
Economics of Electric Vehicles Mean Oil's Days as a Transport Fuel Are Numbered - neo4sure
https://www.forbes.com/sites/mikescott/2019/09/02/economics-of-electric-vehicles-mean-oils-days-as-a-transport-fuel-are-numbered/#3e32d4605102
======
klwejchkwejrhc
>renewable electricity has a short-run marginal cost of zero, is cleaner
environmentally, much easier to transport and could readily replace up to 40%
of global oil demand

Hmm, not sure about that "much easier to transport" part. A cube 3 meters on a
side can contain enough gasoline to power the average car for its entire
lifespan. The gasoline is a liquid, it is relatively easy to move it between
containers. Any technology that is capable of moving macroscopic amounts of
matter is capable of moving gasoline. You can haul it on a bicycle, you can
haul it on an airplane. To transport electricity you need to make sure there
are power lines and batteries arranged in a certain way.

~~~
localhost
That really is a remarkable visualization! So much so that I had to compute it
for myself - 27,000 liters of gasoline will move an average car 287,000 km
assuming 9.4L/100km which is the average 2017 fuel economy for a "car, light
truck, SUV" in the US.[1]

[1]
[https://en.wikipedia.org/wiki/Fuel_economy_in_automobiles](https://en.wikipedia.org/wiki/Fuel_economy_in_automobiles)

~~~
userbinator
Relatedly, fuel consumption can be measured in square meters:

[https://physics.stackexchange.com/questions/325733/why-
can-f...](https://physics.stackexchange.com/questions/325733/why-can-fuel-
economy-be-measured-in-square-meters)

~~~
HALtheWise
Yes, and the grandparent's calculation can be accomplished by simply dividing
the fuel volume by the "area" of the car's efficiency (or multiplying if using
MPG, which is inverse area)

[https://www.wolframalpha.com/input/?i=%283m%29%5E3*24.9mpg](https://www.wolframalpha.com/input/?i=%283m%29%5E3*24.9mpg)

~~~
tzs
Pico hectares are a good unit of area to use for this. For a car that gets N
miles/gallon, for 1/N gallons/mile, that works out to 235/N pico hectares.

That results in nice small, but not too small, numbers for most current cars,
around 50 pico hectares for a Humvee in the city to around 4 pico hectares for
a Prius on the highway.

~~~
seszett
Square centimeters or millimeters seem easier to visualise. The area
represents the size of the tube that feeds the engine to get this mileage. You
could even express it in the form of a radius.

------
inflatableDodo
> _“For a given capital outlay on oil and renewables, how much useful energy
> at the wheel do we get? Our analysis indicates that for the same capital
> outlay today, new wind and solar-energy projects in tandem with battery
> electric vehicles will produce six to seven times more useful energy at the
> wheels than will oil at $60 per barrel for gasoline powered light-duty
> vehicles, and three to four times more than will oil at $60 per barrel for
> light-duty vehicles running on diesel,”_

If these figures are even in the rough ballpark of being correct, then it is
all over bar the shouting.

> _" More than a third (36%) of the crude oil produced today goes to fuel
> vehicles susceptible to electrification"_

[https://www.electricclassiccars.co.uk/](https://www.electricclassiccars.co.uk/)

~~~
Gibbon1
Coffin nail for small internal combustion engines is maintenance and life
span. I think maintenance is around 5 to 10 cents a mile. And the engines only
last 4-8000 hours. Maintenance on electric motors is nil. And the life span is
25-50,000 hours at least for industrial motors.

Kicker once price parity is archived gasoline powered cars will be more
expensive to operate even if the cost of gasoline was zero.

------
arbuge
> renewable electricity has a short-run marginal cost of zero

This seems to be the crux of the argument. It certainly doesn't make sense to
me. Obviously oil would find it hard to compete with electricity if it was
free, but amortizing the cost of renewable power plants means that is unlikely
any time soon.

~~~
Iv
Marginal cost = cost of producing one more unit of something (energy in that
case) once your capital has been spent.

It just says that if you have a solar panel, you don't need to spend
additional money to make it produce electricity. Unlike, say, a diesel
generator. It is purely capital spending, zero marginal cost.

Another way of counting would be to say that _not_ producing costs you money
as you are losing capital over the panels' lifetime.

------
Animats
Bloomberg has a study.[1] But they see electric vehicles hitting 50% of new
sales about 20 years out.

The battery Ford F150 is two years out.. At that point, most consumer vehicles
can potentially be electric, but the electrics will not be lower in initial
cost yet. Bloomberg sees that happening in 2024.

Conversion may happen faster in China. Already, there are heavy incentives to
go electric in Beijing. As in, you can get a car license much more easily.

[1] [https://about.bnef.com/electric-vehicle-
outlook/](https://about.bnef.com/electric-vehicle-outlook/)

[2] [https://thinkprogress.org/electric-vehicles-cheaper-
gasoline...](https://thinkprogress.org/electric-vehicles-cheaper-gasoline-
cars-e4c86bd2aebe/)

~~~
Iv
FYI we are at about 5% yearly now. More than half the EVs produced last year
were produced in China, where the government strong subsidizes electric
vehicles and taxes fuel vehicles.

------
Iv
There is also another strong incentive for EVs in a renewable electricity
scenario: smoothing the intermittence.

Nowadays, electricity grids try to incentivize consumers to use electricity at
night more, as they try to smoothen the consumption baseline. With solar and
wind, you have huge spikes of production and some gaps as well. Expect
electricity to be very expensive at some time and very cheap (even free or
negative price) at some other time. In such a context, storage capacity
becomes very quickly a good investment.

------
kristianp
The Forbes summary of the report it's covering says this only covers light
duty vehicles and up to 40% of oil production. So still plenty of demand for
oil for long haul ships and trucks I imagine.

~~~
abhi152
Fuel used in Ships is very different from Gasoline.

~~~
kristianp
Not sure what you mean? It still comes under the moniker "Oil".

------
emptybits
I have questions about the environmental impact of EV batteries when it comes
time to replace or dispose of them. I've read a few things, including an old
statement by Tesla on the topic.[1]

> Tesla: "our lithium ion cells contain no heavy metals, nor any toxic
> materials. In fact, our cells and Energy Storage System, by law, could be
> disposed of by putting them in a landfill. However, we have no intention of
> landfilling our ESS." They go on to say a recycling plan is being
> implemented. Cool.

From an RoHS POV, sure, no heavy metals. But "no toxic materials" and "ready
for landfill" blows my mind. Am I naive?

I'll assume Tesla is one of the Good Guys, but I predict worse players in the
industry will take advantage of loose disposal regulations if there is short
term benefit.

[1] [https://www.tesla.com/blog/mythbusters-part-3-recycling-
our-...](https://www.tesla.com/blog/mythbusters-part-3-recycling-our-non-
toxic-battery-packs)

~~~
eigenloss
People will buy completely wrecked Teslas for $5-20k just to extract and
resell the battery modules. Each of the 16 battery modules from an S goes for
about $1200 a pop. The secondary market will buy essentially any quantity of
lithium cells if the price is below $200/kWh, no questions asked.

Recycling efforts are almost always for show. If a cell or module has at least
30% of its original capacity remaining, people will reuse it for stationary
storage or weight-insensitive vehicles. Shredding and recovering cathode
materials from lithium cells is about as economically nonsensical as
recovering silicon from cell phones.

There is such a massive worldwide shortage of batteries right now that
worrying about dumping them in landfills is beyond pointless. You may as well
worry that we're throwing away too many gold bars.

------
akeck
This writer works through some upper limits of vehicle electrification, based
on cobalt reserves:

[https://syonyk.blogspot.com/2015/12/cobalt-requirements-
for-...](https://syonyk.blogspot.com/2015/12/cobalt-requirements-for-global-
electric.html)

~~~
tim333
The writer doesn't seem to distinguish between reserves and resources, a
common mistake in these kinds of articles. In normal mining use reserves are
areas of ore you've mapped out and shown to be economically extractable by
drilling holes, taking samples etc, resources are the amount or stuff out
there. Reserves always only go a few years ahead because it takes money to
find them, drill them and so on. That doesn't mean we're running out.

------
nordsieck
> Economics of Electric Vehicles Mean Oil's Days As A Transport Fuel Are
> Numbered

I know the article was about cars, but fossil fuel will always have a place as
aviation fuel. The only thing I can currently see ending that trend is
widespread use of vacuum tunnel trains.

~~~
doctor_eval
I see the claim that we need fossil fuels for airlines and rockets raised
frequently, but once we have widespread renewable electricity, what’s the
barrier to creating fuel from air and water, using electricity?

AFAIK, it’s not really _fossil_ fuels that are needed for planes and rockets,
but high energy density _liquid_ fuels, and these can surely be created
renewably once we have a renewable energy infrastructure.

Or have I missed something?

~~~
olau
Yes.

And small electric planes are in fact beginning to show up. It is my
understanding that going electric enables more efficient designs, and with
those one or two decades of further battery tech development might actually
get us large planes too.

~~~
Gibbon1
That Israeli company Eviation is claiming their yet to fly electric plane will
have a range of 500 miles. I'm reserving judgement till I see it. If they pull
that off it's a line in the sand.

~~~
doctor_eval
This electric aircraft gets 60 minutes endurance and is flying today
(apparently):

[https://www.abc.net.au/news/2018-01-04/first-electric-
plane-...](https://www.abc.net.au/news/2018-01-04/first-electric-plane-
passenger-flights-in-australia-to-rottnest/9304424)

~~~
Gibbon1
Be interesting to talk to someone that has real experience with those.

------
IloveHN84
But all the small electric cars are just starting at the shamed price of
35/40k € ( Peugeot 208, VW ID.3 and so on).

That is a huge barrier of entrance. At the same price, one can buy a BMW or
Audi. We need an economic model to let the EV industry boom

~~~
lnsru
One probably needs to develop and produce EVs in cheaper country than Germany.
BMW and VW engineers earn ~100k € early, they are unionized and can’t be
fired. As a result one gets ID.3 for 40k€. That’s already very expensive car
for most Germans despite some pre-orders: [https://electrek.co/2019/07/22/vw-
zwickau-factory-electric-c...](https://electrek.co/2019/07/22/vw-zwickau-
factory-electric-cars/)

Last but not least: electricity. If you don’t have a garage, EV does not make
sense. No easy overnight charging, I don’t want to park mile or tho away my
car for few hours just for charging. And taxes! Most of petrol/diesel price in
Germany are taxes, electricity is taxed much lower. Can government loose this
stream of income that easy? Or electricity will be taxed same way in the
future?

~~~
imtringued
ICEs are affordable. Engineer wages don't seem to be the limiting factor. The
problem is that the car companies don't want to invest into battery factories
because they hope someone else pays the bill first.

~~~
lnsru
You are right, Sono Motors in Munich did their development on shoestring
budget. I was asked to join electric camper startup, they estimated their
development budget under 2M€ using off shelf parts.

------
psadri
The question on my mind is what else will this freed up oil will be used for?
One area could be cheaper fuel for aviation? More plastics? This of course
ignores the environmental cost of continuing to use oil.

~~~
api
If oil demand falls a lot of tar sands and offshore and fracking and other
hard to get oil will become uneconomical to extract, causing (paradoxically)
supply to appear to contract too. The oil age could ratchet down via a series
of price spikes and contractions just as it ratcheted up via price spikes and
expansions.

~~~
Gibbon1
Thing I read about the history of oil is energy return on investment went from
about 125:1 in 1920 to about 10:1 now and tar sands are worse than that.

If countries start slapping carbon taxes on oil, you can quickly see where
that goes.

~~~
api
It costs so much less to drive an EV per mile largely because we get
electricity from sources with a much higher EROEI than present day oil. Gas,
coal, solar, wind, nuclear, and hydro are all much better. The low energy
return of current oil is priced in.

BTW it's not just obtaining the oil but refining it. Oil refineries use a ton
of power usually from electricity, gas, or by burning some of the oil itself.
Heavier oil like tar sands and shale takes more energy to refine, as does high
sulfur oil.

Tar sands is so bad I've heard it described as being almost more a way of very
indirectly converting other sources of energy into oil than a source of
energy.

~~~
Gibbon1
Yes. From an energy efficiency point of view we'd be better off burning the
oil used to make gasoline in a thermal power plant.

Your comment about Tar Sands reminds me of a quote I read a long time ago
about the price of coal being linked strongly to the price of diesel. Not to
mention fracking boom is just a way to turn free central bank loans into Nat
Gas.

------
RickJWagner
Great!

Now all we need is an electric car that fits the economic footprint of a gas
car and provides decent range. I'll take a performance model, please.

~~~
cylinder
Which car runs on a gas?

~~~
basementcat
Toyota Mirai, Honda Clarity, Hyundai Nexo just to name a few.

------
greglindahl
Note that this is a "Forbes Contributor", i.e. a user of the Forbes blogging
platform. I wish HN wouldn't label these with "forbes.com" because it's even
shittier quality than Forbes.

------
ccsnags
Lithium batteries aren’t green at all. Going to EVs just changes the impact on
the environment.

If we can’t solve the end of life issues with lithium batteries, we need to
look at them as a technology adjacent to petroleum when it pertains to
environmental impact. A true step forward would be an innovation of power
storage itself, rather than the mechanisms around it. Build a better gas tank.

~~~
HALtheWise
It seems likely that the end of life for vehicle lithium ion batteries will
look roughly similar to end of life for vehicle lead acid batteries today.
Namely, lead acid batteries are recycled at a rate of 99.3% in the US, making
them the most recycled consumer good. The demand obviously doesn't exist right
now because so few electric cars have reached end of life, but it seems like
the transitioning the world to battery power will require a one-time
investment of a bunch of materials (nickel arguably being the most important)
then those same materials will just cycle around the economy for centuries.

[https://www.recyclingtoday.com/article/battery-council-
inter...](https://www.recyclingtoday.com/article/battery-council-
international-lead-battery-recycling/)

~~~
NotSammyHagar
tesla's plan for old car packs that lost some range is to turn them into home
battery packs.

~~~
WorldMaker
Originally the PowerWall was meant to be all recycled batteries, though there
aren't generally enough vehicle batteries to recycle yet, so far as I know
Tesla has never sold a PowerWall with recycled batteries.

Nissan actually drew up a plan for a PowerWall competitor before Tesla even
announced theirs, but has never produced one. Nissan has claimed to actually
be waiting for the point in time where Leaf and other Nissan batteries are
recyclable (and also that it has so far been pleasantly surprising how long
the batteries are lasting in "first use" life).

------
Anothernhym
OPEC and the United States keep fossil fuels artificially inflated through
constant wars and their barbaric sanctions against Iran & Venezuela. How much
would a barrel of oil cost if they were allowed to sell on the free market?

~~~
reacweb
"fossil fuel" is a limited resource (not renewable) full of interesting
chemical molecules. It is a shame that it is wasted for energy production.
IMHO, it is too cheap.

------
JackPoach
The entire article is 100% bullshit and has nothing to do with EV per se. All
you need to do is look at general electricity prices, which have been going
up, not down, especially in the countries that have the highest renewable rate
(Denmark or Germany). [https://www.researchgate.net/figure/Line-graph-of-
average-el...](https://www.researchgate.net/figure/Line-graph-of-average-
electricity-price-for-households-for-2005-2015-in-EU-countries_fig3_323445413)

Once electricity prices start collapsing and battery capacity issues are
resolved, I'll start believing the story.

~~~
onion2k
Here in the UK the price of petrol has gone up more than 50% in the past 20
years. So long as electricity is increasing in price more slowly its still
more attractive as a fuel source.

~~~
fromthestart
I imagine that has more to with taxes than anything else. Adjusted for
inflation, petroleum is quite low compared to it's price over much of the last
3-4 decades.

~~~
onion2k
The underlying cause doesn't make any difference to the consumer though. If
you're saying people don't want electric cars because the cost of electricity
is increasing you have to weigh that against the cost of alternatives, and
electricity is still better.

