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Category — Electric Vehicles

The Struggle to Mainstream Electric Vehicles

“Fiat Chrysler CEO Sergio Marchionne told the Brookings Institution audience in Washington, DC regarding his company’s 500e EV: ‘I hope you don’t buy it, because every time I sell one it costs me $14,000.’ The reason the 500e exists is to meet zero-emission rules in California and elsewhere that might impose similar mandates. The company’s plan is to sell the minimum number of EVs it is required by law to sell, at whatever financial loss the company must bear, and then not to sell one more. Marchionne also said that if automakers are forced to suffer losses on EVs in order to satisfy political policies, then the companies will be back in Washington asking for new bailouts.”

Nissan (NSANY-OTC), the manufacturer of the LEAF electric vehicle (EV) has been the number one seller in the U.S. The June auto sales figures showed that Nissan sold 2,347 LEAF vehicles, up 5.5% over the sales for June last year, although they were down 770 units from May’s sales results, which was the record month for sales.  June marked the 16th straight month of record sales compared to the prior year month.

Year-to-date, LEAF sales are up almost 30% from the same period for last year.  So far in 2014, Nissan has sold 12,736 LEAFs versus 9,839 sold last year. Given its strong sales performance, one has to wonder about the latest announcement of the replacement battery pack pricing for the LEAF.  [Read more →]

July 23, 2014   1 Comment

Thomas Edison and the Electric Vehicle (chapter 1 of EV’s Chapter 11)

“When government tries to pick losers and winners, it typically picks losers. Why? Because in a free market, consumers pick winners to leave the losers for government.”

- R. Bradley, Electric Car Verdict: Another Government-Subsidized Bust, September 26, 2012.

In Edison to Enron: Energy Markets and Political Strategies, I discussed some history regarding electric vehicles that has become pertinent given the bankruptcy this week of battery-maker A123 Systems.

The Wall Street Journal reported on this failure with the pull quote: “Obama’s green energy industrial policy turns up in Chapter 11.” Energy physicist Mark Mills wrote in Forbes: “A123 Bites the Dust Because They Forgot Their ABCs.”

Here is some history behind the rise, fall, fall, and fall of electric vehicles from Edison to Enron. Previously at MasterResource, the conversation between Thomas Edison and a young Henry Ford in 1896 was recounted. (Edison told Ford: “Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.”)

Here is some more history. [Read more →]

October 18, 2012   6 Comments

Electric Car Verdict: Another Government-Subsidized Bust

When government tries to pick losers and winners, it typically picks losers. Why? Because in a free market, consumers pick winners to leave the losers for government.

The U.S. energy market is rich with examples. In the 1970s, synthetic fuel projects that went bust, and the Synthetics Fuel Corporation was terminated with much of its funds still unspent. In the same period, the California Energy Commission decided (see p.24) that methanol-powered (M-85) vehicles were the transportation future for their state. But advances in reformulated gasoline and onboard vehicle technology removed the benefits of converting natural gas, wood products, and coal into this transportation fuel. The methanol fad quietly went away.

EV Largesse: $2.2 billion

It seems like only yesterday that electric vehicles (EVs) were a pillar of Obama’s government-knows-best transportation strategy. “Seeking to put the nation back in the lead on an important technology,” Matthew Wald wrote in the New York Times in August 2009,” the Obama administration awarded more than $2 billion in grants on Wednesday for manufacturing advanced batteries and other components for electric cars.” Wald explained the thinking:

The money comes from the economic stimulus package and is intended to further several goals: cutting dependence on petroleum, reducing carbon emissions, creating jobs and giving the United States a better start on what is likely to be a competitive global industry as companies start bringing electric cars to market.

Ford ($30 million), Chrysler ($70 million), GM ($136 million), Compact Power ($151 million), Nissan ($100 million), Navistar International ($39 million), EnerG2 ($21 million), and Cascade Sierra Solutions ($22 million), among others, need to tell we-the-people what we has coem from our tax dollars.

Age-Old Mirage

Electric vehicles were in wide use before gasoline proved to be superior more than a century ago. In a famous exchange in 1896, none other than Thomas Edison gave confirmation to Henry Ford to go with his internal combustion engine. Edison to the budding engineer:

Young man, that’s the thing; you have it. Keep at it. Electric cars must keep near to power stations. The storage battery is too heavy. Steam cars won’t do, either, for they require a boiler and fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.

Henry Ford remembered: [Read more →]

September 26, 2012   9 Comments

The All-Electric Car: Think 132-Year Payback (DOE’s Sandalow shows us what not to do)

“When David Sandalow writes about energy and the environment, we should all pay close attention.”

- Al Gore endorsement, 2007

The term energy encompasses a plethora of technologies, and each attracts the gimlet eye of Big Brother.

In recent years environmental groups have been very successful in insinuating themselves into the halls of government so that today there is a revolving door between government and the environmental movement. And it’s just like the revolving door between the government and other key industries, such as banking and the military-industrial complex.

Government would have us believe that a new regulation is the result of some great, objective, and careful investigation. But mostly these regulations and spending programs are foisted upon us by the people who only yesterday were nothing more than lobbyists for some fervently held cause. There has been no new data, but yesterday’s lobbyists are today carrying the mantle of great authority and prestige because they have become high-level government bureaucrats.

Rent-Seeking

We economists call such lobbying “rent seeking” and those who engage in it are “rent seekers.” Rather than seeking the cooperation of other men in the free market, a rent seeker lobbies government to impose some special privilege. The cost of the rent seeker’s efforts is greatly reduced because he need convince only a few elected officials or government bureaucrats rather than the entire market. His job is made all the easier by the knowledge that the elected official or government bureaucrat can grant the privilege with no cost to himself.

When a rent-seeker gets a job in government itself, well, the fox is in the henhouse. Officials move billions of dollars and coerce millions of people with no responsibility whatsoever. If a program fails to achieve its grand design, no government official suffers the consequences. Furthermore, failed regulations are seldom repealed, because, despite the net burden to the economy, a few new constituents do benefit and lobby mightily to keep them in place.

A Revolving-Door Lobbyist for the All-Electric Car

Such is the case, as recently reported by AP, of a lobbyist for an all-electric car.

Leading the Charge” glorifies Mr. David Sandalow, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energ, and former EVP at the World Wildlife Fund, and an avid advocate for the all-electric car. Hybrid cars usually recharge their batteries only while operating on their gasoline-powered engines, but Mr. Sandalow has converted his Toyota Prius hybrid into a plug-in hybrid at the cost of $9,000. Now he can recharge his car’s battery from his home electrical outlet. [Read more →]

October 19, 2010   13 Comments

Obama, Hybrids, and Electric Vehicles

Last week whilePresident Obama was touring a factory in Charlotte, N.C., one of the workers asked the President why he didn’t use an electric limousine. According to the LA Times , the President, who had just made his customary speech extolling renewable energy and green jobs, said there’s not much he can do to wring more fuel efficiency from the armored limousines that drive him around. He had asked the Secret Service about converting to hybrid vehicles, the president said, but was told that it’s not possible.

“It’s because the cars that I’m in are like tanks,” Obama said.

But he did emphasize that he ordered a tripling of the number of hybrid vehicles in the federal government’s massive fleet. That’s our proactive president where image, not the cost to taxpayers, is what matters.

The event was also, unintentionally, a microcosm of federal policy missteps driven by the lack of concern of regulators to the myriad performance demands of the auto buying public. If the President has unique needs for performance, isn’t it possible others do as well? What about considerations that go beyond fuel economy?

Electric Vehicles (Remember the Biofuels Bust?)

Today’s favorite among the political cognoscenti are electric vehicles and hybrids cars. They are riding high, as noted by the New York Times, while tax subsidies have made them appear a realistic option. But the increased attention will undoubtedly highlight flaws of this fuel source in comparison with gasoline.

The attention being paid to the electric vehicle industry also irritates the biofuel industry, whose own overheated market was abruptly halted in 2007, with subsequent bankruptcies and a fall from grace, after nexus were drawn between biofuels and higher food prices, and between some biofuels and increased greenhouse gas emissions.

Biofuels went from hero to zero, along with billions in investments in factories and farms to produce the fuels. Yet gasoline-powered cars may trump both biofuels and electric/hybrids for decades as the least-worst option. Not only do they fit within existing infrastructure, but wider adoption of more efficient conventional cars will help to curb carbon emissions and oil dependence. Of course, the lower energy content of most biofuels also conflicts with increasingly stringent mileage standards.

Are EVs Really the Future?

So will EVs, hybrids, biofueled or improved conventional cars dominate the future? The uncertainty is striking for a $5 trillion global auto and fuel supply market where there is agreement only that the number of cars will keep increasing, perhaps doubling to two billion by 2050, driven largely by the surging Chinese and Indian middle classes.

Last week, the United States announced new fuel efficiency standards, following similar rules in Europe. Green cars took center stage at auto shows in New York, Geneva and Detroit, including all-battery cars; hybrid varieties that switch between electricity and gasoline; and small (some really, really small), more fuel-efficient conventional cars. But battery-only electric vehicles are expensive.

As reported in the Times:

Mitsubishi Motors and Nissan Motor announced prices for their battery-only electric cars, which are in production already or about to be introduced. Before government subsidies, the Mitsubishi i-MiEV will sell for about $42,000, and the Nissan Leaf for just a few dollars less. And a single charge allows for a driving range of about 160 kilometers, or 100 miles, far less than for a gasoline-powered car. American consumers typically expect to exceed 300 miles on one tankful.

The average refill time for a tankful of gasoline is about ten minutes, not the several hours needed for an EV charge. The time value of refilling is absent from most economic analysis of vehicle technology, but even a once every two weeks instead of once every three, can add to the cost of fuel. For alternative fuels, any temporary price advantage can be quickly eaten up by convenience costs. [Read more →]

April 12, 2010   3 Comments

Rare Earth and Lithium Supplies Cloud Renewables

Rare earths refer to some 17 elements found in Earth’s crust by themselves or combined with other chemicals. Some are scarce and others abundant, but in most every case Rare earths create risk in the renewable energy supply chain under an “energy security” standard.

The metals and their compounds used in battery technologies, windmills, catalysts, and communications technologies are not mined in the U.S. The majority of commercially useful Rare earths come from mines in China, a country that is fickle toward the U.S. in many ways. This energy-security issue contradicts a rationale for taxpayer support for government-dependent energy technologies such as windpower and electric cars.

China’s Rare Earth Monopoly

The Rare earths occupy 57th to 71st place on the periodic chart of the elements. Discovered largely in the 19th century, the minerals have proven useful for modern technologies because of their electrochemical properties. They are crucial to advanced, high-temperature superconducting technologies, in addition to being used in windmills, electric vehicles, and new lighting technologies.

China owns the market for the most important rare earth metals, producing almost 100% of dysprosium and terbium, both crucial to the advanced performance of electric motors and lighting (see figure). Today, demand for the rare metals is booming. But China has been exploiting its dominant monopoly of rare earths to manipulate the market, according to U.S. commodities analysts.


Geographic changes in rare earth production. Courtesy: USGS

These are not internationally traded commodities on transparent markets, so sussing out market price trends is difficult. Analysts surveying the market assert that China is using its market power to control prices and benefit its domestic producers and users. [Read more →]

March 26, 2010   5 Comments

Horsepower Sure Beats Horses! (Part I: remembering what came before cars–and the failure of the electric vehicle)

The energy policy debate is well informed by history. So many ‘silver bullets’ being proffered by the Obama Brain Trust (‘smartest guys in the room’?) energy interventionists/transformationists are yesterday’s failures. As F. A. Hayek would put it, the Holdren-Chu approach to energy suffers from the ‘fatal conceit’ and cannot expect to be cost-effective in addressing the alleged problem.

Whither the Electric Vehicle

Take the electric vehicle versus the internal combustion engine. The market verdict of a century ago still holds–and for the same reasons. Thomas Edison was correct to pronounce the verdict to Henry Ford in 1896.

Edison himself labored to make batteries more economical for the transportation market, but the problem of weight and poor energy density could not be overcome.  A news splash in 1914 by Ford Motor Company of an “experimental” car, the  “Ford Electric” that would sell for $900 and have a range of 100 miles, based on Edison’s work, described as “Mr. Ford’s personal project” and “experimental” by Ford Motor Company—never got off the ground. Edison’s alkaline battery that penetrated the truck market was rejected by car makers because of its size and an incremental cost of between $200 and $600 per vehicle (1)

So it was back to 1896 for Ford and Edison despite the latter’s $1.5 million effort to commercialize batteries for the car. (2) 

Horse Pollution

Consider horse transportation and what supplanted it.

The quotations below should remind the reader of how big a step it was for transportation to become energized by affordable, plentiful, transportable, dense, reliable energy–and that was petroleum.

“In New York City alone at the turn of the century, horses deposited on the streets every day an estimated 2.5 million pounds of manure and 60,000 gallons of urine, accounting for about two-thirds of the filth that littered the city’s streets. Excreta from horses in the form of dried dust irritated nasal passages and lungs, then became a syrupy mass to wade through and track into the home whenever it rained. New York insurance actuaries had established by the turn of the century that infections diseases, including typhoid fever, we much more frequently contracted by livery stable keepers and employees than by other occupational groups, and an appeal to the Brooklyn Board of Health to investigate resulted in the institution of new municipal regulations on stables, compelling more frequent removal excreta and disinfecting of premises. [Read more →]

September 29, 2009   10 Comments

Thomas Edison to Henry Ford: Forget Electric Cars (Revisited)

[Editor note: This post from February 19th is reprinted and expanded upon given the Obama Administration's release of $2 billion this week for electric car components built in the U.S]

The wisdom of the ages applies to energy. The smartest-guys-in-the-room approach to energy transformation by DOE secretary Stephen Chu, based on a false premise of the unsustainability of hydrocarbon energy, should note such history. The silver bullets that he is looking for have a long, failed history for good reason.

Take for example the electric car, a perennially bad idea for receiving taxpayer subsidies. Below, produced verbatim, is an eye-witness account of a conversation between the father of electricity and the father of the automobile that took place some 113 years ago.

This conversation, dated as August 1896 by the eyewitness Samuel Insull (1859–1938), himself considered the father of the modern electricity industry, is recounted in his autobiography, The Memoirs of Samuel Insull (full cite at end):

——————————————————–

“He asked me no end of details,” to use Mr. Ford’s own language, “and I sketched everything for him; for I have always found that I could convey an idea quicker by sketching than by just describing it.” When the conversation ended, Mr. Edison brought his fist down on the table with a bang, and said:

Young man, that’s the thing; you have it. Keep at it. Electric cars must keep near to power stations. The storage battery is too heavy. Steam cars won’t do, either, for they require a boiler and fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.

Later on Mr. Ford wrote: [Read more →]

August 8, 2009   12 Comments

An Electrifying Irony (False hopes and promises in the transportation market)

To those who have a memory that transcends more than a few weeks, recent events in the auto sector must induce a great feeling of irony.

Back in August of 2008, then-candidate Obama called for 1 million plug-in hybrid vehicles to be on the road by 2015.

To that end, then-candidate Obama called for:

*$4 billion in tax credits to American automakers to retool plants for the production of plug-in hybrid cars capable of 150 miles to the gallon;

*A $7,000 tax credit for consumers who bought early model plug-in vehicles; and

*Candidate Obama vowed that half of all cars purchased by the federal government would be plug-in hybrids or all-electric by 2012.

As both candidate and president, Obama has repeatedly raised plug-in hybrids as a vital technology for greening Detroit.

Fast forward [Read more →]

April 3, 2009   1 Comment

Thomas Edison to Henry Ford: Forget Electric Cars (Is this advice from 1896 still relevant?)

The wisdom of the ages applies to energy. The smartest-guys-in-the-room approach to energy transformation by DOE secretary Stephen Chu, based on a false premise of the unsustainability of hydrocarbon energy, should note such history. The silver bullets that he is looking for have a long, failed history for good reason.

Take for example the electric car, [Read more →]

February 19, 2009   12 Comments