Guest post by David Middleton
The Auto Industry Under Assault
by HENRY PAYNE July 8, 2017 4:00 AM
France, Volvo, and Trump’s timely withdrawal from the Paris Climate Accords
One of the Trump Administration’s most crucial economic decisions was its withdrawal in June from the Paris Climate Accords. Politically, the decision upheld a campaign promise. Practically, it avoided saddling the country with the deal’s arbitrary, restrictive CO2-emissions caps.
Just how suffocating those strictures could have been was illustrated this week when the French government upended its automotive sector by mandating the elimination of gas and diesel engines by 2040 in order to meet the climate accord’s targets. The decision will give French consumers — and manufacturers — no choice but to transition to expensive, unproven battery-powered vehicles. It comes on the 25th anniversary of the publication of Al Gore’s Earth in the Balance, in which the then-senator called for eliminating the internal combustion engine by 2017. Needless to say, none of the environmental calamities Gore predicted a quarter century ago have come to pass
But that hasn’t slowed the march of wrongheaded policies meant to combat climate change. Just 24 hours before the French government’s decision, Volvo announced that it would electrify every vehicle in its lineup beginning in 2019.
[…]
Volvo’s announcement was met with universal praise from left-wing U.S. media; it was also universally mis-reported.
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Not quite. In truth Volvo’s decision will help perpetuate the internal combustion engine, which still makes up the overwhelming majority of vehicle sales. While the automaker will add a plugin-hybrid option to every model line and build five all-electric cars beginning in 2019, its core, best-selling gas- and diesel-engine variants will simply add a small, 48-volt battery to compliment existing twelve-volt batteries.
Where traditional twelve-volt batteries turn on a car’s lights and infotainment systems, the 48-volt unit will help power the influx of electric features — steering racks, brake pumps, etc. — into modern cars, while increasing fuel economy by 10–20 percent in order to satisfy looming Chinese and European CO2 mandates. (Europe will force automakers to reduce the CO2 emissions of their vehicles to 95 grams per kilometer by 2021.) In short, contrary to news reports that Volvo is ending gas engines, the company is merely making such engines compliant with the coming rules.
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Volvo’s compliance strategy is understandable, because few customers are buying electrified vehicles. In France, just 1.1 percent of new cars sold are fully electric. In the U.S., despite over 50 new battery-powered vehicles introduced since 2009, fully electric models have just a 2.4 percent share of the automotive market.
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In condemning the Trump Administration’s withdrawal from the Paris Accords, media darling and former Obama EPA official Marge Oge told the New York Times that “the rest of the world is moving forward with electric cars. If the Trump administration goes backward, the U.S. won’t be able to compete globally.” In reality, the opposite is true.
Thanks to less-stringent emissions rules and low gas prices, the U.S. is essential to most automakers’ profits, driving as it does the high-margin sales of popular pickup trucks and SUVs that can’t be sold elsewhere in the world. GM, for example, withdrew from the European market this year because its small cars are unprofitable there.
Ford joined the corporate chorus in condemning Trump’s Paris withdrawal saying that “we believe climate change is real, and remain deeply committed to reducing greenhouse gas emissions in our vehicles and our facilities.” Yet the politically correct statement would seem a financial death wish. Some 80 percent of Ford’s profit reportedly comes from U.S. pickup sales. A France-like gas-engine ban to satisfy CO2 targets would destroy the company’s bottom line.
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Read more at: http://www.nationalreview.com/article/449322/france-volvo-paris-climate-accords-electric-vehicles-hurt-automakers-bottom-lines
Volvo’s decision to add a 48-volt battery unit to all of its models will add $1,000 to $1,500 to the cost of each vehicle… Not a huge incremental change to a $38,000 car. Doing the same thing to $16,000 economy vehicles is a very expensive add-on.
While Ford may have been publicly virtue signalling, in private they were probably engaging in a collective sigh of relief.
June 2017 U.S. Auto Sales: Top 20 Vehicles and Top 7 PEV’s
| Vehicle | June 2017 Sales | Type |
| Ford F – Series PU | 77,895 | PU |
| Chevrolet Silverado PU | 50,515 | PU |
| Dodge Ram PU | 43,073 | PU |
| Nissan Rogue | 34,349 | SUV |
| Toyota RAV4 | 34,120 | SUV |
| Honda Civic | 30,909 | Sedan |
| Honda Accord | 29,791 | Sedan |
| Toyota Camry | 29,463 | Sedan |
| Toyota Corolla / Matrix | 29,432 | Sedan |
| Chevrolet Equinox | 29,182 | SUV |
| Honda CR-V | 28,342 | SUV |
| Nissan Altima | 28,042 | Sedan |
| Ford Escape | 27,151 | SUV |
| Ford Explorer | 24,285 | SUV |
| Nissan Sentra | 22,534 | Sedan |
| Jeep Grand Cherokee | 20,176 | SUV |
| Jeep Wrangler | 18,839 | SUV |
| Ford Fusion | 17,432 | Sedan |
| Toyota Highlander | 17,237 | SUV |
| Toyota Tacoma PU | 16,443 | PU |
| Tesla Model S | 2,350 | PEV |
| Tesla Model X | 2,200 | PEV |
| Chevrolet Volt | 1,745 | PEV |
| Chevrolet Bolt | 1,642 | PEV |
| Toyota Prius Prime | 1,619 | PEV |
| Nissan Leaf | 1,506 | PEV |
| Ford Fusion Energi | 707 | PEV |
Ford sold 77,895 F-series pickup trucks in June. Total PEV sales were just 17,182 vehicles. Ford sold 4.5 F-series pickup trucks for every PEV sold in the U.S. in June. Ford sold 18,139 Fusions, 707 (4%) of which were PEV (Fusion Energi).
69% of June vehicle sales were SUV’s and/or pickup trucks:
Will U.S. automakers follow Vovlo’s lead and put extra batteries and hybrid engines in all of their pickup truck and SUV models? Only if an actual market for such vehicles evolves.
PEV’s might make sense in places where there’s a $3/gal gasoline tax. However, the average residential electricity rate in the U.S. is $0.12/kWh.
| Gasoline Gallon Equivalent (GGE) 33.4 kWh/gal | |
| Gasoline Price ($/gal) | Electricity ($/kWh) |
| $ 2.00 | $ 0.06 |
| $ 2.50 | $ 0.07 |
| $ 3.00 | $ 0.09 |
| $ 3.50 | $ 0.10 |
| $ 4.00 | $ 0.12 |
| $ 4.50 | $ 0.13 |
| $ 5.00 | $ 0.15 |
| $ 5.50 | $ 0.16 |
| $ 6.00 | $ 0.18 |
On Sunday, I filled my Jeep’s tank for $1.99/gal (including taxes) a GGE of $0.06/kWh. That’s comparable to the LCOE of a conventional combined cycle natural gas power plant ($0.0586/kWh) and about half of what I pay for electricity (~$0.11/kWh).
So, when you dream about charging your Tesla Model 3 with green energy, try not to dream about solar thermal or offshore wind, unless you like nightmares…
| Plant Type | Total System LCOE ($/kWh) | GGE |
| Conventional Combined Cycle | $ 0.0573 | $ 1.91 |
| Advanced Combined Cycle | $ 0.0565 | $ 1.89 |
| Advanced CC with CCS | $ 0.0824 | $ 2.75 |
| Coal 90% with carbon sequestration | $ 0.1232 | $ 4.11 |
| Wind – Onshore | $ 0.0637 | $ 2.13 |
| Wind – Offshore | $ 0.1459 | $ 4.87 |
| Solar PV | $ 0.0850 | $ 2.84 |
| Solar Thermal | $ 0.2420 | $ 8.08 |
| Hydroelectric | $ 0.0660 | $ 2.20 |
EIA Levelized Cost of Electricity 2017
The levelized cost of generation of electricity from offshore wind is the equivalent of $4.87/gal and solar thermal is $8.08/gal.
Will gasoline always be this cheap in the U.S.? No. But even at $4/gal, it breaks even with electricity at $0.12/kWh.
Even in the land of Tesla (California), the PEV math doesn’t look good. The average residential electricity rate is nearly $0.19/kWh and gasoline is nearly $3/gal. Charging up the first Tesla Model 3 (in Elon Musk’s garage) will cost the equivalent of $6/gal.
So, thank you President Trump for saving our automobile industry and energy consumers from the “planet saving agreement.”
Featured image from Meme Generator.
Just thinking, would a battery for the EV be valuable enough t be stolen while you sleep?
Depends on how difficult it is to remove. Probably easier to steal the car, but how far will the thieves get if the battery was still recharging? 😉
Haha, they will either have to tow the car away or cut of your finger or poke out your eye as starting cars by then will only be by fingerprint or eye recognition.
No, the thieves will just hack the self-driving to make it go to wherever they want.
Takes too much effort. They are well embedded and heavy.
Not too many years ago, before Giuliani started community policing in New York, the record for stripping a parked car was something like an hour to remove the battery, engine, transmission, and wheels, and sometimes the seats.
The Volvo approach of replacing the ICE starter motor with something able to handle stop/idle/start makes good sense. There is lots of room for improvement in the starting motor, which is basically unchanged for 50+ years.
The complexity remains pretty much unchanged and you eliminate much of the ICE inefficiency. It doesn’t take a very large electric motor to handle stop/idle/start, which greatly simplifies the battery requirements.
Anyone that has had the clutch pedal fail in standard shift might have already used the starting motor to get going with the car in gear.
Actually wouldn’t that have been the invention/operation of the first electric vehicle. They used the starter motor to drive. 😉
One time when I was about five years old, I got in our family car, a 1952 Chevy sedan, by myself, and I drove it down the alley behind my house by pushing the start button, which caused the starter motor to spin which caused the vehicle to lurch forward a couple of feet, since the car was in gear at the time. I “drove’ it about a hundred yards down the alley that way, lurching forward a few feet every time I pushed that starter button. I was too young for my dad to get mad at me at the time, but I did learn not to touch that button any more. So I guess I had some early experience with cars being moved by electric motors. 🙂
There is a niche market today for EVs where driving distances are short and people are relatively wealthy as proven by sales so far. The more EVs the cheaper gas will become until the world runs out but not in the foreseeable future unless you believe the recurring peak oil mantra. It’s an easy market for an established car manufacturer to enter and that’s why they’re doing it….. “me too” syndrome and nothing more.
The EV future is rosy; less rosy when they do away with subsidies and start taxing their sale and charging for road use. Niche markets will always exist. Technologies will continue to evolve in directions we cannot predict. ICEs are not writ in stone.
Entrepreneurs will do what entrepreneurs always do: Bet on their guesses. Some will get rich. Some crony capitalists will get rich on government subsidies and mandates in the meantime.
Markyl,
They are doing because of mandates and subsidies. Without that electric cars are are dead until they get a useful battery and can be quickly charged.
“…Markyl,….They are doing because of mandates and subsidies. Without that electric cars are are dead until they get a useful battery and can be quickly charged….” I hope your salutation was a fat finger and not an attempt at being cute. You don’t understand the niche they serve. Daily commute coupled with convenient overnight charging is the niche. Any part of that you disagree with? Subsidies are a side issue that has nothing to do with the usefulness of an EV.
Can’t wait to see a battery powered truck – carrying more battery weight than cargo? And what next – solar/battery powered ships? Sell it to France.
Batteries are a temporary solution. Super capacitors will run them off the market. They can be charged at a fantastic rate and don’t have a charge cycle limit. They are tiny in comparison – 1/25th of the mass. Do not invest in anything to do with lithium.
Anybody remember the old VW bug?
Air cooled engine.
No hot liquid to divert to heat the car or defrost the windshield.
The old bugs had an optional (I think) gas-powered heater for that.
(By old bugs, I mean the ones that didn’t have a gas gauge. They had a small auxiliary gas tank the driver could switch to.)
How would an all electric car defrost a windshield and heat the car in, say, 20 or 10 or 0 or – 10 or -20*F?
An electric heater draining power from a battery already weakened by the cold.
If someone gave me an electric car, I might keep it and use to go to and from work here in central Ohio (about a 12 mile round trip) if I had a second reliable car, but if I lived much further north, I’d convert to “green” as fast as I could!
They had a fan that circulated outside air over the heads/motor to cool it and once heated it was used to heat the cabin. There was a knob you turned that pulled a cable that opened up the flaps and directed the now heated air into the cabin through ducts from the engine compartment in the rear. Had several of those cars. Lasted forever if you wanted them to. Lots of carbon generated from most air cooled engines 🙂
do you mean the ones where the indicator was an orange plastic stick (for want of a better word) that came out of the centre pillar? We used to have 50 kg of lead under the hood to stop it from being blown sideways in high winds. These were fun though.
I had relatives with VW bugs, and sometimes drove one. The old ones had marked oversteer, to the point that one curve on the road from San Jose to Santa Cruz (the beach) was nicknamed “VW curve” from all the bugs that hit the center divider when they spun out.
The standard heater in a VW bug was pretty inadequate in really cold weather. I can see why they had a gas-powered heater option.
Rear window defrosters are already electric. Why should front windows be different? What’s with all the blowing of hot air about? I think it is just because it is available from the engine. If the heat wasn’t available, I would never use an electric element to heat air to blow over the window. Just heat the window in the same manner as the rear is heated now.
Heating the cabin is another matter. When the vehicle is charging, it could also heat the cabin so as to use grid power instead of stored power. That would reduce the problem on cold mornings. Batteries heat up when discharged so as long as they are installed, that could help. Super caps don’t, but they store far more energy per kg.
There is the additional possibility that major highways will be ‘powered’ so the vehicles can pick up power from the road and pay some fee for what they draw.
France to ban gasoline and diesel cars. Switch to Indy cars. They use methanol and look pretty cool
All of these conflicting Kwh/mi/person/whatever mostly don’t account for the gasoline taxes that are supposed to pay for road construction and maintenance. Besides paying for all the upgrades to the electrical system needed to come anywhere near the utility of typical cars the road taxes need to be applied to all-electric vehicles too.
Once you add in all the system costs electric makes no sense. Whatever is needed, electric cars are just a tax-subsidized luxury for the wealthy. Granted some perks go along with being wealthy, but having the rest of us pay for them doesn’t pass the smell test. Georgia phased out a $5000 per vehicle recently and sales in Georgia fell from 17% of US electric vehicles to 2%. Denmark’s subsidy phased out this year and ECV’s sales dropped 60%. Tesla sales dropped to just 6 cars in the first quarter compared to 176 last year(-96%),
There’s a comment relevant to the supposed 400,000 Tesla Model 3 deposits that I haven’t seen mentioned yet. First, the deposits are 100% refundable, so there’s not much gamble with that money. If you don’t like the car when it comes out, you are not obligated to buy it. Second, the US federal $7500 subsidy per car will run out when the manufacturer (Tesla) sells more than cumulative 200,000 cars in the US. Certainly, a fraction of deposit holders are only holding their position in line speculating that they can make money by either transferring their place in line or immediately selling the car to a third party. It’s anyone’s guess how many are in that category.