EVs May Send Big Oil into “Investor Death Spiral”: Fitch

What if China decides, “We don’t want petrol cars in five years?”

Every global automaker is furiously working on a lineup of electric vehicles. Many of them already have a model in their showrooms. Billions are poured into it every year. Electric cars are cheaper and simpler to build, and have been around longer than cars with internal-combustion engines. Only hiccup? The battery! It takes too long to charge, weighs too much, and costs too much.

But since 2008, costs have plunged 73% to $268 per kilowatt hour. Some expect costs to drop to as low as 100/kWh by 2020, at which point electric cars would become cost competitive. Whether this happens in 2020 or a few years later only shifts the timeline. But this move away from oil as a transportation fuel, says Fitch Ratings in a report released today, could send global oil majors, such as ExxonMobil, Chevron, Total, and Royal Dutch Shell, into an “investor death spiral.”

Transportation accounts for 55% of oil consumption. “Widespread adoption of battery-powered vehicles is a serious threat to the oil industry,” the report says. It would cut into the demand for oil as transportation fuel and “could tip the oil market from growth to contraction earlier than anticipated”:

A market with structurally falling demand will be a lot more risky for all oil companies, with long periods of low prices and investment uncertainty, as demonstrated by the current slump in oil prices.

The narrative of oil’s decline is well rehearsed – and if it starts to play out there is a risk that capital will act long before any transition occurs. This could reduce oil companies’ access to equity and debt capital, increasing funding costs during a crucial period.

Jittery investors would sell their holdings of oil company shares and bonds, thus driving down prices and raising yields. This would hit over $3 trillion in global energy bonds, creating turmoil in the markets overall, and making it too expensive for oil companies to raise new funds. But they constantly have to raise new funds for their capital intensive operations. And investors see that too.

“If they stick their heads in the sand and try and pretend it will all go away, we think they will ultimately have issues,” the report’s lead author, Alex Griffiths, a Fitch managing director, told the Financial Times. “They need to have a plan.”

According to the report:

An acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile.

In an extreme scenario where electric cars gained a 50% market share over 10 years about a quarter of European gasoline demand could disappear.

That would be the doom-and-gloom scenario for oil companies. But not by tomorrow at noon. Fitch says a “compelling” argument can be made that this transition will be a “long, drawn-out process.”

There’s the need to invest in electricity infrastructure, everything from power plants to charging stations. And vehicles can last two decades. So even if half the new vehicles sold are EVs, the replacement cycle will still take time. Fitch came  up with its own estimates:

We calculate that with a 32.5% compound annual growth rate in EV sales, it would be nearly 20 years before EVs comprised a quarter of the global car fleet.

The 1.2 million “plug-ins” on the road are still a rounding error of the total fleet. In terms of sales, plug-ins currently have a market share – despite all the hoopla and hype – of less than 1% globally. But it could happen faster too: In 2015, 500,000 EVs were sold globally. Their share of the market was 22% in Norway and 9.6% in the Netherlands.

And there could be surprises, as Fitch’s Griffiths points out to the Financial Times: “One of the most difficult things for oil companies there would be if China decides, ‘Actually we don’t want petrol cars in five years’ time’.”

China is by far the largest auto market in the world. All global automakers are massively investing in it. GM and Volkswagen are the market leaders. If China forces a switch to electric vehicles – and it could, with power-generation overcapacity of 20% already in place – it would impact the US and Europe as automakers would strive to globalize the technology.

Fitch has some advice for the oil companies that wish to survive this coming disruption in some form:

We believe it will be important for oil companies to react early, and we will continue to evaluate their strategies for doing so, even though the changes discussed here would occur well beyond our rating horizon.

Many are already taking initial steps such as diversifying into batteries or renewables or focusing more on natural gas, and many are actively participating in the debate around future energy sources.

Oil companies are seeing the writing on the wall. For example, Total stepped up to the plate earlier this year and bought French battery specialist Saft for $1.1 billion. And BP has invested heavily in wind power. In the US alone, BP operates 15 wind farms, with a total capacity of 2,279 megawatts. That would be about the capacity of the Diablo Canyon nuclear power plant in California, both reactors combined.

But for automakers, there are now more immediate challenges. Read…  It Starts: Shutdowns, Production Cuts, Layoffs at Auto Plants

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  169 comments for “EVs May Send Big Oil into “Investor Death Spiral”: Fitch

  1. Bookdoc says:

    I just don’t think it will happen with lithium/cobalt battery systems. The supplies come from a limited area. Next, I question whether they will be able to be made cheaply enough for regular people to afford them. Finally, where is all of the electricity going to come from to recharge them? Our power grid has been having a lot of problems that wind and solar cannot deal with, since you have to have a ready spinning reserve for whe the wind dies and the sun ain’t shining. People don’t seem to realize what it takes for the amount of electricity we use.

    • KnuckleDragger says:

      Yep, just mining for lithium is a problem. Also it’s not just generation, but the grid itself that is the main limitation. China can build out their grid more quickly, but forcing the uptake of EV’s is more problematic.

    • Justicia says:

      Two word answer to where the power will come from: distributed solar. Affordable batteries will make micro-grids viable — and specially in areas prone to disruptive weather events (hurricanes, tornadoes). The future is around the corner.

      • subunit says:

        Right, solar PV panels are just what you want to install in areas that get regular hurricanes and tornadoes..

    • CrazyCooter says:

      “Where is all of the electricity going to come from to recharge them?”

      Why not from the really, really cheap oil that no one wants to buy anymore (according to the article sources)? Think no one can find a use for a cheap source of energy? Think again! Power plants run on turbines all the time for back up and peaking. I think Saudi Arabia actually generates a significant percentage power from oil. Not sure what the break even prices is though.

      In the long run, I think coal will go right back into play as gas prices eventually recover to something sensible. Too much money is looking to die in fracking and the market was glutted (gas has to be pipelined – so it is a much more local issue). Those frack wells will fade, they won’t be refracked when the money dries up, and consequently gas prices will go up making coal attractive again.

      My point?

      Unless there are really significant sources of renewables (questionable and certainly regional), that EV will just be emitting coal sourced CO2, particulates, etc a couple hundred miles away from that “green” EV – hopefully with a battery manufactured at an environmentally friendly battery recycling plant.

      There are no free lunches.



      • Gerald Stehura says:

        Coal will die along with oil. Why? Because 2016 is going to be the hottest year ever recorded. The destruction of our ecosystem is the most important and dangerous issue we face.
        I sincerely hope that all the investors in coal and oil and fracking lose every penny they have plowed into creating the suffering that is surly coming.
        Sorry to have to bring some reality to these comments. How can we talk about oil and coal and electric cars without a mention of Climate Change? Unbelievable!

        • Lee says:

          2016 may be the ‘hottest ever recorded’, but it is not the hottest ever.

          Yeah, let’s talk about climate over a period of 1000, 10,000, or 100,000 years.

        • Heinrich Leopold says:

          Because climate change due to CO2 is not happening. The concentration of CO2 at 400 ppm is just too small to have any impact. It is a fake of the elites to collect money worldwide to have fun and toy around in their labs. It is a shame that they also want money from poor countries.

          In my perception we have had one of the coldest years in 2016. London is currently awfully cold in October as I have never experienced.

        • d says:

          Human accelerated global warming, dosent just make everything hotter.

          It cause extremes of weather, look at the huge storms you have had in the storm season, also the wind speed, particularly gust average, is rising everywhere.

          Which is blowing the warm air that sits in London, and much of its smog which keeps it warm at night, and in general, away.

          If the north of the north Atlantic gets much hotter, the gulf stream will die.

          Then you will find out what cold is as central and northern continental Europe, goes back under ice, as the planet heats further.

          As the gulf stream, is what stops central and northern continental Europe being like Siberia. Blisteringly hot for a short summer, and frozen, for the rest of the year.


        • Wolf Richter says:

          You’re conflating weather with climate.

      • Maximus Minimus says:

        What you probably have in mind is surface coal mining.
        Underground mining is quite a different story. If you shutter the mines, let the miners go, and mining communities with it, you will not find able and willing people to go underground ever again.
        My estimate is that most coal is mined deep underground. In western European countries will long mining traditions, all deep mines have been shuttered. As far as I know, in Germany, they keep one mine open so the local mining equipment maker can test their machinery, probably for export to China.

      • SteveK9 says:

        From Uranium, which is inherently the cheapest source of energy on the planet, and will also be in reality, when supply chains are in place, and regulation becomes even slightly reasonable.

        • Gerald Stehura says:

          Do you mean reasonable regulations to prevent the nuclear disaster that happened in Japan?
          Nuclear power plant projects are too costly to build and are too costly to shut down safely. Furthermore, I don’t trust Corporations to build a safe and secure plant, much less take responsibility for shutting it down after it’s useful life is over. Corporations are interested in profits not safely.

  2. Marty says:

    Here’s another problem that no one understands. A friend who works for a major utility did a study for them about five years ago concerning the effect of charging electrics on the power grid. He found that with only two or three of these cars per block plugged into fast chargers, the transformer blew. How many transformers are we talking about replacing?

    This electric car stuff just isn’t well thought out. It’s a brain washed left-liberal meme, top down, la la land social engineering to make middle class life, or what’s left of it, miserable and under increasingly heavier control, just like legislating our toilets, mattresses and clothes washers.

    • Wolf Richter says:

      As Fitch pointed out, the infrastructure needs to be built up to handle this. Thank God we have some years to do it. Where there’s demand, there will be supply. Utilities love this. They’re all over it. They’re among the winners. They can smell the money – if they get it right.

      • Marty says:

        I’m not so sure. Do they really want to replace all that infrastructure right down to the transformers? It’s my weak understanding that they don’t want that because it gets them nowhere with the state regulators who decided if they can raise rates. Maybe that’s an avenue for you to research, Wolf, what are the incentives for the utilities. I think they don’t look to residential customers, but to the regulators.

        The ev push is from state legislators who want to look green. That’s not real demand.

        I’ll ask my buddy if his utility wants this or not…

        • David says:

          Investor-owned utilities would be all over it. Increased distribution plant means a larger rate-base means more return for shareholders. Rates may or may not climb, because usage (which has been flat or falling in recent years) will increase as well. But a regulator would be hard-pressed to deny rate recovery of investment needed to meet new load.

        • CrazyCooter says:

          The piece you are missing is that utilities are regulated and allowed to operate as a monopoly. This means instead of COMPETING for a rate of return/profit – the rate of return/profit is fixed by the government. While it varies from area to area on specifics, the common theme is that the utility can charge a fixed rate of return on a combination of equity, capital, and other metrics.

          So, if a hypothetical utility had zero growth, spent zero money, and depreciated their “rate base” (aka the combination of equity, capital, and other metrics), they would consequently make less revenue/profit and have lower rates. Sort of like a car that goes from having a payment (cab fares are $1 per quarter mile) to not having a payment (cab fares are $.75 per quarter mile) because operating the cab cost more money in the former and less money in the latter – and profits are fixed.

          This is complicated in practice and I am oversimplifying – but this is the general idea. If other folks have other experience, I would love to hear it.

          Now that you know that, and you know people like your product (AC in the summer, a fridge, clothes washer/dryer, lights, etc), you see the opportunity in replacing LOTS and LOTS of infrastructure. So hell yes, let’s yank that 40 year old transformer (depreciated but working just fine) and replace it with a new one (not depreciated) which bumps up the rate base.

          And if you followed my fracking comment upthread – you might see a motivation to build out gas infrastructure, and the flip right around and build out coal infrastructure.

          That said, there are plenty of utilites out there that try to do the right thing (and do do the right thing) – but there are also those that don’t – but understand the profit motive/mechanics is helpful.

          Just my two cents …



        • Gerald Stehura says:

          This is not about looking green or some left wing plot to gain power. This is about our burning forests, acidic oceans, drought, mega hurricanes, melting glaciers, dead oceans, long deadly heat waves, completely unpredictable weather…this is about Climate Chaos. This is about what is happening now!

        • MarkB says:

          Most charging would occur at night, when usage is low. The infrastructure is in place to handle peak daytime loads, which are much greater than having some percentage of cars charging at night. In other words, the same transformers, etc. that handle daytime peak loads would probably be dealing with less at night. Higher than what they do during evening hours today, but it wouldn’t mean replacing a lot of infrastructure.

      • d says:

        There is a monkey wrench missing in this set of KW based #’s.

        Much State/national revenue, comes via fuel tax extortion, that is not spent on transport or electricity infrastructure in many State’s/Nation’s.

        The Government “Taker’s” will be recovering that lost revenue from somewhere.

        Logically some sort of Km/Mileage based “Tax Extortion”. Which shifts the economic’s you project.

        NY just got slammed by christe with 23 Cents a Gallon/5 cents a Liter.

        Shift away from oil/gas based fuel, and they will find another way to extort, from anybody, who need’s, or wants, to travel, beyond walking distance.

      • Doug Neal says:

        If utilities gave a big incentive to charge at night-time when electricity use is WAY down, then we’re well on our way. Charging in the day or near peak use would definitely cause a problem with loads/capacity.

        • Wolf Richter says:

          Yes, and it may be coming.

          I think this is already in place for many commercial customers in the US. In many European countries, “night electricity” is a lot cheaper. Hence the “night electricity heaters” that store heat at night and release it during the day. Been around for decades. It’s just that we in the US on our residential utility bills cannot benefit from it.


        • Phillip says:

          In fact, as the owner of an electric vehicle, I know from experience that no one charges at home during the day unless necessary for an unexpected trip, which is rare by definition, because it makes no economic sense to not charge overnight. It is literally as easy setting a timer? If nighttime electricity generation capacity is the same as daytime peak capacity, then there is a huge untapped electricity source untapped at virtually no added expense… in fact, even at off peak rates, a huge untapped revenue stream for electric generation companies.

        • Lars says:

          That is true to a large extent of course. Lots of power stations idling or standing still at night could produce power to charge EVs. But there are a couple of catches. For one, it depends on the penetration of EVs. At a certain stage new power stations have to be added to the grid to accomodate demand.

          Power stations also need ongoing maintenance and they mostly consist of several power blocks. It is often the case that some blocks are idled during the night for maintenance, and more night time power consumption could put more stress on them. Most fossil power stations have capacity factors of between 80 and 90% on an annual basis and as soon as demand shifts dramatically more power stations will need to come online.

          It is also a task that must befall natural gas or coal power stations + “new renewables”. Nuclears are running flat out anyway because they sell into any price because of low fuel costs, and hydro power has limits to its water and will tend to run during the day when prices are higher.

      • Jon Sellers says:

        Using the grid doesn’t make sense. Cars spend most of their daylight lives parked in a parking lot at places of employment. It makes far more sense to put out structures with solar panels that cars can park under and get recharged.

        It is far more efficient than putting solar panels on houses and far more efficient than rebuilding the grid infrastructure. But none of this will happen until EVs are less costly than ICE powered automobiles. Once they do become less costly, the changes will come fast and furious.

        • SteveK9 says:

          The future will be nuclear power and EV’s, because 2+2 = 4, not 7.

        • Semper Gumby says:

          While we’re rebuilding the grid, can we please harden the grid to make it more resistant to EMP blackmail and solar storms.


        • d says:

          How about America build a new national grid, run in the interest of the society. That any supplier can supply to, if their price is good.

          Instead off a bunch of grids owned by Vampire Corporates some of whom are foreign owned or controlled, used as gates, to milk the society.

          The reason American energy in so many parts of it is so expensive has nothing to do with true production costs.

          Then do the same with railroad’s.

          Anybody should be able to supply a competitive service that runs on the publicly owned railroad. Just as anybody (Almost) can supply a truck service on the road’s in America many of which are not publicly owned in America.

          Railroad’s, power grid’s, road and communication networks, are all national security items. None of the infrastructure that they work on should be in private ownership or control.

      • SteveK9 says:

        As you say it will not be a problem to upgrade the electric grid. Will happen gradually and most ‘charging’ can be overnight when demand drops anyway.

      • Lee says:

        I wonder………….

        If batteries ever get that cheap there will be a huge move to go off grid.

        Then people will not need the electric utilities at all.

        I could easily put 50 more panels on my roof and with batteries at that price I would go off grid – stuff them with their high supply charges (now over $A1.30 a day) and their high electricity prices.

        • Wolf Richter says:

          Here’s another thought about “if batteries ever get that cheap…” (and solar panels too). The utilities will be able to buy them a lot cheaper than you do (scale) and will be able to deliver cheaper power, so the cost savings to you might not be there in the end. Why would they do that? So you don’t go off grid. Competition. But I’m not sure a monopoly would know how to do that.

          Utilities are all over batteries – in theory they could solve a huge problem that utilities have: dealing with the brief peaks and spikes.

        • Lee says:


          The problem here in Australia is that there are two charges on the utility bill:

          1. Usage.

          2. Supply charge.

          The usage charge is around A$0.33 per unit of electricity used.

          The supply charge is around A$1.33 +/- a day.

          it doesn’t matter if you use 1 unit or 100 a day the supply charge doesn’t change.

          Those that use little electricity are in fact paying a huge amount for each unit consumed.

          Those that use a lot get to spread that cost over their use.

          For example, when spring/summer comes around and the sun actually manages to shine (like it did yesterday and not today) I generated a little over 8000 watts with my panels.

          So I ‘made’ a little off my panels yesterday.

          Today, it is cloudy and overcast and if I am lucky they’ll produce 2000 watts which will not cover my use let alone the supply charge.

          If I use 4 units net of electricity my cost per unit is going to be a whopping 60 cents a unit.

          If the usage for a day is only one unit of electricity the effective cost is then even worse: A$1.66 per unit!!!

          Our supply charges here per day are ridiculous.

          When I put my panels up in 2009 the supply charge was A$50 per quarter. Electricity was about 15 cents a unit.

          Now they are around A$120 a quarter. A$70 increase in 7 years.

          They increase every year and in some states the increases are even worse that what has happened in Victoria.

          So once battery prices come down people here will go off the grid in huge numbers.

          My SWAG price for 10kW of storage is around the A$5000 area………………………..

        • d says:

          Other side of ditch has the supply charge issue as well, lot of solar users here, have the grid turned off in the high sunlight period’s, it hasnt been a proper summer on winter for some time.

          There is a charge for this of course.

          Why do you not have a windmill in your system??

          When there is less sun, there tends to be wind, and wind also blows at night.

          The supply charge was one of the charges that forced the decision to live on my boa. I have a diesel generator in caese I have an oophs. I havent needed it in 2 years. Since I built my tidal drive.

        • Lee says:

          No way to put a windmill up in the suburbs. Too many regs.

          Maybe someday they’ll be able to make some kind of cheap, efficient machine that doesn’t make noise and have the normal blades of a windmill that you can stick on your roof.

          Amazing the crappy weather we are having here this year.

          Yesterday we had the lowest recorded amount of sunshine in 2016. The day before we had the highest amount since February.

          Today we’ll probably be around that low mark again.

          Not only are the panels not doing much good (also the solar water hot water system), but the vegetable garden is really in bad shape.

          About the only thing that has done well is the spinach – cool, cloudy days with lots of rain.

          We had wind, rain, and hail today. That will take care of the fruit trees as well. Probably not much from the cherries, peaches, oranges, or apples this year either………………

          Six degrees C below our normal average temp today as well.

          Fruit and vegetable prices are probably going to soar later this year as a result.

          Maybe it will change in the next couple of weeks…………

        • d says:

          Welcome to theresults of human accelerated global warming.

          Small horizontal turbine (horizontal under 4 Ft’ 1500mm in Diameter) should be OK, roof mount it and call it a weather vane. They are under 34 Db so nobody has grounds for complaint.

          Or a vertical or 2 on the side of the roof and call it an extractor system.

          You can get efficient and quiet vertical drives that look like https://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjS_8ud8O3PAhUBxpQKHTuWAY4QjRwIBw&url=http%3A%2F%2Fwww.lulusoso.com%2Fproducts%2FVertical-Axis-Wind-Turbine-Power-Generator.html&psig=AFQjCNG-y_ezjSRo4GROjLmiiDddHNo3MQ&ust=1477207318697833

          Unless they get up there and pull it apart, they will not know what it is.

          Regulations are frequently written to protect crony utility’s, and enrich municipality’s.

      • WAYNE says:

        What I would like to know is how do people in apartments and condos charge their vehicle? Advocates talk like everyone lives in single family homes.

        • Wolf Richter says:

          My fundamental thought is: If there is money in selling electricity, there’s a will to make it happen.

          It’s not a huge problem if there are garages. The condo association or building owner would install charging stations. Utilities might subsidize this because they can sell extra juice at night when there is no demand. New buildings would be so equipped automatically.

          The problem arises in street parking. My guess: Companies/municipalities could install parking-meter-like outlets, using an electronic payment system (“smart” parking meters already accept electronic payment methods). So whoever parks there can charge their vehicle and make the vendor some profit on the difference between the cost of electricity and the price they charge for it.

        • Petunia says:

          In Florida all public places had to install parking and FREE charging for some electric vehicles. This was going on in the colleges, newer malls, and public buildings.

  3. Mark says:

    I’m continually amused that in these discussions there is no mention of the 2% limit to Global Warming which means, at today’s holding of hydrocarbons 75% of them are not required to ensure this limit is not exceeded and this has been signed off on by ALL major economies.

    Maybe it’s an American thing as they still don’t believe in Global Warming but a majority think the world was created on 10K years ago.

    • Lisa says:

      Well, don’t write off all Americans on climate change. There are a lot of people in America working hard to find solutions, including regenerative agriculture, which seems to have a lot of promise.

      • Marty says:

        Yes, a lot of ‘Merikans snookers by this propaganda. There’s been no warming for the past 18 years.

        • night-train says:

          Marty: Only science challenged ‘muricans don’t recognize climate change when the effects are staring them in the face. I live in a major university town full to the brim with bright, energetic youngsters. They are working on solutions to problems that will define the future. Amazing things happen when bright trained minds tackle problems.

        • Petunia says:

          Thanks for fighting the good fight.

          I lived in Florida for 14 years and the sea wasn’t rising. As a matter of fact, it hadn’t risen since I started vacationing there in the 70’s. According to the bought and paid for “science”, I should have been standing in water for the whole 14 years. BTW, I was never more than 5 minutes from the beach.

        • nick kelly says:

          Wasn’t this year the warmest on record?

          The North West Passage, accessing Pacific from Atlantic via Arctic Ocean was only first done in 1930’s by small Canadian boat St.Roche- too much ice for bigger ships.
          In 70’s? US Manhattan tried and got stuck- had to be freed by Canadian Ice Breaker Louis St.Laurent. The crew of latter were PO’d cuz they were on way home when call came in.
          About a year ago a bulk carrier of some kind did it- no adventure just saving time.
          Now there’s a cruise ship doing it.

          No warming?

        • CrazyCooter says:

          And someone just operated a 30 day cruise through the northwest passage this summer as well – I think the fare was 20k or 30k per head – but if I had that kind of money to spend, I would have gone.

          Forget the name of the operation though – it wasn’t one of the big companies, some entrepreneurial outfit.



        • Thomas Malthus says:

          There are far cheaper options — 6 years ago I flew to Resolute Bay and did the passage on a small ship for a total of about CDN10,000.

          If I recall there were less than 100 passengers — we stayed in crew type quarters — and there were a number of experts invited to join who gave presentations throughout (historians, Inuit artist, first Inuit lawyer, Arctic wildlife experts, a Nat Geo photographer….)

        • Edward E says:

          Since my trucking travels began in the mid nineties, the trees died after the turn of the century. Lots of trees, lots and lots and lots… the only way it ever slows is when we do get a rarer hard winter.


          Went swimming in the Buffalo River this Monday, the water was really nice, only a little cooler than August. It’s October people, this is crazy!
          The oceans have risen 8″ since the 1800’s, accept it.

        • Jon Sellers says:

          “Yes, a lot of ‘Merikans snookers by this propaganda. There’s been no warming for the past 18 years.”

          Nice to see folks still get snookered by Big Coal. I left the question behind when even Exxon was too embarrassed by the obvious and simple physics to lie anymore.

          Oh, and 1997 was a very warm El Nino year. It did not get any warmer than 1997 until 2011. But it got warmer every year between 1998 and 2011. And just kept on from there.

          But I am a firm believer that too many people, for whatever reason, like to believe in their own fairly tales. So I don’t think it can be changed. All I can do is prepare my children to face their future, while others don’t. That should give my off-spring a hoped for advantage in the gene-pool game.

        • Tom Kauser says:

          Blue gold

        • Edward E says:

          More likely they’ve been snookered by flying monkeys.

      • Mark says:

        Given that the most sensible and non corrupted politician, Jill Stein, attracts a paltry 2% of the vote, “most” Americans are trapped in the idea of their own exceptionalism where facts are meaningless.

    • uncle tungsten says:

      We are more than likely to pass the 2 degree warming rate. The massive and increasing exhausting of methane hydrate from the eastern siberian arctic shelf is sufficient to tip the balance well beyond that 2 degrees. At 2.5 degrees it is estimated the mammals will be well on the path to extinction due to a range of food and climate system disruptions.

      A rapid shift away from all fossil fuel generation and transport will be essential over the next decade for there to be a realistic chance of mitigating disaster. I may be wrong but the precautionary principle has serbed humanity well over the millenia, it would be supremely ignorant to ignore the words of caution now.

  4. Ptb says:

    Electrical motor is so easy compared to an ICE. I guess we’re going to need a lot more power plants to satisfy demand. Coal, gas, nukes, wind, water, solar. Etc….
    At less than 1% of all vehicles currently on the road and a huge pile of newly minted cars out there, it may be a while.

    • Wolf Richter says:

      Here is one reason why utilities LOVE the arrival of EVs:

      Peak electricity consumption occurs mid-day during the hottest day of summer (in hot parts of the country when A/Cs are maxed out in businesses and homes). Utilities have to put infrastructure in place to supply enough juice even during those spikes that occur only a few hours a day and only during the hottest days of the year.

      At night, when electricity consumption collapses, all that infrastructure JUST SITS THERE and costs money.

      But most people park their cars at home at night. So they charge their cars at night, when electricity demand is lowest.

      So charging EVs at night creates demand for electricity when there is little demand otherwise.

      Utilities love this: they can charge for the electricity using the existing infrastructure during a period when it is WAY underutilized.

      For that reason, infrastructure needed to accommodate EVs will be A LOT SMALLER than imagined by some of the commenters here.

      • nick kelly says:

        Little secret- BC Hydro actually luvs gro-shows, as long as the guy pays his bill (only idiots steal electricity)
        To sell more of most stuff sold retail requires the purchase of more stock wholesale- not electricity.
        The dam, wires etc. are already there- any additional sales are almost 100 % profit.
        Back when the cops still cared about this, there was quite a bit of push back from BC Hydro to cop demands for electric bills.

        But if Hydro caught the guy stealing- very easy once they check with portable meter- different story.
        We know there are 12,500 of the old medical personal gro- licenses in BC. The Feds are trying to shut them down- tied up in court.
        There are at a minimum 2 unlicensed ones for each of those.
        The result is at least a hundred million on Hydro’s bottom line.

      • Ptb says:

        Not if the majority of commuters want to recharge batteries at work. Where it’s really cold and really hot, people run heat and AC in their cars constantly. Which really sucks up electricity. (Not to mention running AC at night in their house.)
        I have to believe that recharging during the day will be much bigger than the theory of off-hours recharging.

      • Joe100 says:

        Take a look at peak loads in New England and other Northern states – these are often at night in the winter when EV charging would be increasing these loads and the cost of firm generation capacity to meet them..

        • Phillip says:

          I am sure the peak loads at night you are referring to is in the evenings. In the wee hours of 2 to 6 a.m. I am sure there is little chance of peak load. That is when ev’s are charged.

        • Wolf Richter says:

          Let’s set this straight:

          In New England, peak hours in the winter are between 5 PM and 8 PM. So early evening.

          Plug the EV in at 3 AM (actually just set the timer), and you’re fine.

          Also, now that more natural gas pipelines are reaching New England from the rest of the country (with more still to come), people can save a TON of money by switching to NG heating. Then you have a lot of excess electricity capacity sitting around, looking for some use.

          The switch will take a few years. But so will EVs. Perfect timing.

      • SteveK9 says:

        Absolutely. Mentioned this above, before I read this.

      • MarkB says:

        When I lived in Phoenix, we had time of day power rates, which were much cheaper after 7:00pm and on weekends. Haven’t lived there for a few years now, but I assume its still available. Also had time of use rates in Raleigh NC and Austin TX. Not sure where you got the idea that we don’t have that capability in the US…..

  5. Good grief! Can’t let go of the delusions, they are just too comforting.

    Electric cars are cars. They are made from glass, steel, plastic (including the ‘rubber’ tires), aluminum, copper, lithium, etc. in stupendous quantities. All of this material has to be obtained, processed, assembled, distributed by different giant-scale industries that all run on high order fossil fuels: rock trucks, excavators, railroad locomotives, conveyors, ocean going ships, crushers; also the equipment that runs on oil, coal and natural gas such as iron processing and smelting, synthetic rubber and chemical plants. A set of tires requires a barrel of oil to make not including the transportation steps that are part of the making- and distribution process.

    There are no electric highways, no electric bridges or viaducts, no electric tunnels or electric concrete, asphalt, crushed stone; even the paint used to coat the exposed metal surfaces on highway structures is the product of a gigantic industry that gobbles vast amounts of specialized compounds such as titanium oxide and epoxies … all of the above must be shipped around the world. Don’t forget the industries needed to fit out the factories with the equipment they need in order to function = all sunk costs and fossil fuel dependent, even if this stuff could be replaced it would not.

    Any gains in the EV sector would be added to those if the the internal combustion engine sector in order to gain that all-important ‘growth’ … even as both sectors fall apart due to lack of returns and negative top line revenue, dependence upon endless debt subsidy and the military action to gain (steal) consumption from other countries.

    There is a reason for Syria, not just a random event. There is special place in hell set aside for the US as payback for the violence, murder and destruction we have sowed around the world so we can sit on our fat, angry, entitled asses for the fifteen miles from the living room to the kitchen.

    Present demand strains the existing, antiquated electricity grid — to the point of breakdown. This is with only a few hundred thousand electric cars out of a total of almost 300 million in the US. The infrastructure to power more than the smallest fraction of EVs simply does not exist, building it out would require more petroleum consumption rather than less.

    The economics of EVs don’t work. EVs are affordable because they are internally subsidized by the sale of gasoline-powered giant pickup trucks and SUVs; without the sales of the gas vehicles the EVs are unaffordable.

    No matter the power source, the car does not provide returns for the user unless the ‘car’ is a farm tractor, a bulldozer or some sort of delivery vehicle for which there are paying customers. The absence of return is why the fuel industry is insolvent TODAY and going forward; not because of ‘efficiency’ or EVs. The cars are sinks rather than sources, they are useless, non-remunerative toys and status symbols (mechanical phalluses) that have bankrupted everything in sight, the oil industry is first into the wood chipper. Finance also trembles at the lip of destruction because of the bubbles it has blown in order to keep up appearances; debts that cannot be repaid by driving a billion cars.

    Keep up appearances, delusions that anyone with eyes can see through.

    • Merlin says:

      +1, Stavro.

      I think there will only be limited demand for EVs in urban areas.

    • Wolf Richter says:

      I’m not sure I get your point.

      Summary of article: Electric cars gradually replace cars with internal-combustion engines. Electricity demand rises, oil demand falls.

      Oil companies experience structural revenue declines. Investors flee. Money gets more expensive, runs out.

      Nothing to do with bridges or tunnels….

      Where there’s demand, there will be supply. The power industry can’t wait. They’ve been stuck with stagnant demand for years. So this is a breath of fresh air.

      They want to see demand rise first (takes time) … then they’ll build. Their investors love that. They’re actually already building….

      • wkevinw says:

        EVs will be a successful niche application. For passengers, only in high density urban areas.

        I used to live in SF Area. From that niche point of view small cars, and EVs make sense in lots of places. In most of the area of the US, they will not for a long time.

        So, as usual with a “new” technology, the progress will be gradual/incremental, where it makes economic sense only; if left to natural, market forces (which always win out in the long run).

        Large/high horsepower trucks, etc., need hydrocarbons- either liquid or gas. For now it’s liquid, but Nat Gas fueled heavy vehicles are somewhat economically feasible.

        EVs for now are only “viable” with subsidy (unethical, in most cases, in my opinion- making people like Mr. Elon rich.)

        Where I live now, small passenger EVs don’t make any sense.

      • patrick k says:

        Not to mention self driving cars and trucks. Pre existing trends, urban dwellers foregoing car ownership, will accelerate. Recent studies indicate every self driving car on the road will replace 10 vehicles currently owned. Over time if that projection is even half right personal consumption of gasoline will plummet. Markets operate on the margin. Even a change in demand of 3-4% will cause major upheavals. Oil will become what coal is today, a boring but necessary commodity that we will never run out of. “Peak oil” was a delusional concept held by the majority that wasn’t paying attention.

        • nick kelly says:

          Self drivers (assuming they can be made practical) will only need to be 10% of human drivers?
          Why? Unless you’re thinking they will be like taxis. I might want a self driver which is ready to go when I am but why would I want to wait for a self- driving taxi?
          Who would be responsible for the interiors? What if it arrives full of puke- or is there an app to prevent that?

          My nephew is quite wealthy- millionaire at 30 (tech stock options)
          He lives on the 38 floor in Vancouver, and until recently had never owned a car- taxis everywhere.
          I can see the concept applying to him and others like him.
          Problem is that for me and others like me this would be living hell and a quick route to mental illness. Getting into an elevator every time I wanted to go in or out? I’d spend half an hour a day in that box!
          A few months ago I spent two months in Montevideo where I never drove once.
          Nice place but when I first got behind the wheel again it was wonderful.

      • Okay … lemme see if I can get this straight … we have a group of persons (at the margin, because these are the people who set prices of things), they have gasoline cars. They can’t afford the gas which has caused oil prices to crash … since 2014 not yesterday. These people are going to pony up a huge amount of money: $30,000+ which they have to borrow … by the simple act of these folks changing the type of car they cannot afford is is going to make electric utilities rich … (how about solvent?) Um, I’m missing something. Meaning absolutely no disrespect.

        BTW: a big reason why Mr Marginal Man is broke = nonstop QE which shifts the greater proportion of credit away from ordinary consumers toward finance, but you know this …

        I can look out the window and see the dangling wires that wind up in the street every time the wind blows and the same people who cannot afford gasoline right now are going to double or triple the capacity of these wires … and they are going to do it by spending money they don’t have. What if the banks crash and they cannot borrow?

        “Arthur Berman is perhaps the most credible debunkers of oil hype on the planet because he is a highly qualified petroleum geologist and a longtime, top-tier employee of the oil industry. In a presentation early this year, he made an offhand remark in answer to a question about Exxon Mobil CEO Rex Tillerson. “Oh,” Berman responded, “Rex knows his company is in liquidation and he’s terrified his stockholders are going to find out.” I don’t know if anyone else heard a thunderclap at that moment. The discussion moved quickly onward, but I sat stunned (as I listened to the tape). It seemed to me I had just heard spoken aloud the essential truth of our industrial age: it’s in liquidation, and the people in charge are terrified we are going to find out.”

        Electric cars are just a shortcut to bankruptcy court.

      • JL says:

        Hi Wolf,

        I think that at least part of Steve’s point is that demand for oil will rise in other ways in order to accomodate this transition to electric vehicles. A lot of materials for automobiles, as well as asphalt and other building materials (as far I understand them) are petroleum based in some way. Also, more places might begin to use oil to generate electricity to meet this new demand.

        As a side note, I know that China currently has a surplus of electricity, but when I was living and studying there last year a big headache for them was how to generate enough energy in the future for desalination. Desal might become necessary in parts of China in the very near future. There were rumors that they might begin using oil more for electrical production in order to meet this need. I’ve heard similar ideas proposed in California in order to power desalination.

        • Wolf Richter says:

          But JL, Steve’s point, as you explained it and as I understood originally, doesn’t make sense. EVs are NOT ADDITIONAL cars. They just replace other cars. Same roads, same materials, same asphalt. No difference. Except for the battery, EVs are simpler to build and use a lot less metal than a car with a combustion engine: no motor, no transmission, no driveshaft, no emission control systems, no catalytic converter, no exhaust system.

          So I still have no clue where Steve was coming from.

          We have desal in California. It’s the most expensive potable water you can buy, other then buying Perrier by the bottle and pouring it into your water supply – just kidding. But it’s very expensive. Energy use is part of the expense. But if you have no other choice, then water becomes priceless.

          In the US, natural gas is a LOT cheaper than oil, and combined cycle natural gas turbines are now about 65% efficient. So power produced by NG plants is very low cost. Oil is way too expensive. If you have to import LNG or pipeline NG, and it’s too expensive, it may be cheaper to use coal or renewables, rather than oil.

      • MarkB says:

        What percentage of oil used in transportation is for cars and how much for big rig trucks? Those will remain diesel for the foreseeable future.

        A quick search indicates about 45% (65% of 70%, see article) of the oil consumed by the US is for passenger vehicles. So we can eliminate that much but not what’s needed for running big rigs, trains, etc.


        • Wolf Richter says:

          Trucks for urban delivery are going to be the huge winner in the EV arena. The USPS is looking into them, UPS is testing them, FEDEX is testing them. Mercedes already has some vans. As do others. The German Bundespost is manufacturing its own electrical delivery vehicles (not kidding, called Streetscooter … a yellow postal truck). Electrical trucks in urban areas are going to a huge winner. EVs are ideal for urban fleets.

          Long-haul trucks might be some of the last categories to convert, if ever.

    • Thomas Malthus says:

      Thanks for the burst of reality Steve.

    • mynamett says:

      Nobody is capable of complex thinking. Most people can only see a small part of the whole system, such as money and debt. Few people are capable to see the whole system as one working together :

      Natural resources extraction – transformation – manufacturing – transport – consumer – once something is consumed we get depletion.

      Peak oil or net energy depletion is already collapsing the supply chain. Look at Hanggin shipping bankruptcy, copper mining shutdown, acceleration of new third world countries : Venezuela, Sweden, Brazil, Argentina, ..

      • Tom Kauser says:

        Duh! Like there is a million years of frozen growth on the Federal Reserve Bank of new yorks balance sheet.
        Which we pay custodial fees and homage!

    • nick kelly says:

      How did Syria get into this? It’s not even a petro-state.
      Its civil war has as much to do with the topic as the US Civil War.
      The majority in Syria doesn’t want a dictatorship especially one from the minority Alawite sect- which also happened to hold most key positions.
      Who knew?

      • nick kelly says:

        PS: the key driver to the current disaster is that Russia sees the fall of former ally/client Assad (son of Assad backed and armed by USSR) as a loss of face.
        Very similar to US attitude in the last years in Vietnam.
        The Pentagon Papers (the first big leak) made it explicitly clear that the US was committing troops when it knew the war was lost- solely for reasons of prestige, or if you like ‘street cred’

        • d says:

          Try russia and iran, not wanting, and Quatar wanting, a gas pipeline from Quatar to Europe, through Syria.

          Which Quatar could never build with Assad (an iranian puppet), in power.

          As Quatar is to bigoted to deal with the evil Israel, so gain a customer and outlet into the Levant.

          It isnt what started the war, but it is what it is being fought over. As so often happens. What starts a war, and what it is fought over, being very different thing’s

          Quatar jumped into the anti Assad, with both feet.

          It is now having trouble extracting its feet.

        • Thomas Malthus says:

          Excellent summary.

      • Tom Kauser says:

        Been trying to string a pipeline thru this country since 1948 but what’s time and/or Marrowbone?

      • Thomas Malthus says:

        This is what the tug of war in Syria is all about – energy as usual:

        “The discovery of the world’s largest, known gas reserves in the Persian Gulf, shared by Qatar and Iran, and new assessments which found 70 percent more gas in the Levantine in 2007, are key to understanding the dynamics of the conflicts we see today. After a completion of the PARS pipeline, from Iran, through Iraq and Syria to the Eastern Mediterranean coast, the European Union would receive more than an estimated 45 percent of the gas it consumes over the next 100 – 120 years from Russian and Iranian sources. Under non-conflict circumstances, this would warrant an increased integration of the European, Russian and Iranian energy sectors and national economies.” Christof Lehmann, Interview with Route Magazine


      • The war in Syria is like all the other US wars, a way to destroy consumption elsewhere so it can be exported to the US.

        I recall someone asking at a convention what the US energy policy was? Some wag answered, I think Dick Vodra: “the US military”.

        Other ways to destroy consumption is denying credit (Greece, Italy) and by currency manipulation … (UK, Japan) watch UK’s energy consumption nose dive as the pound journeys toward worthlessness.

        This is all ‘Conservation by Other Means™’. The fact of it indicates the way forward is purposeful conservation.

      • nick kelly says:

        I went to the site where supposedly there is an explanation of the Syrian civil war being the fault of ‘fat, entitled Americans’
        Here is the first paragraph:

        “History shows that the United States has benefited politically and economically from wars in Europe. The huge outflow of capital from Europe following the First and Second World Wars, transformed the U.S. into a superpower … Today, faced with economic decline, the US is trying to precipitate another European war to achieve the same objective.”… Sergey Glazyev, Russian politician and economist

    • TDK says:

      Wonderful commentary. EV like ethanol is a myth and can’t happen. No one realizes what the amount of energy in a gallon of gas. And over 50 years, 70% is wasted in an ICE, but still is more convenient. Try taking a 10hr drive with an ICE, where the best EV adds at least 50% to the trip, and inconvenience to find a charging station after ~250-300 miles.
      Get real people …

      • nick kelly says:

        I’m a skeptic too but 99% of car trips are not for 250-300 miles.

        Also -in the very early days of ICE driving, gas was a scarce commodity purchased at drug stores.
        Keeping batteries charged ( ignition only) was also an issue.

        I can see a situation where an urban rat has an EV for getting around town and rents, owns, or shares an IC car for the occasional long trip.

        • TDK says:

          So now you need to own two cars …

        • Jon Sellers says:

          Agreed. I can see my wife and I owning one EV and one ICE. We both probably take long trips maybe once a year. This year, while we still own 2 ICE vehicles, we’ll rent a van for our trip because we need real room for 6.

    • Gerald Stehura says:

      This is not about looking green or some left wing plot to gain power. This is about our burning forests, acidic oceans, drought, mega hurricanes, melting glaciers, dead oceans, long deadly heat waves, completely unpredictable weather…this is about Climate Chaos. This is about what is happening now!

    • Derek says:

      Exactly. The problem isn’t ICE cars or EV cars or water-powered cars. It’s CARS.

      We can have a livable planet or cars, but not both.

    • SteveK9 says:

      Stop worrying. The fossil-fuel age is coming to an end and the uranium age is beginning. It’s a bright future, clean air, and no additional CO2 pumped into it.

  6. Kelly says:

    Well, I’ve heard that Toyota is pushing into hydrogen fuel cell vehicles (HFCV)over electric.


    Not sure why, but I would think hydrogen would be more scalable to larger vehicles. I am going to assume you can fill up your hydrogen tank quickly, while I’ve heard EVs take several hours.

    The proprietary nature of everything associated with HFCV- the engines, the storage the fuel pumps! Might make it more profitable than electric.

    If you follow the below article’s logic, the Japanese will use the diatomic deuterium created as a byproduct of the fuel cell’s to power fusion reactors!


    • Wolf Richter says:

      Fuel cells are great, but hydrogen has a lot of disadvantages, including (from what I remember when I had to deal with it): its energy density (the worst of any fuel). Hence it has to be pressurized to 5,000 psi or more to make sense for transportation. The molecules are so small they seep through many metals and fittings. So everything needs to be special. And it’s expensive to obtain (usually from a hydrocarbon product).

    • Thomas Malthus says:

      Remember that kid that supposedly sold his app to Yahoo for 30 million dollars?

      And later it was revealed as outright fraud? The kid developed nothing… it was a PR scam.

      Great for the share price if you can convince the sheeple that you have the next Steve Jobs on board…. sheeple – gullible + stupid + greedy


      Whenever you read about revolutionary this or revolutionary that…. it would pay to keep the story of Nick D’Aloisio in mind….

      • r cohn says:

        Not the first time for Yahoo.Broadcast.com ,partly owned by Mark Cuban was sold to Yahoo for 5.7b Basically it did not exist not many years after the purchase.

        • Thomas Malthus says:

          I wasn’t aware of that. Talk about money for nothin… chicks for free

    • JerryBear says:

      Fuel cells don’t make deuterium, that is cold fusion nonsense.

    • MC says:

      I have in front of me Chemistry of the Elements by Greenwood and Earnshaw, one of my university textbooks, which was printed in 1997.
      In it there’s a brief chapter titled “The Hydrogen Economy” which tellingly ends with the phrase “Much more work is needed to establish safe and viable sources of hydrogen for general energy usage”.

      In the 80’s and early 90’s Japan Incorporated was literally obsessed with this Hydrogen Economy. I remember at the 1992 Tokyo Car Show Honda introduced the prototype of hydrogen fuel cell motorcycle which seemed to herald in the new era. Then the roof came down.
      Apart from a myriad of technical issues, after the First Gulf War ended the war was awash in cheap crude and Japan incorporated found out restructuring after the Zaitech Bubble was going to be a whole lot more painful than the unlimited liquidity provided by the Bank of Japan promised.
      Hydrogen went on the backburner, as Honda and Toyota raced to have the first hybrid car on the market. Intriguingly enough these early hybrids were wholly financed using company funds: IMA was a 100% Honda project while HSD was a joint venture between Toyota (80%) and Matsushita (20%).
      The two hydrogen fuel cell cars presently available (Honda Clarity and Toyota Mirai) are not only a byproduct of the crazy 80’s but of the even crazier Noughties, which saw the Japanese government pour money into this whole scheme at a frantic space: this is not merely about the local car industry, but about the local chemical industry as well.
      Japanese chemical industries have long been among the top players worldwide (they own the worldwide market for carbon fiber and silicon wafers, for example) and should one of them stumble on a miraculous recipe to solve the Hydrogen Economy conundrum, it would be worth all that extra debt Abe has piled on, and then some.

    • Maximus Minimus says:

      Wow. This is probably at the top of my list of popular bollocks. Fuel cells do not make deuterium that is not already in the water.
      Deuterium is an natural isotope of hydrogen. When hydrogen formed water some molecules would be heavier than others, so there could be H2O : HDO, D2O in a ratio of about 1:5000. The separated deuterium is called heavy water.
      Since there was a post here about fusion reactors, the other fuel component is tritium, and still heavier isotope of hydrogen. It does not occur naturally, and is a byproduct in fusion reactor – those powered by Uranium 235 or plutonium.

    • SteveK9 says:

      Hydrogen was all the rage 20 or 30 years ago. It was always a ridiculous idea. Most people used to refer to it as an energy source, not realizing there are no hydrogen mines. It is a type of distribution network, but it is impractical and unnecessary. We have a distribution network in place that works great … it’s called the electric grid.

  7. Thomas H Belstler says:

    I think the article misstated the amount of fuel consumed by transportation.


    The big problem with electric vehicles is lack of range. I expect that, over time, this will be solved but most likely this will have tradeoffs such as longer charging times and a requirement for higher voltage charging connections.

    I also do not believe that the majority of Utilities are overjoyed at the prospect of having to rebuild their distribution systems which of course will also require the rebuilding their bulk power transmissions systems.

    The only people that I see throwing big parties to celebrate are the lawyers which will do a land office business servicing all of the citizens and businesses that do not want to allow the Utilities to string a bigger wire or install another substation or build another transmission line or even just improve it.

    From personal experience, I can tell you that upgrading 5 miles of bulk power transmission line can turn into a 20 year battle.

    • Wolf Richter says:

      “I think the article misstated the amount of fuel consumed by transportation.”

      The article you linked discusses what percentage of total ENERGY consumption in the US (including nuclear, hydro, natgas, etc) is for transportation = 28%. This I assume includes electricity for subways etc.

      The article talked about what percentage of total OIL consumption goes into transportation GLOBALLY = 55%.

      These are two completely different things.

  8. Thomas Malthus says:

    Break even for oil producers is now over $120.

    Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said


    Oil is hovering around $50 with nearly 100% of all vehicles globally running on petrol.

    Effectively all producers are insolvent at the moment.

    If EVs were be something other than a tiny blip in the auto market would that just force the price of oil lower?

    I fail to see how EVs help the problem. They just make things worse than they already are.

    • EVENT HORIZON says:

      Break even at $120 to pay their bills, like Saudi, or $120 to lift the oil?

  9. nick kelly says:

    That would be the doom-and-gloom scenario for oil companies. But not by tomorrow at noon. Fitch says a “compelling” argument can be made that this transition will be a “long, drawn-out process.”

    Indeed- the take away

  10. Yancey Ward says:

    I don’t think EVs will be even 10% of the global automobile fleet even 25 years from now unless one of two things happens-

    Battery capacity surpasses gas tank capacity for a normal sized vehicle for a family of four or more along with a charging time on the order of the three minutes it takes to fill up the tank.

    Or the government literally bans ICEs.

    The latter isn’t going to happen, the former is unlikely in my lifetime.

    • SteveK9 says:

      True enough, but remember EV’s are helped by the fact that using electricity is about equivalent to $1 / gallon gasoline.

      If range is 100 miles and charging times a few hours that could take a good share of the commuter market. This is already possible, but cost is still a problem. Batteries are going to get cheaper. There are enough good results in research laboratories to make it likely that commercial product pricing is going to come down, maybe substantially.

  11. IanCad says:

    I think global warming is a crock. Sea levels are doing just fine, and the air I breathe is cleaner than it ever was.
    I like coal. Coal means smoke, smoke means heat, heat means energy, energy means money. Money makes the world go round.
    That said, as I live in a rural area and rarely drive more than fifty miles a day, an EV would be my vehicle of choice.
    I am not alone; there are millions of us. Big oil is in deep trouble.

    • d says:

      “Sea levels are doing just fine”

      Tell that to the people in the pacific whose homes are going under due to rising sea level’s.

      Dont be surprised if they bang you on the head, tie you up, and then roast you alive, as a response.

      As a lot of their agricultural land has already gone under the sea. So they are back to facing a food, and meat shortage..

      • IanCad says:

        I may be wrong, but as all the oceans and seas are connected, a rise in the level of the Pacific Ocean would create a rise in all.

        • Jon Sellers says:

          Louisiana is spending billions to create barriers on its outer islands so they don’t go under water due to rising sea levels. When the tide is high, the City of Miami Beach has large areas go underwater. Many youtube videos of fish swimming along on the underwater roads.

          Everybody in important positions know the truth. They know they can’t fix it. So they are getting the good land and industry stocks before the plebes figure it out and make a rush.

        • d says:

          Yes but the world holds its ice mostly at top and bottom, so the water rises more there first as it flows away, then you get secondary rise as the water heats up further and expands in the process.

          Being at the bottom of the world surrounded by water and close to it, perhaps we notice it first.


          That should give you a surface temperature map.

          Then light green bit at the bottom that no longer touches the land.

          25 years ago that used to completely surround the land.

          That piece of land is smack in the middle of the biggest cold weather wind system on the planet.

          Correction what used to be a cold weather wind system , now its a warmer, and BIGGER/more aggressive wind system.

          In the last 25 years I have watched high and low tide levels obviously rise on my mooring poles and associated shore lines, its that simple.

          With rising sea levels, you get greater erosion, you can see.

          The old story is that the land rose from the sea.

          Maybe its wrong, maybe the sea withdrew from the land, as it became ice, and sediments grew the shorelines around the land..

          Same result, different cause.

        • d says:

          The world is a big place and most of it is water.

          Takes a while for it to move around think about those 30 meter storm surges that are throwing ships into villages in the Philippines.

          The Pacific is the biggest piece and there are only a few small gaps joining it to the Atlantic some have opposing currents. Water dosent flow out evenly when you spill it, or heat it, in big volumes. Or when you fill a man made lake from a hose at one point.

          Think about how log it took the wreckage from MH370 to move across the Indian ocean (A tiny pond) and land in Africa, years.

          That is the speed’s involved as the water rises and get blown about by the growing wind’s

          Vietnam is also having problems with salinity poisoning crops in the Mekong delta. Because the underlying salt water table is rising. Then china has dammed the Mekong higher up causing a double whammy for the Mekong delta.

          Soon it will be under salt water along with the rest of the low lying coast in South East Asia then the refugee issues in Europe will look like a Sunday school pick-nick.

          50 Years >

          A piece of ice bigger than Texas Broke off and floated away from Antarctica. Not a problem, as it was sea ice any way.

          It was however, hold back layered land ice, several times the size of North America. That is now moving into the sea, which will raise it meters.

          Will only take your life time IF YOU ARE LUCKY.

        • Petunia says:

          Jon Sellers,

          Louisiana’s coastline is not eroding due to a rise in sea levels. It is eroding due to all the levies constructed to redirect water. They are replanting marshes to try and stem the problem, but they need good water management, which they don’t have.

    • Thomas Malthus says:

      Have you been to Asia recently? China in particular? Google China smog then select images.

      I lived in HK and Shanghai for many years – I left because of the smog and instead manage business from the south island of new zealand.

      The air in NZ is extremely clean — because manufacturing has been mostly outsourced to places that are willing to accept toxic air in exchange for prosperity.

      So the air might be cleaner where you and I are but….

      As for global warming I do not take a position on that — I do not care if we are warming the planet – I do not care if the oceans are being ruined by mercury from coal burning — I do not care if we are killing the reefs with acid from pollution….

      Because we have no choice.

      If we stop or slow the burning of fossil fuels we collapse — and we starve.

      There is no alternative to fossil fuels…. they are both a curse and a gift….

    • SteveK9 says:

      Global warming is not a ‘crock’. That said, sea levels will rise very slowly, unless we get some unexpectedly strong positive feedback (methane released from permafrost due to temperature rise, raises temperatures, etc.).

      It is interesting though to realize that if the Greenland ice sheet melted it would raise sea levels by 7 meters (there is a lot of ice there).

      • d says:

        “It is interesting though to realize that if the Greenland ice sheet melted it would raise sea levels by 7 meters ”

        Aye and both Greenland and 1 side of Antarctica (both massive land ice sheets) are melting fast, along with Patagonia.

        The Amundsen shelf is braking up, it used to have a big undersea foot holding it in place, against an undersea mountain ridge.

        That foot has melted off, so the shelf is not there to hold the land based sheet on land any more. The land sheet, is sliding into the sea and breaking up, at an alarming pace.

        All the deniers say we can stop and change this short term problem.

        That land base ice sheet is millions of years old.

        Stupid humans you have abused and unbalanced your planet, now you will start to pay the price of that.

  12. QEternity says:

    The problem with all these prognostications is they assume some form of static system.

    At the present time most ‘murikans has <$1k in savings and 25% of them are at least 120 days in arrears on debt. How do these people buy EV's? The answer is they don't, they buy used beaters as others adopt EV's.

    In the same line of thinking, how do 'poor folk' in India, Brasil, Vietnam etc buy EV's? They don't either because 1) many just drive scooters or 2) they'll buy used gas vehicles forever.

    The issue with commodities is the same as it's ever was — boom and bust from demand/over-production/crash/bankruptcy. Shale oil was the game changer but at $50 almost none make any money. They consume credit. So by 2020 many will be gone with no increase in prices soon. And remember, $50/bbl is for light sweet at Henry Hub — shale producers don't get that. They get a lot less depending on grade op product and transport costs.

    So shale dies, conventional gets tight again, and EV's ramp in the same timeframe. Maybe we tread water for oil over a decade as the existing fleet dies with age and turns over. Even China can't afford to throw all their combustion cars away for EV's.

    But let's move beyond this to capital constraints. Incomes for the vast majority of 'murikans are not growing, while HC, rent and other (unmeasured by the Fed) costs continue to rocket up. Where will the capital come from for not only the vehicle transitions, but the grid buildout? Will this me our economic "Marshall Plan"? I don't have faith in DC to pull their collective heads out their asses to get such a grand plan done.

    Finally, as mentioned before in other ways, you can't fly a big ol' jet airliner, run a locomotive, tractor, semi, bulk transport carrier, or host of other large machines as EV's. Big Ag uses loads of fuel in diesel as well as fertilizers.

    Will there be demand destruction? Oh yes, but only to the extent credit allows. And right now the financial mess of the world is not going to throw its weight behind everyone driving an EV.

    Marginal producers who should have died long ago are still alive on easy CB policy coupled with 'extend & pretend'. Prices will move up. Demand for EV's will move up, prices of oil will move down and up and down over and over again. Probably for at least 2 decades. And by that time my own big Chevy diesel truck will have died, and mane me as well.

    That is if we don't kick off WWIII with Russia first. But that's another story…

    • Wolf Richter says:

      You said: “many just drive scooters.”

      I have news for you: electric scooters work great. I see them all the time. Perfect for zipping around town with.

      And NO ONE says that electric vehicles and planes will replace ALL oil consumption. Your assumption is RIDICULOUS.

      It only takes a 5% decline in oil consumption to throw the entire oil market into turmoil. A 10% decline in consumption would be very tough for the industry. A 20% decline would be the doom-and-gloom scenario, triggering that “investor death spiral.”

      • QEternity says:

        But then, as is currently happening, THE marginal producers die off as they have in the shale patch.

        There is tremendous sunk cost in conventional transport around the world. Most of the world can’t just toss their scooters and cars for a new one.

        I’m not disputing this change can’t or won’t occur, I’m saying that financially right now it’s an expensive hurdle.

        And as mentioned before, shale was the game changer in the US and where are we now? Down a million barrels in domestic production I believe. Will the world Add 5% more now EV’s at a faster rate than supply destruction?

        That’s really the question. My own guess is with the massive financial mess worldwide, it won’t happen in 5 years.

    • Ptb says:

      Yes, the real issue is money of the consumer. It’s going away, not increasing. Scooter sales will be increasing because that’s all the people can afford. Look to third world transportation as an indicator.

  13. unit472 says:

    The question I have about EVs is A/C. Its one thing to drive a Tesla around in San Francisco maybe another thing entirely in Phoenix or Orlando during the summer. Sitting in traffic and watching your battery drain if you keep the A/C on ( or heat if you are in Chicago in the winter) maybe a problem. If your battery dies there is going to be a lot more traffic jams too as ‘out of juice’ vehicles clog the freeways.

    • nick kelly says:

      And the reverse would apply in a cold winter state or Canada. A car without a GOOD heater is useless and dangerous at minus 20

    • Phillip says:

      You don’t realize that when a gasoline car is stuck in traffic it continues to use up its fuel, when an ev is stuck in traffic the motors do not run at all and your battery does NOT drain, except for the ac/ heating that is much less engergy consuming than driving. The chances of your battery dying is less likely than that of an ice car running out of gas. There are some legitimate concerns with a huge build out of ev’s such as sourcing the rare earth elements needed for the motors etc…. but concerns like this are from a lack of experience with the actual driving and charging of these cars.

      • Lee says:

        Have any of you ever driven an EV or even a hybrid?

        I had the opportunity to drive the Chevy Volt here in Australia a number of times.

        Yeah nice car, smooth ride, quiet, and it had problems.

        Also no demand for the car at its current price.

        For Melbourne they might work well especially when one is stuck in traffic at the evening peak when it takes 90 minutes to drive 20 miles……………..

        Out in ‘the bush’ – forget it. They won’t work – the distance is too great and there won’t be any place to recharge, if needed.

  14. S and P 500 says:

    I was looking at a Tesla at a local store, and indeed, electric cars are a lot simpler to build. The engine has only one moving part, no transmission, carburetor, distributor, or fuel pump. It’s amazing.

  15. MarkN says:

    I read this article thinking Wolf is trying to put one over on us all to see how gullible we are. The idea that EV’s will replace the internal combustion engine at any real scale is magical thinking. EV’s make up like 1% of all vehicals on the road. Considering there are like 350 million vehicles in the US alone, just getting to 10% would be an enormous accomplishment. Moreover, that is just for small, light passenger vehicles. Heavy, bigger cars and trucks do not work under battery power at all efficiently.

    • Wolf Richter says:

      It only takes a 5% decline in oil consumption to throw the entire oil market into turmoil. A 10% decline in consumption would be very tough for the industry. A 20% decline would be the doom-and-gloom scenario, triggering that “investor death spiral.”

      The US sells about 1.7 million passenger vehicles per year. Once electricity becomes the preferred method, it won’t take long to have 10 million EVs on the road. And since they’re cheaper to operate, people with two vehicles will give preference to their EV (already happening). So they’re driven more. A lot of those 350 million vehicle rarely get driven. So replacing 35 million with EVs will make a big dent in oil consumption.

      • Thomas Malthus says:

        Hmmm…. oil producers are already headed for bankruptcy with oil at $50.

        What would happen to the price of oil if we shaved even a couple of million barrels off of consumption per day?

        Would that not be the death knell for the oil industry?

        This is what is known as a paradox

        • d says:

          ” Hmmm…. oil producers are already headed for bankruptcy with oil at $50.

          What would happen to the price of oil if we shaved even a couple of million barrels off of consumption per day?”

          In your untenable version of the future.

          In a general gradual wind down of population and debt, the point would arrive where supply and demand curves would meet at an economic price for all.

          As those in need would have the ability to pay the required price if the supplier was not intent on gouging.

          Currently there are to many supplier’s, to much product, and to many people unnecessarily using it, destroying the planet in the process. Whilst trying to service to much untenable debt.

          You want us to go over the cliff.

          You are probably going to win. I must make sure you go over it to.

          I wont be.

  16. Lars says:

    For a reality check on EVs, check out what it would take in terms of production and new installed capacity to replace the fossil fuel car park.
    Not to mention what figures of lithium we need + expensive grid updates etc.


    EVs are nice looking and nice to drive, but in the long term, if we want to go for electric cars, electric hydrogen cars with a fuel cell will likely prevail in my humble opinion.

  17. Dan Romig says:

    A 30 amp @ 110 volt charge = 10 miles or 16 km in 30 minutes
    A 40 amp @ 240 volt charge = 14 miles or 22.5 km in 30 minutes
    A ‘Supercharge’ at a charging station of 2000 amps @ 480 volt = 170 miles or 273 km in 30 minutes

    Which means if you plug in your Model S into a 240 V line, and suck out 40 Amps non-stop, you can drive 28 miles after an hour. The total electric energy equals 9.6 kWh.

    On top of my $8.00 Xcel Energy’s ‘Basic Service Charge’, I pay 15 cents a kWh; so each 100 miles from a 240V home charging would cost about $5.14. Not bad, but my ’95 Lexus SC400 costs about $13 for the same distance, and she’s paid for. A new model S runs 70 thousand bucks so it would take around 900,000 miles to break even at today’s gasoline and electricity prices if I went for a comparable EV!

    Maybe a used Nissan Leaf, eh?

  18. NY Geezer says:

    There appears to be a general Americanized view of auto demand in China. But China is an overpopulated country with serious smog problems and air pollution health related issues. So allowing anyone who has a car to go down to the local motor vehicle bureau and purchase a license plate is generally out of the question, except perhaps in a desert or farm area.

    China’s most populated cities are required to sell license plates only via lottery where on average, the chances of winning about 1 in 700. And then, the lottery winners still can’t drive whenever and wherever they want; they can only drive on certain days of the week, and only within the city in which they got the license plate.

    But the good news is that these limitations apply only to combustion vehicles not electric vehicles. So, those who want to buy an EV can just go down to their local MV Bureau, buy a license plate and drive anywhere and anytime they please.

    • nick kelly says:

      Informative- I knew this but I’d forgotten it.
      BTW: I have a bit of an acquaintance with a cult -the electric bike.
      And I don’t mean the scooters.
      Test rode an old lead acid two years ago- not bad- should have bought it for 300.
      Last week I bump into a ‘bishop’ of this cult- he’s riding one that was 4 grand. He has a stable of these things. And he’s not even a dealer.
      Goes 60K between charges and goes fast.
      Of course a motorcycle (250 cc) for the same bread would go faster.

      Repeat: a cult

  19. prepalaw says:


    another extremely informative commentary generated by your excellent article.

    I accept your premise that a 5% decrease in oil consumption will generate tremendous problems for the oil industry. Except for city buses, natural gas is barely used as motor vehicle fuel. The infrastructure for NG distribution is robust. NG has about 50% of the BTU of gasoline – so the range of the passenger car will be reduced from 500 miles to about 250. That is a doable range for most people.

    In Brazil, you can purchase vehicles that run on a combination of fuels. The gas stations sell straight NG; straight gasoline; straight diesel; straight ethanol; and blended gasoline/ethanol.

    The US has huge NG resources to supplant much gasoline consumption. And, eliminate much imported oil. NG, as motor fuel, is cheaper than gasoline. The only real issue is range. Both fuel generate noxious “fumes”. But, the substitution of NG for gasoline seems only possible if the big oil companies get to control it.

    • d says:

      The Japanese have been running light urban truck’s on NG instead of diesel successfully, for some time.

      All NG vehicles have issues to some degree in cold weather.

    • Ptb says:

      I think many of the garbage truck fleets now run on NG as well.

    • Jon Sellers says:

      Nat Gas has sizeable problems in regular commuter automobiles. Similar to hydrogen, when you have to massively compress the gas, the driver is in effect sitting on a bomb. You do not want to hit one of these things by accident at high speed.

      There are obviously lots of things you can do to mitigate this. But…people are stupid.

      • Lars says:

        Really Mr. Sellers? In Europe there are 2-3 million cars running on CNG (compressed natural gas, mostly methane or biogas), and another 15 million on LPG (propane/etane). I drive a LPG car myself. These fuel thanks are ultra solid and for them to explode they would have to be run over completely by a truck or something like that. Even in that scenario they are not likely to be much damaged and they have safety valves letting out the gas gradually.

        Don`t make problems of things which aren`t…

        • Jon Sellers says:

          I’m not making the problem. American rules making organizations have not defined what constitutes a “safe” container for CNG in US consumer automobiles. That is why it is currently only found in professionally driven vehicles and a few licensed test cases.

          With any CNG container, if the container is at high enough pressure and you compress the container faster than gas can be released from a safety valve it will explode.

          You can not guarantee that will never happen. In the U.S., the question is how to make the risk so small that a viable industry can be created around it. If Europe has found the answer to that problem, well, good for you.

        • Wolf Richter says:

          How can you make up such ignorant nonsense propaganda!?! We sold CNG vehicles 20 years ago. And Ford among others is STILL selling them. They work great.

          Check out Ford’s 2016 F-150 which runs on CNG or propane:


  20. Justme says:

    I’m a person that is pretty much obsessed with energy efficiency. I’m also a person with a strong analytic and scientific bent. Therefore, I insist on proper analysis of the CO2 impact of any technology. It is really not that hard to do, although finding the necessary data can sometimes be challenge, and/or a lot of legwork. When it comes to electric vehicles (cars), the numbers that matter more than anything else are

    average CO2 emission per kWh (for average grid mix)
    MARGINAL CO2 emission per kWh (for marginal grid mix, meaning incremental supply)

    The concept of marginal cost is well known to economists, of which there are clearly a few on this blog. So the above should make sense to a lot of people. Grid mix is a term that refers to the mixture of of sources of the electricity that feeds the grid, such as coal, natgas, hydro, nuclear, solar, wind, etc.

    Entire books can be written about the subject of the CO2-efficiency of the grid and of electrical cars. But the bottom line is this.

    gCO2/kWh * kWh/mile = gCO2/mile

    One can also convert gCO2/mile into an equivalent MPG number. Now, if one goes through all the rigamarole (and I have one this myself), here are some numbers for thought.

    Tesla Model S electric car emits the same CO2 as a 35mpg car
    Toyota Prius hybrid car is a 50mpg car
    Nissan Leaf electric car emits the same CO2 as a 50mpg car

    The above is for AGM (average grid mix). On MGM (marginal grid mix), the electric cars will achieve WORSE numbers, because marginal grid supply comes from coal and natgas, not clean sources.

    Finally, I will mention a common fallacy, namely: “But my electric car runs on solar energy from my solar panels”. This is true ONLY if your solar panels are not and CANNOT be on the grid. What really matter is whether a choice to feed the solar energy into an electric car leads to smaller or large *total* CO2 emission than feeding the solar energy onto the grid and driving, say, a Toyota Prius. The concept needed here is CO2 DISPLACEMENT. By feeding the solar to the grid, you may displace CO2 sources on the grid, and actually generate less CO2 overall *if* you drive an efficient (say 50mpg) oil-based car, such as a Prius. In fact, in the wast majority of cases, feeding the solar to the grid and driving a Prius leads to less CO2 than feeding the solar to a same-size electric car.

    Now, as I said, one could write entire books about the above. And there are other details that factor into the calculations. But none of them negate the basic observations made above.

    Usually when I write things like the above, I get an endless stream of what-about-this and what-about-that or technology-XYZ-will-fix-this. I implore the reader to be VERY skeptical of such claims. In fact, when you see such claims, please make it an exercise to try and spot the fallacy.

    People also often accuse me of being against electrical cars. No, I am not. What I am against is purported improvements that really are not improvements. Very few things would make me happier than people burning much less fossile fuel. But right now, given the nature of the marginal grid mix, electrical cars do not achieve that goal, and it will take many decades to change the grid mix (supply) sufficiently so that electrical cars become the best choice/ In the meantime, the correct solution is for people to sdrive maximally efficient hybrid cars. If everyone was driving a 50+ mpg hybrid RIGHT NOW, it would buy us time to develop the other energy sources that we need.

    • NY Geezer says:

      Is it not the play book of big oil to resist all attempts to expand the generation of electricity via renewable sources and to use this success to support the claim that EVs produce as much CO2 pollution as combustion cars because renewable sources are so limited ?

      • Justme says:

        NY Geezer, it is actually mostly the utility companies that are resisting the generation of electricity via renewable sources (wind and solar). The reason being that wind and solar are intermittent and therefore cannot be use to supply base load unless paired with a very large and expensive energy storage buildout.

        Also utilities want to keep running their old coal and natgas plants running at max profit. The natgas companies would of course have that same interest. Renewables generally cut into the profits of the energy establishment. Bad planning and short term profit motives (fracking would be a good example) abounds in the energy industry.

    • Thomas H Belstler says:

      I have been driving a Prius since 2008. Last year I purchased a 2015 model which averages 46.8MPG. I have tracked every gallon of gas ever put into the vehicle and my little app says that my per mile energy only cost at an average price of $2.21 per gallon is $0.048.

      My electric energy supplier is Duke which started off charging me $0.082 per KWH when I first moved here but 6 years later is up to $0.0965 for the first 1,000 KWH and $0.10348 for anything over that.

      Further, although I have not looked into that aspect of it, it may well be that Duke may reclassify my energy use category from Residential to one that has higher charges associated with it if I begin to use much more power than the average residential dwelling. The entrance rating may also be insufficient, even though I have central air, to support a 240V charger with the AC running. The homeowner pays for the required upgrades to the service and it’s not cheap. I looked into the cost of that some time ago for an acquaintance who suddenly became enamoured by the idea of an electric vehicle. He soon became disenchanted when just the initial startup costs began to mount up and dropped the idea.

      • Justme says:

        46.8 mpg is decent. Keep at it. If you do not have many cold starts, and do not have only short trips, you might be able to do a little better on average. Cold starts and cold running are the bane of fuel efficiency for any car with an ICE (internal combustion engine). If you have the plug-in version of Prius, you might be able to avoid running the ICE at all for short trips, that is, if Toyota programmed the Prius smartly to avoid starting the engine on short trips. It is all in the details.

        The above may sound strange to some in light of what I wrote above about EV being worse than a good hybrid. But there are corner cases of driving patterns where an EV fed by AGM (aver grid mix) is better than even the best hybrid: If you drive 1 mile, then stop for 1 hr, repeat all day long. Then the engine will never get warm and pure electric is actually better. But that is a highly unusual driving pattern.

        • Thomas H Belstler says:

          If I play around with it and seriously annoy the cars following me by coasting to stop signs, minimizing but not eliminating braking because some of that braking energy is returned to the traction battery and starting off slow enough so that I stay in ECO mode and the weather is just right, I have been able to boost my mileage to 51.5 mpg for a full tank of gas.

      • Dan Romig says:

        Xcel Energy has an ‘Energy Charge Summer’, an ‘Energy Charge Winter’, a ‘Fuel Cost Charge’. These are similar to what you pay Duke, but haven’t you also got City Fees, City & County & State tax, plus other items that bring your cost per kWh closer to my cost in MPLS of 15 cents?

        • Thomas H Belstler says:

          Yup, there is a ‘Basic Service Charge of $8.29 and a $0.50 “Fixed Monthly 50C Leaf Charge” which I am totally clueless about. I did not include any of those charges in my description because they do not pay for energy.

      • nick kelly says:

        I am driving a 2001 Honda Civic- bought August 2014 for 3300
        Not a scratch. well maintained.
        Then 217 K now 260. Timing belt and clutch had been done in 2013.
        Done rear brakes and battery, light bulbs- $350
        1.7 liter standard goes fast and gets about 35 town 40 highway.
        Drives like new.

        • Ptb says:

          I’m with you, Nick. My 1998 civic is at 283k, gets 35 to 40 mpg and is a joke to maintain and rarely needs fixing. Costs me $1500 5 years ago. Do the math on my civic verses a used Prius at 45 mph and much higher purchase price.

    • Thomas Malthus says:

      I’d like to extend and invitation to join the Finite World blog. We have a few engineers who weigh in on these sorts of issues and your input would be most welcome

  21. Thomas Malthus says:

    Could Electric Cars Threaten the Grid?

    Some neighborhood grids just aren’t built for huge spikes in power demand. The rise of the electric car has utilities scrambling to adjust.

    Plugging in an electric vehicle is, in some cases, the equivalent of adding three houses to the grid. That has utilities in California—where the largest number of electric vehicles are sold—scrambling to upgrade the grid to avoid power outages.

    Last year in the United States, only about 50,000 electric cars were sold.

    And researchers at the U.S. Department of Energy’s Pacific Northwest National Laboratory have calculated that the grid has enough excess capacity to support over 150 million battery-powered cars, or about 75 percent of the cars, pickups, and SUVs on the road in the United States.

    But there’s a catch.

    While power plants and transmission lines have excess capacity, things can get tight when it comes to distributing power to individual neighborhoods. And this is especially the case since electric vehicle sales aren’t evenly distributed. In California, for example, they’re taking off in Silicon Valley and places such as Long Beach and Santa Monica.

    Electric cars being sold today can draw two to five times more power when they’re charging than electric cars that came on the market just a couple of years ago. But the impact of charging one depends on where it is on the grid and how it is charged.

    They don’t pose a problem if they’re charged slowly at conventional 110 volt outlets. And public fast-charging stations don’t impact the grid much because they are part of commercial grids that have transformers and other equipment sized to accommodate large loads.

    The trouble arises when electric car owners install dedicated electric vehicle charging circuits. In most parts of California, charging an electric car at one of those is the equivalent of adding one house to the grid, which can be a significant additional burden.

    More https://www.technologyreview.com/s/518066/could-electric-cars-threaten-the-grid/

    It is amazing what one can learn using Google….

    • Wolf Richter says:

      Note my comment earlier in the stack on enormous amounts of excess capacity in the grid at night. The grid is designed to be able to supply the power needed to feed the biggest spikes midday during the hottest days of the year. The rest of the time, this capacity just sits there and costs money. At night, demand for power collapses. This is when people would charge their vehicles. They would simply use the excess capacity of the night hours. Utilities love this aspect!

      • d says:

        Flexible solar panels are a reality, today.

        The flat surfaces on Ev’s will be solar-charging panels, as soon as their is any real competition in the Ev market. Just as they are already charging surfaces, in most good motor-homes.

        Another daylight grid usage reducing factor.

        Rooftop parking becomes premium parking, in parking building’s.

      • Kevin says:

        Wolf, I don’t get why you keep repeating that utilities will love this or that. You own shares in utilities counters? ;-)

        IMO, for the most part, utilities will NOT love this idea of EVs or electrical grid running off solar panels or some other form of renewables.

        If Solar PV becomes mainstream, and every other home charges their cars using batteries that store the “free” energy from solar, wind or other renewables. Utilities companies will die a slow death eventually. You can’t make people pay money for a “free” energy source such as solar, other than making consumers pay ridiculous amounts to “maintain” the solar PVs and/or the batteries.

        Fact is, battery technologies are rapidly moving into economically efficient scales with many new technologies and variants much safer than the current Lithium formats (viz. exploding Samsung phones). The same has been happening with Solar PVs where it is now effectively on par with fossil fuel powered electrical grid charges per kwH basis.

        In layman speak, it means solar is the same cost (after factoring the lifecycle cost including installation, minimal maintenance etc.) with what you would have to pay utilities companies over 3 year recovery period. Solar cells have also made huge gains of more than 50% in efficiency over the past 2 years alone and many experts are saying its efficiency progress is faster than Moores Law. That means, going forwards, Solar PVs will be cheaper than buying electricity off your grid and you could justify the initial installation costs very quickly. In fact, some European countries already have a huge amount of “excess” energy from home solar PVs “sold” back to the utilities companies, with the attendant reduction in their electrical bills.

        Many utilities around the world, are struggling to find a viable capitalistic business model (such as leasing solar PVs, charging ridiculously high amounts for maintenance over a 10 year contract etc.) which is self-defeating but understandable in the context of their need for revenue. My guess, is they are fighting a losing war, unless governments step in to regulate away the innovation (as in Uber, AirBnb and other technologies deemed too “disruptive”)

        I’d say it will be good for humanity and the environment in general, but the world’s economy will likely be shot to pieces as many such technical innovations come online. Basically, when energy is “Free” and effectively infinite (for the next billion years or so from the Sun), market economics no longer works since there is no “money” involved to transmit the demand-supply curves.

        There are already companies that have successfully made machines that distill pure water from water vapor in the air, and other innovations that does desalination from sea water at increasingly cost-competitive levels. When the miniaturization sets in, there will be another shakeup with water utilities as well.

        Currently, the way I see it, is that all the people can really get “free” energy and “free” water and electricity, but the politicians and big business will NOT like the idea. Mother Nature is a generous provider once humans use their ingenuity, but its those that wants to hang on to their political power and maintain the social status quo that wants to legislate or delay these innovations.

        I hope I can live long enough to see humanity move into an egalitarian social structure with the help of these innovations, but I think the current political and economic systems (consisting mostly of and controlled by psychopathic power-mongers and narcissistic corporate fat cats) will not go away without a fight.

        • Wolf Richter says:

          You’re right, utilities HATE rooftop solar – always have, always will. They fought net metering for a decade before they were finally more or less forced to give in, and some still fight it. But that wasn’t part of my original sentence. I was just talking about the regular grid.

      • Kevin says:

        Ok, Wolf, maybe I misread you. Anyway, EVs will be the future, but I don’t think the petroleum industry will collapse as badly as what the author implicates. They will get smaller for sure.

        There are still many industries that requires petroleum and her by-products, such as in agriculture, paints and lubricants, plastics manufacturing, chemicals etc. These will never go completely away.

        Besides these, commercial airliners and military vehicles will always prefer the reliability and energy density of the liquid black gold versus batteries susceptible to EMP or other interference.

        A good chunk of aircraft fuel consumption will still be there as world tourism is still trending northwards. Sorry Greenies and tree-huggers.

        However, Big Oil will certainly get a whole lot less revenue as EVs, solar cells and batteries in combination or in part, progressively displaces oil and gas usage. The less dominance Big Oil has, the better for everyone and the more freedoms there is for the broader masses.

        Incidentally, as renewables gets dispersed among the people and not corralled and controlled in the hands of the few, you will see less need for Wars over oil or other energy resources throughout the world. I’d say Elon Musk deserves the Noble Peace Prize more so than that O-blam-ma president.

  22. Christopher Martin says:

    Here in nz, taxes comprise over half of the price we pay at the pump for petrol. Diesel fuel is cheaper because they pay a road user tax based on mileage. The switch to EVs will mean a road user tax based on mileage will have to be paid by EV cars. The government has announced that this road user charge on EVs is being deferred to assist the adoption of EVs. So we know it’s coming.
    As a child growing up in UK in 1950’s electric vehicles were every where. They were called ‘floats’ and mainly used for urban bread and milk deliveries before supermarkets.
    Nobody refills gas ( propane in US?) cylinders here – you take the empty to the garage and swap it for a full cylinder which has been tested and certified, paying only for the gas. Putting on my ‘jetson’ cap I can envisage a future where EV batteries are developed that can be replaced with a charged one at the garage, paying only for the charge plus a margin for maintenance. This would be safe,convenient and remove problems of range, battery charge points and replacement.

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