The Viability of Electric Transportation
Frequent commenter Glenn Doty and I have ongoing discussions about the legitimacy of electric transportation. I wrote recently about the coming hockey-stick growth curve that I expect to see in this space, to which Glenn replies:
I still don’t see it Craig.
Every player in the industry is still selling at loss leader pricing, and that pricing still includes unthinkable federal and state incentives.. and the market still isn’t growing.
Tesla is the only company likely to survive the winnowing in the EV field (this is only the first year of winnowing), and Tesla is still losing hundreds of millions per year, even with the incentives.
The market just isn’t there, and the vehicles cannot compete (sans incentives) unless gasoline is pushing ~$6-$8/gallon… which as we all know is fine, because they’re worse for the environment in the present grid regime anyway.
I like to look at this in the grand “plan” of our civilization. Obviously, there is no such plan…but if such a thing existed, it would be marked by a couple of major items on the agenda, including:
• Low-carbon energy, an absolute requirement for the sustainability of humankind. Once this is solved via some combination of nuclear, renewables and efficiency solutions, EVs will be the eco-bargain of the century. And keep in mind that, at a certain point, people will actually care about environmental matters. It’s hard to imagine what will happen when the man on the street starts to get on board.
• Dealing with the externalities of petroleum, by which I chiefly mean one thing: war. If we didn’t care that there was oil in the Middle East, that region would have no more relevance to the Western world than some remote part of interstellar space. Needless to say, that day can’t come soon enough.
Btw, the concept that EVs and renewables need subsidies at this point while their costs are coming into line should not concern us a bit. We don’t have a problem with 90 years (and counting) of subsidies for the oil industry; it’s hard to argue that a decade or two of help for clean energy (a social good) is somehow morally wrong.
As always, I respect you greatly and I appreciate your participation here.
First ” unthinkable ” incentives…compared to what?…The external costs and consequence cost of FF as well as the reality of Climate Change and its costs, health costs, etc… makes EV’s and their costs much more effective…As well, consider the subsidies to the FF and auto industry ( can you spell and finance “Bail Out”). Consider the cost to FF and the auto industry through Federal legislation and military costs regarding the; acquisition, procurement, and protection of the FF industry. Its about 3 to 4 billion a year just to escort and protect oil tankers out of the Middle east and beyond( Military Costs). I believe he may be showing his hand and the tell leans towards his allegiance to FF for whatever reason, or he hasn’t dug deep enough to cover the real story…
Perhaps your hope for Middle East irrevelance is premature. In addition to oil they also have a lot of sunlight. Even now there are (diminishing) 50 year plans to supply Europe with Middle East sunlight produced electricity. https://en.wikipedia.org/wiki/Desertec
Craig,
Adoption of EV’s is more damaged by the claims of it’s supporters than detractors!
Oil is a valuable and strategic resource, but it’s not the primary cause for conflict in the Middle East. Over the last few decades the US has been involved in many conflicts, only a few being in oil rich nations.
The problems of the Middles East are complex and heavily intertwined with the history of US policies for unconditional support for Israel, and “containment” of the old USSR.
The largest oil exporter to the US is Canada ! To the best of my knowledge, the US hasn’t fought Canada since losing in 1813 !
(Currently, the US is energy self-sufficient from North American sources and the world is awash with cheap oil. Nor does the US oil industry any longer receive any significant subsidies )
The challenges of mass EV adoption have nothing to do with “grand plans” or even with environmental concerns. Focusing on an imaginary war with the Oil industry, is an unnecessary distraction and counter-productive.
Heightened environmental aware may help justify government subsidies and incentives, but essentially it comes down to the ability of EV technology to satisfy consumer requirements.
Consumers require a vehicle to be convenient, reliable, economically justifiable, and reflect the image and aesthetics of the consumer. ( what the consumer wants, not what someone else thinks they need).
In order to compete, EV technology must have better ESD (electric storage device) technology. This is what consumers want before they will invest in EV technology.
How many ardent haters of oil companies actually invest in the purchase of an EV ? Despite passionate ranting, and demands for ‘action’ they still drive their ICE vehicle to the gas station to buy 2-4 stroke fuel for their lawnmower, leaf blower etc.
These folk will find any excuse, but none are prepared to admit that either EV technology is inconvenient or inadequate for their requirements, or they are unwilling to pay a premium for more environmentally friendly technology.
Most blame the oil companies, or the Auto-makers for a conspiracy, rather than admit obvious truth.
A dramatic improvement in ESD capacity, rapid charging, and lower ESD costs, would see EV adoption begin to improve. Taxpayer incentives have been very valuable in helping to establish the industry and have proved successful in pushing R&D investment.
Research into ESD development is the subject of huge investment. New technologies are constantly being developed, not all will be ‘winners’, but even the failures add to knowledge that will eventually lead to a “breakthrough”.
The future of EV government incentives limited, but should be maintained while the industry is still developing.
We’ve had this discussion before, so I know you’re aware of this important truth: It doesn’t matter where the U.S. sources it’s oil; every drop of oil that the US buys from Canada is another drop that some country somewhere will be buying from Saudi Arabia.