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 Future of Gas

I talk an awful lot about electric cars on my podcast, and for good reason. They’re widely accepted as the future of motoring, whether they be powered exclusively by batteries, by hydrogen fuel cells or some sort of capacitor setup we’ve yet to see. And the reasons for this are myriad - EVs produce fewer carbon emissions, they have fewer moving parts so are in theory more reliable, they make less noise and better pair with autonomous systems and, critically, there is a finite amount of oil on this planet to power internal combustion cars. 

But the truth is, and I’ve spoken to this before, I love gasoline. I love pumping it into a tank for five minutes and turning a key or pressing a button and having an electric motor spit that gasoline into a chamber whose sole purpose is to contain a tiny explosion ignited by a little electric spark. And, more than anything else, I love the sound it makes. I love the fire and the fury of a singing six cylinder and the rumbling burble of a V8, even at idle. I love the angry beehive of a turbocharged four cylinder or the raucous rasp of a V-twin, or especially my inline triple. And I will miss all of those things when gasoline engines go away. 

But fortunately, I don’t think we’re in danger of that, at least not for many years. In 2017, electric vehicles made up less than a tenth of a percent of total vehicle sales in the United States, and, sure, they did better elsewhere in the world where incentives are higher or there are more models available or where the income gap is narrower and people have more funds to spend on more expensive electric vehicles, but most analysts predict it will be at least 2025 before electric vehicles are on parity with internal combustion cars in terms of costs.

With the average price of new cars rising every year and the income gap only widening, an increasing majority of the auto buying public will be priced out of electric vehicles even when their average price matches gasoline cars. Buyers will continue to buy used petrol-powered cars until the third or fourth generation of EVs are out and the initial versions have depreciated to the point where they’re affordable. Even then, you’ll have the issue of battery life/reliability and the question of whether infrastructure has built up enough for buyers to see EVs as worthy competitors to good old gas engines.

According to a new report by the University of Michigan Transportation Research Institute, the rate of car ownership in the US is increasing, from .756 vehicles per person in 2015 to .766 vehicles per person in 2016, so there’s a very real chance that, of the people who will be buying an electric car, they’ll be buying it to complement their existing gas vehicles or to serve as a commuting car.

Another report from Bank of America predicts that the U.S. will reach peak oil demand in 2030, meaning there will be no further growth in the demand for oil or gasoline. This, they say, will be directly caused by the increasing share of electric vehicles in the automotive marketplace, which is great. Why is it great if I’m trying to make an argument for gas cars? Because less demand means that we could run into oversupply situations where gas gets even cheaper for those holdouts of gasoline cars like myself and low income households who can’t afford electric vehicles. There’s obviously a risk that oil companies anticipate this and start to curb their drilling or cut supplies, but, from my knowledge of the oil and gas industry, once a well is tapped, it doesn’t make much sense to just plug it up and leave it if even people are using less of your product. You run that well dry and squeeze it for everything it was worth. Companies may not drill new wells or invest so much in shale, which would be a great thing for the environment, so either way we kind of win.

Plus, innovation continues with gasoline engines. Companies are finding new and creative ways to increase efficiency and maximize output. Take Mazda’s Skyactiv-X technology, which achieves 30% better fuel economy than its already good Skyactiv-G engines like I had in my Mazda 3 (R.I.P.). Those will debut in 2019 while the Volvos and BMWs of the world transition their lineups to all-electric and hybrid vehicles. Indeed it’s telling that the first companies committing to move to all-electrified cars are luxury automakers, because they know the cost is higher and their buyers can afford it. 

But for every Volvo XC90, there’s a Shelby Mustang and for every Honda NSX, a Dodge Demon. In fact, there have been many cars announced in the past year that rely solely on burning dinosaurs to go fast and create a great time, and there’s no reason to think that’s going to stop, especially when mixed with some hybrid and electric vehicles, auto manufacturers can meet corporate average fuel economy standards and still have room to blow on gas guzzling performance cars for the masses. Plus the low-cost cars will still be gas-powered, as will the classic cars and trailer queens and garage angels that have been sold up to this point and will be driven on weekends by old guys who share the same love for the symphony of combustion that I have. So I’ll continue to talk about electric cars and they’ll very much continue to be the future of motoring, but that doesn’t have to mean that internal combustion and gasoline will be relegated exclusively to our past.

Authored by
Devlin Riggs