Guest post by Bjørn Lomborg
I’ve said electric cars get subsidized too much. Turns out I was wrong.
In California, they are subsidized ridiculously too much.
Tesla gets $45,000 for each car it sells in state and federal subsidies. The Tesla S starts at $69,000, so about 40% of its total cost is subsidies (Tesla isn’t making any big profits).
This is because the California Air Resources Board has mandated that zero emission vehicles should comprise 15% of new-car sales by 2025 — up from less than 1% now. This forces other car companies that can’t comply to pay for credits from Tesla.
“At the end of the day, other carmakers are subsidizing Tesla,” says one analyst.
Remember, the Tesla avoids perhaps 10 tons of CO2 (more likely, with its large battery pack it avoids nothing or even *increases* total CO2 emissions). That means Americans pay at least $5,000 per ton of CO2 avoided – about a thousand times more than the price in the European Trading System.
It also avoids local air pollution (which is presumably the Air Resources Board’s objective), but over the entire lifetime of the car, this is worth around $500.
Source:
Air pollution costs:
For Europe:http://ec.europa.eu/transport/themes/sustainable/doc/2008_costs_handbook.pdf, p57, air pollution for new gasoline cars is about €0.001/km or $150 for 150,000 km;
For France:http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP201203.pdffor France, p26, shows €634
Danish numbers: DKK 1500 (or about $300) for 150,000km, p147http://www.dors.dk/graphics/Synkron-Library/Publikationer/Rapporter/Miljo_2013/Trykt/M13.pdf
We subsidize electric cars too much:http://online.wsj.com/article/SB10001424127887324128504578346913994914472.html
http://articles.latimes.com/2013/may/05/business/la-fi-electric-cars-20130506
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Richard G:
This is a shell game of EXPORTING emissions from the L.A. air basin to another state.
Well, yes and no. AB 32 apparently requires out of state generators to buy emissions allowances just like in-state producers, so in theory there would be no cap and trade advantage to leaving the state. However there is the problem of ‘resource reshuffling.” Hypothetical example: Arizona Public Service declares that power it is exporting to California is coming from its large scale solar installations, rather than four corners. When everything gets dumped into a common power grid, how does one establish such things? Even assuming that it is possible to trace the power, it seems probable that the utilities can arrange things to their advantage, so your observation stands.
Nobody can fault what they’re trying to do, it really would be great to relocate the emissions away from the basin. I’ve been to LA in 1980 and witnessed the smog, and I was there in 1996 with a lot less smog. Could have been coincidence or different weather patterns, so no direct cause/effect… but cleaning up emissions with Catalytic Converters and other changes made a lot of sense for that area.
However…
A 15% mandate is nothing short of madness. I think the politicos involved are convinced they are going to spark a revolution in transport, and are thrilled that it will be their legacy. I see it more as folly.
I would be a lot more sympathetic to this idea if we actually HAD the technology required to make this a reality, but the plain fact is that we don’t. And that’s just California… move farther north, even cross the border to Canada, and the energy requirement for a vehicle is massively increased, especially when you consider that for half the year you need to run lights more, you need heat, you need more power to move through snow, etc.
[snip. Zero content, just insults. ~ mod.]
And in regards to the article and Mr. Lomborg’s comments: He just can’t wrap his head around how one company (Tesla) made a smart business plan and executed on it in within 10 years. Where all of the other large automotive manufactures have had at least 20 years and are still unable to build a car that can compete with Tesla. They need to stop their crying and get moving forward with their designs.
GM would have received these exact same credits with their EV1. But instead they crushed it. Literally, CRUSHED IT!
Move forward or be left behind when someone like Musk comes along.
Garn
Joseph A Olson says:
May 12, 2013 at 12:41 pm
““The story of Fisker is a story of the ingenuity of an American Company, the commitment to innovation by the U S government and the preservation of the American automobile industry” ~ VP Joe Biden”
Good old Joe neglected to mention that the cars were actually made in Finland. Great use of our tax dollars. Multiple sources to support this assertion are readily available on the web.
When we get LH2 fuel cells, I might be interested in a zero emissions car. Even then I’m not sure. LH2 must be made with nuclear power or it doesn’t make sense at all, and it should be done with hydrolysis, not stripping H2 from hydrocarbons. Throw the O2 away and you still have half of a battery. LH2 is useful for other purposes. You can use LH2 to cool a superconducting power transmissions system and prevent power losses over long distances of 10 to 30%.
Preferably, nuclear power would be produced from new integral fast reactors. By burning almost all of the waste and almost all of the fuel, it would seem nuclear reactors become legal in CA without repealing or modifying any laws. However, we can expect the Dems would immediately pass legislation to restrict them as a knee-jerk reaction.
But what about melt-down risk? Modern modular reactors can be designed so they simply can not melt down, and that issue goes away (except for irrational people). Lacking a major high-level waste problem, nuclear power in CA becomes legal. The worst problem with nuclear “waste” from current designs is you set aside 97% or more of the fuel you could otherwise use to produce power. Yucca Mountain was a stupid idea from this perspective.
IFRs could extend power generation from our existing fissionable materials stock to centuries of power. That means our failing economy could be turned around very quickly if we simply had the will.
Let’s fund their research only then, not their production. There are no scale-efficiencies to be obtained here. (Lomborg also made this point in his recent House testimony.)
Joseph A Olson says:
May 12, 2013 at 12:41 pm
This week Fisker declared bankruptcy, defaulting on $200 million in loans, ending 2000 jobs after creating only 2000 GREEN autos. Fair to say, the taxpayers got Fiskered on this one.
Joseph, I can’t find any mention of this at any of the main business news outlets. What was your source for this?
The CRL (criminal reactionary left) talks about redistributing wealth. What do you think their take is on middle- and low-income taxpayers paying for half of the cost of a $100,000 piece of junk they could never afford or use themselves, so that some fat cat celebrity or crony capitalist making millions can buy it on the cheap? That’s redistributing wealth all right, from lower incomes to higher, from poorer to richer. The hypocrisy of this is truly breathtaking.
Looking at rogue regulatory agencies like CARB and the EPA, and the corruption of education at the hands of the CRL, it would seem that at some point the government and the educational system are going to have to undergo a rigorous de-Nazification process, to get rid of these people and restore sanity to our world. These people can’t even be persuaded by evidence that their regulations are leading to more pollution and envirnmental damage, because their real objective isn’t to save the planet – it’s to enslave us.
The word really needs to be gotten out to the lower-income people who are being screwed by the CRL politicians they so fervently support. The rich CRL types will never be swayed by economic arguments, since they will only get richer and not the feel the pain of high energy costs, and of course they will never voluntarily give up their totalitarian ambitions. But perhaps if we can show lower-income people specifically and onvincingly how the AGW agenda will hit them in the pocketbook, and even crucify them financially – which it most positively and certainly will do – perhaps we could get support from them for rolling back this tide of tyranny.
Somehow, this has to be accomplished to save our country, and unfortunately, there may very well come a day when armed force and revolution will be needed to do it. As the Benghazi and IRS scndals show, the CRL will stop at nothing to keep itself in power. They are already rigging elections, and they’ve fattened their bureaucratic and entitled constituencies to the point where they decide elections – so it likely will be impossible ever to vote them out. They will very possibly have to be physically, forcibly removed from their positions of control.
Catcracking says:
> “We should not spend one penny on an electric car until we have a viable battery.”
Kind of a chicken and egg game there, isn’t it? More investment (customer demand and investors seeing customer demand) equals new technology.
This is because the California Air Resources Board has mandated that zero emission vehicles should comprise 15% of new-car sales by 2025 …
If the goal is to reduce emissions then the rule should be that 15% of miles driven should be in zero emission vehicles. Because of their limited range, the Tesla cars are suited to low-mileage local use limiting their impact on emissions. Gasoline and Diesel will continue to power the cars of people who rack up the miles.
Related … Fred Smith (CEO FedEx) spoke at Cato recently. FedEx uses lots of hydrocarbons to power its aircraft and vehicles. Asked about electric trucks, he said that fuel cost of an electric is 70% to 80% less than a diesel. But while a diesel Sprinter (truck) costs about $60,000, and electric version is about $105,000.
http://www.cato.org/multimedia/events/impact-cartel-behavior-global-oil-prices-challenge-free-markets
Good thing there are people who think long term in this world,
If we relied people who think electric cars lost time,
40 years from now, will ride the horse-drawn carts.
> “We should not spend one penny on an electric car until we have a viable battery.”
“Kind of a chicken and egg game there, isn’t it? More investment (customer demand and investors seeing customer demand) equals new technology.”
The demand for better batteries has existed long before Tesla Motors or any other company
started building electric cars, so the chicken and egg analogy is not valid here. And money alone
won’t provide any advance in technology, as history has proven time and again. Tesla is using laptop batteries, as a matter of fact. About 6400 of them, weighing around 1000 pounds, and last I heard, costing $40,000. A very large number of corporate and commercial researchers are hunting for the breakthru battery technology. They are getting close. Whether electric cars are being sold is irrelevant to the efforts expended.
Here you go, Frizzy: http://www.delawareonline.com/article/20130505/BUSINESS08/305050030/Fisker-may-little-left-value-bankruptcy
It’s Nikolai not Nikola
Bloke down the Pub and Paul Homeward.
I clearly remember Willy Jones the Farm (Welsh expression) delivering milk in churns by his horse and cart (ca 1957) and my neighbour’s son rushing out to collect the manure droppings for the rose beds.
Ernie drove the “fastest milk cart in the West” Great song by Benny Hill. Google it.
The subsidy is even higher than $45,000 per vehicle since the Tesla owners don’t pay road tax on the electricity they consume to power their cars down the roads built by hydrocarbon powered vehicle taxpayers.
Tesla officially advises the ZEV credits will no longer be contributing to revenue or profit by Q4, has claimed it would be profitable without them, and makes no pricing or production decisions based on that income.
Operating range and expenses, winter and summer, have by now been rather thoroughly explored by owners from Canada to New England to Southern California, and vary by the same ratio as gasoline cars’. No surprises, no show-stoppers. Owners almost universally swear they will never buy another ICE (Internal Combustion Engine) vehicle, there is such a discrepancy in driving pleasure and convenience.
The stock has climbed from about $38 to $76 in a month, on the basis of excellent results, and Consumer Reports’ recent pronouncement that the Model S is the best car they’ve ever tested. The nascent network of 400V fast DC chargers, free to owners, is about to expand rapidly, beginning with regions of densest ownership, with the aim of making intercity travel easy and routine.
Face it, it’s an engineering marvel.
janama says:
May 12, 2013 at 3:09 pm
>>I would love an electric car, not for environmental reasons but because I’d love to drive a car with the torque available with electric motor drive. It also requires less maintenance than a petrol motor etc.
So plugging it in everyday and constantly worrying that it’ll get you as far as you want to go ISN’T MAINTENANCE???
Reblogged this on Public Secrets and commented:
Yet another “Green scam.” Makers of fossil-fueled cars are forced to buy, in essence, “carbon credits” from Tesla to meet California’s “zero emission” standards. You can bet those costs are passed along to the consumer.
The reason that Tesla’s stock price has skyrocketed over the last few days is the same as the reason that Volkswagen’s stock price soared in 2008.
It’s called a short squeeze. (If you don’t know what that means, Google it.)
Electric cars cannot become mainstream until refuel (recharge) time for 400 mile range can be brought under 5-7 minutes and refuel (recharge) stations are as ubiquitous as gas stations.
@ur momisugly Frizzy says:
May 12, 2013 at 3:51 pm
“Joseph A Olson says:
May 12, 2013 at 12:41 pm
This week Fisker declared bankruptcy, defaulting on $200 million in loans, ending 2000 jobs after creating only 2000 GREEN autos. Fair to say, the taxpayers got Fiskered on this one.
Joseph, I can’t find any mention of this at any of the main business news outlets. What was your source for this?”
Frizzy, it took me less than one minute to find a piece in the NYTimes and several others. The following article seems to be the most detailed and includes links to most of its sources.
http://finance.townhall.com/columnists/maritanoon/2013/04/28/fisker-free-to-make-flashy-cars-in-finland-n1580841/page/full/
Well at least California is allowing the free market to work like it’s supposed to. Of course the state is also mandating boys to have access to girl’s locker rooms and vice versa. It’s only fair you know.
sarc/off
“Catcracking says:
> “We should not spend one penny on an electric car until we have a viable battery.”
Kind of a chicken and egg game there, isn’t it? More investment (customer demand and investors seeing customer demand) equals new technology.”
Arthur is correct re the history of battery development, except we may not be that close with a viable battery. Creating artificial demand via government edict may temporarily work in the financial community but not in the world of technology and scientific research.
Just because some politician, lacking any scientific knowledge whatsoever, wants something (by wasting tax dollars), technology results are not guaranteed especially when the goal has been elusive for many decades. Successful research does not work that way in the real world. No car company would be building electric cars on a commercial scale without subsidies or pressure from governments when a viable battery is not yet available.
Similarly the government edict for cellulosic ethanol has been a total failure other than enriching bundlers.
When will they learn about how technology is developed in the real world?
LH2 is a better way forward then pure electric. let’s keep the greenies happy (I know, I know.. there’s NO such thing as a happy greenie) by reducing supposed rising sea levels and using sea water and nuclear power to split the water molecules for LH2 powered cars.
But the greenies need to get over their unfounded abject panic over nuclear power first.