, and lithium batteries which made the modern EV possible.”.
No!
The advances you list could easily have been incorporated into existing cars as an upgrade. No changes to the basic design of the cars would have been required.
Frank,
Um, the relevance of your comment eludes me ?
The EV1 wasn’t commercially viable because most of the advances in technology hadn’t been developed, in some cases conceived, at the time of the EV1’s production.
It’s absurd to suggest a manufacturer should produce and sell a poor product because “some time in the future a better technology may be invented and the car “upgraded” !
Do you really imagine any consumer accepting such a proposition ?
Some real fact about the EV1.
1) Not safety compliant. (the EV1 received an exemption from certain safety feature due to it’s experimental status.
2)EV1’s range was only about half it advertised 130 miles. running the headlight reduced the range 10%. In reality the 16.5–18.7 kWh lead-acid, or late later 26.4 kWh Nickel Metal Hydride (NiMH), had a range of less than 60 miles, with one person and not exceeding 30 mph. heating and Aircon, were out of the question.
3) Gradients were a real problem.
4) NiMH batteries do not respond well to irregular and very little existed in the way of public charging facilities. Batteries were guaranteed for only three years but most failed in the first year.
5)EV1 was very heavy. 3000lbs.
6)Battery replacement could only be performed by skilled technicians working on live circuits ! EV1’s batteries couldn’t be “turned off.” Another reason why the EV1’s were leased, not sold.
7) Uncomfortable two seat design.
8) Cost. EV1 one was largely hand made. Even as a production vehicle, the EV1 would have to have sold more than 280,000 pear year at $72,000 to cover the cost of production !
9)Brakes. The energy recovery braking system was unreliable and quickly developed faults, even complete failure.(Graphene was still 4 years away).
10)No warranty or Spare parts inventory.
The EV1 was a good experiment, much was learned, but it was never deigned or able to be put into production and sold to consumers.
Silent,
Thank you for your reply.
I watched the link Breath was kind enough to recommend, and I found it trite, preachy and wildly optimistic.
The problem I find with such little bits of propaganda is the way the producers think we are all as shallow as themselves.
The key to EV progress is ESD development. It’s true major hurdles remain, but there is also vast efforts being made to research and commercialism superior ESD technology.
My point is not that EV (and electrification of machinery won’t occur, but that it’s not going to happen quickly, certainly not by 2020, 30, or even 50 !
At the moment the technology is based on lithium. Lithium is not particularly rare or difficult to mine and produce (that’s why some years ago I started investing in US/Australian lithium mining leases), but it will get more expensive as Bolivian lithium production starts to decrease.
Lithium production also involves extensive environmental problems.
Estimates of known global lithium reserves and expert opinion of the viability of Lithium batteries for transport vary widely.
A study by MIT scientists concluded;
“Realistically achievable lithium carbonate production will be sufficient for only a small fraction of future PHEV and EV global market requirements”. The report also stated, “Demand from the portable electronics sector will absorb much of the planned production increases in the next decade”.
A Harvard Study concluded :
“Mass production of lithium carbonate is not environmentally sound, it will cause irreparable ecological damage to ecosystems that should be protected and that LiIon propulsion is incompatible with the notion of the ‘Green Car'”.
In contrast, Lawrence Berkeley National Laboratory and the University of California, Berkeley concluded :
” currently estimated reserve base of lithium should not be a limiting factor for large-scale battery production for electric vehicles because an estimated 200 million 80 kWh Li-based batteries could be built with current reserves.
These studies were all connected before the development of Tesla’s ‘Power Wall”, and real uptake in the number of home and business power wall type storage would drive up the price of lithium and reduce the availability of lithium for EVs.
(I suspect somewhere in between would be accurate).
It’s very likely that non-lithium ESD will be developed (several are at late research stage), in the future.
Some predict profound social change is inevitable, and people will adopt a simpler, less consumerist lifestyle. It’s a possibility, but in my opinion, not a realistic possibility.
With the exception of Toyota, Renault-Nissan and Honda, most auto-makers only produce EV technology to comply with government policies, remove the policies and the interest declines.
Without huge improvements in ESD technology, EV’s will one day face competition from HFCV technology.
All this makes the future difficult to predict. I’m afraid Craig’s portrayal of the future for EV would appear to be seen with the aid of Rose tinted glasses !
Except on many motorcycles
That comment should reference Frank’s, ” Now, of course, there is no provision for a crank.” … except on motorcycles.
Actually, I’ve never seen a crank on motorcycles although I suppose the kick starter could be considered to be a crank. The only modern motorcycles with a kick starter are trail bikes and even some of them now have electric starters. The only motorcycles I’ve ridden have been road bikes and they all had electric starters.
I would not want to have to start a bike with a kick starter and have to balance the bike with one foot while using the other foot to operate the kick starter. However, trail bikes are relatively light (probably around 200 pounds) so perhaps it isn’t a serious problem.
If the starter on a road bike failed, it could be push started assuming that it did not have an automatic transmission.
Frank I would guess from your comment that you have not spent a lot of time on a motorcycle. Even a 700 to 800+ pound machine can be balanced while you essentially jump off the ground and “land” on the kick starter, which performs exactly the same function as the old engine cranks. If however you have grown used to electric start the process may seem somewhat daunting.
Marco the two aspects of “Who Killed the Electric car the Electric Car” that stood out for me were the long lists of waiting lines for cars that GM did not want to disclose and the advertisements for the vehicles that looked more like it was for a horror film. It seems pretty clear that GM did not want to produce this vehicle but it had a cult if not mass following.
Breath,
Have you ever considered why no other car manufacturer at that time responded with an EV to fulfill such a demand ?
There was nothing special about the EV1. It involved no really sophisticated advanced electronics or technology.
Years later,and with huge government support, Carlos Ghosn introduced a far more advanced product the Nissan-Leaf which by then was able to take advantage of a number of rapid advances in technology.
The Leaf required billions in development money, along with continued backing by the French government, a boom in all things green, and the support of a hugely profitable automotive alliance.
The Leaf has been a valiant effort, it’s impossible to say if it’s been a commercial success, but it’s certainly a tribute (along with Zoe, Kangoo etc) to the vision, courage and determination of Carlos Ghosn. Renault=Nissan has invested nearly $ 15 billion in EV technology, it loses money on every EV sold.
There seems to be a strange belief with folk like Craig, that for some unknown reason GM had a moral obligation to produce an uneconomic model that no one would actually buy, (certainly not him).
The cult following you mention, would not have justified the vast cost of putting such a vehicle into mass production.
Breath,
I have been riding motorcycles since 2005 but have never ridden one that had a kick starter. The fact that it is possible to balance a heavy motorcycle while kick starting it has been demonstrated by riders who have done it. However, I would not want to. Even a slight error could result in dropping a heavy bike. I remember when electric starters were introduced on motorcycles. Many seasoned riders eschewed them asserting that they were for sissies.
At least a car is guaranteed to stay upright while being cranked.
Frank I would say kudos to you for picking up the challenge of two wheeled transportation. Certainly it is not for everyone and as a result they will never experience the associated pleasures and closeness to the environment.
Regarding the “slight error of dropping a heavy bike” I might suggest it is a matter of degree rather than a different thing completely. Certainly to those unfamiliar with two wheels, just the idea that you can safely come to a stop and start again seems like too much of a balancing act.
Once a while ago I had a friend who’s tractor had a crank start. While it tended to start quite easily the danger was a backfire or the engine starting in reverse rotation that would tend to break an arm.
So Frank you found a copy of the See the USA in Chevrolet , thanks.
I can see my late Dear Mother and Auntie singing along with that commercial as they ironed our clothes as a youth. We were a Chevy household and still are.
Breath your conspiracy theories do not bother me as there has been serious manipulation of the public by the moneyed interests over the years and decades. the Exxon case over climate denial and destruction of their own scientists studies is the smoking gun to all that !! They nuke themselves but have the cheesecloth courts and legalize loopholes to now navigate so they most likely escape more damage but trust in them is low.
But then Mate Marco points out some interesting points so Exxon is the reason we have Lithium batteries now. Did not know that.
They once made solar panels as did BP and Shell.
As for the supply of Lithium ores Marco you were fair you produced studies that said shortages loom and supply is good . Conflicting so it does go back to what you said that the ERA we are in is so difficult to predict clear path ways forward. Too many variables.
Marco European countries are not as controlled by the immense OIL lobby money as in the USA etc. other countries too. they pay high fuel costs as well now. while we dont in the States.
So they have laid out plans to restrict I C Engines and it will be easy to pull that off provided their is a supply of AFFORDABLE EV s for the mainstream consumer budget.
You may have found the presentation by Mr Simon trite , I dont think I would Cavalierly dismiss all of his message as he did the cost stack analysis and showed the attractiveness of very low marginal costs inherent to EVs . The cost of the main computer chip running the autos is now down to $ 59 a unit. it was thousands 10 years ago. So technology convergence into the auto mobile is extensive .
Perhaps Australia is immune and the middle is doing well perhaps I have no idea.
But in America wages have been very flat or declining going on over 30 years. Well documented no need to try and Parse it. Most Middle and Lower income working people have less than a $ 1,000 if that in savings of any type.
The legacy of over 35 years of austerity, low or no taxes on the privileged class and their Corporate Hierarchy along with over spending and reckless waste of resources on non productive armed conflicts and poor investment in un holy alliances with dubious actors at best is Economic Failures ! So The people were told that the Streets would be paved in Gold and the bounty would flow to all doorsteps lifting up all above their status.
None of that has happened so people look to technology to reclaim some of their income! EVs like solar pv offers a ladder upwards perhaps if it can reached.
In US Only 30 to 40 % of people are putting any funds aside for retirement as the cost of housing, food, cars, entertainment, cell phones, some sort of expanded tv services and internet services and the Big Monster health Care consumes their budgets. Education costs are also a money pit. Consumer debt is creeping up once again but the ability to service that debt is not as strong as once before.
We have pockets of high wage growth but they tend to be in cities where housing costs consume over 55 % of the salary so that serves as a brake on economic activity. let alone account for student debt of over $ 1. 2 Trillion and counting.
Many different forms of these brakes are out there now. They collectively combine to reduce Aggregate Demand!
Globally:
The uber rich boys and girlies at DAVOS the past 3 years have all gone home with no answers to reduced Demand for consumer items. They are coming out of their self affirmation circle of endless joy and growth and realizing that something must be done to stimulate more Growth in Demand.
One thing perhaps we can agree on relates back to what Breath said earlier! You mentioned debt in the country and the need to control it, he alluded to the fact there is no REAL debate over the fiscal or policy sanity in dropping $ 23 million dollar bombs or shooting off 59 roman candles at over $ 70 million in direct and indirect costs.
And the payoff is a operating airfield the next day and we claim we took out close to 40 bad guys. spend $ 23 million to get 40 bad guys! You complain about some governmental programs and tax breaks that has created over 3 million green sector jobs in the USA.
There is no need for economic comparison on which tax dollars get the Best Bang or Return for the dollar. it is no contest.
need we say more! We are too busy working uneconomic schemes when some of these new technologies can deliver much better resource and econometric returns,. yes they will be socially and Labor market disruptive. that is one of the strong points of Mr Simons presentations. it was not All Upside like so many techno babolists do. I watched 3 of them.
he has more depth that most.
I agree with you in concept only as there are far too many techno false technology prophets extolling the virtues of their new gadgets that really dont have the level of Utilitarian Demand ( like we dont really need them to improve our lifes, or the improvement is marginal and could be had manually) . So I will take your Trite comment about Mr Simon with some Brown sugar ….
I will say it again Thanks Breath for sharing that.
Marco Shell, Statoil, Eni oil, BP, all have announced they are going into off shore wind heavy and Shell has won 2 bids in N Sea. They want to provide the wind electricity needed to power the NON ICE Engines of Europe that are coming! Shell says 2030 cross over point for OIl Marco. so less gasoline and more refined products which is future.
Meanwhile refineries in the USA are running under capacity as the base of more fuel efficient cars hit the markets the past 6 years thanks to Obama’s good vision….. yes the carbon heads will tear them up but the averages were moved up so progress was made. The auto makers will not Re Tool backwards !
My ECO Tech Chevy can get me to Dallas over 650 miles on less than 20 gallons doing 80 MPHr. w the A/C on too. sweet ride.
So either way those oil folks are gonna sell less volume and if the prices go up they see demand fall again.
Mature markets economics are now at play all the way around. but EVS must be priced so that money strapped consumes can afford them. They want those marginal costs savings their budgets need it.
Too much clutter to navigate just 1 path hedge your bets!
cheers
One thing which has not been adequately discussed is that much of our national debt is owned by China. Although I couldn’t prove it, I suspect that that influences foreign policy. If we strongly irritated China, China could make things very unpleasant for us as a result of owning much of our national debt.
Frank,
You are correct when you point out that the PRC is a major buyer of US debt.
You would also be correct in identifying the cause of PRC prosperity has been a vast transfer of wealth from the US to the PRC. The PRC buys US debt with US money !
You would also be correct in assuming that a natural consequence of globalization is the increasing divide in prosperity between those benefiting from the new globalized economy, and those left behind.
The PRC has spent 30 years achieving truly astonishing economic growth, mostly at the cost of the USA.
The PRC is no poised to challenge the US and put pressure on US allies in international affairs. So far, the US has shown weakness and indecision in containing the PRC. The US has become a divided nation between those who have benefited from the rise of the PRC and are virtual collaborators anxious to appease the hand that feeds them, and those Americans left behinds to deal with the pain.
President Trump recognized those left behind, and they elected him President.
Debt is a two-edged sword. The PRC is in the difficult position of not wanting to offend it’s best customer and lose it’s investment.
For the US economy, the national debt is not only crippling financially, but it represents a cancer in American society.
Marco, you might as well be railing against the Baker Electric. Regardless of your list of defects owners wanted them and even were inspired to proceed with a mock funeral. The EV-1 was demonstration of a technology that GM was forced to produce and it did everything it could to stop production calling it a failed experiment.
In retrospect they admitted that the failure was to not continue with the experiment. And so the EV-1 stands in a few museums as a monument not to a successful technology but as a failure to recognize technological potential. As a failure to seize the future at a time when they were ahead of the market. At a time when Tesla was only a dream in one person’s mind. And ultimately as a failure of GM as a company. They threw away consumer good will and interest and sold out to the interests of big oil and the status quo. This is how you might operate a monopoly in a communist state not a thriving company in a market economy.
But the EV-1 no longer exists. If GM is not successful in transitioning to electric transportation, their days as a company are numbered. They might as well be producing buggy whips. That is the story.
Breath,
Hmmm, as I said, it’s very hard to kill a good myth !
Over the last 100 years, there have been many attempt to build electric cars.
All failed because the technology which involves a host of components and market conditions just weren’t adequate competition for cheaper and more convenient ICE vehicles.
The very few people who wanted an EV1, wouldn’t justify a production run with all the costs involved in ‘selling a production vehicle’. No one would have paid the real commercial price of over $120,000 in 1995 dollars !
Good grief, after 20 years of enormous improvements in technology quality of EV construction, infrastructure, government incentives etc, I still can’t persuade ardent advocates like yourself and Craig to buy an EV, let alone an impractical little vehicle like an EV1.
Marco, Yes it seems you have as much trouble convincing someone to “buy an EV” as I do convincing a parsimonious person to pay for one for someone else… and for similar reasons, it is so very difficult to give what we don’t have.
Breath,
Spoken like a true leftist ! Someone else has to pay for you to follow your convictions !
“parsimonious” ? Hardly. It’s not any “parsimony” on my part preventing you practicing what you preach ! Nor is it the fault of GM, Oil companies, or anyone else but yourself.
Generous governments, both Federal and State have provided you with subsidies, Tax credits, rebates and a host of other incentives.
I’m not suggesting you or Craig should invest in a Tesla S or BMWi8, but Nissan Leaf or even Mitsubishi Overlander Plug-in are perfectly satisfactory, affordable alternatives.
Odd, awkward things convictions, easy to preach, but often require sacrifice, (your own sacrifice) to practice.
As for ‘parsimony’ , well I’ll confess I’m not like Elvis who made a habit of giving Cadillac’s to his friends, instead I strive to create employment.
In Australia, I and a team of volunteers have built, operate and maintain, not one, but three Electric buses as free transport for the elderly and disadvantaged in our rural community. Although operated as a not-for profit enterprise, we have received no government assistance.
In the UK, I hope to replicate a similar service using our estate as a base and servicing surrounding villages and communities.
Actually Marco, many of my associates consider me too conservative, but that is just playing with words in the end. If labels somehow bring you peace have at it.
Other than that I somehow knew you would be complete in either misunderstanding or that it would completely go over your head as you focused on the word rather than the message. You so easily and predictably go after the glittering thing that there is no longer even any sport to it.
I am sure you can tell yourself and others of the many “good” things you do, but it is that door you run past and never open to which I was referring. adieu
Breath,
Well done ! A reply both condescending and obscure.
just to make sure that I hadn’t missed an American interpretation of the word ” parsimonious” I looked it up in Webster’s instead of the Oxford dictionary:-
“very unwilling to spend money or use resources” .
synonyms: mean, miserly, niggardly, close-fisted, penny-pinching, cheese-paring, ungenerous, penurious, illiberal, close, grasping, Scrooge-like, stinting, sparing, frugal;
Hmmm…..seems inappropriate, but then there’s a certain amount of irony in you accusing me of “parsimony” , simply because I won’t save you from bearing the cost of your own advocacy!
But then again, when you really think about it, that may be the philosophical divide between us.
I believe in personal sacrifice, example and responsibility for my convictions. Putting words into action. I don’t expect others, including the taxpayer, to foot the bill for my advocacy.
I hope my beliefs are rooted in the soil of reality and fair minded objectivity. Which is why I’m not a fan of conspiracy theorists, or those who don’t practice what they preach.
I’m sure both Craig and yourself can easily afford the relatively small premium required when you purchase a vehicle to incorporate EV technology. (Craig drives a VW diesel, and because his vehicle is used for his business, he’s more than compensate by the US government and State of California).
I’m not suggesting buying a BMW i8, my choice of this model in Australia was simply an extravagance. In 3 years, I will pass it on to my daughter as a replacement for her Lexus CT 200 hybrid.
The BMW i8 uncommon in Australia.(even less than Tesla S.)
The car is a great advertisement for EV technology, and more attractive than it’s sibling. Over the years my LERR has attracted more interest in EV technology and clean technology than a thousand articles, advocacy and demonstrations.
Each week our fleet of Tesla courtesy cars, promotes EV technology to individuals who would otherwise close their ears and minds.
There’s something to be said for leading by example.
Breath and Marco this discussion has been interesting as each of you makes some salient points.
Learning some new insider the Story or the Story behind the story factoids about the EV 1 and GM s arrogance ( corporate blunder of losing first mover advantage ) good point Breath.
As for kick starters on motorcycles , pro s and cons – as a non motorcycle fella have no interest too loud and noisy for me. I would go with electric starter for convenience and let the Purists quibble over it LOL
I think the lesson from the withdrawal of the EV 1 is rooted in the classic case that most of our business and consumption patterns are built around short term economic forces ( we remain trapped in a short term reaction mode to short term price changes) and the long term marginal cost challenges eludes our tendency to be short term oriented.
Thus GM looked around and saw a gas glut – truck sales going good and they discovered they could make lots more money switching consumers into the SUV and alas the Rush was on. Everyone jumped into the large SUV and Truck market and the sedans and small cars fell by wayside by domestic manufactures.
fuel efficiency is a long term solution or option and consumers responded with the long term does not impact me NOW. So I want a SUV etc even if I never will drive it off road or use the 4 wheel drive or lower the rear seat I feel safer too its bigger and its more powerful all superficial wants disguised and promoted as needs !
The fuel is cheap to a degree so it dont matter.
This changed after 2008 some , but now the truck and SUV rage is coming back as our low gas prices in US are back now for a couple of years. The good news is we did make some needed improvements in engines and fuel efficiency and even some of the SUV s and Trucks have gotten these improvements baked in so we have made some progress.
This too slows down EV penetrations but gas prices will go up in a few years and then we will see the cycle go back to more fuel efficiency perhaps and that will help EV s compete on payback.
So I will just sit on sidelines and listen to debate that there is or is not a conspiracy to kill the EV 1.
I think it is more rooted in technology limitations and the short term consumer response model to external short term fuel price trends. Lack of cultural acceptance to something that is good for us in long term and solves many problems, but these goals fall short in the face of the limited and frail human condition.
Compounded by pandering political forces that encourage short term responses rather than long term solutions to challenges.
We as a culture and most cultures the human condition – seem to be Wired for short term responses and over reactions to most stimulus. Rare is the level of discernment and deep contemplation needed to advance cultures away from the traps and self inflicted wounds of short term destructive actions. !
To further validate this position just look at US current political situation where bombast and short term oriented feel good proclamations based on deep emotional and interlaced with cultural divisions has led to a CON man taking over the country’s highest leadership position with no serious plan to lead us forward just alot of Kabookey Theatre tweets up to this Point.
His policies will most likely be forged around short term reactions to false signals.
A convergence of convolutions maximo supremo !!!
In closing on EV 1 now perhaps GM humbled by its former corporate arrogance – excellent points Breath – has now refined its product lines and is covering all bases and appears to be positioned to be a market player in what ever sector does emerge as the path Forward. so perhaps they learned their lessons well! time w tell.
I am sure the profile of those EV 1 lessees were early adopter types who think into the future thus they liked what they had . That may explain some of the cars appeal and folk legend following to the movie and the EV 1 perhaps?
Marco you have been at it long time with EV s so your perspective in certain areas is very informative – you have a serious handle on the technical hurdles and milestones over the years. Thanks for sharing that info.
Same to you Breath good info on this developing technology.
I see it taking over in the future when unknown!
looks like Craig is switching channel volume some what ?