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  • What Future for the Global Auto Industry? Discussion Post

    Posted by David Foster on January 7th, 2020 (All posts by )

    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?

     

    43 Responses to “What Future for the Global Auto Industry? Discussion Post”

    1. Gavin Longmuir Says:

      When the subsidies and the mandates go, so will the market for Electric Vehicles.

      The big question then is — when do the subsidies go? It is instructive that even an economic powerhouse like China and super-wealthy Norway are cutting back subsidies already. When any Western government is faced with eliminating subsidies for Electric Vehicles used as status symbols by the super-wealthy or reducing pensions for teachers — the choice will be obvious. And with the financial mismanagement of almost all governments, that day is closer than many people would like to believe.

      EVs will go back to the niches they have long occupied, where they have genuine advantages. The old stop/start electric milk cart. The standard electric fork lift used inside a warehouse. The big issue left behind by this environmentalist fantasy will be disposing of the used EVs — as has often been said, the half-life of psycho-active Lithium is infinite.

    2. Brian Says:

      Are EVs considered a replacement for current cars, a la a newer model, or are they a fundamentally new product? If it’s the former, then they have to be similar enough to make people feel no friction in their adoption. So a 45 minute charging time is never, ever, ever going to work. You need to be able to “charge up” exactly as easily as you “fill up”, i.e., it needs to take a couple of minutes. The immediate suggestion, I suppose, is that if you extend range so that you never have to charge during the day, has the problem of how to handle charging for people living in apartments, etc., who won’t have their own dedicated charging space that homeowners will have in their garages.
      Some people have argued that we’re going to move away from people owning their own cars, but in that case it’s a fundamentally new product, and you need to convince people that that’s worth the tradeoffs of convenience, etc. And I see absolutely no bottom-up demand for that sort of thing at all at this point.

    3. BobtheRegisterredFool Says:

      Two bits of gossip. One, a major manufacturer has elected to go with fuel cells over batteries for their near term future technical needs. Two, check out the upcoming Japan Olympics, for a statement on battery EVs versus other alternatives. Not sure how much more I can pass on without making my sources and methods obvious.

      Tesla I suspect will be continuing to go all in on battery power, but we may well see a shift from other manufacturers.

      I remain strongly interested in the self driving aspect. I suspect it will not work out well for the civilian market. Military applications I think might be enough out of the hands of the technocrats that I do not feel so strong a sense of impending doom.

      On board GPS, and systems that report position of the vehicle, are also interesting. There’s a lot of interesting surveillance potential, as well as the possibility of triggering an explosive to hit a specific vehicle. Suppose an American civil war. You might be able to localize kill teams by their transportation, and destroy them specifically by roadside mines targeting their transportation. Of course, there is a counter in loading children on the transportation, and spinning it through the media that way.

    4. David Foster Says:

      Gavin…”When the subsidies and the mandates go, so will the market for Electric Vehicles”

      But, considering the world market, the subsidies and mandates are going to go on for a long time. Increased volumes will drive costs down, via normal economy-of-scale effects…I don’t think the curve will be anything like the decline rate of Moore’s Law phenomena, but there will surely be some nontrivial impact. Will this get costs down to the point where the EVs are viable for a substantial market *without* the subsidies?…I don’t think we can rule it out.

      Speaking of Moore’s Law, it would be interesting to compare to total $ value of subsidies given to the EV industry so far with the amount of government purchases (for missile and space guidance systems) in the early days of the integrated circuit industry.

    5. David Foster Says:

      I assume that the fuel cell vehicle referred to is the Toyota Mirai:

      https://ssl.toyota.com/mirai/fcv.html

      This is an electric-drive vehicle which can draw power from either the fuel cell or the battery, the latter can be recharged by the dynamic braking. Didn’t see the KWH capacity of the battery in the specs, only the peak output of 9KW, but assume it’s pretty small.

      Big issue of course would be building out a hydrogen refueling system with useful geographic reach.

      Probably also some emotional/safety concerns about hydrogen: expect a lot of references to the Hindenburg if this car really becomes a thing.

      A little misleading of them to assert that hydrogen is available “virtually everywhere” when it is available in a useable state virtually nowhere.

    6. Grurray Says:

      Trump just killed a proposed expansion of the EV tax credit a few weeks ago. For Tesla it will be eliminated, and for GM it will be cut in half. It will soon dwindle for other big brands as they sell more cars.

      Startups like like Rivian are still eligible. Trucks, vans, and utility vehicles seem like the the most realistic types for this technology.

    7. Anonymous Says:

      A quick check in the Energy Information Agency files — primary energy consumption in the US in 2018 totaled 101.3 Quadrillion British Thermal Units. (Don’t fret about units). Of that — 38.3 Quads was used in the generation of electricity, and 28.3 Quads in transportation (gasoline & diesel). The remaining 34.6 Quads was used in industry, commercial, and residential.

      Of course, the electricity generated was also used in industry, commercial, and residential.

      So, take that 28.3 Quads used in transportation and assume that it would be twice as efficient to burn it in large power stations & transmit it to the cars. If we had been all electric vehicles in 2018, the effective energy consumed in the vehicles might have been equivalent to about 14.1 Quads.

      Hence, if we went all electric, the US would have to increase its electric generating capacity from 28.3 to 42.4 Quads — about a 50% increase. Considering that Democrats don’t want any more fossil fuel power plants, and certainly don’t want any nuclear plants, and some of the smarter ones are even beginning to get concerned about the environmental consequences & bird kills of wind turbines — the poor chances of getting a significant increase in electric power generation will put a definite damper on growth in electric vehicle use.

    8. David Foster Says:

      Anon…the need for generation capacity increase depends on *when* the electricity is consumed, in this case, when the EV batteries are charged. If everyone does their charging from midnight to 5am, when other demands are relatively low, then existing generation infrastructure can probably handle it all. But 4pm–10pm is another story, especially on hot days when there is a lot of air conditioning load.

      In actuality, different people will do their charging at different times–pricing incentives can make a difference, of course–so there likely would be a significant increase in generation capacity needed, but not as much as one would assume from a raw comparison of quads then with quads now.

      On the other hand, the fuel consumption (for fossil fuel plants) WILL increase directly with total demand…I’d expect natural gas demand to greatly increase and some pipeline capacity increases to be necessary.

    9. Gavin Longmuir Says:

      My apologies — Anonymous above was me.

      David F: “But, considering the world market, the subsidies and mandates are going to go on for a long time.”

      That depends on how soon the unsustainability of government spending hits home.

      Another factor to consider — are EVs a better solution? Or are they merely a fashion item? At the moment, they seem to be closer to a fashion item, which is a dangerous place to be. A few more exposes about the environmental damage caused by South American lithium mining, or about child labor in African cobalt mines, or about the high costs for disposing batteries, and EVs will have as much appeal to the fashion-conscious as a Chick-Fil-A sandwich.

      In the interests of full disclosure, I worked some time ago on the potential for Compressed Natural Gas vehicles. Fuel costs were significantly cheaper than gasoline; manufacturing was not substantially different from existing vehicles; emissions were much cleaner. What happened was that there were significant improvements in emissions from gasoline-powered vehicles, removing that advantage. It left only the disadvantages of the absence of a substantial fuel station network and the challenges of refueling with high pressure gas. Which is largely why we don’t see many natural gas automobiles on the roads.

    10. Gavin Longmuir Says:

      David — We have to consider Where as well as When. California is struggling to meet peak electric demand already, and they are dead-set against building power plants and transmission lines. If EVs grow beyond a very limited market, it is going to put an impossible strain on the existing system.

      Will potential EV owners start campaigning for nuclear power plants, more transmission lines, and more electric sub-stations in their neighborhoods?

    11. pouncer Says:

      “If everyone does their charging from midnight to 5am, when other demands are relatively low, then existing generation infrastructure can probably handle it all.”

      Oh my yes. The availability of free solar power is just so abundant between midnight and dawn, too.

      What, you think the “existing generation infrastructure” is NOT being reduced?

    12. David Foster Says:

      “Oh my yes. The availability of free solar power is just so abundant between midnight and dawn, too.”

      That was my point about the double battery charging. If you want to charge your 100KWH battery at night, from solar power generated during the day, then you are going to also need 100KWH of storage capacity, somewhere in your home or in the system.

      If there are a few overcast or very rainy days when not much solar is being generated, you are going to need substantially more than 100KWH, so that you can charge the car on multiple days.

    13. Kirk Says:

      EV designs will proliferate and dominate in short-range applications, but the fact is, the likely future for long-range endurance is going to rectified liquid fuels. Battery power cannot match their storage capacity and ease of handling, when you get down to it.

      My bet is that when it’s all said and done, there are going to be artificially-produced liquid hydrocarbon fuels that will be produced from rectified natural stocks, and artificial sources created by nuclear powered refineries. The sad fact is that pure hydrogen is too hard to handle, and when you couple the existing infrastructure with the extant technology, the ICE solution is still going to make the most sense until we get electrical storage up to the same density and safety levels as liquid-fuel ICE.

      An artificially-produced rectified fuel with low potential for pollution should be easy enough, once we fix the power input question. Hell, it may still make sense even if we don’t–There are a lot of interesting things coming on with bio-reactors and algae.

    14. David Foster Says:

      One consideration I think is important is that the auto industry seems ripe for disruption…most companies are bureaucratic, not tremendously innovative and not very exciting, and depending on a distribution system in which the local dealers are most much more focused on competing with other dealers to sell the same products than they are in effectively representing a manufacturer’s products against other competitive products.

      Someone is going to grab a big piece of this market with a different approach, whether or not that approach is based on a pure-EV model.

    15. Brian Says:

      “most companies are bureaucratic, not tremendously innovative and not very exciting…Someone is going to grab a big piece of this market with a different approach”
      But my impression is that at the moment automobiles are so highly regulated that there’s really a very limited space for innovation in product?

    16. Gavin Longmuir Says:

      David F: “the auto industry seems ripe for disruption”

      That is a good observation — both at the vehicle level and in the distribution channels.

      The most likely source of near-term disruption may be the entry of Chinese auto manufacturers to the world market. The Chinese have played their cards well on foreign access to their market, and learned well from Western auto manufacturers. The quality of Chinese-made vehicles is already very good. Some day, the student will surpass the master.

      One scenario is that, as China’s internal market slows down, China will start exporting vehicles to keep their production lines running and their employment high. Germany is in a very precarious situation, and could easily be outperformed on design & reliability and undercut on prices. Even if the EU throws up tariffs against Chinese imports, Germany will lose its world markets.

      On the vehicle level, I am still in shock from learning that a used rather-pedestrian Japanese car can sell for over $30k, and a used SUV can cost over $50k. Used! The real breakthrough could come in reducing the price of vehicles, but as Brian says, the issue driving up prices is (excessive?) regulations – which governments are going to be very reluctant to revise.

    17. Anonymous Says:

      >One consideration I think is important is that the auto industry seems ripe for disruption…most companies are bureaucratic, not tremendously innovative and not very exciting, and depending on a distribution system in which the local dealers are most much more focused on competing with other dealers to sell the same products than they are in effectively representing a manufacturer’s products against other competitive products.

      Someone is going to grab a big piece of this market with a different approach, whether or not that approach is based on a pure-EV model.<

      Here's "disruption": eliminate all regulations on automobiles and trucks.

    18. Kirk Parker Says:

      Speaking of Moore’s Law, it would be interesting to compare to total $ value of subsidies given to the EV industry so far with the amount of government purchases (for missile and space guidance systems) in the early days of the integrated circuit industry.

      Other than sheer dollar volume, this is an apples-to-oranges comparison, as the aerospace purchases were not in any way subsidies.

    19. Kirk Parker Says:

      Re regenerative braking, doesn’t a hybrid do just as well as an EV, while completely avoiding the range and charge-time issues?

    20. David Foster Says:

      Kirk…”Re regenerative braking, doesn’t a hybrid do just as well as an EV, while completely avoiding the range and charge-time issues?”

      Yes, although of course you don’t get the benefits of a theoretically-omnivorous choice of fuel sources.

      Both hybrids and pure electrics draw on the same technology improvements and cost reductions in electric motors and control electronics.

    21. David Foster Says:

      Just ran across this WSJ article from October: ‘Peak Car’ is holding back the global economy

    22. Brian Says:

      Related, via Tyler Cowen (you can follow a link to get to the original, but their site is horribly obnoxious with ads, so I’ll link MR instead):
      40-year-old tractors are now a hot commodity
      Tractors manufactured in the late 1970s and 1980s are some of the hottest items in farm auctions across the Midwest these days — and it’s not because they’re antiques.
      Cost-conscious farmers are looking for bargains, and tractors from that era are well-built and totally functional, and aren’t as complicated or expensive to repair as more recent models that run on sophisticated software.

      The other big draw of the older tractors is their lack of complex technology. Farmers prefer to fix what they can on the spot, or take it to their mechanic and not have to spend tens of thousands of dollars.
      “The newer machines, any time something breaks, you’ve got to have a computer to fix it,” Stock said.
      There are some good things about the software in newer machines, said Peterson. The dealer will get a warning if something is about to break and can contact the farmer ahead of time to nip the problem in the bud. But if something does break, the farmer is powerless, stuck in the field waiting for a service truck from the dealership to come out to their farm and charge up to $150 per hour for labor.
      “That goes against the pride of ownership, plus your lifetime of skills you’ve built up being able to fix things,” Peterson said.

    23. Mike K Says:

      Tractors manufactured in the late 1970s and 1980s are some of the hottest items in farm auctions across the Midwest these days — and it’s not because they’re antiques.

      The same is true of many household appliances. Water conservation is an issue in Arizona abut should not be in Michigan and Minnesota. An awful lot of cost in new cars and other mechanical devices is regulation based.

      Also, blue states like CA and Oregon are having a crisis in fuel tax shortages. The EVs are not only subsidized but the fuel is not taxed. The current hysteria about climate may fade, especially as we learn about such things as arson in Australia and the motives.

      Meanwhile, my wife and I drive Hondas which we expect to last 250,000 miles if we live that long.

    24. Joe Wooten Says:

      The sad fact is that pure hydrogen is too hard to handle

      Kirk,

      The even sadder fact for hydrogen is that it takes more energy to make it from either water or natural gas than you get out of it as a fuel. You can get around the handling issues with thick walled pressure vessels as storage tanks under high pressures (which will also significantly increase vehicle weight), but the cost of production is going to make it more expensive than using either batteries or natural gas/diesel/gasoline.

    25. CapitalistRoader Says:

      COMPARISON OF ENERGY EFFICIENCY AND CO2 OF GASOLINE AND ELECTRIC VEHICLES
      Willem Post on May 7, 2017

      High Efficiency E10 Hybrids are More User-Friendly Than EVs: It would be much more economical for the US car industry and the US economy to have 45-mpg E10 hybrids, as Toyota has proven with its Prius models for more than 15 years, than to make the very expensive, capital-intensive transition towards EVs to reduce CO2 from E10 vehicles, especially when such a transition likely would have minimal impact on lifetime CO2 emissions.

      Post calculates vehicle lifecycle energy usage and CO2 emissions on a well-to-wheel basis. I expect cars and trucks will be increasingly hybridized, with pure EVs taking market share only in short, stop & go applications like taxi cabs/Uber, and then only in mild climates.

      My guess is that twenty years from now almost all of us be using cars with internal combustion engines.

    26. Gavin Longmuir Says:

      “My guess is that twenty years from now almost all of us be using cars with internal combustion engines.”

      My guess is that twenty years from now, a lot of us will be using bicycles. The rich will have motorcycles. And government will look very, very different.

      Fifty years from now, we will have climbed back up the technological ladder to using internal combustion engines again. Government will be smaller, cheaper, less intrusive. But over the subsequent generations, a Political Class will grow once more. Whether our descendants will remember the lessons of the 21st Century and squash that Political Class before it repeats the cycle — only time will tell.

    27. phwest Says:

      Having spent some time last month in my brother’s new Tesla 3, some comments on Tesla and the EV market.

      1) the target market for EVs is commuters who drive 60-100 miles per day. A big part of Tesla’s autodrive is tied to this – if you are spending 2 hours per day in highway traffic, having the car manage that is a big plus. This isn’t everyone, but it’s not a small niche either. This driving can be serviced entirely with home/office charging, no need for supercharging stations at all.
      2) The trade-off in EVs is capital vs operating expense (they cost more, but less to operate). The big expense savings (assuming Tesla has the battery life issue largely worked out) is not energy but maintenance – other than tires and brakes there is not much to maintain in a Tesla.
      3) Given the capital/expense trade-off, once EVs have established their depreciation (mainly battery) curves, leasing would be the obvious way to address the capital cost aversion that would otherwise limit sales.
      4) Long-range driving – my brother met us in San Antonio after driving down from Dallas. The key detail in long range situations is that you don’t actually want to fully charge a Tesla under time constraints. You can get to 70% charge pretty fast, but the last 30% takes a lot longer. So you don’t – instead of driving 300 miles and then spending a hour recharging it’s more like drive 150 miles, then charge the battery from 20% to 70% in about 15 minutes. If you start the trip full, bring your charger along and do the same before the return you can go a 400 mile drive with one stop, which you’d probably do anyway just for the rest break.
      5) Supercharge stations – because most drivers will manage their local charging needs on their own, charging stations are really only needed for extended driving, which mainly means highways. Because charging times will still be multiples of refill times on a per mile driven basis, you would expect to need a lot more charging stations to cover the same miles driven, but if they only need to service say 20% of the miles, you are closer to parity.

      Tesla is being smart with the model 3. It has a clear economic case on its own (independent of subsidy) and is designed to meet the needs of the driver who would realize the most value from an EV, with enough flexibility to handle 99% of the likely use. Perfect as the commuter car paired with a minivan for a family with one extended commuter and one local. Not for rural drivers, nor cold weather markets.

      Tesla also realizes significant development savings from being EV-only (we’ll see if that is enough to make them viable long term). Traditional car makers (and the overall economy) are probably better served by hybrids – leveraging their existing ICE investment in a way Tesla can’t, and still a superior solution for large parts of the market. From an overall US economy perspective this probably works pretty well – ICE’s still dominate the market but electrics take a significant share over the next 10-20 years. Gives the grid time to expand for the additional load and maximizes the utilization of the resources required for the batteries, while still utilizing the enormous infrastructure that supports ICEs.

      All this said, I really can’t see pure EVs with a majority share of transportation (road freight never for one). The sweet spot where you can cover for the low energy density/high cost of the batteries just isn’t big enough. Tesla is doing a lot to expand that, but the market they are serving is very US-centric (low density development along with a large, relatively wealthy commuter population).

    28. phwest Says:

      Bleh – point 3) got chopped somehow. Should read

      Once EVs have a well defined depreciation curve, expect the market to shift to leasing as a way to avoid the negative impact of the high up-front cost.

    29. Bill Brandt Says:

      I have a friend who just bought a Tesla Model 3. A coupla surprising things: If you want any color but white or black, it’s an extra $2,000. Want the extended range? Another $10,000.

      His range is about 230 miles.

      I just got back from a nice trip though the Southwest, and asked him how his Tewsla would have done.

      I mean, Hwy 90 though Marfa and Big Bend National Park?

      I think half of the trip would be searching for charging spots.

      And that charging time you cited I think is for 80% recharge. The last 20% takes a lot longer.

      And with more EVs now sometimes there are lines to get in. Long lines.

      And with lines you will be tethered to the charging station.

      Is it done yet?

      I just read yesterday that some Australian researchers have invented a battery that lasts 5x as long.

      My friend sill use his mostly around town, which is ideal for that car.

    30. BobtheRegisterredFool Says:

      Hindenberg might not be as well known in Japan. Didn’t it explode near the US?

      Consider an automobile company that doesn’t think hydrogen fuel cells will work, and really doesn’t think batteries will work. If you are giving fuel cells an honest try, so that you will have leverage with the legislature later in case nothing works out, a hydrogen fuel cell is your best chance for selling fuel cells as an environmentally friendly alternative technology. Note that I do not know what Toyota’s thinking is with the Mirai or hydrogen fuel cells.

      I’m not sure I buy a new entrant as a disruptive innovator. Vehicles are complex as individual units. Adding in the quality control needs from mass production, and you have a great deal of engineering complexity to manage. I’m not sure how you put together a start up so that you know that you have that covered, and can make the necessary adjustments for whatever your innovation is.

      On the other hand, the slow down in sales is interesting. Regulation adds capabilities and increases prices. If the capabilities are wholly unnecessary, the price increase will decrease the number of interested customers. Are bankruptcies impossible?

    31. Subotai Bahadur Says:

      Regulation is a factor in the costs of operating an electric vehicle. So is lack of government competence. For a number of ideological reasons, the very sizeable auto market of California has rotating blackouts every year. And interestingly enough, they are largely when the ability to use a vehicle to get out of the way of a wildfire is at its peak. A lot of people with Tesla’s and the like were very nervous last fire season. California refuses for ideological reasons to produce sufficient power to match their population. California subordinated maintaining their power distribution system in a safe manner to appease Mother Gaia. California’s government theology is to never build or improve anything, but rather to make the peasants pay. Right now, they have started a water rationing scheme that will of course only be applied to the peasants. Electricity rationing for those not of the Nomenklatura or politically correct is coming soon.

      I have a family member who owns a Chevy Volt. He also has solar panels to try to cover part of the load of keeping it charged. But this is Colorado. He lives right up against the east slope of a mountain. 1/3 of daylight hours, solar is not possible. And it is cold in the winter which plays merry hob with battery efficiency. Range anxiety is a fixture, even though after the battery runs out [about 30 miles] it switches to gas with horrible mileage. Interestingly enough, he is far to the Left of me, and having an electric car, with all the problems it causes, grants him a plenary indulgence. Which he uses up in blasphemy because there is a lot of space between our places out here.

      Then there is the hazard problem. Talk to any fireman who has tried to put out a Tesla that has spontaneously combusted. It is not easy, and the bloody things have a habit of re-igniting sometimes days after the fire department thinks they are safely out.

      Today at Stavenger, Norway there is a fire at a parking garage at the airport. Garage holds 3,000 when full. It was almost full. A fire broke out, and the early reports [since removed from online] were that a Tesla had caught fire. It is taking the local FD a long time to get it out. Tesla’s are subsidized in the EU and they may have been a bunch of them in that garage, by chance. Someone’s car insurance rates are going to be going up.

      Even with subsidies, they are expensive, too short ranged in the United States, have an unreliable fuel source, and are dangerous to an degree that no other consumer product would be allowed to be for consumers.

      Subotai Bahadur

    32. Anonymous Says:

      Scotty Kilmer (a you-tube auto gadfly/personality) suggests that, in addition to greater up-front costs, keeping an EV for a long time (and many miles) adds another cost because the batteries are extremely expensive when they need to be replaced. I’d like to know about how long a time that usually is for, say, a Prius.

      tyouth20

    33. David Foster Says:

      Capitalist Roader…interesting analysis, but something is missing. “Electrical energy has a source energy, which, if reduced by about 8% due to exploration, extraction, processing and transport, becomes the primary energy fed to power plants, which convert that energy into electricity, which after transmission and distribution losses of about 6.5%, arrives at user meters. As a result, the energy fed to the meter has to be multiplied by 2.8776 to obtain source energy.’

      The paragraph doesn’t include the thermodynamic losses, which are the biggest ones….if you assume these losses are around 40%, which are best-case, then you get something like their 2.87 ratio. They must have left out a sentence.

      I see that the LA mayor is talking about requiring electric vehicles for ride-sharing services. Doubt if he’s interested in analyses such as this…he’s more interested in appealing to a constituency that views all fossil fuels as evil, and wants to convince themselves that they are driving cars that don’t use such things. That self-convincing is a lot easier with a pure electric, where the conversion process is out of sight, then with a hybrid, where one has to actually put gas into the tank.

    34. Mike K Says:

      As for Los Angeles Mayors and their understanding of energy issues, when Arizona passed SB 2010 which allowed local police to inquire about immigration status at traffic stops, Los Angeles City Council passed an ordinance boycotting Arizona.

      City staff had to quietly inform these brilliant legislators that Los Angeles got 25% of its electricity from Arizona. The ordinance was dropped quietly.

    35. CapitalistRoader Says:

      David Foster, that link is just a summary page. Here Post lists his calculations:

      SOURCE ENERGY AND PRIMARY ENERGY
      Willem Post on May 11, 2017

    36. David Foster Says:

      CR, thanks. So he is saying (in table 3) that the net electrical generation as a % of the energy contained in the fuel (after refining and transportation costs) is about 39%. This makes sense as an overall number for the existing plant infrastructure, but you can do much better with currently-available combined-cycle turbines, about 60%..subtract another 5% for generator losses, 55% number for new plants comparable to the 39% overall now. Can’t run combined-cycle plants on coal, though; I guess you could if you gasify the coal first.

    37. Gospace Says:

      IMHO, hybrids will probably offer the best overall energy efficiency.

      Start with- an all electric drive train. Use the gas engine only to generate electricity. Design the engine/generator combination to operate at the most efficient speed for the motor with the output required to drive the fully loaded vehicle up a specified grade without slowing down. The grapevine in CA would be challenge for that. Used to be driving a Dodge Colt if I hit the base at 80 and no one got in my way on the way up- I’d hit the top at 55. That would be an extreme test…. If someone blocked me then whatever lower speed I was at that would be my speed the rest of the way up. 4 lanes across both ways with the right lane reserved for trucks – and there’d be people in clunkers struggling to do 40 on the left lane….

      A plug in option would be nice, since the vehicle is designed to run on electricity. Have it charge slowly on a standard 15A 120V circuit at home in the garage.

      I have a 2014 Toyota Prius and a new 2019 Hyundai Ioniq. I’m a hybrid fan. Current range of pure EVs – I couldn’t trust them to get me back from work with a one way 37 mile trip, especially when it was snowing.

    38. David Foster Says:

      Speaking of hybrids…

      https://www.garrettmotion.com/electric-hybrid/garrett-e-turbo/

    39. Kirk Parker Says:

      Gospace,

      Will motors ever get compact and light enough to be built into the wheel hubs? think of the benefits of entirely eliminating the drivetrain, and of inherent all-wheel drive.

    40. MCS Says:

      Kirk: There are physical limits to both the maximum magnetic flux density and the maximum current density that put a lower limit on the size of a motor for a given output. Superconductivity gives a way around the current density limit, see:
      https://www.engineering.com/AdvancedManufacturing/ArticleID/19454/Fully-Superconducting-Motor-Prepares-for-Testing.aspx

      The physical size of motors of more or less conventional materials are generally limited by heat dissipation and efficiency. A common squirrel cage induction motor can produce from 3 to 5 times its rated power (which it does when it starts) for short periods of time at low efficiency and overheats in a few minutes. Very large machines use different methods like forced cooling with hydrogen (gas) to push these limits. The hydrogen conducts heat much better than air and the lower density reduces windage losses.

      Then there’s the aspect ratio. There’s a reason that most motors are longer than they are in diameter, especially the rotor or armature. This doesn’t preclude pancake motors but it requires compromises.

      The short answer is that you probably could, at least up to a certain power but not easily.

    41. CapitalistRoader Says:

      David Foster, I think the author was calculating based on the national average energy source. The Dept. of Energy has a page showing each state’s source:

      Electricity Sources and Emissions

      EV fans in the Northwest like to point out how low their cars’ CO2 emissions are due to hydro. That’s great but hydro provides only 7% of electricity nationally while coal provides 28%. Here in CO an EV is mostly a coal car.

    42. Brian Says:

      An interesting and relative story:
      https://www.wired.com/story/safety-gizmos-making-car-insurance-more-expensive/
      “It turns out that new features designed to keep vehicles in their lanes and out of trouble are contributing to rising insurance rates. That’s because the sensors that power those systems make cars much more expensive to fix when they do crash…“Technology is playing a bigger role than ever in pricing,” says Nicole Beck, The Zebra’s communications chief. “It’s not actually making it cheaper for people.””

    43. MCS Says:

      The air bags will total most cars, the newer ones with side and others besides just the front ones.