In December, I announced an upcoming discussion of the future of the auto industry and, in particular, of the role and impact of electric cars. In that post, I included a number of links to worthwhile reading on the subject. Let’s do the discussion this week, in comments to this post. I have a few thoughts to get things going:
–It is true, as Vitaliy Katsenslson points out in his essay, that electric cars are much simpler than conventional cars…but I would qualify this statement as mechanically simpler than conventional cars. They are significantly more complex electrically and especially in terms of the electrochemistry of the battery…a hidden kind of complexity, but important nonetheless. From what I have read, there seems to be considerable uncertainty about the expected lifespan of new lithium-ion battery models..which lifespan, of course, has a major impact on the overall economics of electric cars.
EVs are expected to have lower maintenance costs and requirements than conventional vehicles, based on their relative mechanical simplicity. This is probably true, in general, although a lot of the problems with cars these days seem to be with systems other than the engine and drivetrain..airbag sensors, seat actuator motors, various sensors, etc.
–Range limitations and “range anxiety” have been significant inhibitors to EV sales. Vitaliy K makes the excellent point that it is much easier to set up an electric-vehicle charging station than a conventional gas station, with its underground tanks and consequent regulatory complexities, and he believes we will see tremendous growth in the number of such charging stations and consequent reductions in EV range anxiety.
It takes about 45 minutes to an hour to fully charge an EV (using Tesla as a model and assuming a high-power charger such as Tesla’s “Supercharger’), which implies that people are going to need something else to do while their vehicles are charging, away from home or the office. Restaurants and shopping centers become obvious venues for charging; however, this leads to another issue, that the driver may wind up being away from the car for a couple of hours or more, tying up the charger for that whole interval: this issue would need to be reflected in the pricing of the charging facility.
Also, while it is true that setting up EV charging is simpler than opening a gas station, it is not necessarily trivial if one is setting up multiple high-capacity chargers. A Tesla supercharger draws 150KW, so putting 30 of them in a parking lot would result in an incremental peak demand of up to 4.5 megawatts. I doubt if the electrical systems feeding many restaurants, or even shopping centers, could accommodate 4.5MW of additional demand without some work by the utility supplying the power.
–Efficiency: It is true that the conversion of stored energy into motion is much more efficient in an EV than an internal-combustion-engine vehicle; this is mainly a matter of the engine thermodynamics. BUT, if the charging electricity comes from a natural gas plant of a coal plant, you are looking at best at a 60% fuel-to-electricity conversion efficiency, and there will also be losses in power transmission and distribution. If the electricity comes from solar or wind, then..depending on the time of day and weather conditions of the charging..you may be faced with a double battery storage situation, where energy is stored in a utility or home battery until needed for charging, and then stored again in the vehicle’s battery. That double-storage situation carries both efficiency losses and, more significantly, additional capital costs.
EVs do have the ability to capture much of the energy that would otherwise be lost in braking, and this is especially valuable in start-stop driving situations, as with local delivery operations, and probably extends the lifetime of the mechanical brakes.
–Performance…EVs have excellent acceleration capability (when adequately powered) due to the torque characteristics of electric motors. They may be able to achieve very good handling if battery installation provides for a very low center of gravity.
–Climate…not speaking here about ‘climate change’, but about climate in its ordinary meaning. In a conventional car, heating is basically free, using rejected heat from the engine (ignoring the energy used to power the fan, but that’s a small part of the picture), whereas in an electric car, heat must be generated using electricity from the battery, which of course has a negative impact on range. Also, the battery itself will have lesser performance in cold weather. (And the regenerative braking feature is also limited in very cold weather.)
–Relative Costs…a high % of EVs today are either sold with subsidies by national/local governments, are built and sold in response to government edicts, or are bought in significant part for status purposes by individuals and organizations. Can EVs compete on cost head-to-head with IC vehicles on a nonsubsidized, free-choice basis? This would seem to be largely a matter of how successfully battery costs are further driven down and how long battery lifespans turn out to be in actual service.
It should be noted that electric vehicle sales in China have cooled rapidly…down 44%…since the government reduced most subsidies at the end of June. What would be the ‘true’ demand in the US without consumer incentives and mix requirement on the manufacturers?
–Software and Self-Driving. Tesla includes a number of snazzy software-based features…Vitaliy K mentions keyless entry, iPad-style controls, built-in videogames, and software-based enablement of previously-unnanounced features–and Tesla and other EV-makers are putting great emphasis on self-driving and on partially-self-driving autopilot features. I’d note, though, that there is no inherent connection between these things and the type of power used by the car. (Whether existing car manufacturers can do them well or not is another question: the climate control interface in my BMW is terrible and I’ve heard similar remarks about the various interfaces in many kinds of cars.)
–Industry Structure and Supply Chains. A significant technological breakpoint often disadvantages incumbent providers relative to new providers: the companies with large legacy business focus too much on how to fit their existing product designs, their existing manufacturing processes, and their existing distribution channels into the new paradigm, even when these things don’t fit very well. VK mentions the examples of Nokia versus Apple in the smartphone space, but he also mentions the example of Samsung, which has been able to navigate the transition to smartphones successfully.
The supply chains of electric vehicles versus IC vehicles are significantly different; however, there are substantial overlaps, including for example tires and mechanical brakes. Perhaps the biggest supply-chain shifts are in the post-sales world: IC vehicles almost use gasoline or diesel fuel, whereas electric vehicles use electricity (duh!), which can in principle be supplied by many alternative sources, but in practice will be supplied largely by either coal plants or natural gas plants. So to the extent that EVs become a major factor, one might expect natural gas demand to further increase relative to oil demand. The impact on capital investment requirements and on the capital efficiency of electric utilities will be highly dependent on when the charging tends to be done–peak or near-peak demand times, or off-peak demand times?
Based on what I know now, I think that in the US at least, EVs will be a niche product achieving no more than, say, 10-20% of the overall market, unless there are major breakthroughs in battery technology. They will be particularly attractive in local delivery and taxi/ridesharing services where regenerative braking has a good payoff and range is not so much of an issue. Lower maintenance will be an attractive feature for many, especially for busy people who don’t have much time for service appointments. And the coolness and status factors should not be underrated.
On the other hand, range continues to be a factor, especially for those who take long trips. Even if you can always find a high-capacity charger, it may not be convenient to stop for 45 minutes in East Nowhere, Nebraska, when you have places to be and things to do. EVs are going to be less-attractive in places that have very cold seasons, and also in places that get very hot, with consequent high air-conditioning demand and battery load. EV growth could be limited by battery-materials supply constraints…see my post here…and political pressure for ‘renewables’ in electrical generation could drive electricity costs much higher, with consequences for the electricity vs gas/diesel cost comparison.
The degree of EV success or lack of same has big implications throughout the economy and for investments of many types. What are your thoughts on this matter?