Economist on electric vehicles

The Economist has three pieces on electric cars (1, 2 in print and 3 online), calling it a big gamble for the car industry, questioning the sustainability of the generous subsidies for the well-to-do, and highlighting the limited reduction in carbon dioxide emissions.

Interestingly, Carlos Ghosn, one of the keenest supporters, appears to believe that 1 in 10 of new cars in 2020 will be all-electric. The goal for Ireland goes far beyond that: 1 in 10 cars (new and old) in 2020 should be all-electric.

24 replies on “Economist on electric vehicles”

questioning the sustainability of the generous subsidies for the well-to-do

So, what about the “sustainability” of the “generous subsidies” for the oil-powered car industry that we’ve had for eighty years?

Very good point EWI! We are not comparing totally private non-subsidized hydrocarbon driven cars with government subsidized green cars. We are comparing one “subsidized” industry against another.

Whilst Electric Vehicles are being promoted, no mention is being made of the commercial transport vehicles, which are major contributors to C02 emissions. Essentially HGV’s cannot become electric as the battery size is such that the vehicle could not accommodate it and the best option for commercial vehicles appears to be CLG, but to date Bord Gais do not seem to be running with it or indeed getting the investment from the State to encourage it.

1 in 10? Hahahaha! :o)

How the prophets of e-vehicles are going to solve the supply-demand crisis on Rare Earth Metals is beyond my comprehension.

Apart from environmental concerns when mining of REE’s takes place, and importing countries are not paying the price for the damage.

So what is the solution, declare it a matter of national security and send troops to Baotou? (Inner Mongolia) – Just kidding! –

Demand will reach approximately 180,000 metric tons by 2012.

In 2009 ~124,000 metric tons were produced with an estimated demand of 134,000, the delta was served by existing stockpile. (source: energy bulletin)

John Fitz Gerald remarked at an Energy conference that if Ireland was to impose stringent standards on Motor Vehicles then everyone would probably have to walk but if the EU was to do so then the motor industry would strive to meet the new standard in record time.

And so it will be with Electric Vehicles.

btw Richard & Georg, you seem to casually overlook the fact that oil is finite and a solution will have to be found, unless you have a secret miracle solution then electric vehicles will be the only game around

Does “transport” in the future necessarily have to work the same way as in the past. Access to energy is likely to a tricky issue in the future.
If it is , urban areas and the national transport infrastructure will evolve accordingly.

“Transit Oriented Development” proposes that residences, colleges and business etc should be less geographically dispersed (much less), and concentrated near trunk public transport lines.
Consequently substantial numbers of people would live within walking / cycling distance of all the places they need to go, including good public transport links if they need to go further afield.
The need for a personal vehicle will be greatly diminished.

However “diminished” is not the same as “removed”. There will probably still be a need for personal vehicles (EVs / Cars etc).

Any – I am surprised that The Economist didnt consider a complete “paradigm shift” on the use of personal vehicles.

@fergaloh

On the contrary, I am talking about peak oil since the early 80s, and I am more than aware that the liquid fuel crisis requires new strategies to secure ever increasing energy demands.

However, what I see unfolding in Ireland for example is a push for unsustainable short term energy benefits, driven by a political agenda and vested interests rather than econometric analysis and longterm strategies.

In my little world, if things don’t add, they don’t add up, such as is the case with the curious tale on Spirit of Ireland for example, simple as that.

Btw. talk about Spirit of Ireland, on a launch event here in Donegal for one of the many emerging wind energy ‘Klondikers’, I raised a question and adressed it directly to the gentleman (A. Costello) of Spirit of Ireland:

Can you please clarify Maples & Calder’s involvement in Spirit of Ireland, the legal representatives together with London based Bingham McCutchen of senior Bondholders in Anglo Irish Bank?

Some people filmed the event btw. Mr Costello blushed and turned around to the panel whispering …. “Fuck!” Needless to say, no sufficient answer was provided.

No fergaloh, I am very aware about our liquid fuel crisis, and equally aware that our officials acting in ways we all know too well by now, serving vested interest groups and looking after status quo and political agendas is still a priority.

Statements like: ‘The only game around’, ‘There is no other way’, are a language I do not subscribe to.

All this is not a isolated irish problem of course, look at the Tianjin results, zero, talks were unsuccessful, 177 countries, 6 days, results are ridiculous.

The EU Commissioner on Energy has centralization fantasies on certain aspects of energy infrastructure, and they will be on the records coming November….

P.S.

The EU Commissioner on Energy has centralization fantasies on certain aspects of energy infrastructure, and they will be on the records coming November….

which in deed is another 15 billion Euro (first estimates) joke on the taxpayer.

I wouldn’t be too negative about electric cars in Ireland – in the articles listed one of the complaints was that the electricity used was made from carbon fuels so it didn’t really reduce CO2 emissions much. In Ireland however with 40% wind, the carbon intensity of grid kWh will be way below the UK so that it will reduce Co2. Also the Japanese predict a 30% reduction in the cost of the battery from current prices, by 2015.

Similarly the concern over the charging efficiency and the cost per kWh is a red herring – whether the cost is 10c at night or 20c during the day, it’s hugely less than the cost per mile of a petrol engine. The real issue that was not addressed is that part of the reason is the lack of significant excise duty on electricity as compared to petrol. One solution that is likely is to have congestion charging rather than excise on fuel to make up revenue shortages in the future if EV’s increase significantly.

Having a load like an Electric Car which can be turned off /on as wind generation varies would make the accomodation of wind easier. Also, unlike other possible fuels such as hydrogen, the distribution infrastructure is already in place. Unless the capacity of cars increases dramatically or car owners insist on charging at more than 3kW at home, there are no real costs with upgrading the infrastructure.

If more than3kW required some minor alterations or the use of SmartGrid could be required.

If the market decides that pure battery EV’s are too expensive/restrictive and that hybrids are better, there is still a real gain, because the use of electric motors to drive the wheels is still more efficient than the alternative.

In the meantime, by 2011, Ireland will be the only country in the world in which an electric car can be driven to any part of the country and charged along it’s route – this is partly due to the small size of the island which means Ireland can achieve this with a similar amount of charging points to those being installed n other EU countries as pilot projects.

This does give Ireland a reputation as a leading edge country for trials and promotes it above it’s weight for investment. In theory this should not happen, but there is a difference between economic models which are simplified and what happens in the real world. In the real world information is limited and decisions are made in short timescales based on perceptions.

I have seen this in practice outside Ireland where countries such as Denmark with a reputation in certain fields simply attract investment on the basis of their perceived reputation rather than on the basis of a cold look at their actual capabilities.

No-one seems to have picked up the main point of Georg’s first post in this thread.

Where is the lithium for all the batteries to come from?

Hi Greg,

oOn the LSM 09 in Chile the industry predicts sufficient supply and stable prices until 2020, of course they do.

Barclay Capital and other sources will have an abundance of slideshows available to support this view, however, fact is that the demand is exponential, fact is too, that for e-vehicles other materials are equally required, such as neodymium for the magnets for example.

It is true that by looking at the lonely figures of Li availability, we have resources available. It is tunnel vision however to not take geo strategical issues into consideration at the same time as the resources are predominant in politically rather unstable or even less US friendly locations.

Copper being another main resource for this technology as well, and we know what happened with Cu?

So I guess, looking only at the fancy BarCap slide shows or similar is providing a rather one sided picture of the real situation.

Unfortunately the pdf is only in german, but a short and useful explanation in english here:

Despite the higher figures, the lithium resources are still not exhausted in this scenario either. However, those geological occurrences which can be extracted using today’s technologies and at today’s lithium prices will be completely exploited, meaning that new reserves would have to be tapped.

http://www.isi.fraunhofer.de/isi-en/service/presseinfos/2010/pri10-02.php?WSESSIONID=hreuynqf

Global production is dominated by Chile, Argentina, Australia and China, half of the world’s reserves are in Bolivia.

Interesting twist, allegedly $ 1 trillion worth of Copper, Lithium and other Rare Earth metals were found in Afghanistan. (NYT 14th of June)

Chile’s SQM is the main player afaik.

However, keep in mind Li as a battery component makes only round about 3% of the battery cost. Nevertheless, demand could surge very quickly, up to 40% until 2014 according to Galaxy Resources Ltd. and Byron Capital Markets.

Whatever about the economic/psychological issues regarding EVs, I think while the raw material shortage angle makes good copy, it is overplayed.

Lithium:
A battery contains about 0.6kg/kWh Lithium-Carbonate Equivalent (LCE) [1]. Lithium carbonate retails currently at about $5.50/kg [2], so that’s $3.30/kWh. A Leaf contains 24kWh which equates to $80 or €60/Leaf. The Leaf will retail here at €30,000 after a €5,000 grant and a €4,199 VRT waiver. 60/30000=0.2%.

Byron Capital Markets assumes battery demand equivalent to approx 1m Leafs in 2014, which results in incremental demand of 15% of LCE (30kt/yr) [1]. Credit Suisse alternatively envisage appox 0.5m Leaf equivalents in 2014 [3]. At this level they forecast 20% underutilisation of global lithium production capacity based on a 7% CAGR of global lithium demand.

Rare Earths:
Contrary to popular belief, rare earths are not required for EVs. Tesla’s Roadster uses an AC induction motor and most EV retrofits by enthusiasts are free of rare earths. Most upcoming EVs/hybrids use Neodymium-Iron-Boron magnets, but this can be switched if a supply crunch materialises. A Leaf’s motor will contain approximately 0.28kg of neodymium oxide and 0.04kg of dysprosium oxide, which equates to approx €20/Leaf [4]. Here’s what the head of GM’s hybrid division has stated [5]:

“GM’s Bly said access to lanthanides is not a zero-sum issue.

“There are other materials available, but you might lose a couple percent of efficiency,” Bly said. “It’s not as though if you don’t get this, you get nothing. A couple points of efficiency are measurable, but it will not hamper the ability of electric machines or motors to propagate very rapidly.”

There’s an Irish company about to IPO on the Toronto TSX which is seeking to develop a substantial South African rare earth deposit (20kt/yr or 16% of the current total) [6], which I may have some involvement with.

[1] Byron Capital Markets, “Electric Metals Greenbook”, 2010 pdf: (http://www.byroncapitalmarkets.com/reports/Electric%20Metals%20Green%20Book%20April%202010.pdf)

[2] Lithium Investing News, “Lithium Price Increases Underscore Inflationary Pressures”, 2010 (http://lithiuminvestingnews.com/1941/lithium-price-increases-underscore-inflationary-pressures/)

[3] Credit Suisse, “Batteries Not the Only EV Plays”, 2009 pdf: (http://www.london-accord.co.uk/images/reports/pdf/ev_creditsuisse_2009.pdf)

[4] Eamon Keane, “Rare Earth Elements and the Green Economy”, 2010 (http://www.slideshare.net/EamonKeane/rare-earth-elements-and-the-green-economy-5210467)

[5] Autoweek, “Material costs threaten affordable green cars”, 2010 (http://www.autoweek.com/article/20100615/GREEN/100619925)

[6] Mining Weekly, “Frontier Rare Earths to list in Toronto, targets 2014 production from SA project”, 2010 (http://miningweekly.com/article/frontier-rare-earths-to-list-in-toronto-targets-2014-production-from-sa-project-2010-10-04)

Whatever about the economic/psychological issues regarding EVs, I think while the raw material shortage angle makes good copy, it is overplayed.

Lithium:
A battery contains about 0.6kg/kWh Lithium-Carbonate Equivalent (LCE) [1]. Lithium carbonate retails currently at about $5.50/kg [2], so that’s $3.30/kWh. A Leaf contains 24kWh which equates to $80 or €60/Leaf. The Leaf will retail here at €30,000 after a €5,000 grant and a €4,199 VRT waiver. 60/30000=0.2%.

Byron Capital Markets assumes battery demand equivalent to approx 1m Leafs in 2014, which results in incremental demand of 15% of LCE (30kt/yr) [1]. Credit Suisse alternatively envisage appox 0.5m Leaf equivalents in 2014 [3]. At this level they forecast 20% underutilisation of global lithium production capacity based on a 7% CAGR of global lithium demand.

Rare Earths:
Contrary to popular belief, rare earths are not required for EVs. Tesla’s Roadster uses an AC induction motor and most EV retrofits by enthusiasts are free of rare earths. Most upcoming EVs/hybrids use Neodymium-Iron-Boron magnets, but this can be switched if a supply crunch materialises. A Leaf’s motor will contain approximately 0.28kg of neodymium oxide and 0.04kg of dysprosium oxide, which equates to approx €20/Leaf [4]. Here’s what the head of GM’s hybrid division has stated [5]:

“GM’s Bly said access to lanthanides is not a zero-sum issue.

“There are other materials available, but you might lose a couple percent of efficiency,” Bly said. “It’s not as though if you don’t get this, you get nothing. A couple points of efficiency are measurable, but it will not hamper the ability of electric machines or motors to propagate very rapidly.”

There’s an Irish company about to IPO on the Toronto TSX which is seeking to develop a substantial South African rare earth deposit (20kt/yr or 16% of the current total) [6], which I may have some involvement with.

[1] Byron Capital Markets, “Electric Metals Greenbook”, 2010 pdf: (http://www.byroncapitalmarkets.com/reports/Electric%20Metals%20Green%20Book%20April%202010.pdf)

It seems one can’t post multiple links, so I’ll break the references up.

[2] Lithium Investing News, “Lithium Price Increases Underscore Inflationary Pressures”, 2010 (lithiuminvestingnews.com/1941/lithium-price-increases-underscore-inflationary-pressures/)

[3] Credit Suisse, “Batteries Not the Only EV Plays”, 2009 pdf: (www.london-accord.co.uk/images/reports/pdf/ev_creditsuisse_2009.pdf)

[4] Eamon Keane, “Rare Earth Elements and the Green Economy”, 2010 (www.slideshare.net/EamonKeane/rare-earth-elements-and-the-green-economy-5210467)

[5] Autoweek, “Material costs threaten affordable green cars”, 2010 (www.autoweek.com/article/20100615/GREEN/100619925)

[6] Mining Weekly, “Frontier Rare Earths to list in Toronto, targets 2014 production from SA project”, 2010 (miningweekly.com/article/frontier-rare-earths-to-list-in-toronto-targets-2014-production-from-sa-project-2010-10-04)

Let aside the two faced approach of selling all this under the ‘clean green energy label’ while the environment impact of these mining operations is devastating, with the shift in national policies around the globe, adding to that the ‘exploding’ weapons trade – pun intended -, I guess we revisit supply / demand situation around 2014 again…

For me, the top priorities for making the transportation network less dependent on carbon would be:

1. Electrify the Maynooth railway, Kildare railway and build the Interconnector. Once this is done, incrementally electrify to Drogheda, then Portlaoise, then Mullingar, then Gorey.
2. Get electric trolleybuses for trunk bus streets which don’t have enough room for a LUAS reservation.
3. Where LUAS or ETBs aren’t practical, get hybrid bendybuses
4. Require all new taxis to be hybrid, rolled out progressively by city in line with available supply of cars
5. Require all parking warden and heavily used local government vehicles to be hybrid
6. Incentivise purchase of hybrid courier and light delivery vans.

Selling EV or HVs to the general public most of which will be used 2-3hrs a day? Way down my list.

Electricity is a SECONDARY energy resource. Whats No. 1 then???

If No. 1 gets a tad tight, think there might be a problem with No. 2?

“Doctrines asserted with great dogmatism, and acted on with unhesitating confidence” [John Rae].

Bye-the-bye. What energy source do you use to extract Li etc? Hot air? Nope, I thought so!

Brian P

What taxes will apply to EVs? I understand that they will be exempt from VRT. In the UK there is no road tax or congestion charge and there may be discounted parking.

The main difference between an EV and a normal engined car is that the emissions are somewhat cleaner and lower in CO2. Normal cars pay massive taxes each year. Surely they are not all for CO2 and NOX emissions??

This obviously does not include the €5k advance on the battery purchase. I like the idea of EVs becuase of their green credentials but people should be made to pay fairly for them.

Interesting articles.
wrt the rating stickers, I wonder why they don’t just use a kWh per km rating for all vehicles.

Comments are closed.