Today’s guest appearance features Kenneth P. Green, my former colleague and frequent writing partner back in our days at AEI over a decade ago. In the intervening years Ken has worked at the Fraser Institute in Canada, and has just lately completed a dazzling manuscript on the problems with all of the models (COVID, climate, you name it) beloved of our policymakers. Podcast listeners may remember him from our episode on science fiction and the defects of all the successors to the original Star Trek. Even further back in his career he worked as an engineer with one of the major aerospace companies that once prospered in California but now no longer exist, on early electric car technology. What did he learn from that experience, and what does the current scene look like? No much has really changed about the fundamentals.
EV’s are not the future – the consensus grows
Have you noticed that when it comes to EVs, the smartest guys in the room—the ones who study energy/technology trends, run successful energy-tech investment firms, and more importantly, the guys who actually build the things—are uniformly dubious about their future?
Akio Toyoda (CEO of Toyota): “TOKYO—Toyota Motor Corp.’s leader criticized what he described as excessive hype over electric vehicles, saying advocates failed to consider the carbon emitted by generating electricity and the costs of an EV transition…Toyoda said Japan would run out of electricity in the summer if all cars were running on electric power. The infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between ¥14 trillion and ¥37 trillion, the equivalent of $135 billion to $358 billion, he said.
“When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?”
The short answer there is “no,” but let’s continue.
Elon Musk (CEO of Tesla, natch): “Tesla Chief Executive Elon Musk said on Tuesday that electricity consumption will double if the world’s car fleets are electrified, increasing the need to expand nuclear, solar, geothermal and wind energy generating sources. Increasing the availability of sustainable energy is a major challenge as cars move from combustion engines to battery-driven electric motors, a shift which will take two decades, Musk said in a talk hosted by Berlin-based publisher Axel Springer.”
Of course, Musk. Gotta love the man, but he’s not exactly consistent. Musk is also hedging his bet with research into hydrogen (foolish, if you ask me), and has warned about problems with mining enough battery elements to allow for the “EV transition” Still, he did successfully bogart the name of one of the world’s greatest electrical engineers (Nikola Tesla)…so maybe he knows a few things.
Jim Farley (CEO, Ford): “Ford CEO Jim Farley explained to Automotive News that not all of its customers are ready to make the transition, due to their specific needs. “We have a lot of rural customers at Ford that a lot of other brands don’t have. We have Super Duty customers who do heavy-duty towing: horse trailers, people in the energy business who are towing big-time loads over very long distances. It’s hard for me to imagine that all those customers will go electric in the next 10 years,” Farley said.
In other words, “Dude, we sell a hell of a lot of trucks, and you’re not powering an F450 with Duracells or Energizers…”
Hey, when the guys who are building these things warn you that they might not be able to live up to the hype? Our “fearless leaders” might want to pay attention.
STEVE adds: Since Ken filed this story, Vanity Fair—Vanity Fair!— has weighed in with a critical story whose subhed tells the thesis: “Could the electric car market collapse under its own weight?“
Electric vehicles require components that are so in demand that miners and producers of the necessary metals and chemicals simply can’t keep up. Electric-car batteries, for example, are typically made of cobalt, nickel, and lithium, the price of which have risen significantly, according to the consulting firm AlixPartners. “Due to multiple global factors, the E.V. market is currently experiencing some unusual bumps,” says Josh D. Boone,executive director of Veloz, a nonprofit advocate for electric cars.
Arnaud Deboeuf, chief manufacturing officer for Stellantis, an automotive manufacturing company, told Bloomberg that the transition to electric cars is “doomed” unless the prices start to fall. “If E.V.s don’t get cheaper, the market will collapse,” Deboeuf said. In other words, if manufacturing electric cars becomes so expensive that consumers decide they aren’t worth the price, then automakers could be forced to drop prices below what it costs to make them, profit margins could collapse, and the entire system could fall in on the weight of itself.