Contributed by Robert Lyman @2016
Many western governments, having embraced the thesis that humans are responsible for catastrophic global warming, have sought to reduce greenhouse gas emissions in transportation by subsidizing the sale of partially electric (i.e. hybrid) vehicles and all-electric (plug-in) vehicles and by embracing ambitious targets for the market penetration of these vehicles. In the United States, for example, President Barack Obama introduced programs that provided billions of dollars in subsidies for the manufacturers of the vehicles and the electric storage batteries that power them and offered consumer subsidies of $7500 per vehicle to those who would buy them. The Administration’s goal was to have one million electric vehicles (hybrids and plug-ins) on U.S. roads by the end of 2015. In Germany, Chancellor Angela Merkel similarly offered large industry and consumer subsidies and declared a goal of having one million electric vehicles on German roads by 2020. While Canadian governments have not published such lofty goals, buyers of all-electric vehicles qualify for taxpayer subsidies of Cdn $8500 each.
Along with these well-publicized commitments by governments, the manufacturers of electric vehicles have made many announcements of technological advances and of new research initiatives (almost always partially or totally funded by taxpayers) that they confidently predicted would lead to increased sales and consumer acceptance. Perhaps the most widely publicized claims have been made by Tesla and its charismatic Present, Elon Musk. Tesla has produced a number of high-performance expensive luxury cars that are powered entirely by electricity. Famously, Tesla has claimed that it is on track to produce a U.S. $35,000 to $40,000 all-electric car with a range of roughly 200 miles by 2017. Many young people accept Tesla’s prediction that, with the introduction of a mid-priced all-electric vehicle, the days of the internal combustion engine are soon coming to an end.
The reality of the marketplace is strongly at odds with these perceptions.
In a December, 2015 program entitled “Electric Cars Running on E”, U.S investigative reporter Sharyl Attkisson delved into this subject. The program can be viewed here:
She found the U.S. electric vehicle program’s achievements are actually way behind its targets, and that the goal of putting 1 million electric cars on the road by the end of 2015 had fallen woefully short. Only about one-third that many electric cars, heavily subsidized with tax incentives, have been sold. Further, six of the 11 main manufacturers have gone belly up or stopped manufacturing.
Tesla Motors got half a billion dollars to make the Model 2 electric vehicle. It was one of the few success stories. The Model 2 went from 0 to 60 in 2.8 seconds, and strong sales helped it pay back its $10 million government loan early. Others, like the Volkswagen E Golf, and the Chevy Volt, have not been so successful.
One of the most serious problems concerns the limitations of current battery technology. In the 1990s, GM used cheaper lead-acid batteries for its electric EV-1; each battery weighed a bulky 600 kilograms and delivered only 55 to 95 miles before it had to be recharged. When Tesla Motors introduced one of the first lithium-ion-powered electric cars in 2008, it could go 250 miles on a charge, roughly three times farther than the EV-1. But the vehicle cost over $100,000, in large part because the batteries were so expensive. To cut costs, the lithium-ion-powered electric cars made today by companies such as Nissan and GM use small battery packs with a range of less than 100 miles.
While countless breakthroughs have been announced over the last decade, time and again these advances failed to translate into commercial batteries. One difficult thing about developing better batteries is that the technology is still poorly understood. Changing one part of a battery—say, by introducing a new electrode—can produce unforeseen problems, some of which can’t be detected without years of testing.
Yet for electric cars to account for a significant portion of the roughly 60 million cars sold each year around the world, batteries will probably need to get considerably better. After all, 200 miles is far short of the 350-plus miles people are used to driving on a tank of gasoline, and $35,000 is still quite a bit more than the $15,000 price of many small gas-powered cars.
So what has been the actual experience of electric vehicle sales in North America? What has billions of dollars in taxpayer subsidies achieved?
In the United States, by the end of 2015 there were about 320,000 electric vehicles on the roads, less than a third of Obama’s goal. In 2015, total electric drive vehicle sales were 498,000, of which plug-ins constituted 114, 000, or 23%. By comparison, total light duty vehicle sales in the United States in 2015 were almost 17,400,000. Electric vehicles represent only 2.87% of total light duty vehicle sales. Worse, electric vehicle sales in 2015 were actually down from the 571,000 (119,000 plug-ins) achieved in 2014.
In Canada, there are about 150,000 hybrid light duty vehicles on the roads. The most recent data on electric vehicles sales are to the end of June, 2015. At that point in time, there were 14,300 plug-in vehicles registered in Canada, half of which were plug-in hydrids and the other half battery powered all-electric vehicles. The sales of plug-ins (all-electric and hybrids) during the first half of 2015 were 2,779. Of the total number on the roads, most were small vehicles like the Chevrolet Volt or the Nissan Leaf; there were only 394 Teslas. As of the end of 2014, plug-in electric vehicles had 0.27 of total vehicle market share in Canada — roughly speaking, one out of every 300 cars sold in Canada is an EV. By comparison, in 2015, total light duty vehicle sales in Canada in 2015 were 1,900,000. Plug-ins barely register.
What about the much hyped “affordable” Tesla coming in 2017? The lower price will help, but it will not change the fact that American and Canadian buyers are showing considerable resistance to all-electric vehicles, preferring the more user-friendly hybrids. Factors such as high prices, uncertain resale values, the inconvenience of plugging the vehicle in, the recharge time and limited range are difficult for consumers to ignore.
For all the hype, and even assuming that the taxpayer subsidies will continue indefinitely, it seems highly unlikely that electric vehicle sales will rise to even 5% of total light duty vehicle sales for several years. In other words, the internal combustion engine will be the norm for the foreseeable future. We will still need the oil.