Grim News for Electric Transportation
As reported by my brilliant colleague Jon LeSage in his Green Auto Digest, the electric vehicle market is in the tank, largely due to the fact that prices of gasoline have fallen in half. How much longer will gas prices stay low? Though it’s anyone’s guess, the most obvious answer: Long enough to bankrupt anybody who bet on electric vehicles–at which point it’s “game back on” for the oil companies.
But while victory is sweet for Big Energy, it won’t last long. The people of the world are starting to understand that our addictive consumption of oil will have catastrophic effects on this planet over the next few decades if left unabated. As short-sighted and self-absorbed as our species often tends to be, we will simply not put up with this.
You write as if the USA is the whole world. It is not. Gasoline prices may have halved at the pump in the USA, but that is far from being so in Europe where prices have dropped by around a quarter from their peak due to far higher levels of fuel duty.
In Europe, electric vehicle sales more than doubled in 2015 and there remains a strong political will to promote transition to lower carbon vehicles.
Look also at China – ambitions for electric vehicles are enormous with very strong political will to ensure a faster transition than even Europe based on a combination of strategic long term aims to dominate vehicle manufacture combined with very real fears of political upheaval if the government is not seen to be working to achieve cleaner air in the major cities.
Also, the cost of vehicle batteries is dropping very rapidly so that the cost premium looks likely to all but disappear in the next 2 to 3 years during which smaller lighter batteries will allow increasing range.
Do not expect too many electric vehicle companies to fold, however you might look out for dealerships starting to sell cars from BYD, and another 10 or so Chinese manufacturers of electric vehicles over the next 2 or 3 years. Think that’s unlikely? Your parents would have said that about Japanese cars before the oil shocks of the 1970s, but now, everyone recognises Toyota, Honda etc.
You make an excellent point here; I apologize for my comment; I try not to be so insular.
And your analogy to the acceptance of Japanese cars in the 1970s is an excellent one.
Economics is clearly a major driving point in Electric Vehicle sales, but it is not the only possible buying consideration. Some will be swayed by environmental considerations.
An even more select group will recall the volatility of gasoline prices and the stability of electric costs and view an EV as a strategic decision. These people will understand that electricity is a domestic product while we continue to import more than 50% of our oil from foreign countries. https://www.cia.gov/library/publications/the-world-factbook/fields/2243.html#34 During disasters, when there is a shortage of gasoline, it is electric vehicles that can return to roads.
We can expect electric vehicle sales to lag at this time but it may be myopic to believe that gasoline prices will remain at the present levels. When prices do inevitably rise they will be greeted by cheaper electric vehicles that have a longer range and are supported by greater infrastructure.
Craig,
The problem with EV’s has been an over reliance on government incentives, pollution regulations, and the cost of oil.
The assumption has always been to somehow coerce or bribe motorists to purchase vehicles they don’t want, for reasons the don’t care about or don’t necessarily agree.
The real success of EV technology was pioneered by Toyota. Against all the odds, the success of Toyota’s version of hybrid technology introduced with the humble Prius was then reinforced by inclusion in the highly successful, and prestigious Lexus range.
The result has been more than Toyota 10 million hybrids.
In contrast, Carlos Ghosn (a particular hero of mine) has courageously persisted producing a range of BEV’s led by the Nissan Leaf and Renault Kangoo vehicles mainstream as “volume” mass production vehicles.
While all other makers stuck to low volume compliance or experimental models, or in GM’s case poorly supported efforts, Renault-Nissan has definitely tried hard and at tremendous cost, has produced a substainial nuber of EV’s.
Tesla is the one exception. Tesla alone has captured markets outside of markets enjoying massive government support. Tesla has succeed due to identifying a market niche and catering to the buying motives of that niche. Tesla also developed their own support facilities. By this method,Tesla has avoided the problems of the general auto-industry of producing a high risk, high volume, low profit product with high capital costs. Tesla sales are unaffected by low oil prices since Tesla clients never really cared about the cost of fuel in the first place.
Some smaller specialist makers have survived by sticking to what their customers want, rather than telling them what they should want! (Liberty Electric Vehicles of the UK is a good example).
The ESD technology for EV’s is still not sufficiently advanced to compete with ICE vehicles for the average man. However, advancing research will see ESD capacity improve. It may take several decades, or a “breakthrough” may be just around the corner !
I believe it’s inevitable that ESD capacity will increase to the point where EV technology is simply superior, and ICE technology will slowly become obsolete.
IMO, a large part of the problem has been created by advocates who raised expectations far beyond the capacity of existing technology. The enthusiasm of the most ardent advocates was always based on wishful thinking. Governments activists, especially in California, (for the best of motives) fueled by unrealistic expectations did their best to promote alternate fueled vehicles. The technical challenges involved in the immaturity ESD technology have been ignored.
EV’s will continue to improve, but it’s an evolution, not a revolution.
Please see: http://www.2greenenergy.com/2016/03/16/electric-vehicles-3/