Electric Vehicles: In Demand & Bad for the Planet?

While vehicles that plug in for electric power comprise just more than 1 percent of vehicles sold in the United States, electric vehicles may not remain such niche products for much longer. According to a new survey from AAA, as many as 20 percent of consumers want their next car to be electric, which is up five percent from this time last year. The reasons why 80 percent remain disinterested are obvious and well covered – from range anxiety to lack of infrastructure to the fact that batteries are a new technology that haven’t yet been optimized – but those interested in EVs say that the benefit to the environment outweighs the concerns.

But is that even accurate? In China, the government has been offering huge subsidies to encourage automakers to build and sell electric vehicles and the country has the highest adoption rate of EVs of any in the world except Norway. The problem is, their smog problem isn’t going away. In China, 72 percent of the country’s electric power is generated from coal, which, regardless of what conservative talk radio may tell you, is not clean and cannot be made to be clean. You can merely capture and store the carbon byproduct of burning coal to create power. They’re not doing that in China though, and oil company CNPC found that electric vehicles emitted more than double the toxic PM2.5 particles that generate China’s smog than do standard internal combustion vehicles. And, if you like your statistics not brought to you by an oil company whose interests may be somewhat skewed, a University of Michigan Transportation Research Institute paper found that cars that achieved greater than 40 miles per gallon were actually more environmentally friendly than the electric vehicles being made in China. And that’s just when it comes to operating the vehicles.

Add to that a Harvard and Tsinghua Universities study that reported that China’s production of EVs, PHEVs and fuel-cell vehicles generated 50 percent more greenhouse gas emissions than production of internal combustion cars, it’s hard to make the case that electric cars are the more environmentally friendly solution.

Photo by Gwenn Dubourthoumieu

And speaking of production, that’s looking like it’s going to get harder before it gets easier. I’ve discussed this a bit before, but the situation is only worsening when it comes to the global supply of cobalt, which right now is a critical part of the lithium-ion batteries that power most electric vehicles. About 60 percent of the world’s cobalt supply is located in the Democratic Republic of Congo, a country with a humanitarian rap sheet as long as the receipt you get from CVS when you go in just to get some gum. High taxes, the use of child labor and an unstable government all contribute to huge volatility in the cobalt market, which has gotten analysts revising their figures about when they think a shortage is going to hit. The answer is sooner than later. Though the CEO of Cobalt 27 Capital, the owner of the world’s largest stockpile of cobalt, ensures that there won’t be any supply shortages, he does not go on to say just how much companies will have to pay for that supply – costs that would undoubtedly be passed on to consumers and therefore delay adoption of EVs because they’re too expensive. Non-cobalt-company-CEOs are less optimistic, with Bloomberg New Energy Finance and Darlton Commodities both predicting shortages as soon as 2021. Prices have already spiked 300 percent over where they were in 2016 and capacity is not expanding as quickly as demand, which is a recipe for higher prices.

Fortunately, several companies are getting off their asses and doing something about this. Panasonic announced this week that they are working towards lithium-ion batteries that achieve zero cobalt usage in the near future and have been already reducing its content in the batteries that they supply, primarily to Tesla.  Samsung too has been working to reduce cobalt content below the 5% of batteries it currently achieves, and they are hoping to expand recycling programs that will recover cobalt from used cell phone, computer and other lithium-ion battery sources. Currently recycling rates are somewhere between 25 and 50 percent, so there’s a lot of potential for improvement there. Chinese automaker BYD is also developing batteries with a nickel-manganese-cobalt ration that reduces the amount of cobalt, which, in addition to lowering prices, apparently extends the life of the battery, which is a win-win for companies and consumers.

For even more bad news, cars aren’t the only things using lithium-ion batteries. Companies and utilities are expanding the use of modular energy storage systems to better utilize distributed energy resources like solar and wind farms and even hydroelectric generation, so there’s another force working to increase demand for cobalt and other precious metals. Full disclosure- I work for a company that makes those big battery storage units and they are flying off the shelf, so companies will have to both ramp up cobalt production and R&D into technology that uses less of it if there’s any hope of averting a shortage or at least a price spike.

But back to the cars – what does all this mean for those of us who just want a Jeep Wrangler plug-in hybrid? The truth is somewhere in between everything. While 20 percent of people would love an electric vehicle as their next car, not that many will take up the technology, especially with 80 percent of such vehicles being leased right now. It shows that public trust isn’t there that we’ve really mastered electric cars yet and nobody wants to be locked into technology that’ll be obsolete in a couple years. Cobalt demand will cause prices to remain high but the price of gas was high and look what that did – it spurred investment into the research and development of electric vehicles, which have lowered demand and prices have eased up, if only just a bit. The market will adapt, companies will continue to innovate and while EVs aren’t optimized right now and the electrical grid (especially in China) isn’t well suited to provide clean energy for them, it won’t always stay that way. Nor does it mean that EVs are destroying the planet, it just means they’re maybe not as green as we want them to be yet. We’re on a good path right now and have unprecedented choice in vehicles. At least until companies start thinking like Ford, but I don’t think it’s going to become too widespread.

Authored by
Devlin Riggs

The Electric Future may be Cheaper & Come Later

It’s another week in 2018, meaning there’s been a new batch of news about electric vehicles since they’re pretty much regarded as the future of motoring. But how fast that future is coming is very much in question, and a new study from the Centers for Automotive Research suggests it’s not any time soon. According to the study, government emissions and fuel economy mandates are helping drive the push into future technologies, rather than consumer interest, which tracks with the amount of people leasing electric vehicles instead of buying them.

The research suggests that electrification and self-driving tech will start in densely-populated urban areas with ride sharing services and slowly proliferate to the rest of the market with EVs expected to comprise just eight percent of the vehicle market by 2030. Remember that several cities and countries are aiming to ban the sales of gasoline and diesel-powered cars by 2040, so to make up a 92% gap in adoption in the span of ten years will require some serious incentives or some revised expectations. Additionally, any sort of slowing new vehicle sales market (like we’re seeing now) or economic downturn (like what might result from the ridiculously high deep subprime vehicle loan market) would push adoption even further down the line. 

The United Kingdom’s National Grid, however, isn’t waiting around for electric cars to take off. The electric utility announced this week that they would spend between £500 million and £1 billion to upgrade the electrical grid and install 50 fast chargers throughout the country to the point that 90% of the population would live within 50 miles of a fast charger. Such chargers would fill batteries in most EVs in about 12 minutes, which will go a long way toward soothing the range anxiety of British EV owners. Current demand for such chargers may be low, but in 2017, for the first time, the Tesla Model S outsold both the BMW 7 series and the Mercedes S-Class, so demand is certainly there among the upper crust buyers.

Photo by The Washington Post

But you may not see many other cars at those chargers for some time since the Centers for Automotive Research also suggested that investment in electric vehicle technology would slow over the next few years as companies fail to see the return on their investment with slow sales. Part of the problem with investment is that production of EVs is still very expensive because of rare earth elements like cobalt, which is used in batteries. The demand for cobalt has driven a boom in small-scale cobalt production in Africa, particularly the Democratic Republic of Congo, where some mines have been found using child labor to meet production quotas. These small-scale mines, which are sometimes referred to as “artisanal mines” because nothing can just have a normal name anymore, are tough to police and companies that purchase from them are increasingly under pressure to better vet how the resources are being produced. The value of cobalt has tripled in the last 18 months, and companies looking for the lowest cost aren’t likely to commit too much effort into ensuring their suppliers are acting ethically, which is a problem. Unfortunately, the answer usually means slowing the pace of production or paying more from reputable miners.

Toyota, however, is exploring a third option, which is developing batteries that don’t rely on rare-earth elements. While they haven’t yet found a replacement for cobalt, they have developed a battery that uses less neodymium, replacing it with lanthanum and cerium, which I understand are much more abundant and cheaper despite the fact that I’ve never heard of them before. That said, the development will take a while to get itself into vehicles and Toyota is aiming for implementation sometime in the next ten years, which won’t help potential neodymium shortages in the near-term. Now to figure out that whole cobalt thing…

Authored by
Devlin Riggs