February 22, 2024

They try to kill the electric car again

Anti-EV rhetoric is on the rise again. A British newspaper has even accused Mr Bean actor Rowan Atkinson of being the central influence against electrification, at least in Britain. That may be a bit far-fetched, but there has been a clear increase in journalism and negativity on social media focused on electric cars. When you step back and look at history, you realize that we could have gone electric 25 years ago, but concerted industrial forces killed the trend. Are we seeing another attempt to ruin the latest EV revolution, and will it succeed?

History repeats itself?

Twenty-five years ago, General Motors’ EV1 showed incredible promise. This may have started out with an EPA range of just 60 miles with the original lead-acid battery, but the final NiMH version increased this to 107 miles (and the original EPA estimates were higher). Toyota had an EV version of the RAV4 and Honda had the EV Plus. But then all three companies withdrew their vehicles and didn’t even let existing owners keep them. This unedifying piece of history is well documented in the film Who killed the electric car? from 2006.

This movie points the blame at the car and oil companies for protecting their profits, and the current situation doesn’t seem all that different. Although both electric and combustion engine cars require energy to drive, the companies that supply that energy and the infrastructure they use are different. Your home energy company, or the grid supplier for public charging, is not an oil company (although both Shell and BP own charging networks in Britain). EVs also bring a shift from gas stations to street and home chargers, changing both the business model and the refueling method we have been familiar with for a century.

Charging infrastructure remains an issue that deters many drivers from purchasing electric vehicles, and that’s a valid concern if you don’t have a home charger. The significant cost benefit of cheap electricity during the night means that the economics of owning an EV heavily factor this in. If you don’t have a home charger, driving an EV is much more expensive. Since the energy crisis, public charging costs have brought the price per kilometer of an electric car much closer to that of fossil fuel. However, the market of those who can charge at home is still huge – it could be more than half the UK population, for example. That is a group that is far from saturated so far.

Another weaponized story is that traditional automakers are pulling away from electric cars again, which is presented as evidence that interest in electric cars is waning. Ford is reducing production of F-150 Lightning EVs while increasing production of the Bronco SUV and Range pickup, and last year VW halted production of some of its EVs due to weak demand. Some who are clearly not very good at math have also equated a decline in the growth rate with a decline in demand, when in fact it amounts to a slowdown rather than a slowdown. The EV market is still growing.

EV sales still healthy

Rumors about the demise of BEV sales are greatly exaggerated. In Britain, BEVs have now reached the milestone of 1 million on the road (from an estimated 33.58 million). The Tesla Model Y was the world’s best-selling car in 2023, with 1.23 million units sold, surpassing both the Toyota RAV and Corolla. Only a few manufacturers are facing problems, and this may be due to the price of the electric vehicles they sell. Most automakers continue to focus on the premium market, presumably to recoup the development costs of their powertrain innovation more quickly than would be possible with lower-margin cars.

In 2020, I expected electric vehicles to approach parity with ICE this year, but that was before the fallout from Covid, the war in Ukraine, the costs of the energy crisis and supply chain problems caused by the Houthi blockade of the routes for container ships in the Red Sea. . Nevertheless, CATL still expects to halve the price per kWh of its lithium iron phosphate (LFP) batteries this year, and these are the chemistry of choice for cheaper electric vehicles such as the entry-level MG4.

Herein lies another story. The fact that European and American manufacturers have concentrated on the premium market of early adopters has made them vulnerable. Chinese manufacturers like MG have not been as reluctant to tackle affordability, and there are other brands from China waiting in the wings to steal market share, like BYD, just as Japanese automakers did in the 1970s and 1980s. While traditional European and American car companies may see electric cars as a threat, Chinese companies see them as an opportunity to gain a bigger foothold in Western markets.

Hopium is running again

You can recognize a renewed campaign against BEVs when there is a revival of the discussion about hydrogen fuel cells. There are several articles and social posts circulating claiming that BMW is “saying goodbye to electric because it has solved the problem of hydrogen engines,” apparently based on the fact that BMW launched a prototype fuel cell-powered iX5 SUV about a year ago. But that has to be weighed against the much bigger efforts it is making towards BEVs, such as the upcoming Neue Klasse and the just-announced all-electric version of the i5 Touring estate.

Comparisons are regularly made with the VHS-Betamax tape format competition of the early 1980s, with EVs in the Betamax role (because they are technically better?) and FCEVs as VHS. But as of November 2023, there were 2.4 million BEVs in the US, compared to fewer than 18,000 FCEVs. The 1 million BEVs in Britain are equivalent to fewer than 400 FCEVs. Shell has closed all its hydrogen filling stations worldwide and a recent audit found there were only four working H2 pumps in the entire UK, including the one in Aberdeen with no “live status information”. There used to be eleven. That’s compared to 31,445 EV charging locations, including more than 4,000 with a capacity of 150 kW or more.

Having personally attended the BMW iX5 Hydrogen launch, and many other BMW EV events, I’m convinced the company is just hedging its bets in a completely sensible way. There may be parts of the world where the fast refueling capabilities of FCEVs and gasoline-like distribution infrastructure are preferable to BEVs, so BMW wants to explore that and be ready just in case. But most of the energy will go to BEVs, which will clearly be the mass market winners in the developed world.

Political pressure will not defeat market forces

The anti-EV sentiment is not about the validity of the technology at all. The cars aren’t perfect, but when you look at how far we’ve come in the last four years, it’s like night and day. There are now multiple products to choose from in most segments and many cars offer a range of more than 300 miles. This is actually all about politics. Those on the right see “anti-net zero” politically as another stick to bash “progressives” with, in addition to xenophobic anti-immigration sentiments. Trump has promised to perform a “baby drill” and will clearly roll back as many of Biden’s green initiatives as he can if he takes office this year. The British government has softened its position, prompting a House of Lords committee to call for more progress. Some British Conservative politicians are even calling for the reopening of coal mines (after Conservative Prime Minister Margaret Thatcher infamously closed most of them in the 1980s). Britain’s Labor Party has dropped its £28 billion green pledge amid fears the expected costs would be used against it during the campaign for this year’s British elections.

There are reasons to be a little depressed if you’re concerned about the world’s environment. The EU’s climate agency has claimed that global warming will exceed +1.5 degrees Celsius compared to pre-industrial temperatures for the first time ever in 2023. But there are also reasons not to fear that the electric car will be wiped out as it was 25 years ago. For a start, the market is now much more established, with all the major mainstream car manufacturers participating and infrastructure providers realizing that there is a growing charging market to take advantage of. There is also the threat from China, which has less ICE incumbency to worry about in its home market and is switching to electric vehicles at a rate of knots.

But most of all, it feels like the EV market has turned a corner towards the mainstream. I started writing about EVs because it felt like the home PC market in the mid-1990s – full of enthusiasts and rapid innovation, which made it exciting. But now everyone has a computer in their pocket. Likewise, EV is entering a similar phase. It’s no longer a toy for a weird bunch of die-hard early adopters. The great cars that hit the market around 2020 are coming off the leasing company and into the used market, increasing affordability, and some manufacturers are starting to make vehicles at reasonable prices. That’s probably why the incumbents who will be displaced are now fighting back with articles and disinformation on social media. They see that the threat is real.

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