Promises, promises: Why plans for an all-electric future are wildly premature

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My Brooklyn neighbors, like many Americans, seem to have a keen interest in electric cars. They always ask, “Have you driven that new Tesla yet?” They’ll say, or ask how a Mustang Mach-E or Porsche Taycan compares.

Recently the questions are as follows: “So I read that General Motors is stopping making gasoline cars.” I’ve been asked the same about Volvo, Ford and GM’s Cadillac. Seemingly every week, a different automaker shoots up a hand to promise good green intentions and hatred for climate change, like front row students seeking a teacher’s praise – or in this high tuition fee, a gold star of the media and Wall Street . My neighbors reliably settle their question with an expectant look: this is my signal to say how great it all is, and it won’t be great if everyone drives an electric car.

This is where things get tricky. I think that would be a great thing for so many reasons: climate change, suffocating smog, the physical and financial health of consumers, ultimately the competitiveness of American industry and the country itself. But I’m not going to lie to these people: The promises that automakers (and analysts) are driving for an all-electric future are hugely premature. That’s despite a potential major change in political support for electric vehicles. President Joe Biden’s own goal requires $ 174 billion in government spending to support electric vehicle adoption, with everything from consumer discounts to 500,000 new public chargers. That would be a great start, but it hasn’t even started yet.

For now, the goalposts for these alleged conversions are 2025 for an all-electric Jaguar and 2030 for Cadillac and Volvo. By 2030, the UK insists that it will ban the sale of new gasoline and diesel cars. The EU is under pressure to set its own phase-out date. Do you think the football Super League has embraced royalty? Wait until 2029 rolls around, and these guys hear they can only buy an EV from now on.

The elephant in the studio apartment: a near blackout of charging options for residents of major cities and apartment renters around the world

The promises then get bigger and more vague: by 2035, no more petrol or diesel passenger models in GM showrooms (with a dispensation for heavy trucks). For GM, full carbon neutrality by 2040. Volkswagen, zero carbon in both production and vehicle emissions by 2050.

Now, I am not saying that automakers are exactly lying. VW may have fiddled with its fake ‘Voltswagen’ naming stunt, but it’s not investing $ 80 billion in electric vehicles for an image boost. Ditto for GM’s own $ 27 billion bet on EVs and autonomous cars through 2025, including battery giga factories in Ohio and Tennessee.

But goal posts have a way of moving. Cans get kicked on the road, especially when they bump into a wall of stubborn consumers or economic reality. At this point, it’s almost not worth ticking off the reasons for the glacial adoption of EVs: models that remain unaffordable for many mainstream buyers, despite encouraging progress in lowering battery costs. Limited range and associated fear. Public charging is rarely where you want it, or as fast as you need it. And the elephant in the studio apartment, a near blackout of charging options for residents of major cities and apartment renters around the world. These include skilled, high-income professionals who would like to have an electric car but feel left out. Solving the charging problem alone requires a Marshall Plan level of spending and political will: Globally, AlixPartners expects an investment of $ 300 billion to support electric vehicles at the projected 2030 level, of which $ 50 billion in America.

Meanwhile, too many analysts and cheerleaders continue to make false assumptions about electric vehicle adoption. They ignore the elephants, the systemic forces – including gasoline, the cheap, government-subsidized drug available on every street corner – and think it’s just a matter of carmakers pushing more models to consumers. They collect, say, the roughly 100 new electric vehicles expected to hit showrooms by 2025, assuring us that this time will be the tipping point. But the sales and projections never add up. The original Nissan Leaf still holds the US annual sales record for non-Tesla EVs, with 30,200 sales in 2014. You could reasonably assume that if Americans were so excited about EVs, an older automaker would have hit a real sales hit by now. , with something, something better than a 2014 Nissan Leaf. The fact that they don’t should tell you something about the current competitiveness of electric vehicles. (Again, Tesla is the outlier.) Imagine EVs could cost less in the long run, once energy and maintenance costs are included. If people are satisfied with the gasoline cars they own now, and choose not to look beyond a monthly payment, arguments for rational consumer behavior can fail.

Given a full year of sales, the impressive Ford Mustang Mach-E should break the Leaf’s record – if Ford can pry enough units out of Europe, where regulatory requirements are more urgent. But even, say, 40,000 units is a pittance compared to the 400,000 annual sales of a Toyota RAV4. (As I said, wake me up when the first non-Tesla EV exceeds 100,000 sales). Maybe next year’s electric Ford F-150 pickup will win the masses. With Ford moving about 800,000 F-150s in a good year, converting just one in ten buyers would mean selling 80,000 electric pickups. Another good start, in America’s perennially best-selling vehicle, which may prove the merits of electricity at a base level, at the topsoil level.

Regardless, the ongoing PR spin from older car makers could power a planet of EVs. In some ways it’s hard to blame them. An industry that has been seen as a dead end with a low margin suddenly has a bright future, including autonomous cars and car poolers. So every automaker applies the Tesla and start-ups playbook: “Story stock” promises, fairytales or not, can work wonders to attract investment and trigger geese company valuations. GM’s announcement alone that it would be phasing out gasoline cars in 14 years’ time increased its stock by 4%. More concrete news of a Silverado electric pickup truck set a record high for the post-bankruptcy “New GM” at more than $ 63 a share and a market cap of $ 89 billion. Peanuts compared to Tesla’s valuation of $ 685 billion, but went in the right direction.

If consumers don’t see the benefit of joining the EV brigade, and governments don’t firmly endorse their own lofty promises, then all showrooms full of shiny EVs won’t be a squat.

Aside from the worst examples of greenwashing – including opportunistic start-ups like Nikola and Lordstown Motors that look more like vaporware every day – most major automakers seem to be sincere and serious about their company’s transition. Finally. Tesla’s existential threat, China’s attempt to dominate the EV and battery industry, and looming regulations from San Francisco to Shanghai, keep GM and other automakers wide awake, even if they aren’t as awake to the environment as they want us to. make believe. Unlike an all-electric Tesla, older automakers still have to design and sell the ICE cars that generate the vast majority of sales and all of the profit, while developing electric cars that could one day bankrupt their old business.

That’s a tricky business, as Steve Carlisle, GM’s North American chief, suggested to Automotive News. That promise of fully electric cars? More like a goal.

“We’re all in, but we need other people to join us,” Carlisle said. “We are going to do everything we can to make that future a reality. There is a little bit of leading the horse to the water. ”

“We need to offer consumers what they want, when they want it, while giving them a different, compelling view of the future.”

You don’t have to read between the lines to hear how he covers GM’s EV bet. But Carlisle is right: if consumers don’t see the benefits of joining the EV brigade, and governments don’t support their own lofty promises, all showrooms full of shiny EVs won’t be the same as squats.

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