We are seeing more than a few articles in the major media and the car press about the economics of creating a viable electric-car industry. My take in brief is that it’s going to happen in fits and starts, but also more slowly than some would like.
You already know some of the problems and roadblocks to be overcome: battery cost and disposal, other material costs, creating an infrastructure of charging stations, and making products, finally, that people will buy. The Smart ForTwo Electric (above) may or may not be one of these.
Most daunting is the chicken-egg problem of how to build an infrastructure for cars that may have at best a 2 percent market share over the next decade. Charging stations are coming to California, however, and a few other places. EVs as short-distance commuter cars will aggregate in bigger cities.
Dealing with fluctuating demand for “juice” is another tricky problem, as is the disposal of worn-out lithium batteries. We have all seen the mounds of bald tires in landfills, now mostly banned, thankfully. Some organizations are working on battery recycling, among them the electric utilities, which may use still-viable batteries to help them store juice and buffer demand.
Autoweek ran an interesting piece on material costs for green cars. Knowledgeable opinion seemed to be all over the lot as to whether costs of lithium (cheap and abundant) and rare-earth elements (mostly from China) would rise or fall over the next decade. Will things develop as they did in IT, where volume drove prices down? Or will raw material costs just accelerate with increasing demand?
And who’s going to make the cars? Big automakers like Nissan and Chevrolet—with clear advantages of scale, supply, and money—or smaller entrepreneurial startups that can be flexible and innovate more easily?
We bet there will be more investments by the big players in the small ones, e.g., Toyota and Daimler in Tesla. And don’t discount the fervor and zeal of the little guys.
So we have to bet on fits and starts, even though the Feds are putting money into some of these efforts. It will take a lot more money and concerted planning to bring these elements into focus and produce what is essentially a new industry.
Most everyone knows this, but not many in Congress want to face these needs, given the anti-government fervor afoot in the land.
Should the government do more to promote EVs? Can we build a viable electric-car industry in a reasonable timeframe?