Electric Vehicles: Misdirection & Misinformation

Fumbling Towards Electricity

The past decade has been unusually exciting for the automotive industry. Aside from pandemic induced convulsions, established OEMs have been working through a Tesla-induced 8-step program of curiosity, ridicule, fear, vigorous greenwashing, intense lobbying, meaningful battery electric vehicle (BEV) investment, battery supply chain panic, and painfully public production ramp. The macro driver is pressure to reduce the 27% of greenhouse gases generated by transportation (EPA-420-F-22-018, May 2022). The lower complexity of BEVs, coupled with exuberant public markets, birthed a multitude of startups keen to follow in Tesla’s footsteps. From a distance it all looks great, but on closer inspection there is much self-serving misdirection and misinformation flying around. Let’s pull at a few strings.

Smug in the Zero Emission Delusion

I spent several formative years in technology marketing. An early lesson was to carefully define your market to achieve the desired competitive ranking. This is just a twist on magicians’ misdirection: “please direct your attention to the complete lack of emissions from our BEVs”. The reality is quite different with emissions created during every stage of the lifecycle: development & testing, production tooling and factory buildout, extracting and refining raw materials, manufacturing and final assembly, transportation, consumables (tires, brakes, replacement parts etc.), electricity generation and transmission, and end-of-life recycling back to raw materials. Just manufacturing a BEV generates 60% higher emissions than an equivalent internal combustion engine vehicle. To this we need to add externalities, such as each vehicle’s share of emissions from road and charging infrastructure build out/maintenance. The emissions breakeven point for most BEVs are over 50k miles driven.

Form Follows Marketing

The 1937 creation of the Buick Y-Job by Harley Earl and team marked the transition of the burgeoning auto industry from selling cars to purveyors of dreams. Subsequent deft lifestyle marketing has driven the aspirations of generations, divorcing need from want as quickly as punters from cash. We’ve all seen the ads: traversing an idyllic mountain pass where diamond-knurled controls and associated electronic doodads propel two implausibly attractive plutocrats into a state of transcendental ecstasy; or perhaps a cavernous conveyance loaded with generations of harmonious, and clearly medicated, occupants wafting through an enchanted forest. We have been programmed to focus on model years, to equate bigger and faster with better, and to lust after new features that we did not know existed minutes before. Unsurprisingly, vehicles have grown in size, weight, complexity, and especially, share of income.

Marketeers have applied the ICE playbook to BEVs resulting in conventional form factors and model hierarchies (turbo BEV anyone?), but with MSRP enhancing virtue signaling. The magicians highlight nausea-inducing acceleration, dancing LEDs, obese touchscreens, and especially zero emissions. Ameliorating range anxiety dictates massive 80-200 kWh battery packs, giving us the 6,000 lb sedan and 9,000 lb SUV. By casting the spotlight on the new and novel, and glossing over inconvenient details, marketeers spark the subliminal justification to purchase the edge case: vehicles where their full capabilities are irrelevant to substantially all of their buyers, substantially all of the time.

Sadly, business as usual undermines the opportunity to embrace the tremendous flexibility electric powertrains and active safety features provide to rethink regulation, form factors, usage and ownership models to efficiently and responsibly meet real needs. I have no doubt that the incredible automotive marketing machine could make this vision of mobility aspirational, which is the key to engaging the rightly disaffected young.

The Grid: She’s Going to Blow Captain

The often-repeated assertion is that the grid is stretched thin is demonstrated by frequent summer brownouts, so plugging in 25 million new BEVs by 2030 is bound to push it to failure. Despite decades of chronic underinvestment there is more than enough generating and high voltage transmission capacity. Admittedly, many new and upgraded substations will be required to support new high-speed chargers, and we need to continue the migration to greener generation. The substantial majority of BEVs are Level 2 charged overnight at home when demand and rates are low. Next generation BEVs are equipped with V2H/V2G (Vehicle to Home/Grid) capability where charge stored in the vehicle battery can be delivered to the home/grid to meet peak demand. Utilities are putting V2G incentives in place to avoid the uneconomic cost of sizing generation to peak demand. With the right combination of incentives and regulation the benefits of transitioning to a smart, localized, resilient grid can be realized by all.

Battery Replacement: The Sky is Falling

Lithium-ion battery packs are the single most expensive component of a BEV ($11k for an 80 kWh pack in 2022), and we know from smartphones their ability to hold a charge degrades over time. So, should we expect rapid battery degradation until the BEV has the range of a golf cart and requires a second mortgage for a new pack? Fortunately, BEV battery packs include sophisticated thermal and charge management systems designed to minimize degradation. As with many things operator behavior has a meaningful impact: using L2 vs DC fast charging, and keeping the pack charged between 10-90% further extend battery life. With a decade of real-world data, OEMs are comfortable warranting packs to retain >70% capacity for 8-10 years and 100-175k miles. New packs are expected to last 20 years on the road, followed by a second life in less demanding applications, such as domestic energy storage, before ultimately being recycled into new batteries. At the same time chemistry is slowly improving energy density and scale is pushing down cost/kWh.

Incentivizing Good Behavior

With a few entertaining exceptions, most people and organizations involved in transportation are rational economic actors. It falls to government to create the combination of regulation and incentive to nudge things along in the right direction. In the US, the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) allocated nearly $700 billion to transportation. Notably absent is a detailed framework to deploy this funding to greatest effect. I’ll end with a few suggestions:

  1. Set consumer incentives on a sliding scale based on efficiency (kWh/mile on the EPA test cycle) with a cut off at 150% of median new vehicle sale price.
  2. Base manufacturer incentives on a sliding scale of estimated cradle-to-cradle emissions (no need for overtly protectionist clauses as manufacturing and assembly of lower weight vehicle in the target market are the most richly rewarded).
  3. Commit to the rapid buildout of a ubiquitous, highly available, interoperable, fast changing network. This will require: (i) eliminating red tape to collapse the Byzantine approval processes to a single fast-tracked submission for L2 and L3 public charges; (ii) requiring all public chargers to push availability/pricing to a cloud database shared in real-time with drivers and authorities; (iii) providing incentives for installing public chargers in desired locations (i.e. high traffic/underserved) in the form of subsidized debt to be forgiven based upon consistently achieving uptime targets.