1.Background to electric cars

This blog is about battery electric vehicles (BEVs), like Tesla, not plug in hybrid electric vehicles(PHEVs) or non-plug in hybrid cars.

The idea of electric vehicles is not new. In 1832 R. Anderson invented the first crude nonchargeable electric vehicle, followed by T. Davenport’s first electric locomotive in 1834.There was only some sporadic development of electric cars in the first half of the 20th Century. The 1970s oil crisis provided a new impetus to the development of electric cars. The first practical electric cars were PHEVs ,like the Toyota Prius.The real disruption to internal combustion engine (ICE) cars has been created by Elon Musk’s Tesla models, which are BEVs. This disruption has been reinforced by ‘diesel gate’ in 2015. By now all major car manufacturers have a number of BEV and PHEV models. Furthermore, Governments all around the word offer subsidies to entice customers to buy them.

Despite all the above developments, BEVs remain unpopular. The sales of BEVs remain sluggish and they represented 2.1% of the total global sales of new cars in 2018. (F. Wilson 11/02/2019, S&P Global Platts, London). The only notable exception is Norway, where the sales of BEVS and PHEVs were above 60% of total new cars sold in 2018. However, this could very well be due to the punitive taxes on ICE cars and the huge government subsidies for BEVs and PHEVs from the sale of North Sea fossil fuels to the world (!!!).

 My contention is that people are rational. BEVs will remain unpopular until a number of concerns with regard to these cars are addressed. And even after that, BEVs are not for everyone.

2. Concern 1: The initial cost of BEVS

The initial cost of buying BEV is significantly higher than that of an ICE car.

For example, in Australia the cheapest BEVs are;

      Renault Zoe   AU$ 47.490.00

      Nissan Leaf    AU$ 49,990.00

      Tesla 3            AU$ 55,000.00

At the same time the cheapest ICE cars are;

      Mitsubishi Mirage ES AU$ 12,125.00

      Suzuki Celerio              AU$ 12,990.00

      Holden Spark               AU$ 13,990.00

Notwithstanding Norway, I am not aware of any country, where the cheapest BEV would be cheaper than an ICE car, even with government subsidy. Over the passage of time with the development of cheaper batteries this gap should reduce.

3 Concern 2; Replacement cost of batteries

Currently car manufacturers guarantee their batteries between 5-7 years, although it is expected that Porsche will guarantee their batteries for 8 years. Furthermore, the performance of current car batteries will deteriorate even during the guarantee period.The replacement cost of batteries can be substantial. For example, J. Voelcker (Green Car Report, June 9, 2017) suggests that the replacement of batteries for Chevrolet Volt is U$ 15,734.29 (part number 24285978). The replacement cost of batteries could be much lower in other models depending on the battery power and technology. It is expected that with technological developments this cost will reduce for all BEVs.

The year to year running and repair costs of BEVs are cheaper than that of ICE cars.Whilst the levelized overall costs comparison of ICE cars and BEVs are inherently difficult (see for example, D. De Gasperi, Drive, 10/10/2019), the ownership of BEVs from purchase to running costs and battery replacement costs currently much higher.

4. Concern; Driving range anxiety

The real energy consumption of BEVs is not only a function of driving styles, but also of the weather.For example, the much-anticipated Porsche Taycan has an estimated driving range from 300km to585km depending on the weather conditions ( Running out of petrol in an ICE car is annoying, but road side assistance can always top up your empty petrol tank. A BEV without power has to be towed away.

5. Concern 5; Recharging anxiety

If you live in a house with a garage with three phase electricity and you only use your car or short distances, you will never experience this anxiety.

Regrettably, this is not the case for most of the urbanised population living in large cities like New York, London, Rome, Paris and Berlin.  People live in high rises, many of them built in the 19th and the 20th Centuries.In these neighborhoods finding a parking space is challenging enough, let alone finding one with a charger. The local authorities and supermarkets may introduce some high-speed chargers,where BEVs can be charged at very best, under an hour.However,every body will be anxious to find a charging spot after work ,whilst they are shopping for their groceries.

The same anxiety will be felt by people driving long distances, for example, when people drive during the holiday period from say Northern Europe to the Mediterranean Sea. Even if they estimated the distance to the next charging station correctly, what happens, when they are number four in the queue to charge their car? I guess they will have to have a really long, long lunch! Or when somebody is driving through remote areas like the Australian outback? It just would not be feasible to replace two jerrycans of petrol on the back of a pickup truck with a supercharger station.

Car manufacturers recognise this ‘recharge’ anxiety and aim to roll out charging infrastructure along the main freeways. This will take some time. However, even they will not be able to rebuild the housing stocks of cities to provide charging stations to all BEVs.,

6. Key takeaways and recommendations

(i) BEVs will be cheaper and more user friendly over time, but they are not going to completely replace ICE cars.

(ii) Consumers are going to decide what type of car meets their needs best, hence Governments  should let the market for cars work freely, without setting arbitrary targets for BEVs.

(iii) Governments should stop subsidising the purchase of BEVs and PHEVs as this subsidy is an upper middle class welfare payment.

(iv) Governments should also encourage the development of even cleaner ICE cars and non-plug in hybrid cars.

(iv) Governments should encourage rather than oppose the competitive ‘cars on demand’ business models like taxis, Uber,Ola and car sharing like GoGet to reduce the need for individual car ownership.

(v) Car manufacturers should continue with the development of all   types of cars and technologies from BEVs to ICE cars and a should standardise the types of electric plugs used on all makes.

(vi) Unless you are an affluent individual with a garage and three phase electricity to your name, wait with your BEV purchase.        

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