Electric Cars: Will Any Auto Company Make Money?

By Steve Goreham

Republished with the permission of The Washington Times

Tesla reported second quarter results earlier this month. Despite losing $718 million during the quarter, Tesla shares rose 16 percent on renewed promises of profitability. Driven by government incentives and mandates, world automakers have announced big electric car introduction plans. But will any electric car firm be able to make money?

Start-up automobile companies face long odds. Over the last ten years, Tesla posted cumulative losses of over $3 billion. In the second quarter, Tesla began to ramp production of its new Model 3 sedan, producing more than 50,000 cars. Tesla also promises to attain profitability in the near future, but the firm is about to face rapidly growing electric car competition.

World auto makers have not only embraced electric cars, but now appear to be competing to introduce the most electric models. More than 400 fully electric or hybrid electric vehicles have been announced. BMW plans to introduce 12 all electric and 13 hybrids into its lineup by 2025. Ford announced an $11 billion investment, 16 fully electric, and 24 plug-in hybrid electric cars by 2022. Toyota, Volkswagen, General Motors, and others appear to be all in for electrics.

Hybrid electric vehicles, such as the Toyota Prius, use a conventional internal combustion engine along with an electric motor system to improve mileage. Hybrids can’t be plugged-in and charged. After ten years of production, Toyota was finally able to turn a profit on the hybrid Prius. Hybrid electric cars, which do not suffer the range limitation of fully electric cars, grew to about three percent of global vehicle sales in 2017.

Plug-in hybrid electrics, such as the Chevrolet Volt, can plug-in and run wholly on electric batteries but also use a gasoline engine for longer trips. Battery electric vehicles, such as the Tesla Model S and the Nissan Leaf, are fully electric and run only on batteries. Neither plug-in hybrid electrics nor fully electric vehicles are yet profitable.

UBS analysts estimate that General Motors loses $7,000 on every one of its new Bolt battery electric cars. The Bolt battery pack costs about $10,000‒$12,000, or up to one-third of the Bolt price tag. Daimler, Peugeot, Honda, and other auto makers warn of looming electric car losses.

Where is the demand to support all these new electric car models? Entrepreneurs and new companies traditionally achieve success by meeting a market need (market-pull strategy), or by developing a new technology to create a new market (technology-push strategy). An example of market-pull was the digital camera, which addressed the need for a camera able to take endless pictures that could be displayed almost immediately. Touch screen technology now found in PDAs, smart-phones, and computers is an example of technology-push. The electric car craze may be neither market-pull nor technology push, but instead is driven by government incentives and mandates.

Over the last decade, world nations established large financial incentives to promote electric vehicle adoption. Australia, China, India, Japan, the US, more than 20 nations in Europe, and others offered tax credits, deductions, and subsidies to consumers and businesses, but electric car growth has been disappointing. Battery electric vehicles comprised only 0.8 percent of the 86 million cars and light trucks sold globally in 2017.

Even this small consumer demand for electric cars is thin. When tax benefits are cut, demand plunges. A reduction in electric car vehicle registration taxes in Hong Kong and Denmark caused demand to drop more than 80 percent in those nations.

With subsidies largely ineffective, governments in Europe now plan to ban internal combustion engine car sales in the name of saving the environment. Bans on the sale of gasoline and diesel cars have now been adopted in France, Germany, Netherlands, and Norway, to begin in 2030 or 2040. California, other locations, and other nations are considering similar bans.

Are consumers going to be forced to shift to electrics? Electric cars have advantages of fast acceleration, lower maintenance costs, and lower fuel cost. But the fuel cost advantage will narrow when governments impose vehicle and fuel taxes as electric car penetration grows. Electric car deficiencies are major, including high purchase price, short driving range, small carrying capacity, lack of charging stations, long charging times, and expensive battery packs that need to be replaced during the life of the vehicle.

Auto makers are in a tough position. Demand for electric cars is small, but governments intend to force auto firms to convert their car lines to electrics. Hundreds of new car models chasing only five percent of the market is a recipe for financial debacle.

Look for big auto company electric car losses and a growing resale market for traditional gasoline and diesel vehicles.


Steve Goreham is a speaker on the environment, business, and public policy and author of the book Outside the Green Box: Rethinking Sustainable Development.

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Wallaby Geoff
August 23, 2018 2:57 pm

One missing disadvantage was the intolerable load on the electricity grid that renewables will never meet. So how is the environment saved? The madness continues.

Dennis Sandberg
Reply to  Wallaby Geoff
August 23, 2018 11:46 pm

Yes, the madness continues. So many hopeless wind/solar/EV souls out there. Liberal voters without a clue.

RM25483
Reply to  Wallaby Geoff
August 24, 2018 9:13 am

Renewables never stood a chance before EVs… here’s hoping EVs closes that lid just a little further. +1 for EVs to kill renewables, anybody? =p

Jake J
Reply to  Wallaby Geoff
August 28, 2018 9:49 am

Convert all 115 million U.S. automobiles to batteries (this being purely a thought experiment, because it won’t happen anytime soon, if ever), and electricity use would rise by about 11%. Most EV charging is done at night, when power plants are running far below their capacity. It wouldn’t put any appreciable strain on the grid to go all-EV.

There would be plenty of other issues, but not that one.

markl
August 23, 2018 2:58 pm

As long as your government can force people into using/buying EVs of course they’ll make money as the only other alternative is to go out of business. Next step would be government ownership of EV manufacturing but that would only be for the elites that can afford it. The real goal is urbanization of all and mass transportation. People need to read Agenda21 and understand what the UN is pushing on the world. It’s already taking place stealthily right under your nose and you don’t even realize it. Evs for the elite are nothing but one of the precursors to the “plan” that is there for anyone to see. Go ahead, won’t be the first time I’ve been accused of being a conspiracy theorist.

Honest liberty
Reply to  markl
August 23, 2018 3:15 pm

Mark is spot on. It looks like this:
Multi use dense Urban highrise- Denver. I know, I’ve glazed three new builds. Union tower west, Quincy, and 17 Chestnut. Union station and all the train services are saturated, home prices far exceed the ability for single payer household.
Forest service using lies about Forest fire to ban shooting. Banning easy access camping. Changing rules for zoning to live rural, won’t permit tiny homes, cashless system, full surveillance, 5G plus S.M.A.R.T. interface, can’t travel without approval and enough digital credit, soon to be social credit like China- facebook already rolling out similar social credit rating, my phone sucks takes forever to type with this new cookie acceptance bs. Much much worse and all the crap covered here is the evidence. Everyone is too comfortable to take action. The great culling will happen when the grid and next generation are sewed up, and they aren’t far away

markl
Reply to  Honest liberty
August 23, 2018 7:44 pm

“Everyone is too comfortable to take action.” Exactly. By the time they realize their comfort zone has been destroyed it will be too late.

Reply to  markl
August 25, 2018 11:46 am

Essentially what I have been saying: an attempt of a de facto ban on car ownership for all but the elite class. That would solve so many other issues: compliance costs, cost of accidents (including medical), road and bridge construction and repairs, air pollution, traffic jams, inadequate parking, and more. Best of all, the elite could drive and park as they please without putting up with the rest of us.

That is the only thing that explains why there has been virtually no action on reinforcing the electrical grid or installing charging stations; they know those things will not be needed.

Surf
Reply to  markl
August 25, 2018 11:17 pm

No one is being forced to by EVs in the US. If you decide to get one there is a tax incentive that doesn’t that doesn’t cover most of the purchases cost.. but no one is being required to get one and that is really about it. They are selling in most cases because people want them.

MarkW
Reply to  Surf
August 27, 2018 1:15 pm

Nobody is being forced to buy EVs. However CA is talking about outlawing anything that isn’t an EV.

You aren’t being forced to buy and EV. If you don’t want one you can always walk or ride a bike.

MarkW
Reply to  Surf
August 27, 2018 1:16 pm

Nobody is forced to buy an EV.

Tell that to the taxpayers who are forced to help pay for your toys!

M__ S__
August 23, 2018 3:11 pm

When fuel cells replace batteries as primary fuel system, with a small buffer battery, then the electric car will make sense.

markl
Reply to  M__ S__
August 23, 2018 5:08 pm

What, you’ve given up on super capacitors (and fusion :-)) already?

M__ S__
Reply to  markl
August 24, 2018 8:22 pm

LOL You know, I’ve followed the fusion promise since the 70’s, and no matter when I checked, fusion has stayed at least 50 years in the future. I’m not saying it won’t come to pass, but there might be starships flying around when it happens. 🙂

Surf
Reply to  M__ S__
August 25, 2018 11:23 pm

LOL You know, I’ve followed the fusion promise since the 70’s, and no matter when I checked,

I have been following the fuel cell promise for about as long and it looks like engineers have made as much progress as the fusion scientists.

Marty
August 23, 2018 3:17 pm

Ever see the musical theater play and/or the movie “The Music Man?” Harold Hill is a conman in Iowa in the early years of the twentieth century. He comes to River City. There he convinces the town folks that what they really need is a boy’s marching band. And he is the man to sell them the uniforms, the instruments and to teach them to play them. He runs into his old companion Marsellus who tells him the town doesn’t have any troubles. Harold Hill replies “We’ll just have to make some.” He then proceeds to convince the towns people that they have terrible trouble in River City and that what they need to solve this trouble is a boy’s marching band. But of course Harold Hills is planning to get the money for the uniforms and the instruments and skip town with the money. Well his con fails when he accidentally falls in love. But it’s an entertaining story with some great music.

Isn’t the electric car the same story? Just substitute Elon Musk for Professor Harold Hill. And the rube Californians and Governor Jerry Brown for the towns people. I can just imagine Elon Musk singing and dancing to Jerry Brown and Barrack Obama that “you got trouble, right here in River City” and that what will solve their trouble is a $35,000 electric car. Of course the $35,000 electric car will never be delivered. But it was an entertaining musical.

azraycatcher
Reply to  Marty
August 23, 2018 4:23 pm

LOL! One of the nicknames for Sacramento is River City!!

MarkW
Reply to  Marty
August 23, 2018 6:19 pm

Ya gotta know the territory, the territory, the territory

Rud Istvan
August 23, 2018 3:42 pm

Some technical realities, from someone with several global patents in this general field.
1. Electric storage technology is reasonably well understood after several hundred years. There are just four basic types: electrostatic (Layden jar, most caps), Helmholtz double layer (Tstorms and super caps), Fardic pseudocapacitance (nothing major commercially, a few military single side band radar exceptions from Dave Evans), and Faradic true Allessandro Volta batteries.
2. Within Faradic batteries, all the conceivable electrochemical systems have been experimented with. The most commercially familiar are lead acid PbA and LiIon. Others like something air all have major problems like dendritic growth lifetime.
3. There are probably no ‘miracles’ in newish nanotechnology (a subject of several of my own now globally issued patents). There is one possible exception, detailed in a guest post a couple of years ago at Climate Etc. Concerns the hybrid LiC device (real and commercial in small quantities) using nanodoped laser scribed 3d graphene (itself a new patented nanotechnology). Alas, not even a lab scale demo device yet after 4 years. Conceptually possible not the same as techically feasible not the same as commercially practical.

Until some unforeseeable technical miracle solves Ecar range anxiety and cost, aint gonna happen. Anybody disagrees, bring your counter facts after reading several chapters in The Arts of Truth.

Curious George
Reply to  Rud Istvan
August 23, 2018 5:01 pm

An electric car does not necessarily need a battery. Any source of electricity would do. My favorite is a fuel cell. Imagine a self-driving car running on ethanol – due to a better efficiency, it would have a range longer than a combustion engine. Clean, environmentally friendly, user friendly. Should you, God forbid, run out of fuel, you could share your scotch with the car.

Dennis Sandberg
Reply to  Curious George
August 23, 2018 11:59 pm

Ethanol environmentally friendly, you gotta be kidding. Even the greens know it causes more environmental damage than oil/gas when land use, fertilizer, water consumption etc is included. They want it to go away. Do you grow corn or work for an ethanol company? Bad for everyone else,

RM25483
Reply to  Rud Istvan
August 24, 2018 9:25 am

How many materials / combinations did Edison try in his light bulb? I’ve seen the remake of his lab, dozens of workers, buckets of materials & chemicals, thousands of failures. In the end, the most basic solution (carbon filament) combined with a vacuum solved the problem.

EVs aside, I have faith that we will produce better batteries when something completely different is tried. Until then, we get mere slim improvements in existing battery technology due to tweaking chemicals, materials, and blends.

MarkW
Reply to  RM25483
August 24, 2018 10:10 am

Unless someone invents a new atom, everything has already been tried in terms of making batteries out of them.

A C Osborn
Reply to  RM25483
August 24, 2018 10:23 am

That was a completely new concept, Batteries have been under development for 200 years, I think most elements have been tried during that time.
But it still comes down to Energy Density.

RM25483
Reply to  A C Osborn
August 24, 2018 10:38 am

Maybe we don’t need a new atom… there’s always… Uranium. 🙂
Ok, I kid I kid.
I am familiar with the shortfalls of battery improvements, particularly with graphene. But what I mean is a completely new technique, like using a Eduson’s vacuum _instead of_ finding a new material blend that never did what he wanted.

Here is an example from Brown University from some time ago: http://www.brown.edu/Administration/News_Bureau/2006-07/06-022.html

They built a multi-layered cake of basically static-charged plastic, each layer with many pockets acting as mini capacitors.

“The result is a hybrid. Like a capacitor, the battery can be rapidly charged then discharged to deliver power. Like a battery, it can store and deliver that charge over long periods of time. During performance testing, the new battery performed like a hybrid, too. It had twice the storage capacity of an electric double-layer capacitor. And it delivered more than 100 times the power of a standard alkaline battery.”

I have not seen much on this since then, so I assume that it did not pan out. However, this is the sort of completely different thinking to which I am referring.

Reply to  Rud Istvan
August 24, 2018 10:57 am

For ecars, perhaps swappable batteries could be an answer to sudden end of range. Maybe they they could be quickly hooked to small trailers.

Jake J
Reply to  Rud Istvan
August 28, 2018 9:42 am

A Chevy Bolt will go 140 to 200 miles on 80% of its battery, depending on the season. This makes it useful for urban commuting.

Firey
August 23, 2018 4:21 pm

Hydrogen power may be the answer. The Australian CSIRO (Research Body) are working towards it.

https://reneweconomy.com.au/renewable-hydrogen-could-match-gas-battery-storage-on-cost-by-2025-csiro-46302/

MarkG
Reply to  Firey
August 23, 2018 5:14 pm

Then they just need to find a hydrogen mine.

MarkW
Reply to  MarkG
August 23, 2018 6:22 pm

Hydrogen can and will leak out of even the tiniest of cracks or improperly fitted seals.
Heck, it doesn’t even need cracks, under the right conditions it can migrate right through the metal itself.

Dennis Sandberg
Reply to  MarkW
August 24, 2018 12:01 am

and in the process ruin the metal…hydrogen embrittlement…nasty.

MarkW
Reply to  Dennis Sandberg
August 24, 2018 7:25 am

Hydrogen embrittlement, combined with a high vibration environment. Not a pretty picture.

Patrick MJD
Reply to  MarkG
August 23, 2018 6:52 pm

The oceans.

Boris
Reply to  MarkG
August 24, 2018 10:04 am

I used to work in a chemical plant that had a Hydrogen stream as a waste product. We utilized this waste stream to make HCL acid in a burner which we sold as a product to end users. To actually use the Hydrogen we had to gather it in a header, remove the excess water and compress it to feed it into the burner at 50 PSI. The number of fires and explosions that occurred in this area of the plant was to say the least disturbing. Try as we might you could not keep the H2 in the pipes. It leaked from everywhere regardless of how many types of sealing products and different gaskets were used on the pipe joints and flanges. The compressor building would shed its walls with a regularity till we gave up and left the water ring compressors outside in the winter. Lots of insulation and heat tracing to prevent freezing was applied to the compressors and piping. The excess H2 was vented into one of three stacks and it would light off in a glorious fire all by itself during thunder storms or one time snow hitting the stack caused enough static electricity to cause it to ignite. The stability of this element is too volatile for the everyday consumer to use. I see people who have a hard enough time pumping their own gas at a service station to believe that this element would become a widely used fuel.

Patrick MJD
Reply to  Firey
August 23, 2018 6:59 pm

Did you read the article? Splitting hydrogen from water consumes vast amounts of energy. Burning hydrogen produces water vapour. And they claim transporting hydrogen in the form of ammonia also consumes vast amounts of energy.

It’s pie in the sky stuff and not a surprise from the CSIRO.

Reasonable Skeptic
August 23, 2018 5:14 pm

Which political party will ban ICE cars first?

MarkW
Reply to  Reasonable Skeptic
August 23, 2018 6:22 pm

The one getting the biggest donations from EV makers.

Patrick MJD
August 23, 2018 6:18 pm

Punters (Suckers) here in Aus have already paid an AU$1500 deposit a year ago for a Model 3 and they will still have to wait a year or more to actually receive their right-hand drive version.

Steve O
August 23, 2018 7:15 pm

“Tesla also promises to attain profitability in the near future”
— I believe they only indicated an expectation to be cash flow positive. That’s a much lower hurdle.

Reply to  Steve O
August 23, 2018 9:53 pm

Right now it’s looking as though Tesla will instead lose $250 million in Q3, and miss its production and sales targets too. See the articles listed on this page:
https://seekingalpha.com/symbol/TSLA

vrager
August 24, 2018 1:28 am

After a while all sorts of problems arise with electric and hybrid cars that are expensive to fix. Rich people hate being sold a pup.

Virtue signalling with your new electric car is great for urban dwellers – rubbish for anyone doing more than 30 mile journeys regularly over hilly terrain and in places without charge points. An extra 25-35% cost and everyone saying “you’ve just moved your emissions to the power station’s exhaust pipe” and “your battery is made using expensive materials mined in dreadful places” isn’t making them attractive.

Jake J
Reply to  vrager
August 28, 2018 9:35 am

While I agree that a fair amount of virtue signaling goes on with EVs, I’d note that vehicles have always “signaled” various kinds of status. Just look at the car and truck ads. I’d also point out that a Tesla EV signals not just virtue, but wealth, same as any other luxury sled.

And you’re wrong about 30 miles. Even the first-generation, small-battery EVs will typically go for 60 to 80 miles on 80% of the battery. The newer EVs (i.e. Chevy Bolt) will go for 140 to 190 miles on 80% of the battery.

Van Doren
August 24, 2018 2:06 am

The difference in costs is actually not that big. I own a diesel BMW, and you can look up for yourself what different parts cost – http://de.bmwfans.info/parts-catalog. Motor (7k) plus manual transmission (2.7k) are roughly 9.7k Euro for my car. For the electric I3 motor costs 1400, transmission 300, battery roughly 11k. Or roughly 12.7k for everything. The difference is 3k or ca. 10% of the total car cost. However, I3 is rather comparable with automatic transmission, which costs 4k, so we are at 11k vs 12.7k.

Reply to  Van Doren
August 24, 2018 2:37 am

What’s the cost of the two cars themselves?

Curious George
Reply to  Van Doren
August 24, 2018 8:39 am

Why is there a transmission in an electric car?

Van Doren
Reply to  Curious George
August 24, 2018 12:04 pm

To get higher torque. It’s a one gear transmission.

MarkW
Reply to  Curious George
August 24, 2018 2:08 pm

There’s a limit to how fast an electric motor can spin and still deliver good torque. It has to do with the inductance of the windings and trying to push a high frequency signal through a a high inductance load.

Aelfrith
August 24, 2018 4:16 am
ferdperple
August 24, 2018 4:27 am

The Bolt battery pack costs about $10,000‒$12,000
========
Over its lifetime the battery will store and delivery about $12000 worth of electricity. Which is the energy equivalent of about $12000 worth of gasoline.

In other words the economy of an electric vehicle is hugely negative once you add in the cost of the battery. You would need double the efficiency of an ICU just to break even.

Reply to  ferdperple
August 25, 2018 6:26 am

Possible solution — use 20 standard lead-acid batteries in series for a 240V motor. Cost of each battery ~ $100, so $2000 for a total replacement. Viola!

I actually saw an article where a motorhead had built & was running just such an EV — in an old Camero body IIRC.

Jake J
Reply to  beng135
August 28, 2018 9:31 am

The original EV conversions ran on lead-acid batteries. I once test drove a converted Ford Ranger pickup that used them. EVs that run on lead-acid batteries have very short range, and the batteries take up much more space, on account of very low energy density relative to lithium-ion batteries.

Lead-acid batteries also have much shorter life. Yep, the cost of the batteries is lower, but you’ll buy a lot more of them. The practical range of the Ranger conversion was 25 miles in good weather (lead-acid batteries have the same sensitivity to ambient temperatures as lithium-ion, so winter ranges are lower), compared to a smaller battery in my Think City EV, which has a practical range of 60 miles in winter and 75 miles in summer.

A note about range. To preserve battery life, a lead-acid battery shouldn’t be drained below 50% of capacity on a regular basis. A lithium-ion battery can be drained to 20% of capacity. When both are treated well, a lithium battery will last at least four times as long as a lead-acid battery, and when put into a vehicle in realistic configurations, will have a much longer range.

ferdperple
August 24, 2018 4:32 am

At 60kwh the Chevy bolt battery is the energy equivalent of just under 2 gallons of gasoline or $ 6 worth of electricity.

ferdperple
August 24, 2018 4:35 am

Over a 1000 charge cycle lifetime the bolt battery will only store and return $6000 worth of electricity or gasoline equivalent. The economics are worse than I thought.

Jake J
Reply to  ferdperple
August 27, 2018 11:34 am

It should last 2,000 cycles, and if discharged to 20% state of charge it will take 96,000 kWh, which will cost ~$9,000 where I live. The car will go ~315,000 miles on that amount of juice. Obviously, the rest of the car won’t last that long. So let’s call it 1,000 cycles like you wanted to, and 155,000 miles, and 48,000 kWh costing $4,500 in my neck of the woods.

On the fuel side, where I live the Chevy Cruse, roughly equivalent to the Bolt, will use 5,000 gallons of gasoline to go 155,000 miles. At today’s gas price ($3.40/gallon where I live), it will cost $17,000 for the fuel.

The Bolt will be much cheaper to maintain, because it won’t need oil changes, transmission repair, or exhaust system repair. The only downside to the Bolt will be its range, and to me that’s a big downside if the Bolt is someone’s only car. But as a second car, it’ll save at least $15,000 over its lifetime.

Pretty good economics even without a subsidy. Results will vary by location, obviously.

MarkW
Reply to  Jake J
August 27, 2018 1:25 pm

Don’t forget that over half the cost of gasoline is taxes. The fact that you aren’t paying these taxes is just another of the many subsidies EVs get.
Anywho, most governments are looking for ways to add taxes to EVs to recover this lost revenue. The notion that EV’s are cheaper to run is going to end really soon.

As to cost of repairs, that is no where near as high as most EVers like to believe.
Most IC engines outlast the chassis they are in, I’ve never needed to repair a transmission and I’ve owned cars for almost 40 years.
Never needed to repair an exhaust system.
I only change oil twice a year, and that’s only two switch the weight as the seasons change. If I lived in an area with less climatic variability, I wouldn’t even do that much.

Reply to  MarkW
August 27, 2018 1:55 pm

“over half the cost of gasoline is taxes”
..
The current average price nationally of a gallon of gas is $2.83
..
The current NYMEX quote for a gallon is $2.07
..
You flunk 8th grade math.

RACookPE1978
Editor
Reply to  Remy Mermelstein
August 27, 2018 5:53 pm

Consider “taxes” as “money paid to a government to stay in business or get something that required the taxes, but the government provided no value” So crude oil being pumped requires money and an investment in the tools, facilities, and drilling and exploring. But the “government” in EVERY oil patch taxes the oil as it leaves the ground, taxes every step of the transportation, refining, and distribution, and then taxes the sale of the oil. It taxes the payroll, the savings plans, the full cost of their social security, medical, and their houses …

Yes, more than half of the price per gallon of gasoline is taxes in one form or another.

Reply to  RACookPE1978
August 27, 2018 6:11 pm

Get a clue RACookPE1978……..the NYMEX price already includes everything you are complaining about. Do you understand how markets work????
.
NO, you are wrong. Most of the cost of a gallon of gasoline is reflected in the price of a barrel of crude (the raw material).

Reply to  Remy Mermelstein
August 27, 2018 6:20 pm

Which is why Mr. RACook when the price of a barrel of crude goes up 10%, the price of a gallon of gas also goes up 10%. The taxes are pretty much fixed and are independent of the cost of the raw material.

Reply to  Remy Mermelstein
August 27, 2018 6:22 pm

You see Mr. RACook, if you are a gasoline wholesaler in Spain, you can purchase gasoline on NYMEX at the quoted price, irrespective of the taxes that Spain will impose.

Reply to  Remy Mermelstein
August 27, 2018 6:30 pm

Lastly Mr. RACook, the price determined by NYMEX is independent of national boundaries. It is the price that Saudi Arabia can obtain for a gallon of gasoline on the open market. This aspect of reality makes anything you’ve said moot.

Dennis Sandberg
Reply to  Remy Mermelstein
August 29, 2018 10:23 pm

“A typical 42-gal barrel of oil will yield about 45 gal of petroleum product because of refinery processing gains”. Not all gasoline because it’s more economical to produce, 20% gas, 20% diesel, etc. but at $68 bbl crude looking at $1.50 gal…and this $1.50 includes taxes on exploration, production, refining etc. so yes, $3.00 gas is > 50% tax.

Jake J
Reply to  MarkW
August 28, 2018 9:20 am

I own a Think City EV and a Ram 3500 diesel truck. I live in WA State. A gallon of regular gas goes for $3.399 at the local gas station. This incudes $0.678 in taxes, which is 19.9% of the price. Diesel goes for $3.499, including $0.738 in tax, which is 21% of the price.

On a per-mile driven basis, a gas car equivalent to the EV would be a Scion iQ. It gets 37 mpg, which comes to 1.83 cents tax per mile. The diesel truck gets 16 mpg, which comes to 4.61 cents tax per mile.

The state charges a flat $150 a year fee on EVs, ostensibly to replace the gas tax. It actually does a lot more than that. The per-mile tax depends (obviously) on how many miles a year you drive an EV. The average EV is driven 9,000 miles a year; I drive mine 4,000 miles a year. Therefore, the average EV pays 1.67 cents a mile, while my EV would pay 3.75 cents a mile.

In either case, this is grossly unfair, given that my EV gets ~110 equivalent miles per gallon. Gas and diesel taxes implicitly reward fuel economy. If EV taxes were levied on the same basis, my EV would pay not 3.75 cents a mile but 0.61 cents a mile. This is why I evade the EV tax by registering my EV in Oregon, which current does not levy an EV fee. I don’t think EVs should get any preferences, yet nor should they be penalized.

When I originally presented the numbers, I excluded taxes on both sides of the equation because of the comparability issue that I just detailed. I hope you don’t paint me as any kind of EVangelist, because I’m not. I own the EV strictly out of curiosity, and because I was able to get it for a 70% discount when Think went out of business in 2012. Nor should you paint me as any kind of fan of the thieves who run WA and OR’s state governments.

Dr. Strangelove
August 24, 2018 4:41 am

People will always drive gasoline cars for as long as there is crude oil. When oil reserves get totally depleted, people will shift to methanol, which can be produced from coal to syngas to methanol. Indy 500 cars use pure methanol.

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Dr. Strangelove
Reply to  Dr. Strangelove
August 24, 2018 5:06 am

When we ran out of oil, people will also use nitromethane, which is produced from propane (by-product of natural gas). Nitromethane is used by Top Fuel dragsters

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Dr. Strangelove
Reply to  Dr. Strangelove
August 24, 2018 5:59 am

With methanol and nitromethane available in gas stations, muscle cars will be more popular than ever. So much for the green’s dream of electric cars for everybody

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Dr. Strangelove
Reply to  Dr. Strangelove
August 24, 2018 7:01 pm

After 400 years when fossil fuels have been depleted, people will shift to ammonia. Nuclear plants will produce ammonia by electrolysis of water and Haber process. X-15, the fastest aircraft of all time at Mach 6.72, used ammonia as fuel.

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Dr. Strangelove
Reply to  Dr. Strangelove
August 24, 2018 7:25 pm

Gas turbines can use ammonia as fuel. The gas turbine car, Bluebird CN7, produced 4,450 hp and held the land speed record of 403 mph. With abundant energy from nuclear fusion, gas turbine cars with 1,000 hp will be the common muscle cars of the future. ICE cars are here forever!

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MarkW
Reply to  Dr. Strangelove
August 27, 2018 1:26 pm

If you are going to use the energy from nuclear plants, it would be better to go ahead and produce regular gasoline. Too many safety problems with ammonia.

Reply to  Dr. Strangelove
August 27, 2018 2:00 pm

Indy 500 cars stopped using pure methanol in 2007 and switched to pure ethanol (E100.)

ferdperple
August 24, 2018 4:44 am

Building the $12000 bolt battery is likely to produce 2x the CO2 than the bolt can save in its lifetime. Assuming the electricity comes from a zzero CO2 source.

If the source is not CO2 zero then the bolt likely produces closer to 3x the CO2 excluding motor and charging efficiencies.

Nylo
August 24, 2018 4:48 am

Tesla also promises to attain profitability in the near future, but the firm is about to face rapidly growing electric car competition.

A competition increase would not be a problem for Tesla at this moment, as they cannot produce as fast as their customers demand. Actually, some reduced demand for some time would make the people that do buy the Model 3 happier, as waiting times would drop. The only reason why they are not selling more right now is that they cannot produce faster.

iRock
August 24, 2018 5:32 am

Governments and the eco-terrorist aligned media ignore the real hazards of giant batteries on the highways, high current electric shock deaths and driver-emulation by battery self-combustion.

First responders ‘at risk of electrocution from hybrid and electric cars after serious accidents’ http://www.dailymail.co.uk/news/article-2254602/First-responders-risk-electrocution-hybrid-electric-cars-accidents.html

Federal agency will investigate Tesla crash that killed two young students http://www.sun-sentinel.com/local/broward/fort-lauderdale/fl-sb-engulfed-flames-car-crash-20180508-story.html

ozspeaksup
August 24, 2018 7:22 am

one of the wags at zerohedge named the Teslas “the crematorium on wheels”
guess the saving on cremation might make it a seller for some?
hmm?

Crispin in Waterloo
August 24, 2018 7:23 am

“Battery electric vehicles comprised only 0.8 percent of the 86 million cars and light trucks sold globally in 2017.”

It is so low because of the vehicles they choose to include in the definition of ‘electric’. The number of electrically powered vehicles is far greater treated than 0.7m counted here. Far more.

Bob Denby
August 24, 2018 8:22 am

I notice, below, that everyone’s talking cars — should be talking batteries! When the only allowable fuel is electricity, ‘mommy earth’ is gonna get hit!

August 24, 2018 8:31 am

Steve, one trouble with the cost of electric cars is they make them like IC cars with all the bells and whistles. Actually, when they came out with the IC cars over a century ago, they looked like horse drawn vehicles – even were called horseless carriages. UK called their highways “carriageways” not long ago. Since the push is for a more spartan low environ”mental” society, a pragmatic design to get you from A to B would do. Make a $20k vehicle and you’d find customers for it. Look at every aspect, from wheels/tires upwards and break from the swooshy streamlined look. Think like a backyard mechanic. I put this idea forward as a forecast.

John Endicott
Reply to  Gary Pearse
August 24, 2018 9:00 am

Make a $20k vehicle

Considering the cost of the power system (mainly the battery) eats up the vast majority of the $20k, that doesn’t leave the manufacturer much to cover the rest of the vehicle (windows, mirrors, lights, tires, seats, frame, etc) and still have a hope of making a profit for themselves and their dealers (without heavy govt. subsides)

Not to mention the customers will be looking at what they are getting for $20k (IE a bare bones EV) and comparing it to what they could be getting for $20k elsewhere (IE ICE vehicles that have much more in the way of “the bells and whistles”). Which do you think will look like a better bang for the buck? the bare bones EV? really? Outside a small niche of virtue-signalers, I rather doubt it.

A C Osborn
Reply to  Gary Pearse
August 24, 2018 10:18 am

“break from the swooshy streamlined look.”
You do know why they are “streamlined”?
So you do not want any infotainment, heating, cooling etc.
Why do you think you do not get IC cars built like that?

John Endicott
Reply to  A C Osborn
August 24, 2018 11:01 am

Indeed, there’s a reason manufacturers continue to include many “bells and whistles” such as “infotainment, heating, cooling, etc.” It’s because car buyers actually want many of those things. If you live in a hot state (like Texas for example) good luck trying to find a buyer for your $20K EV that doesn’t have AC.

August 24, 2018 11:35 am

Electric cars are dixie cups.

Nigel Sherratt
August 24, 2018 1:10 pm

Kalashnikov joins the EV market!

https://www.bbc.co.uk/news/world-europe-45292028

Reply to  Nigel Sherratt
August 25, 2018 6:11 am

Cool. An assault car! I assume it has selectable semi-automatic/automatic transmission, a 30-round removable battery pack, and an optional flash-suppressor for the front….

John Endicott
Reply to  beng135
August 25, 2018 1:18 pm

And an ejector seat, it needs a cool Bond-style ejector seat.