
Tesla Shock Means Global Gasoline Demand Has All but Peaked - jseliger
http://www.bloomberg.com/news/articles/2016-11-22/the-tesla-shock-global-gasoline-consumption-has-all-but-peaked
======
oblio
They call it the "Tesla shock" and the article says that by 2040 there will be
150 million electric cars. Yet a few paragraphs later they admit that there
will be 2 billion cars in use in 2040 (ergo 90% internal combustion engines).

I'm not saying that the progress is not impressive, but 10% maximum market
share in 24 years doesn't feel like a shock.

Also, the polar ice caps are doomed :)

~~~
jseliger
I hear what you're saying, but I think the shift will happen faster than is
commonly anticipated. The simplest way to sense this is to just drive a Tesla.
Doing so is reminiscent of seeing early iPhones. There is a strong sense of,
"Ah, yes, this is obviously the future."

As soon as the initial cost of electrics becomes remotely competitive with
gas-powered cars, pretty much everyone is going to want one. Yes, there will
be the much-ballyhooed challenges of installing charging stations in parking
garages and so forth. All those commonly cited issues will remain issues, but
they'll be like AT&T's initial network congestion due to iPhones: short-term
problems that'll be overcome because the product is that good.

~~~
petra
Once you factor in the cost of the home charging station(and the required
charging infra) and the battery and other electric components ,electric cars
are(and will stay) more expensive ,meaningfully than ICE-cars. And ICE cars
are much more reliable , they don't need an expensive battery swap every 5
years.

And when fuel is priced low it isn't more expensive than electricity.

So yes, an EV might have some extra benefits and some western consumers might
be willing to pay more for that, others won't and especially not people at the
3rd world.

So only 10% global penetration rate unless there's some government incentive
by 2040 and maybe longer seems likely.

~~~
1053r
As an owner of a pure electric car (and a home renter) for more than 5 years,
I logged in specifically to respond to this.

In 5 years, our Leaf has needed new tires, brake fluid, and... windshield
wiper fluid and blades. We didn't need any new infrastructure. We plug it into
a normal outlet at night, and it's full every morning. We've been taking the
money we save on not doing transmission fluid and clutches and oil changes,
and all of that stuff and put it in a savings account. In another 3 years,
we'll need a new battery, but by then, it will probably be twice the capacity
of the old one. (Nissan has discontinued the 24Kwhr battery, so fingers
crossed, we'll get a 40KWhr battery when the time comes).

From a more global perspective, even here in Northern California, electricity
is very inexpensive at night, because of all the spare generator capacity.
Practically everyone can plug in their car at night, and with nothing more
sophisticated than a $10 outlet timer, fuel up the fleet no problem.

Will every car be electric in 2040? Probably not, because cars last a long
time. But I'll bet there will be very few gas cars sold by then. Battery
prices are falling over 7% a year, and that's the most expensive part of an
EV.

~~~
feadog
_Practically everyone can plug in their car at night, and with nothing more
sophisticated than a $10 outlet timer, fuel up the fleet no problem._

Even that expense should disappear. My Fiat 500e lets me set a timer to start
its charge.

~~~
ZeroGravitas
And then the next step is to talk to the grid in realtime and soak up any
excess wind energy when demand is otherwise low and pause charge if there's a
sudden spike in demand and get a discount from the utility company for helping
them out. This is already built into some chargers, but should be standard in
cars in future.

------
AJ007
Here are a few things to be considered, and have all be well discussed on hn.
Some things we know for sure such as:

\- Ride sharing means much fewer vehicles needed to do the same thing. Current
numbers would indicate by quite a lot, this was before pooled ride sharing was
widely used.

Other things we don't know, but we will learn in years ago:

\- How do overall global demographic shifts change the demand for vehicles?

\- Will employment trend changes reduce the amount of commuting time?

\- Will self-driving tech be coupled with all-electric cars?

\- Electric seems like it will be a commodity function, but will self driving?
Or will there be some other platform effect that makes the vehicle business
overall look and behave much more like software?

\- How quickly does improved safety from self-driving lead to much lighter
vehicles due to regulatory changes? (lower gasoline usage, with or without
electric)

\- Will regulators decide to impose outright bans on gasoline vehicles for
environmental reasons?

\- Will there be a carbon tax and if so will it be high enough to make
gasoline unfavorable to electric?

\- Will regulators decide to ban non-self driving vehicles for safety reasons?
Presumably, this would remove old cars from the road quickly.

\- Will continued improvements in electric vehicle manufacturing lead to
dramatically more favorable economics over gasoline vehicles? (This seems very
possible to me, given the simplification of electric motors.)

\- Will major ride sharing companies get exclusive transportation rights to
municipalities or even nation-states? Will those ride sharing companies be
manufacturing their own vehicles?

Whatever parts do or don't happen, it seems like a giant mistake to draw a
linear line and predict how things will look in 2044.

~~~
tropo
Ride sharing means fewer vehicles existing, but many more vehicles on the
road.

Today my car goes with me to work, and then it goes home with me. If I accept
ride sharing, then it has to also travel empty. Each time I use the car, the
car must first drive to where I am. This roughly doubles the number of cars on
the road.

With self-driving, it gets worse. I can send small children places alone. This
means they can visit friends whenever they like, and they can participate in
more activities.

~~~
Decade
Ride sharing could also mean fewer vehicles on the road and, crucially, taking
parking spaces.

Today, even if I had a car, I would not use it. Why? Because there is no place
to park.

The last couple times I tried driving a car at night, I spent _double_ the
travel time, just crawling around the streets near my house until I could find
an open parking spot. After the last time, I vowed: never again.

With self-driving, it gets better. When driving is a monetary transaction and
human-powered transportation is free, then I expect that people will feel less
impulsive about just taking a quick drive. With other necessary trends in
human-scale urbanism, I expect that means the small children will just have to
bike themselves to their friends’ places.

------
bkmrkr
People are missing one factor.

In going from an 8 cylinder to a Prius you are going to save more gas than in
going from a Prius to a Tesla, and even though we might not all be driving
Teslas anytime soon the majority of us will drive more efficient cars.

~~~
esotericsean
Sidenote: it's better for the environment to buy a used Ford pickup truck than
to buy a new Prius. The pickup will have been made in one factory while the
Prius is made from parts from all around the world. It's already done a
million miles by the time you buy it. Tesla not only has zero emissions, but
they're also vertically integrated. For me, it's not all about which is the
cheaper option to own. It's about what's going to help the environment the
most.

~~~
CydeWeys
Do you have a source on that? It doesn't seem right to me. Transportation is
not the largest energy expense that goes into a product like a car; the
largest energy expense is extracting and refining the raw materials into
processed materials that are ready to be used for final production.

There's no way that the equivalent of one million driving miles' worth of
pollution is emitted merely by moving around the pieces that then get turned
into a car. Bulk surface/marine transport is extremely efficient.

~~~
lightcatcher
> Transportation is not the largest energy expense that goes into a product
> like a car; the largest energy expense is extracting and refining the raw
> materials into processed materials that are ready to be used for final
> production.

Sure, maybe the GP's point is that (she thinks) (environmental impact of new
Prius construction + n years of Prius driving > impact of n years of driving
an existing pickup truck). I have no evidence for or against this, but I
wouldn't be surprised if it's true for n=5 years and typical mileage/day. As
you point out yourself, besides bringing the parts from all over the world,
you need to mine the resources, spend the energy to cast them, etc.

------
tehwebguy
Just a reminder that in California you can lease a Fiat 500e for $3500 down
(only $2500 if you have any other lease already) and $49 per month.

Plus CA will give you $2500 back if you make under like 200k.

The lease ends up being like $0.12 per mile with taxes and fees.

It's not a great car or anything but it's a ridiculous deal.

~~~
feadog
I beg to differ. It's a very fun to drive retro stylish car! (I'm an owner.)

~~~
tehwebguy
I stand corrected!

------
renesd
Tesla is quite good at PR, and adding Tesla in a headline gets clicks. The
article does say it's all the car companies, not just Tesla though.

Also Hydrogen vehicles are a thing now. Trains coming online in Germany, and
Toyota are selling hydrogen cars now in Japan/USA. There are shipping
container sized hydrogen production stations being produced in Germany that
run on solar.

Hydrogen powered cargo ships have already been made as well. However, I'm not
sure if hydrogen generation on board ships has been explored yet. Who knows...
it may be possible for ships to run without ever needing to refuel if
generation is done on board.

Now it's possible to use the extra power from renewables to make Hydrogen.
Often solar and wind are over provisioned so they can provide extra when the
sun or wind is low. However when wind or sun is high, the extra power is just
wasted. Many home solar systems for example work on charging three days worth
of power in case there are a couple of cloudy days. So even though conversion
is only currently around 35% efficiency, that power would have gone to waste
anyway.

The writing is on the wall for fossil fuels. I think this is the main reason
why so many big funds are divesting from fossil fuels.

~~~
feadog
_Hydrogen powered cargo ships have already been made as well. However, I 'm
not sure if hydrogen generation on board ships has been explored yet. Who
knows... it may be possible for ships to run without ever needing to refuel if
generation is done on board._

Sorry. Go back and study thermodynamics again. If you have the energy to
generate hydrogen, you might as well use that energy to move the ship. You're
always going to spend more energy generating the hydrogen than you will get
back burning it or combining it in a fuel cell. The one exception is if you
start from just the right feedstock to generate the hydrogen from, like some
hydrocarbon. The leading candidate now is natural gas. However, in that case,
the byproduct is CO2 -- so what's the point?

Or, maybe you were thinking of hydrogen as energy storage? Batteries are far
better than hydrogen as far as that goes.

~~~
vamur
Energy generation is not a problem, there is nuclear, sun, wind. Energy
storage is. Currently, hydrogen should be a better option for energy storage
as it is cheaper than the expensive and explosive lithium-ion batteries. Never
mind that lithium-ion loses its capacity on every cycle and requires rare
minerals.

------
chx
Self driving cars will mean the huge shift. As rehashed many times, most
people won't buy a car but rather use it on demand. Right now a car is driven
perhaps 15 000 miles a year which means probably two hours a day. This will
jump to 12, perhaps 18 hours a day. Maintenance costs and reliability will be
king and electric cars are huge leaders in that.

~~~
notahacker
Considering that use of cars is highly synchronised for commute times, and
people's pride in car ownership as a status symbol extends to spending a non-
trivial portion of their annual income on depreciation to ensure their car is
unsullied by previous owners, I'm not so sure...

~~~
laser
Very affordable ownership will be viable if you're willing to lend your car
into the share fleet when you're not using it. Might even be near break-even;
the natural benefit of fronting the capital for production.

------
Animats
We'll have to see how the Chevy Bolt does. That's the first mass-market
electric car.

Electric car tax credits in the US are halved after a manufacturer sells
200,000 electric cars. Chevy is likely to hit that in a year or so. So is
Tesla.

~~~
srb-
As a fan of all electric cars, I really hope the Bolt does well. However, my
understanding is that GM/LG only have enough battery manufacturing capacity
for 50,000 units a year. So that puts a major cap on how much success it can
have, at least initially.

This is why Tesla longs are so bullish on the stock... even if the other car
companies instantly switched all their models to electric, there wouldn't be
enough battery supply to meet that demand for years. Tesla, on the other hand,
should be sitting pretty with their Gigafactory 1.

~~~
Animats
Tesla's "Gigafactory" currently has just the assembly line for battery packs
that used to be in Fremont. LG's factory in Holland, MI is the largest battery
factory in the US and is set up for easy expansion.[1] The Chevrolet Division
of General Motors has a good track record at manufacturing large numbers of
cars. They can probably make as many as they can sell.

Tesla is still learning how to scale.

[1]
[http://www.autonews.com/article/20151214/OEM06/312149992/lg-...](http://www.autonews.com/article/20151214/OEM06/312149992/lg-
chem-quietly-surges-in-battery-race)

~~~
srb-
I'd be glad to be wrong! But according to [1] LG's factory might get to 3 GWh
output in a few years. At 60 KWh per Bolt that is 50,000 cars, in a few years.

Tesla is planning 150GWh eventually, but starting at least in the 10's of
GWh's to start. Lets say 30. At 30 GWh that is potentially 500,000 Model 3s.

Obviously, this is all speculative on both sides. Let me know if my
calculations are off or I missed something.

[1]
[http://www.autonews.com/article/20151214/OEM06/312149992/lg-...](http://www.autonews.com/article/20151214/OEM06/312149992/lg-
chem-quietly-surges-in-battery-race)

~~~
Animats
LG has other battery factories for EVs. One in Poland, one in China, some in
Korea... Also, since the Faraday Future project seems to be tanking, and LG
built up battery capacity for that, they probably have some extra capacity.

China is building about 100,000 electric buses a year. That's where the
batteries are going right now.

------
Daishiman
I have to say that it's insteresting how the IEA consistently, year over year,
underestimates the growth of renewables and overestimates the growth of fossil
fuels.

------
_pdp_
Oil will not be cheap forever. It is a scarce resource that will only become
even more scarce as we go hence the price inevitably will go up.

In terms of Tesla (and electric cars for that matter), I never had the need to
own a car because I happen to live in a cosmopolitan city that has a good
transportation network. However, since I am now moving into the suburbs I am
thinking to buy a car and I am pretty sure it will be a Tesla because electric
makes sense if you happen to care about the environment.

That being said, I am not convinced that electric powered vehicles are better
for the environment in this very moment because 8% to 15% of the electricity
is lost in transmission and electricity generation is not a zero sum game.
However, this can change very rapidly if we happen to build more localised
sources of energy such as local photo cells, etc. - and yes solar roofs is the
way to go.

~~~
Decade
Oil price may run into Jevons’s paradox, though. The prices are already
depressed because new production outpaced demand back in 2014.

I expect as oil production continues to outstrip demand, while all this
production machinery is still operational, then the price will continue to
plummet. Making it more attractive to use oil frivolously, like driving SUVs
into pedestrians.[0]

I’m not convinced that oil will become expensive quickly enough to avoid
catastrophic climate change. Not without a major carbon tax. For the price to
go up due to scarcity, we would need to extract the oil from our currently
available reserves, leaving only the more difficult resources. It’s better for
the climate if we leave the reserves where they are.[1]

[0][http://www.roadpeace.org/remembering/world_day_of_remembranc...](http://www.roadpeace.org/remembering/world_day_of_remembrance/)

[1][https://www.theguardian.com/environment/2015/jan/07/much-
wor...](https://www.theguardian.com/environment/2015/jan/07/much-worlds-
fossil-fuel-reserve-must-stay-buried-prevent-climate-change-study-says)

------
kneel
More electric cars on the road means that oil will be cheaper for everyone
else. The fossil fuels industry has massive infrastructure that isn't going
away anytime soon, I'd guess their growth period is over though.

There is going to be a very long transition from combustion engines to
electric motors.

~~~
stale2002
Self driving cars changes the math of this immensely.

Your car sits idle 98 percent of the time.

Once self driving hits, you only need a 10th of the cars that you needed
before. And that 10 percent electric penetration rate becomes 100 percent.

~~~
antisthenes
Electric cars can't drive more than ~10 hrs a day without recharging.

And that's at the upper range (250mi+ range). All the lower range cars like
Leaf and Spark EV will run out of charge in 3 hours.

~~~
stale2002
And they will drive for those ten hours, recharge for 30 minutes and then
drive for another 10 hours that same day.

Automated recharging is especially a good idea.

------
brilliantcode
When Ferrari begins to make EV, we will know gasoline demand have been
decimated, but it's an existential question for exotic supercar manufacturer
with a long lineage & tradition that plays so much in to their brand.

Ferrari have stated that they will _never_ make a fully EV vehicle. I'm not
sure what Enzo Ferrari would think.

I would be very interested to know what an EV supercar will look like I expect
something like sub two second range with instant torque and lightweight
composite material.

I get giddy thinking about the torque to weight ratio of such vehicles.

~~~
blahi
Ferrari makes 10,000 per year. What do they have to do with gasoline demand?

~~~
brilliantcode
well they make roughly 62k from each margin. As soon as they begin to see the
ROI from EV R&D (assuming in the future they do) which increases that margin,
either by cutting costs associated with assembling a combustion engine and all
the relevant components like the transmission, gearing, etc OR producing an
engine that absolutely kills the biggest and baddest V12 engine. then it's not
far fetched to say Ferrari might begin to steer towards making EV "cool".

La Ferrari's use of electric motor on top of the V12 may just be the
beginning. It doesn't make sense for Ferrari to be "slow" which eventually
will be the case when EV's instant torque + new lightweight materials + less
traditional components adding weight.

It might be that the baseline EV model from Ferrari will be at the track spec
cars like the Scuderia, Speciale series but with all of the ameneties and
technological innovation that you find on a Tesla, which shows a whole
different demand for cars that excel on the technological front.

That might also win Ferrari more customers, people who thought Ferraris were
"uncomfortable" or "I just want from A to B while my car drives me home" etc.

All of this is pure speculation of course.

------
sandworm101
Clickbait.

Note the word "Gasoline" not fossil fuels burnt inside cars. The age of
electrics is not here, nor does this article predict it anytime soon. Gas
stations beside the road aren't going anywhere, at least not worldwide.

>> While the agency anticipates a gasoline peak, it still forecasts overall
oil demand growing for several decades because of higher consumption of
diesel, fuel oil and jet fuel by the shipping, trucking, aviation and
petrochemical industries.

------
laser
The IEA has an absolutely abysmal prediction record when it comes to trying to
account for technological disruption and innovation:
[http://www.vox.com/2015/10/12/9510879/iea-underestimate-
rene...](http://www.vox.com/2015/10/12/9510879/iea-underestimate-renewables)

------
stolsvik
One have to be blind and ignorant if you believe that the number of cars will
_double_ by 2040. I believe they will be halved, if not quartered or more.
Have they not seen any of the self-driving cars appearing, and getting here
much faster than most anticipated?!

~~~
kuschku
Self driving cars will just increase the amount of cars existing.

People won't suddenly shift their work schedule around, so they'll all need to
use cars at the same time, still.

But they'd also use the cars for additional courier services.

------
pimlottc
I re-read the entire article twice and I still don't know exactly what they
mean by "Tesla shock". Very sloppy headline.

~~~
skoocda
This was my thought, but due to "Global Gasoline Demand Has All but Peaked"

They mean "global gasoline demand has peaked". They have literally said the
opposite.

Is this the new way to write headlines?

It's like people saying "I could care less". The proper euphemism is "I
couldn't care less" because otherwise, you actually do care.

