Reason Foundation: 2024 Update on the Decline of Electric Vehicles

Robert Poole's article titled The (Not So?) Surprising Decline of Electric Vehicles gives a useful update on the reduction of EV sales and manufacturing in the US.  All the text below is from Robert's newsletter.

Recent headlines in business media report trouble with the electric vehicle market. Last month, (all-EV) Tesla reported a 45% profit decrease in the most recent quarter, due to lower sales and the lower prices it’s recently been charging due to increased EV competition. GM announced delays in two planned EV factories—one for electric Buicks and the other for electric trucks. And Ford CEO Jim Farley announced that the company would focus more on smaller, less-expensive EVs, since its large ones are selling poorly. Ford’s EV unit had a $1.1 billion loss for the second quarter of this year.

What accounts for EVs’ declining popularity? A survey of electric vehicle owners by J.D. Power found that their battery electric vehicles (BEVs) and plug-in hybrids went back to the dealer for repairs at three times the rate of gasoline-fueled cars. And despite early claims that EVs would be low-maintenance due to fewer moving parts, etc., repairs and maintenance average more labor hours (possibly because mechanics are still getting familiar with them).

Kelly Blue Book and Manheim found that the residual value of BEVs after two years is significantly lower than that of gasoline cars, while hybrids held slightly more value than gas cars after two years.

Finally, when an EV gets into a collision, it is significantly more likely to be declared a total loss, rather than being repaired.

My engineer friend in Sweden, Michael Sena, editor of The Dispatcher, reported in the Summer 2024 issue the results of a survey of EV buyers by McKinsey & Company’s Center for the Future of Mobility, released June 12. They found that 46% of BEV purchasers say they will go back to an internal combustion vehicle for their next purchase. Their main concerns were about charging, the high cost of ownership, and the complexity of long-distance travel. Respondents were also upset that the range of the BEVs they purchased is considerably less than what it says on the sticker. They were also surprised by poor performance in very cold and very hot weather. Sena also reports the result of a different survey of residual value, by Cox Automotive, whose results paralleled those reported above—a faster decline than for internal combustion vehicles.

These may be short-term problems, due to the technology being new and charging networks still being rudimentary. But these findings certainly put down a caution flag for an expected total EV replacement within the next several decades.

The Riveting Events of Ms. Chao's Drowning in a Tesla X

Click for the full article by Michael L. Sena 

Wiki: Ms. Angela Chao was chairwoman and chief executive of her family's shipping business, the Foremost Group, which operates a global fleet of bulk carrier ships. The Chaos have a net worth of $14.2 billion, according to Forbes.

<quote>This incident became international news for two reasons: 1) the person who drove the car was well known and very wealthy; 2) the person was the sister of Elaine Chao, who is both a former U.S. Secretary of Transportation and the wife of the current U.S. Senate Minority Leader, Mitch McConnell. The fact that the car was a TESLA added to the interest because the reason the car ended up in the water was linked to TESLA's unconventional gear-shifting design.

Approximately 400 people die each year in the U.S. in car accidents involving vehicle submersion. That is, the car enters the water and the person cannot get out before the inside of the car fills up with water and the person drowns. Four hundred is around 1% of all U.S. traffic-related deaths. We don't know how many of those deaths were intentional, or 'autocide' to use the official term, with the driver using the vehicle and water rather than intentionally colliding with an oncoming car or purposely steering their car into a tree. What we do know is that it is effective, because once a car is in the water and sinking, it is not easy for the driver or occupants to get out of the car, especially with most newer-model vehicles that have power windows and automatic door locks. That's the problem. A great deal of care is dedicated by car designers to how we enter and exit cars under normal conditions, and doors and windows are controlled, but cars are not designed for easy exit once they have entered into and are submerged under water, as the Angela Chao incident illustrates. 

It is not often that a car accident is described in such detail as the one involving Angela Chao. The entire event had many witnesses as the drama played out over two hours between when the car entered the water and when the victim was pronounced dead. Among the witnesses was Ms. Chao herself, who made a phone call to a friend as soon as the car was in the water, and she continued to talk to this person for eight minutes, relating the status of the water level rising inside the car and providing details of how the car ended up in the water. What we know about the incident is what was released by the police in a public report. Ms. Chao had invited seven close friends to the 4,500-acre ranch owned by her and her husband for a weekend party to celebrate the Chinese New Year. 

The party took place in a cottage on the ranch some distance from their home. The cottage is in close proximity to a pond. At around 11:37 p.m., security footage captured Chao walking alone and unsteadily to her vehicle, a Tesla Model X, wrapped in a blanket and holding a phone in her right hand. As she attempted a three point turn, the vehicle suddenly "shot backwards" down an embankment (or over a retaining wall; there are two variants of the story) and into the pond at 11.38. A toxicology report, ordered as part of the investigation into her death, revealed that Chao had a blood alcohol concentration of 0.233, well above the legal driving limit of 0.08 in Texas. Chao called one of her friends who was at the party at 11:42 p.m. At this point she had not followed the first rule of surviving a water-related accident, and the call violated the second rule.

Rule #1: When a car is entering the water, open a window and prepare to exit the vehicle as soon as it hits the water. The vehicle's electrical system should continue to function for at least a few minutes, so even electric window controls should work.

Rule #2: Don't waste precious time calling the emergency services until you are out of the vehicle. They won't get to you in time to keep you from drowning. A car can fill up with water in 60 seconds; the Tesla Model X took eight minutes.

The vehicle at this point was apparently floating but sinking slowly during the eight-minute phone call. Chao told her friend she had put the car in reverse instead of drive—a mistake she had made before, she told her friend—causing the vehicle to go over an embankment and into the pond. She told her friend that the water was rising inside the car, and she was going to die.

Someone (Another friend at the party?) called 911. Emergency units arrived at 12.23. a.m. We don't know if the inside of the car had filled with water at this point. Rescuers stood on top of the submerged vehicle and tried unsuccessfully to enter the vehicle, attempting to break the windows with a pole. A tow truck arrived, but the Tesla was over 20 meters from the shore, too far into the pond for the truck's chains to reach it. Additional emergency responders then arrived with diving gear and managed to break a side window, extracting Chao from the vehicle at approximately 12:56 a.m. EMS responders performed "advanced life support" for 43 minutes in an attempt to resuscitate her, but she was ultimately pronounced dead at 1:40 a.m. <end quote>

Consumer Reports Can Be Wrong!

CONSUMER REPORTS: Can the Grid Handle EVs? Yes! 

They should really study this series: The EV transition at scale poses daunting challenges

 Dear Chris,

The answer in your blog is incorrect. It is predicated on:

"...Americans drive approximately 2.9 trillion miles a year,..." and "...The average efficiency of all 20 comes to 3.1 miles per kilowatt hour. "

Totals and averages can be grossly misleading and this is the case here.

Total power generation capacity may match total EV KWh demand over the course of a year. But this totally ignores diurnal patterns and Peak Demand periods! The grid often has a hard time providing enough power for the usual demands plus a/c on hot and humid days.

Some locations have spare capacity, some are nearly maxed out (California, Hawaii, many others), and the US grid is far from being interconnected to cover demand deficits.

This question can be answered with reasonable confidence only at the local/regional level based on historical patterns of daily KWh consumption, along with specific forecasts of EV in traffic by type... car, SUV, pickup, delivery truck, long distance truck.

-- 
Panos D. Prevedouros, PhD
Reno, Nevada
Past Chairman and Professor Emeritus
Civil and Environmental Engineering
University of Hawaii at Mānoa

Robert Poole: Problems on the Road to All-Electric Transportation

Excellent summary of opportunities, impediments and realistic timelines for surface transportation electrification by Robert W. Poole Jr. of Reason Foundation.

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Over the past few years, I’ve become convinced of the superiority of electric vehicles. Part of this was an exhilarating ride in a friend’s Tesla and more enthusiasm has come via keeping up with technology advances. As electric vehicles (EVs) mature, with next-generation battery systems having much greater range and/or much shorter recharging times, I’ll be happy to trade in my current vehicle for the cleaner, quicker, and less maintenance-intensive EV that is coming.

That said, there are some major problems preventing the emergence of an all-electric personal vehicle fleet. (I’ll discuss all-electric trucks on another occasion). As a starting point, I recommend renowned energy analyst Daniel Yergin’s recent piece in Politico Magazine, “The Major Problems Blocking America’s Electric Car Future.” His article discusses supply chain transformation, modernization and expansion of the electricity grid, and public acceptance of very different vehicles. Another good introduction is former U.S. Department of Transportation (DOT) research and technology advisor Steven Polzin’s Q&A session at Arizona State University.

Here is my brief overview of the problems the industry and government must address to get beyond idealistic projections of no more fossil-fuel vehicles sold beyond 2030 and a completely carbon-free electricity sector by 2035.

Enough electric generating capacity

Most attempts to quantify a complete phase-out of fossil fuel electricity generation by 2035 take the objective to be replacing the current 4.13 terawatt-hours generated in 2019. Reason science editor Ron Bailey earlier this year wrote a good summary of the Energy Information Administration’s estimates of what this would take. For example, it would take 290 new nuclear power plants to replace the 62% of current electricity generated by coal and natural gas, at an estimated cost of $3.6 trillion—and in just 15 years. Alternatively, aiming to get 90% there via wind and solar (with some natural gas backup) was estimated by a University of California—Berkeley Center for Environmental Public Policy study to cost $1.7 trillion.

But that is just to replace current electricity uses. If even 60% of all US cars were electric vehicles by 2050, the nation’s electricity capacity would need to double by that date, according to the January 2021 electrification futures study by the National Renewable Energy Laboratory. Reuters’ Nichola Groom and Tina Bellon provided a good summary of this challenge in “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids.” I will venture to say that neither replacement of all existing electricity capacity by 2035 nor doubling its current capacity by 2050 will happen.

Battery problems

News articles regularly appear about the limitations of current electric vehicle batteries. They don’t provide enough range for trips beyond urban travel. They take far longer to charge than refilling a conventional car’s gas tank (which is why nearly all of today’s gas stations lack the room to serve more than a handful of EV charging customers per hour). The current lithium batteries cost way too much (which is why EVs cost far more than a conventional car of the same size), they can catch fire and explode, and they require a number of rare and expensive metals, whose sources are mostly in either China or underdeveloped countries. The good news is there’s a fortune being invested in new kinds of vehicle batteries, but no one can predict how soon and how much better the next generation of EV batteries will be.

Far more (and much faster) EV charging

The “more” problem is one focus of the Biden administration’s environmental agenda, focusing mostly on subsidies for electric vehicle charging stations. If successful, this risks putting lots of new capacity in place before there is enough demand for it, but leave that aside. The administration and the Senate have shown no interest in changing federal law to allow EV charging facilities on rural Interstate highway rest areas, unlike the House, whose Fixing America’s Surface Transportation (FAST) Act reauthorization bill includes such a provision. An informal business/environmental coalition is trying to build support for including this provision in one of the pending infrastructure bills, but the White House and DOT have remained silent on this.

Faster EV charging is being developed by researchers and battery companies (established and startups), but even cutting it from 45 minutes to 15 still means much longer waits for customers and far more acreage needed due to durations several times longer than at gas pumps. This will be a much bigger problem for long-distance car and truck trips than for urban travel, where much EV charging can take place overnight at home, or at workplaces.

Environmental opposition

Experts know that the kind of electrical transformation desired by the Biden administration and (in theory) by nearly all environmental groups will require a huge investment in new long-distance electricity transmission lines, huge areas to locate a vast expansion of solar panels and windmills, and a very large expansion of mining rare-earth minerals, such as lithium and others. Yet as these efforts are starting to get underway, we see various environmental groups, often allied with local NIMBYs, seeking to block new transmission lines, large-scale solar arrays even in deserts, a major expansion of wind power installations, and domestic attempts to start mining lithium and other rare earths. Since this is a surface transportation newsletter, let me just say that there are numerous examples and they are taking place with increasing frequency. The major environmental groups need to start speaking out against this kind of opposition if we are to take their commitment to widespread electrification seriously. And the Biden administration needs to reform the National Environmental Policy Act (NEPA) to reduce endless opportunities for litigation that seeks to block just about every kind of new infrastructure project.

For all these reasons, I have to be skeptical about grandiose electrification goals for 2030, 2035, or even 2050. And if achieving those goals will actually take a lot longer, we need to think through what is actually possible, let alone cost-effective. A completely EV America will require a much larger electricity sector.

How Clean Is Your Electric Vehicle?

The correct answer is... it depends on the way that power is produced. For example, EVs are not very clean in Honolulu (top graph); hybrids do better. But Reno (bottom graph) has natural gas, geothermal and solar power production, so EVs there run much cleaner. Find out about EV pollution for your area by entering your zip code at the website of the Union of Concerned Scientists.

250 Miles with a Made in the USA Supercar, the Tesla P85D

The surprising acceleration of the Tesla S prompted Jay Leno to race his 700 HP Cobra two-seater against a grandmother driving a Tesla P85D in the opening segment of a recent episode of Jay Leno’s Garage shown on NBC-SN.  With minimal effort, the grandma handed Jay’s Cobra a clear defeat. Jay retorted: “Horsepower wins sales, torque wins races.” This is where electric motors reign supreme with their instant, large and constant torque. Torque is the actual force that turns the wheels and propels a vehicle forward.

Through a school fundraiser I got a weekend drive of a Tesla S. I asked if they had the 2015 top-of-the-line model available for the drive, the P85D, and they did!  I kept the car for almost three days; offered rides to over a dozen wowed passengers, then loaded the family and completed a tour around the island… Honolulu, Mililani, Haleiwa, Kaneohe, Waimanalo, Hawaii Kai, and back to Honolulu.



A fair comparison would pit the Tesla against the $150,000 Maserati Quatroporte for size and luxury or a $300,000 Ferrari FF for performance and luxury, but hardly anyone is familiar with those Italian exotics. Instead, I’d compare the Tesla S by with two popular cars that I and a lot of other people are familiar with, that also have elective drive: The BMW 335i in hybrid version, which is sold as the Active Hybrid 3, and the top selling sedan in the US, the Toyota Camry, in Hybrid and XLE trim.

F U L L   R E V I E W

People who can deduct expensive car leases or who can buy cars in the range of $60,000 and above owe it to themselves to test drive a Tesla S and its more powerful variants.  I will wait for the 75% scale version of the P85D or its 2016 sister the P90D. I’d love a Tesla M, M for motor sport; 25% smaller, 25% lighter and 25% cheaper than the P85D.  Hopefully one of these days Elon Musk will read this and oblige me …