Sunday, October 10, 2010

Electric Cars will be cool, but won’t save the world

Commentary – See all Commentary

By Mr. Sig

My interest in electric cars jumped again when I saw a pair of articles regarding the recent craze in this week’s Economist Magazine.  I’m very skeptical about how practical they are, but I’m also pretty excited to see them on the road.  This excitement stems from two sources.  First, it represents the first real leap in automotive infrastructure in a long time.  Second, I’m tired of seeing all those Toyota Prius’ out on the road.  These cars just make me think of socialist hipsters sipping some goofy drink at Starbucks and talking about how great their Mac is.  Based on what I’ve read, the extra expense for them doesn’t start saving you money in gas until many years after you’ve owned the car.  So, by default, the car is a statement car which only leads me to what I consider accurate conclusions about the people who drive them.  But enough with judging individuals I’ve never met.  It always seems to lead to trouble anyway. 

Let me get back to my first point.  “It represents the first real leap in automotive infrastructure in a long time.”  I use infrastructure rather than call it “revolutionary” because I don’t consider anything in electric cars to be revolutionary in the way the internal combustion engine was.  I can only conclude that the electric car promoters must have hired the PR people from Apple Computer.  Let’s think about that.  Steve Jobs has never invented or created anything all that new or revolutionary.  No, not even the graphical user interface… that was Xerox.  He didn’t invent the smartphone, he didn’t invent digital music.  He didn’t create anything.  What he did was take existing things that sucked, thought about them a little bit, and then repackaged them into something that didn’t suck.  There is something to be said for that, that’s for sure, but let’s not call him the inventor of these things.  I see the electric car the same way.  Let’s take the Tesla car for example.  It takes some mighty balls to do what Elon Musk did… that is… really take a big jump into an industry that is thus far unproven and technologically questionable within a consumer price range.  What I ask is, how hard is it really to just take a bazillion laptop batteries and shove them into the trunk of a car.  Then route them to electric motors that drive the powertrain.  I couldn’t do that, but I know enough that it can’t be terribly complicated to do with a handful of good engineers.  Mr. Musk was just the first person to put all the pieces together.  So far, the business is not doing well, but that has not stopped the Tesla Roadster from generating a massive amount of publicity.

The Economist’s article brings up several valid criticisms of the electric car craze.  First, it notes that while electric cars do not put out greenhouse gasses, they still need electricity.  And electricity comes from power plants which spit out greenhouse gasses.  The more electric cars we have, the more power plants will be necessary.  Decades in the future, it is possible that we will not use petroleum for our power generation, but that is still many years away.  Next, it brings up a point that I’ve never thought of before.  Even if we have an alternative way of generating our energy, or even just a “greener” fuel to use in our power plants, electric-powered vehicles are still a “costly way of abating CO2 emissions.”  I was amazed to see another example touted by Richard Pike, an executive with the Royal Society of Chemistry.  He commented that replacing all of Britain’s petrol-powered cars with subsidized electric ones would cost about 150B pounds.  This change would reduce carbon emissions in the UK by 2%.  With the same amount of money, “Britain could replace its entire power-generation stock with solar cells and cut its emissions by a third.

All this leads me to the conclusion that electric cars are awesome, and I want one.  I also want a computer monitor that I can roll up like a piece of paper.  And I would like all LED-light bulbs in my house.  These technologies are certainly possible, and any one of them could be propped up to get going with heavy subsidies.  But the natural “real” development of the industry is still a ways off.  I fear that our government is jumping on this electric car bandwagon too early, and the money they spend subsidizing the industry is diverting resources away from perhaps more important but less sexy things like battery technology.  This has been the historical record of industry subsidies which makes me very skeptical that the electric car movement is going to go anywhere and could perhaps ruin existing car companies in the process.  This would not bode well for Michigan whose car companies (save for Ford) are still gasping for air.

However, if I was given the option to trade in my 2007 Monte Carlo for a Chevy Volt, would I take it?

You bet I would!

Would you?  Let me know in the comments.

10 comments:

  1. A Chevy Volt without government subsidies costs about $40,000. That had better be one helluva nice Monte Carlo to be an even trade. The fact is, the Volt is cool but prohibitively expensive. For that price, you could by at least two comparable Chevy Malibus.

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  2. I just read an article from one of the Michigan Alumni magazines touting nuclear power as the savior. If we are to worry that electric cars still cause emissions through their usage of electricity then it seems we are conceding the battle of fuel to fossil fuels.

    For as popular as macs are with the urban hipsters, it seems that wind and solar are just as popular. The problem is that they are as practical as a mac (good products but too expensive for me to validate).

    If we are to make a switch from fossil fuels to a more efficient and clean method for the grid then nuclear is the only solution. It is by far more powerful and clean (even in its extraction) then any other type of fuel. Spent fuel can be reprocessed so that the waste is reduced by 95% (this reduced waste is also much less radioactive). Waste is storable (no emissions).

    Unfortunately regulations state that reprocessing is illegal (need verification), and nuclear power becomes too expensive to be practical. If we ever get beyond this point and are able to overcome our fears of 0 meltdowns in US history then power will be cheap and clean enough to make electric cars "green".

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  3. I would trade in my 2007 Mazda 3 then immediately sell the volt, buy a cheaper car with cash and pocket the difference.

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  4. To clarify, I would trade in my Monte Carlo for a Volt only if I was offered a 1:1 swap (in my dreams). The point was that it looks cool and I'd like one. But am I going to pay 40K for it? hell no.

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  5. Agreed, I'd take a new Volt too.

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  6. If $40,000 for the Volt is too much, what is the right price? Would you be willing to pay any premium for an electric car, or only an even trade? Personally, I'd be willing to pay a premium, because I think it's a cool technology, but I wonder what the "right" price is for most consumers. $30,000? $20,000? I hope GM has done this study...

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  7. It's hard to figure out what premium that customers are willing to pay. The main 40K luxury brands such as Lexus, BVW, Cadillac have cars with big engines and lots of comfort and safety features. So it's hard to see them picking up a 40K car. And, your basic consumer doesn't spend 40K on a car. So who is left? A handful of rich guys that like novelty items and .. hmm I really can't think of anyone else. They have to somehow get the price down around 20K before they can plan on selling a million of them. Or, keep it at 40K, and make it look and feel like a Lexus.

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  8. The right price for consumers depends on availability of credit and consumer savings. I think the bigger question is whether or not it is possible for GM to match consumer price preference with vehicle profitability. I don’t know if it is possible because our savings rate is way too low and credit is tight (although not tight enough). Like Joe said, I’d say that this is a novelty thing at best until production costs can come down to levels that make it feasible to market this car to the average joe. Plus with gas being cheap there really isn’t much economic incentive to buy a Volt anyway.

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  9. The concept vehicle I wanted GM to pursue was the Hummer HX which debuted at the 2008 Detroit Auto Show, but alas it will not come to pass.

    http://money.cnn.com/galleries/2010/autos/1002/gallery.hummer_bio/index.html

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