Category Archives: Opinion

EV Charging Station (Image: Shutterstock)

We’re probably underestimating how quickly electric vehicles will disrupt the oil market

Unpredictably rapid growth happens pretty predictably

Just about every analyst agrees that the electric vehicle market is poised for rapid growth. But how rapid?

It’s not an idle question. The rate of EV growth will have huge implications for oil markets, auto markets, and electric utilities. Yet it is maddeningly difficult to predict the future; forecasts for the EV market are all over the place.

I don’t think the wide range of projections means that we’re blind here, though — I think we can make educated guesses. Specifically, I think history justifies optimism, the belief that the high-end projections (like those in a new study I discuss below) are closer to the truth.

Let’s walk through it.

EVs could do serious damage to oil — or not much

Transportation accounts for a huge portion of US carbon emissions. As recently as 2014, it was behind the electricity sector — 26 percent of US emissions to electricity’s 30 percent. But as Vox has reported, and the US Energy Information Administration (EIA) just confirmed, as of 2016, they have crossed paths. “Electric power sector CO2 emissions,” EIA writes, “are now regularly below transportation sector CO2 emissions for the first time since the late 1970s.”

This is happening because power sector “carbon intensity” — carbon emissions per unit of energy produced — is falling, as coal is replaced with natural gas, renewables, and efficiency.

The only realistic prospect for reducing transportation sector emissions rapidly and substantially is electrification. How much market share EVs take from oil (gasoline is by far the most common use for oil in the US) will matter a great deal.

EV Charging Station (Image: Shutterstock)
EV Charging Station (Image: Shutterstock)

However, as Rice University’s Dan Cohan explains in The Hill, EV forecasts are all over the map.

The EIA’s “Annual Energy Outlook 2017” is much more bullish about EVs than in previous years — its forecast for the EV market is “nearly double its forecast from last year, and nearly 10 times its forecast from 2014.” It no longer thinks hybrids or plug-in hybrids will play a major role. It believes EVs are ready.

Read more: Vox

Ten ways the electric car revolution will transform the global economy

The world has begun a rapid switch to electric vehicles. In the first half of this year, worldwide sales were up 57 per cent to 285,000, despite low oil prices, and there are now more than 1m electric cars on the world’s roads for the first time ever.

Last February, Bloomberg New Energy Finance (BNEF) forecast that electric vehicles would account for 35 per cent of new car sales by 2040, and perhaps more under certain scenarios.

The reason for this bullishness is not just that battery costs are plummeting – down 65 per cent in the past five years – it is also that electric vehicles outperform internal combustion cars in so many key areas. They drive more smoothly and accelerate better; they can be charged without a trip to the petrol station; they require less maintenance; they help solve air quality problems; and they increase the autonomy of oil-importing countries.

The rapid uptake of electric vehicles has given established car companies a huge shock. Tesla, the upstart technological leader, expected to produce 85,000 vehicles this year, has a market value of $32bn. That’s more than half of the value of General Motors, which makes nearly 120 times as many vehicles.

All of the incumbent car companies are racing to adjust their strategies, putting electric vehicles at their heart. Volkswagen, still reeling from the “Dieselgate” scandal, is intending to invest $11.2bn over the next decade to push electric vehicles to 25 per cent of its sales.

Read the full list of ten: LinkedIn

Car exhaust pollution (Image: Wikipedia)

The Solution to Air Pollution is Already Here

The overwhelming cause of air pollution in large cities is vehicle emissions (see DEFRA Website), and the answer is already here. Accelerate adoption of Electric Vehicles (EVs), including cars, buses and ancillary vehicles.

For any EV driver, you will already know that traffic jams are much less stressful than in a petrol or diesel car. Each time you stop, you just stop. You don’t produce any emissions or waste any further energy. This was a delightful and unexpected insight to me when I got my first EV; that part of the stress of a traffic jam for me was the sheer sense of waste – not only was I burning fuel but it was achieving nothing.

Car exhaust pollution (Image: Wikipedia)
Car exhaust pollution (Image: Wikipedia)

A government genuinely committed to delivering clean air could achieve an enormous amount by designing fiscal “carrots” to allow serious growth of EVs to actively reduce air pollution. For example:

Come on Theresa. I know you are busy, but this is too important to leave to chance.

Source: LinkedIn

Volkswagen ID Concept electric car (Image: VW)

Hybrids ‘likely to be a passing phase’ as EV technology advances quickly

Hybrids are likely to be a passing phase in car technology that will be surpassed by electric vehicles in a matter of a few years, predicts Glass’s.

The vehicle data provider says that EV technology is advancing so quickly that a new hybrid vehicle being bought today could be effectively obsolete by the time it reaches the end of its normal life.

Volkswagen ID Concept electric car (Image: VW)
Volkswagen ID Concept electric car (Image: VW)

Rupert Pontin, director of valuations, said:

“Hybrids are designed to solve two of the problems that EVs have faced in recent years – high cost and low range.

“However, there are very clear signs that these issues are being resolved very quickly. For example, the revised Renault Zoe announced at Paris Motor Show has a 250-mile range and costs £17,000.

“Similarly, the new battery in the BMW i3 lasts around 190 miles and Volkswagen is claiming that its ID, which will come to market in 2020, will go up to 373 miles between charges and be priced competitively.

“The fact is that vehicles such as this effectively remove the rationale for hybrids. Within a few years, hybrids could be seen as little more than a curiosity and this will undoubtedly affect their values.”

Read more: Fleet News

Tesla Model S on charge (Image: Tesla)

Electric Cars Could Send Oil Companies Into ‘Death Spiral’

Economists and reporters have been saying that electric cars could actually kill the oil industry for a little while now, but it hasn’t made a lot of real-world impact so far. But now Fitch, an enormously influential financial ratings agency, is issuing dire warnings over electric cars.

Tesla Model S on charge (Image: Tesla)
Tesla Model S on charge (Image: Tesla)

It actually seems impossible at this point to overstate just how screwed the oil industry as we know it appears to be by electric vehicles. “Resoundingly negative,” “serious threat,” and “investor death spiral” were all actual terms used by Fitch Ratings in a report detailing the future of oil in a world of electricity, the Financial Times says:

“An acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile,” says the Fitch report.

“In an extreme scenario where electric cars gained a 50 per cent market share over 10 years about a quarter of European gasoline demand could disappear.”

The “death spiral” scenario entails a situation in which nervous investors start selling all of their assets attached to oil companies, the Fitch report says, making loans more expensive, which depresses the companies’ value further, which makes investors more nervous, which makes them sell, which makes loans more expensive, which depresses the oil companies’ value further, and on and on.

The electric car could completely eliminate the oil industry, and it won’t even take a complete lack of gasoline-powered cars to do it.

Read more: Jalopnik

Tesla cars are presented during press days of the Paris motor Show on September 30, 2016 (Image: E. Piermont/AFP/Getty)

What’s Driving The Move To Electric Vehicles?

Tesla may be the catalyst driving electric cars. But just about every car maker in the world is developing either an all-electric car or a hybrid vehicle that runs on both electricity and petroleum. That’s good news for the environment, especially as such vehicles approach price parity with traditional ones.

Tesla cars are presented during press days of the Paris motor Show on September 30, 2016 (Image: E. Piermont/AFP/Getty)
Tesla cars are presented during press days of the Paris motor Show on September 30, 2016 (Image: E. Piermont/AFP/Getty)

As electric cars continue to improve, so do the efficiencies — or the ability to input a unit of energy and to realize more output. In fact, traditional cars running on an internal combustion engine have a 30 percent efficiency rate. The rest is lost to heat, sound and energy. Just refining a gallon of gasoline takes 7 kilowatts-hours per gallon, says Thor Hinckley, an electric vehicle and renewable energy expert with CLEAResult, a consulting specializing in energy efficiency.

But vehicles that run on electricity have an 80 percent efficiency rate, or they convert 80 percent of those Btus to energy, he explains. The efficiencies are greater because of the superiority of the electric motor over that of the internal combustion engine — not because one unit of energy is better than another.

“With an efficiency difference that great, anything will be cleaner than burning gasoline,” says Hinckley. Obviously, burning a Btu of wind, solar or hydro is cleaner than burning the same unit of coal. But even if coal is used to generate the electricity to drive the car, he says that emissions are 20-30 percent less than a comparable vehicle running on petroleum. That’s huge.

Read more: Forbes

Bill McKibben: The Question I Get Asked the Most

The questions come after talks, on twitter, in the days’ incoming tide of email—sometimes even in old-fashioned letters that arrive in envelopes. The most common one by far is also the simplest: What can I do? I bet I’ve been asked it 10,000 times by now and—like a climate scientist predicting the temperature—I’m pretty sure I’m erring on the low side.

It’s the right question or almost: It implies an eagerness to act and action is what we need. But my answer to it has changed over the years, as the science of global warming has shifted. I find, in fact, that I’m now saying almost the opposite of what I said three decades ago.

Then—when I was 27 and writing the first book on climate change—I was fairly self-obsessed (perhaps age appropriately). And it looked like we had some time: No climate scientist in the late 1980s thought that by 2016 we’d already be seeing massive Arctic ice melt. So it made sense for everyone to think about the changes they could make in their own lives that, over time, would add up to significant change. In The End of Nature, I described how my wife and I had tried to “prune and snip our desires,” how instead of taking long vacation trips by car we rode our bikes in the road, how we grew more of our own food, how we “tried not to think about how much we’d like a baby.”

Some of these changes we’ve maintained—we still ride our bikes, and I haven’t been on a vacation in a very long time. Some we modified—thank God we decided to have a child, who turned out to be the joy of our life. And some I’ve abandoned: I’ve spent much of the last decade in frenetic travel, much of it on airplanes. That’s because, over time, it became clear to me that there’s a problem with the question “What can I do.”

The problem is the word “I.” By ourselves, there’s not much we can do. Yes, my roof is covered with solar panels and I drive a plug-in car that draws its power from those panels, and yes our hot water is heated by the sun, and yes we eat low on the food chain and close to home. I’m glad we do all those things, and I think everyone should do them, and I no longer try to fool myself that they will solve climate change.

Because the science has changed and with it our understanding of the necessary politics and economics of survival. Climate change is coming far faster than people anticipated even a couple of decades ago. 2016 is smashing the temperature records set in 2015 which smashed the records set in 2014; some of the world’s largest physical features (giant coral reefs, vast river deltas) are starting to die off or disappear. Drought does damage daily; hundred-year floods come every other spring. In the last 18 months we’ve seen the highest wind speeds ever recorded in many of the world’s ocean basins. In Basra Iraq—not far from the Garden of Eden—the temperature hit 129 Fahrenheit this summer, the highest reliably recorded temperature ever and right at the limit of human tolerance.

July and August were not just the hottest months ever recorded, they were, according to most climatologists, the hottest months in the entire history of human civilization. The most common phrase I hear from scientists is “faster than anticipated.” Sometime in the last few years we left behind the Holocene, the 10,000 year period of benign climatic stability that marked the rise of human civilization. We’re in something new now—something new and frightening.

Read more: Ecowatch

Green power: consider how EVs can contribute to a positive brand image (Source: Getty)

Is it take-off time for electric vehicles?

With major car manufacturers falling over themselves to offer electric vehicle models, and businesses increasingly being wooed by the financial benefits of signing up, could we be on the cusp of an EV revolution?

Green power: consider how EVs can contribute to a positive brand image (Source: Getty)
Green power: consider how EVs can contribute to a positive brand image (Source: Getty)

When sci-fi author William Gibson said: “The future is already here – it’s just not very evenly distributed,” he was not talking about electric vehicles (EVs). But you don’t need his powers of imagination to understand why he might have been.

In 2013, only 3,500 of the newly registered cars in the UK were plug-in full electric or hybrid EVs, according to The Society of Motor Manufacturers & Traders. This year, the number is more than 63,000. And while Elon Musk’s Tesla Motors was once a trailblazer – practically alone in thinking seriously about making EVs for normal consumers – major car manufacturers are now falling over themselves to offer EV models. The British motorist can now choose from about 40.

Of course, much of EVs’ surge in popularity stems from concerns about global warming. The Climate Change Act 2008 meant that the UK was already legally obliged to cut emissions by 80pc of 1990 levels by 2050, but in March this year Andrea Leadsom, then a minister at the department for energy and climate change, suggested that a more ambitious target of reaching “net zero emissions” by the late 21st century would be enshrined in law. With EVs enabling a 40pc reduction in CO₂ emissions, it’s clear that they will be part of the picture.

The UK is among 13 members of the Zero Emission Vehicle Alliance to have signed a commitment to make all passenger vehicles sold “zero-emissions” by 2050.

The Government has also announced that it will spend more than £600m between 2015 and 2020 to “support the uptake and manufacturing of ultra-low-emission vehicles”, including £38m to be spent on public charging points. There are also plans to create an ultra-low-emissions zone in London.

From September 2020, vehicles entering the area currently covered by the congestion charge in the capital will have to pay an additional fee unless they meet exhaust emissions standards.

In addition to this, government grants (of £4,500 towards the cost of a standard EV and £500 towards the cost of a charging point), tax breaks and possible savings of around £100 per 1,000 miles driven (versus a petrol or diesel car) mean that electric vehicles are fast becoming attractive because of cost-effectiveness alone – a fact that has not escaped the attention of businesses.

“EVs can have a very real impact on cost saving for a business,”

says Martin Quail, chief commercial officer at EV leasing and management company Alphabet. But, he adds, that is not the only upside.

“The image of the brand can be bolstered if people can see that the business is working towards an environmentally friendly fleet composition.”

Read more: Telegraph

Energy companies are dead already, they just haven’t realised it

“The stone age came to an end, not for lack of stones, and the oil age will end, but not for lack of oil” (Sheikh Yamani OPEC co-founder and former Saudi Arabian oil minister)

Electricity companies around the world will begin to go bankrupt by 2018, even while they generate profits. It sounds absurd doesn’t it? However, hear me out.

By now everyone has read the headlines. “Tesla Powerwall changes everything, electricity death spiral, energy storage revolution, the Kodak moment for electricity etc.” This was the hype of 2015.

In 2016, reality set in, many households realised a $A17,999 5kW SolarEdge system with a 7kWh Tesla Powerwall would take about 17 years to pay back. These were sobering figures considering most equipment warranties are only 10-12 years. However, in just 2 years this payback equation will be radically different. It will rock the very foundations of modern society, creating and destroying fortunes across the planet.

Read more: Renew Economy

Hy-Vee, a Midwestern grocery chain, installs charging stations at all its new locations. The number of commercial charging stations is growing quickly. (Image: A+G/WSJ)

Why Electric Cars Will Be Here Sooner Than You Think

Adoption of electric vehicles will not be gradual, because the factors required to unlock demand for them are in place

Hy-Vee, a Midwestern grocery chain, installs charging stations at all its new locations. The number of commercial charging stations is growing quickly. (Image: A+G/WSJ)
Hy-Vee, a Midwestern grocery chain, installs charging stations at all its new locations. The number of commercial charging stations is growing quickly. (Image: A+G/WSJ)

In 2015, about one in every 150 cars sold in the U.S. had a plug and a battery. But mass adoption of electric vehicles is coming, and much sooner than most people realize.

In part, this is because electric cars are gadgets, and technological change in gadgets is rapid.

One big leap is in batteries. A typical electric vehicle today costs $30,000 and will go about 100 miles on a charge, if that. Within a year, you’ll be able to get double that range for just a little more money.

Tesla Motors Inc. is the standard-bearer, promising a Model 3 vehicle meant to appeal to the masses at $35,000 without incentives and more than 200 miles of range. By comparison, the average new car in the U.S. today sells for about $33,000.

But Tesla is hardly alone. Later this year, Chevrolet will roll out its $37,500 Bolt EV. It, too, boasts more than 200 miles of range, which appears to be the new goal for eliminating “range anxiety”—the fear that a vehicle will run out of juice—among potential electric-vehicle buyers.

And that is just the start. Pasquale Romano, chief executive of ChargePoint Inc., the world’s largest maker of electric-car charging stations, says he works with, and talks to, most major car companies.

“We have seen their internal plans to just electrify everything,” he said.

In the short run, many of these cars will be plug-in hybrids, with both electric motors and gasoline engines. It makes sense to lump them with electric vehicles because most new models have enough battery power to get the average U.S. commuter to work and back without using any gasoline.

Steve Majoros, a marketing director at General Motors Co.’s Chevrolet unit, says that 90% of trips and 65% of miles driven in its Volt plug-in hybrid are on electric-only mode. The Volt can go 53 miles on a charge.

Every plug-in hybrid is effectively an electric car that is carrying a “range extender,” just in case. They will help electrify a large share of the miles Americans drive. They’ll also help ease consumers into electric vehicles, overcoming any remaining fear about being stranded after running out of juice.

Competition among electric vehicles and plug-in hybrids will be intense, which will drive down prices. Volkswagen AG has pledged to make every model available as a plug-in hybrid by 2025. BMW AG has made the same promise. Hyundai Motor Co. promises eight plug-in hybrid models by 2020, plus two all-electric vehicles. Toyota Motor Corp.’s overhaul of the plug-in Prius, boasting twice the range, arrives before the year is out.

Read more: Wall Street Journal