
Future of EV vs. ICE - hunglee2
https://threader.app/thread/1050408954898001920
======
Dumblydorr
His writing is Heavy on opinion and low on fact. The simple facts are these:
It takes 20 years to turn over the auto fleet and dozens of millions of ices
are still being bought in 2018. That means gas demand well into the 2040s.
Much like our emissions overall, our auto sector is transitioning too little
and too late.

~~~
bryanlarsen
Small changes in demand have a huge impact on price though.

Remember, the price of a commodity is set on the margin: the price of a
commodity is the marginal cost of the marginal producer. And oil production
has high capital costs.

So let's pretend in 2018 that the highest cost producer of oil is Canadian tar
sands. Let's assume that it costs them $50 per barrel to produce a single
barrel excluding capital sunk costs, but $80 to cover both marginal and sunk
costs.

So even if demand is rising, nobody is going to build a new tar sands project
until the price is well above $80 and they're relatively sure that it's going
to stay there long enough to pay back their one time capital costs.

But if demand is falling, nobody is going to shut down one of those tar sands
facilities until the price is below $50.

Of course the price of oil has a huge effect on demand, but that demand is
pretty sticky. As you said, it takes years for the worldwide fleet to turn
over with more or less fuel efficient options.

This effect is horribly bad news for the greenhouse effect, though. It does
not operate on the margin. We cannot depend on steadily rising petroleum
prices to reign in our emissions. We desperately need a global carbon tax or
something equivalent or pretty soon we're going to be spending hundreds of
trillions of dollars evacuating and protecting our coastal cities and on other
global warming mitigation measures.

~~~
sandworm101
Small IC engines are not the total cause of greenhouse gas emissions, not even
the bulk of them. Other transport (shipping, rail, trucks, air etc) contribute
as does cement, steel, power and fertilizer production. Replacing every "car"
with a tesla today wont do nearly what is needed. Coversely, a delay to the
switch to EV doesnt spell doom. This is a larger problem.

------
karpodiem
Funny how these articles are written by individuals who have never worked in
the industry - the author is totally clueless.

Okay, let's start with money. Zoom out to a population view and do $1000 USD
increments from $1000 to 100,000. The median/average ASP for a new vehicle in
the U.S. is $36,270 - [https://mediaroom.kbb.com/2018-02-01-Average-New-Car-
Prices-...](https://mediaroom.kbb.com/2018-02-01-Average-New-Car-Prices-Rise-
Nearly-4-Percent-For-January-2018-On-Shifting-Sales-Mix-According-To-Kelley-
Blue-Book).

That is not going to increase very much year over year, because wages are
largely stagnant and the economy is peaking. The U.S. is way over overdue for
a recession, European GDP is anemic (0.3% growth in Q3 2018 -
[https://ec.europa.eu/eurostat/documents/2995521/9102849/2-07...](https://ec.europa.eu/eurostat/documents/2995521/9102849/2-07092018-AP-
EN/5ee25c3b-4e58-40df-9be9-7671859d6f37)) and China GDP is 6.5%
([https://www.cnbc.com/2018/10/19/china-q3-gdp-china-posts-
eco...](https://www.cnbc.com/2018/10/19/china-q3-gdp-china-posts-economic-
data-amid-trade-war-with-us.html)), but China always lies, so it's probably
around 2% or 3%. That's not even taking into account that Chinese consumer
debt for mortgage holdings has increased eight-fold since 2008
([https://www.zerohedge.com/news/2018-11-10/nightmare-
scenario...](https://www.zerohedge.com/news/2018-11-10/nightmare-scenario-
beijing-50-million-chinese-apartments-are-empty)). The Chinese consumer is
tapped out, which is why for the first time in 31 years, Chinese vehicle sales
have actually decreased year over year -
[https://www.autoblog.com/2018/11/09/china-car-sales-
fall/](https://www.autoblog.com/2018/11/09/china-car-sales-fall/)

So your vehicle ASP isn't going to increase in the next 10 years - it's
probably going to decrease. Total unit volumes in the US will probably go from
17 million units to 11 or 12 million units by 2025.

You're trying to tell me the industrial CapEx required for the OEM/supply
chain to switch over EV powertrain in a period of falling vehicle sales and
deflationary prices for the second largest purchase a consumer can make, after
a home, for the two largest automotive markets (the U.S. and China)? Bullshit.

~~~
tigershark
Funny how you compare Europe gdp growth _for the last quarter_ to China growth
_for the whole year_ , just to cheat the readers trying to push your
narrative. Funny how, for your admission, you have stakes in the oil industry
and you are criticising EV with nothing apart from opinions, exactly the same
thing that you accuse other writers to do. Even funnier is that you are
actually writing that the ASP _for a new vehicle, not for a new EV_ is 36k$
when in about 6/9 months the model 3 will sell for 35k$. The funniest thing
obviously is the last word of your comment. Bullshit. It’s the funniest
because it really applies to you, working in the oil industry, and just none
the wiser like all your colleagues that were ridiculing ev trying all they can
to avoid the inevitable. We have today an electric car that can lap faster
than a Ferrari 458 [0] without any changes, apart from the wheels, for a
fraction of the price. In 12 years, at worst, India and Germany will ban the
sale of all the ice cars, as I highlighted in my previous comment. Enjoy your
last years in an industry that was lucrative only at the expenses of the whole
world.

[0] [https://www.google.co.uk/amp/s/www.carsguide.com.au/car-
news...](https://www.google.co.uk/amp/s/www.carsguide.com.au/car-news/tesla-
model-3-faster-than-a-ferrari-458-with-new-track-mode-71836/amp)

~~~
karpodiem
Haha, seems like the truth hit a nerve and got you all salty. I'll continue
drop some knowledge bombs -

Chinese stock market is down 20% on the year -
[https://www.bloomberg.com/news/articles/2018-09-17/china-
s-s...](https://www.bloomberg.com/news/articles/2018-09-17/china-s-stocks-
sink-past-lowest-level-seen-in-5-trillion-crash)

Chinese GDP is lower than whatever is being reported. Chinese GDP has
supposedly been between 6-7% for the last six years, but Chinese consumer debt
has increased eight fold
([https://www.ft.com/content/5d01b4d8-c1f9-11e8-95b1-d36dfef1b...](https://www.ft.com/content/5d01b4d8-c1f9-11e8-95b1-d36dfef1b89a))
during the same period. So that obviously means the Chinese consumer has less
pocket in their cash. All the numbers I cited are valid and my point still
stands. The US is the only country whose financial markets are positive or
flat for 2018 - everyone else is down. China GDP is up in 2018, but slightly.
Outside of Germany, all of European GDP is down in 2018 - a lot. Look at Italy
and France, negative GDP.

There will be millions fewer vehicles sold in the years to come, globally, and
consumers will be more price conscientious in that period than they are today.
EVs are toys for the rich, for at least the next 10-20 years.

There will be ZERO $35,000 M3s sold before the US federal subsidy is halved to
$3750 starting 2019.01.01. That, at minimum, will make it a $38,750 car.
Without any options. Oops.

Musk himself is dead silent on WHEN the $35,000 M3 will sold, but is shilling
some $40k+ something variant - [https://www.cnbc.com/2018/10/18/tesla-ceo-
elon-musk-tweets-a...](https://www.cnbc.com/2018/10/18/tesla-ceo-elon-musk-
tweets-about-35000-model-3-but-not-base-model.html)

There has been talk of extending the federal subsidy it but it's all just
talk. Talk means nothing. Tick tock, 2019.01.01 isn't that far away. Less than
60 days.

I don't work for the oil industry, I work in software, but thanks for playing.
I can do this all day.

~~~
tigershark
I’ll stop answering your comments, you just write complete nonsense and it’s
not worth it. Just to show everyone how much you are wrong I’d like to point
out that you are probably _the only person_ on this website ignoring that the
model 3 is 35k$ _before_ all incentives. With the incentives, as of today, we
are speaking of 27.5k$, so it’s more than 11k$ less of what you thought would
happen with the incentives halved. Indeed I would say that “Oops” is the right
word. Please stop spreading misinformation based on your fantasies because in
that case I might still answer to your comments if they are as mendacious as
the previous two.

~~~
karpodiem
Fact - There is no Model 3 available for purchase at $35,000 before
incentives. Source -
[https://3.tesla.com/model3/design?#battery](https://3.tesla.com/model3/design?#battery)

Fact - The federal incentive is reduced to $3750 starting January 1st, 2019.
Source -
[https://3.tesla.com/model3/design?#battery](https://3.tesla.com/model3/design?#battery)
('Learn More' link)

Fact - Tesla has dropped all mention of the $35,000 vehicle Source
-[https://arstechnica.com/cars/2018/07/tesla-
drops-35000-price...](https://arstechnica.com/cars/2018/07/tesla-
drops-35000-price-from-model-3-page-insists-plans-havent-changed/)

Fact - Elon Musk is a pathologic liar.

Fact - Tesla will go bankrupt.

------
Jemm
ICE Internal Combustion Engine, gas or diesel or propane

EV Electric Vehicle

~~~
petee
Thank you, I've never seen ICE used this way before; I assumed the article was
somehow about a new immigration department.

------
benj111
I don't really have much comment to make on most of these but "18/ In Britain
for example, it's now pretty clear that ICE vehicle sales growth peaked in
2016. The total UK market is declining for a second year in row, down 8.9%
this year through October. But EV are going the opposite way, and will reach
above 6% market share this year." I'm not sure that the ICE sales drops are
down to EV sales. At the very least they seem to be over egging the pudding.

I'm having a hard time trying to work out some of the authors points (this is
basically a list of tweets), but I'd find it interesting to hear about the
supply demand interplay when oil use starts dropping. Ie oil use falls leading
to lower prices leading to static usage at lower prices? Or lower investment,
lower supply, increasing prices, and a rapid death spiral.

~~~
maxerickson
I imagine industrial users of petroleum will prevent any sort of rapid death
spiral. Really right now oil is pretty cheap¹ with lots of production costing
much less than the commodity price.

1\. the extraction cost is a fraction of what people are willing to pay for it
in high tax countries.

~~~
beerlord
Non-transport use of oil is only 32%. 9% is for heating and electricity
generation, which presumably will also be replaced with batteries or some
other improved technology in the long term.

Falling oil demand is great for the planet, since it means lower CO2
emissions, moving pollution from vehicles to centralised power plants (or
removing it completely in the case of renewables) rather than at ground level
in dense cities, and oil as a finite resource can be used longer for
industrial processes for which there are not yet alternatives before we run
out.

I think once the West is on its way to being mostly oil and coal free, we will
start to see really heavy international action on climate change, because any
taxes or penalties introduced for carbon emissions will hurt non-Western
countries much more. Already there is immense behind the scenes pressure on
developing nations to cut fuel subsidies.

~~~
maxerickson
So with the 32%, we can restate the question about the rapid death spiral:

Will oil companies choose billions of dollars in profits or will they just
stop?

~~~
fpoling
If the oil demand drops by 2/3, it will hurt most the expensive oil extraction
methods. Meadle East companies will survive as their oil is cheapes. But
fracking, tar sands and perhaps sea oil platforms will stop.

~~~
beerlord
Interesting to note that whilst Saudi Arabia can technically extract oil for
$9/barrel, they have a gigantic society to maintain on top of all that oil
revenue - requiring $70/barrel to break even.

~~~
baking
This seems irrelevant, or at best helping the point of the parent comment. If
Saudi society has large fixed costs, then they only need to sell more of their
large reserves driving down prices even more and increasing the pain of the
high-cost producers.

------
neilwilson
Recommended video comparing the environmental impacts of EVs and ICE.

[https://youtu.be/6RhtiPefVzM](https://youtu.be/6RhtiPefVzM)

------
seedless-sensat
The first paragraph is full of acronyms. Who is the audience of this?

~~~
saagarjha
This is Twitter, so each character matters. Presumably the intended audience
is already familiar with the acronyms (which you would be, if you have ever
done a report that has required energy statistics from the agencies mentioned)
or able to look them up as needed to follow along.

~~~
imglorp
What a horrible place /1 to post a long /2 form article.

Why do people do this, instead of tweeting a link to their blog?

~~~
zimpenfish
Not everyone has a blog. Even those that do sometimes tweet out a stream
recapping the blog post (Erik Loomis being the one I remember most).

(This is such a bizarre complaint to me - it's like insisting that people not
speak to you in real time but instead put down their arguments onto paper and
present them to you.)

~~~
petee
> it's like insisting that people not speak to you in real time but instead
> put down their arguments onto paper

Thats not the best analogy for the complaint -- its more like insisting that
instead of putting your arguments down on paper in words, you're using
emoticons and forcing the reader to play charades. Though to your point,
listing out your arguments is certainly a boring, bland way of conveying a
topic...

Its a poor medium choice; I don't choose a 10x10px image to show you the Mona
Lisa...

~~~
zimpenfish
> you're using emoticons and forcing the reader to play charades.

Except the tweets aren't emoticons and no-one is forcing the reader to guess
anything - the authors are literally "putting [their] arguments down on paper
in words", just in short paragraphs.

------
Tempest1981
He mentions rising oil prices, and engineering a price spike. But this week,
the headlines are all about a glut of oil:

“Crude oil suffers longest losing streak since 1984”
[https://www.cnn.com/2018/11/08/investing/oil-prices-bear-
mar...](https://www.cnn.com/2018/11/08/investing/oil-prices-bear-
market/index.html)

Graph:
[https://www.marketwatch.com/investing/future/clz8/charts](https://www.marketwatch.com/investing/future/clz8/charts)

------
baybal2
I think photocameras are a good analogy. Early on, it was all about digital
storage being so constraining, now an average digital camera can store more
photos than a kilogram of film.

~~~
neogodless
I hope you're right. Can we apply Moore's law to batteries and energy
storage?! Ah, sarcasm, sorry.

I do hope you're at least _a little_ right, in that we start to see some
hugely efficient, lightweight storage of energy in EV batteries. We love
headlines about battery breakthrough science, but right now, gasoline is still
much more energy dense.

~~~
baybal2
It is not exactly the same, but simple physics says that there is a huuuge
potential for further improvement event without changing cell chemistry:

Lighter car bodies, better regeneration, more efficient voltage conversion,
better battery management, trend towards smaller cars in general, and relaxing
crashworthiness standards.

Tesla cars have close to a third of the total battery capacity being used as a
buffer to extend battery life.

Now, imagine a two seater car with CFRP/magnesium spaceframe body, weighting
600kg, and having 200kg battery pack of capacity similar to Model S. You can
easily have the range tripled.

I'd say that Model S range is already an overkill, and a typical city car will
morph much closer towards what Chinese LSEVs are now:

No crashworthiness whatsoever, no hydraulics, no cooling system, fibreglass
body, 100kg battery pack made of brick cells, spaceframe, 2 PMDC hub motors,
70km max speed. Basically a stool with wheels and a tent roof. Something
similar is already on the market and is called Renault Twizy

~~~
benj111
I would like you to be right, but I suspect you probably aren't, a scooter
(moped) can get 100mpg+ right now, and the havent taken off, and as you
mention the Twizy, that isn't exactly selling like hot cakes.

What I would like to see is temporary, removable, rentable batteries. You size
your standard battery to the journeys you make 99% of the time. When you want
to make that longer journey you rent an extra battery.

~~~
baybal2
About mopeds, that is only true for North America. Most of Asia is totally in
love with two wheel transport. China is a complicated exception (authorities
ban motorcycles to force people spending more on cars)

For the second point, the much more likelier outcome is that people will start
paying to have their cars being towed to another city, and travel separately.

------
beerlord
Soon we'll see the beginnings of the death cycle for ICE vehicles. Lower sales
means fewer:

Gas Stations

Car Dealers

Advertisements

Repair Shops

Which in turn limits the appeal (or increase costs) of an ICE vehicle.

Governments worldwide need to rush to figure out how to pay for roads when
there is no gas tax revenue. We will need a system that tracks where and when
cars are used, like the London congestion charge but on a much bigger scale.

~~~
jasonjayr
Where & When? Eww.

Why not just a base ownership tax + some trusted means of reporting mileage?

We shoulden't share more than we need to calculate a fair use tax.

update: s/authenticated/trusted/

~~~
beerlord
Your location is already being tracked quite accurately by your smartphone. So
that horse has already bolted.

Vehicle tracking and charging not only allows for effective replacement of gas
taxes (they can remain in place just to address the pollution angle for legacy
vehicles) but also to tackle congestion - situations where a 10% reduction in
vehicles would result in a 30% increase in speed, etc.

~~~
jasonjayr
I know this, and I'm not going to pretend that there _isn 't_ pretty liberal
data sharing between intelligence + cellular companies, but I think it would
be easier to regulate an interface between private companies + government,
rather than regulate use of already retained data.

For now, you can choose to not bring your cell phone on that trip to the seedy
part of town, so we got that going for us.

