Talk is cheap, when it comes to ramming EVs down our throats

Talk is cheap, when it comes to ramming EVs down our throats

With the nation about to enter another (largely understandable) period of ‘lockdown’, Iain Robertson is concerned that unguents masquerading as palliatives to turn a fossil-fuelled tide in our troubled automotive scene are truly not what they appear to be.

A recent data study of new vehicle registrations from Europe boasted with a degree of joy that Electric Vehicles (EVs) had finally overtaken diesel-powered types, with the latter’s market share dipping to 24.8% and EVs constituting over 300,000 new car platings. On such evidence major celebrations are made, among the government supported bodies promoting, with limited thought, a future fuelled inadequately by electricity.

It is worth highlighting, of course, that those impressive numbers were of all electrified forms of transport and not strictly just EVs, as more than half were hybrids, or the increasing mild hybrid class of cars; this latter grouping being almost totally reliant on petrol as a primary fuel source (diesel does fuel a small percentage of them). Whether, or not, the news will upset Elon Musk, the intriguing founder of Tesla, that Volkswagen’s Golf-sized ID.3 model is now outselling the Tesla Model 3, by a factor of almost two-to-one, it is fascinating that the highest number of plug-in hybrids was by Mercedes-Benz (22%), followed by Volvo and BMW.

It is also worth pointing out the incredible turbulence that has been a feature of world car manufacturing in the past twelve months. Bear in mind that European vehicle production dropped by a massive 29% in the first nine months of this year, to 8.54m units, and the relative anonymity of EVs (the majority of which cost from around £45,000, can cover around 160-miles without incurring range anxiety and can be charged from 0-80% at a far from adequate quantity of charging points, in around 35 minutes) starts to look more in focus.

Pricing remains an issue. Even plug-in hybrids (PiH) seem to carry a non-discountable £7-10,000 premium over their fossil-fuelled equivalents. While corporate spending on electrified vehicles has been vibrant, with firms taking advantage of taxation benefits, the private buyer is no less confused by the offering but is keeping the purse-strings clasped shut, concerned that furloughing, while helpful, is no means to improving prosperity, or cash flow. The critical appraisal of how poorly serviced is the EV user has been much-publicised in the past few days, with the boss of the UK’s largest vehicle leasing company (Richard Jones of Lex Autolease) stating that the recharging infrastructure, once out of the typical urban environment, is abysmally inadequate.

His comments were mirrored by Khaled Shahbo, MD of Enterprise Rent-a-Car, who reiterated long-held consumer views on lack of confidence, range anxiety and both practical and pragmatic logistics issues. He admitted to changing recently his entire company car fleet to EV, or PiH, but even equipping each of the company’s outlets with dozens of charge points, they cannot manage the numbers of vehicles that need to be charged on a daily basis.
Yet, one of the country’s largest suppliers of plug-in recharging devices (BP Chargemaster) has reported that fewer than 25% of the current infrastructure is in use at any one time. However, such information has no relationship with either accessibility or availability of the network. Disturbingly, a high proportion of charging devices are either dedicated to specific brands (like Tesla), or prove to be difficult to use, or simply not in use, due to breakdowns and, in rare cases, damage.

While EVangelism has been rife during a period at which little other than ‘Coronavirus’ has constituted the ‘news’, a groundswell of opinion has been building around the Clean Energy vs. Fossil Fuel argument, which is starting to percolate to the surface. A growing number of consumers is starting to realise that subsidised ‘clean fuels’ may not carry the pricing advantage presumed from support packages. The big question arising from the fast-tracked growth of cleaner solutions is, how secular, or cyclical, are the trends? Renewables are secular but the decline of fossil fuels is surely cyclical.

The world demand for oil and gas products is still increasing and is likely to do so for the next twenty years, at least. Market recovery, albeit stymied by the pandemic, is likely to occur within the next three years. Yet, the rush to provide wind and solar energy is going to rear a very ugly environmental threat that no amount of EVs, or PiHs, will be able to resolve. The quantities of precious metals required in the production of solar panels, charging devices and batteries is eye-wateringly high: to meet just 50% of intended clean air targets for 2050 will require lithium extraction to increase by 2,700% but to produce just one tonne of lithium requires 500,000 gallons of water, a factor that is already endangering some South American communities.

While burying aged wind turbines is not a major catastrophe, they do not leech pollutants into the earth. However, a landfill packed with defunct solar panels will cause untold damage from chemical leakages. While contemplating this situation, it is important to note that all the talk about recycling plastics is only 9% effective…91% remains unrecycled. It is also worth highlighting that China owns and controls more than 80% of the world’s rare earth minerals used in the production of EVs. In fact, it is impossible to manufacture an EV without China.

For investors, energy remains a very friable market sector. Overpriced on more than one hand but seemingly in distress mode on the others. Incidentally, silver and gold remain buoyant. Consolidation among major energy providers is a necessity but, when the subsidies slide, clean energy suppliers will find their stocks declining too. It is an intriguing dichotomy: clean energy is growing but fossil fuels are not declining. There are innumerable challenges to be addressed but preferring one type over the other is not an issue, they will be worked together. The real issue lies with returning a sense of reality and truth to the transport sector.

02/11/2020