Growing up on a farm, an initial mechanical obsession of mine was tractors (don’t laugh until you’ve tried one – think you feel unassailable in a 4×4 F-150? You have no idea), quickly followed by cars. They are so central to everything, and represent freedom, in a sense. The auto industry has been a passion ever since, my head hopelessly stuffed with useless trivia that only gearheads appreciate.
There have been painful episodes along the way, including watching beloved automakers at times make unfathomably stupid decisions. The entire US auto industry ran itself onto the rocks of bankruptcy a decade and a half ago, their smug executives shouting about their respective superiority right up until the infamous day that the three bonehead leaders of the big US auto manufacturers all flew from Detroit to Washington on the same day in separate private jets to beg Washington for bailouts.
Times change, and these days it’s hard not to feel a bit sorry for that bungling brigade. Consider the tight wire act they’re being forced to walk on, with the only safety net being the precarious support of governments barrelling full speed ahead towards an energy transition strategy that first and foremost burns all the bridges behind. Governmental transition plans with respect to autos will work against some very big odds, or will be a spectacular failure.
While the Biden administration recently spoke of increasing corporate average fuel economy standards significantly in coming years – a great development, more on that in a minute – the greater winds of change are clearly towards outlawing internal combustion engines (ICE) both in North America and in Europe. Canada and many western European countries have firm deadlines, as does California, and what California does, the rest of the US often follows emissions wise.
Imagine then what it’s like for North American/European auto manufacturers to see news headlines like this: EVs Are Piling Up on Dealer Lots as Supply Outpaces Demand. No more piffle about supply chain woes hindering EV sales, something else is going on. 29dk2902lhttps://boereport.com/29dk2902l.html
On top of that are grim results for those vehicles actually sold. In the second quarter of 2023, Ford lost $72,000 on every EV sold. While the latter is ‘sort of’ normal for new car platforms – and EVs are nothing if not new platforms – what isn’t normal is for highly-touted/media-frenzy revolutionary new autos like the Ford Mustang Mach E EV to be selling under 3,000 units per month in the US as it is in 2023, two years after introduction (US sales peaked over 5,000 units per month shortly after introduction). In the second quarter of 2023, Ford sold 14,843 EVs (out of 513,662 vehicles sold by the company overall), a fairly meagre total considering the capital invested and the marketing campaigns. In the minds of most consumers, it seems an EV means a Tesla, and there is scant interest in anything else no matter the marketing hyperbole.
Problems compound further. Western countries and auto manufacturers are piling into new battery plant investments, trying to emulate Tesla. Well, guess what… many of the materials going into those batteries will have to come from China, who controls most of the world’s critical mineral processing facilities. China is itself, of course, setting out to build as many batteries as possible. Given their home field advantage with raw materials and the cost advantages noted by western automakers, what chance will western automakers have to compete?
And then it gets even worse from there. Think Cuba.
Cuba and the US have had their differences, as would any neighbourhood where adjoining neighbours are fierce capitalists and fierce communists. While the ideological fervour may be fading – Cuba is no longer as commie as it was, and the US is, well, like an ideological but malfunctioning fireworks show. Regardless, Cuba has not had access to modern automotive technology since the 1960s. As a result, streets still are full of ancient American cars, held together forever.
There is no reason to think that won’t happen in the US, Canada and western Europe when the new-ICE ban comes into effect. Some segments of the population will go with the regulatory-mandated flow, while a great many will hold onto what they know, trust, and love. Short of a miracle battery breakthrough, many will simply not trust EVs in cold weather and/or instances where battery power doesn’t cut it.
Should that happen, it will place a damper on new EV sales, or at minimum remove a potentially significant slice of the new car market. But the luddite old coots (as they will be known) hanging onto their ICE pickup trucks will be but a tiny worry in American automakers’ viewpoint; the central dominating terror in their eyes will be Chinese competition.
Chinese EV auto companies currently enjoy a 25 percent cost advantage in the manufacture of EVs, according to US automakers. Add that fact to the current stranglehold China has on critical minerals processing, and domestic auto manufacturers would be out of their minds not to be at least somewhat frightened.
But it gets even worse from there. North American and European automakers are being forced to abandon further development of ICE vehicles, because they have been assured by western leaders that those are doomed, and to suggest otherwise is to engage in modern blasphemy punishable by the worst of all possible punishments – public shaming and accusations that they don’t care about the planet.
Chinese automakers have no such compunction. They operate in a different universe. They will build what they have to and want to, including EVs and ICE and hamster-drive if they so choose.
Consider the meaning of Chinese vehicular manufacturing independence. The world currently purchases something like 100 million vehicles per year. The US, formerly the predominant market, is seeing its share slide to something like 15 percent. Europe likewise is shrinking.
But developing country demand is skyrocketing, and most developing countries have not declared China to be an industrial enemy. China will build what those markets want, and will not give even a fraction of a single hoot about western demands to eliminate gasoline and diesel. There are too many mouths to feed.
Western auto manufacturers that go all-in on EVs, as demanded by their governments, will find that they no longer can even dream of global domination; their home markets will be a money pit of massive proportions.
In case anyone cares, and it doesn’t seem that they do when energy transitions are discussed, this will all work out the absolute worst for lower income people. Ordinarily, the auto market provides options for lower economic classes with vehicles that are no longer in favour. For example, in periods of high gasoline prices, consumers that can afford to switch up will tend to go for more fuel efficient vehicles, and the market can get flooded with inefficient ones – which has the effect of pushing down prices of these out of favour beasts, putting them within reach of poorer people. The fuel costs may be higher, but at least they can buy wheels.
That likely won’t happen this time around, if we see people buy ICE vehicles and then hoard them for as long as they can. In fact, things are terrible already for lower income people looking to buy older used cars – prices have skyrocketed for those as well.
Used cars are expensive, new cars are hideously more so, and EVs are, thus far, mostly toys of the wealthy with multi-car garages, or well paid urbanites that can afford to use them where they really shine. Again, we can see where China is twelve steps ahead; many popular EVs in China are tiny, cheap EV runabouts that don’t have massive range, but get the job done. No such option is available here in North America, few in Europe, and if they do show up on these shores, it is a safe bet they will be of Chinese origin, because they’re the only ones that can make money at it.
One last bit of drizzle for the day. Recently, Toyota announced that they had made breakthroughs in solid state batteries; by 2026-27 they expect to have EVs on the road that can charge far faster, with batteries that don’t overheat and catch fire, and with more range. It truly is an exciting development (companies have teased us with solid state batteries for years, including one Lamborghini model that incorporated a tiny supplemental one more as a fashion statement than anything). I would be happy to buy a solid state Toyota EV if it lives up to its promise and is cost effective.
The problem is, if the new Toyota tech is as good as hoped (and Toyota brings much needed credibility to the idea), then what happens to all the existing EVs, to all the existing battery plants now being funded at a cost of hundreds of billions, to all the money being spent on lithium ion battery development/processing/etc.? It is normal for new technology to overtake old and outdated items, but these massive current investments will not have had any chance to recoup the investment. Ford may have lost $72,000 on each EV sold in Q2 2023, but that could be acceptable if they went from selling 14,000 EVs per quarter to a million.
But what if that is as good as it gets? What if they never see sales of these lithium-ion EVs rise to the levels needed to recoup even a fraction of that investment? What if they build them and no one comes?
In that scenario, there is at least one silver lining – poor people might have an amazing choice of today’s EV crop, at very modest prices indeed.
In a sane world, automakers would morph first into hybrid vehicle manufacturers, which can make pretty much everyone happy. That’s why Biden’s proposed new fuel efficiency standards would be important; we should be striving for higher mileage, low hanging fruit instead of utterly demolishing the old ICE world. Besides that logical point, hybrids are far, far better for the environment from a materials availability perspective. Toyota calculated that they could make 90 hybrids for the same battery material that goes into a single EV, and that those 90 hybrids over their life could offer electrical motivation of a magnitude no single EV could even hope to. Plus, the energy transition is being hobbled by lack of critical metals/minerals; why not pursue the biggest bang for the buck while the world sorts through exactly what additional resources are available, and where, and when?
But sanity is forbidden in the west. It is EV or nothing. Infrastructure be damned. Investment be damned. Popular demand be damned.
The only western auto company I’ve seen that is keeping their feet on the ground and their wits about them is Toyota, who is openly stating that there is a future for ICE, a future for hybrids, and that maybe hydrogen fuel cells will be the power of choice. Hats off to them for, if nothing else, courage.
The scenarios above are, of course, possibilities, and maybe probabilities, but not certainties. But the odds of big trouble for western automakers are significant and ignored at our peril. No one wants to see forlorn Big Three auto execs having to climb into those private jets for that humbling ride again.
Energy conversations should be positive and, most of all, grounded in reality. Life depends on it. Find out more in “The End of Fossil Fuel Insanity” at Amazon.ca, Indigo.ca, or Amazon.com. Thanks!
Read more insightful analysis from Terry Etam here, or email Terry here.
I believe it was Thomas Sowell who commented on the folly of placing decisions in the hands of those who suffer no consequences for the outcome.
The book “Skin in the Game” by Dr. Nassim Taleb talks about why people who feel no negative feedback for bad decisions should not be making such decisions. They don’t learn (painfully) from their mistakes.
Yes. Notably, George McGovern, that late, unlamented Senator and pres. Candidate said that if he realized what harm resulted from the laws he voted for, he’d not have voted for them. Regretably, he didn’t realize this until he was out of office trying to make a living.
I believe he opened a resturant and found out what the regulatory state does to businesses. It wasn’t pretty. The business went bankrupt within two years.
McGovern wrote about his experience and clinically diagnosed the problems in an Op-Ed in The Wall Street Journal in 1992, titled “A Politician’s Dream Is a Businessman’s Nightmare.”
Thank you for bringing that up!
Notably McGovern was a liberal with actual belief that government could help the little people. Now the left is comprised of malignant statist hacks that think it’s their divine right to dictate to the proles. He was a humble midwestern small town guy, there is no humility in any of these present day functionaries, only the party line.
I’ve come to believe that each of Congresses’ and the regulatory state’s crazy ideas should be given a one year trial in the District of Columbia. When they can’t get a cab or a restaurant, they will understand.
The minor little problem with that is that most apparatchiks do not live in DC, but Maryland or Virginia.
Georgetown
Make them trial everything there, build a wall around it so they can’t cheat.
Start with zero emissions grid and just stop oil.
And observe.
One would almost get the impression that we now are living under a centrally-planned fascist economy run by ideologically-driven people who couldn’t manage a lemonade stand.
C’mon, man!
This administration could easily handle a lemonade stand; only $10 a glass, with no sweetener!
With 10% off the top for the big guy.
Just how many politicians in the US have been bought and paid for by Chinese money? All around us we see policies coming out of Washington DC that can only be considered as pro-Chinese and anti-American. From the dumbing down of our children’s math and reading scores to punishing interest rates to damaging inflation to proscribing production of materials of national security impact while China is advancing in these same areas is damning evidence. Washington DC in hell bent on travelling down the road to perdition!
Is it possible that those involved are so dumb that they don’t even realise that this is a Chinese plot?
I’m afraid it’s just a case of meglomania, delusions of grandeur after attending the WEF in Davos.
The Big Guy certainly is in their pocket
I’m inclined to think They are in TBG’s pocket…
I had to look it up:
Perdition; a state of eternal punishment and damnation into which a sinful and unpenitent person passes after death.
Do a google on “primrose path”. The problem is taking all the unsinful and penitent persons with them on the primrose path!
Don’t ya just love how this site forces one to expand their vocabulary.
One of my favorites is myrmidon:
noun
: a loyal follower
especially : a subordinate who executes orders unquestioningly or unscrupulously
Achilles followers
😉
https://www.howtopronounce.com/myrmidon
Unsold electric cars may be signaling a death spiral for the auto industry.
Endless government subsidies to encourage EV sales seems unable to sway the logical thinking and the numerous concerns of the average citizens to buy into EV’s.
https://heartland.org/opinion/unsold-electric-cars-may-be-signaling-a-death-spiral-for-the-auto-industry/
I wouldn’t have an EV even if you gave me one.
Not even for an event on 5th November..?
Parked in the cellars of the Houses of Parliament?
Really? There’s a maxim; “Price fixes everything.” At free we approach the cost benefit point. Sure Insurance is high, sure time is money while recharging, sure range is an issue but paying me a few more thousands per year beyond free and I’d entertain the idea.
You could use a few more thousands per year beyond free to keep an ICE on the road
If you pay me to own the EV, I can buy gas and drive the ICE car. (And parking the EV under the legislature’s chambers seems just right.)
With a few dozen sticks of dynamite, an EV could be fun.
The announced “solid state” batteries are nothing of the sort. It is marketing hype. The liquid electrolyte is replaced by a solid, but there is still a chemical reaction taking place.
True solid state batteries already exist. They are called capacitors. The problem is they have low energy density and are not practical in an EV.
There is not the remotest possibility that batteries, solid-state or not, will ever achieve the 50-fold improvement to match the energy density of gasoline or diesel. Simple Thermodynamics.
Gotta be honest, when they use the phrase solid state batteries, I assumed that they were based on capacitors
Capacitor bank could be used in a hybrid where an ICE produces electricity to charge capacitor bank, while the drivetrain powered by the bank is electric. An ICE that is only used to produce electricity can be very simple, low weight and low cost. Still, it would help to develop higher energy density capacitors that would hold enough charge overnight for at least 15-20 min driving from starting the engine, before the ICE recharges the bank in driving.
Or just a small battery (safer). Basically build a car along the same lines as diesel-electric locomotives. The diesel gets to run at a constant optimized rate for best fuel efficiency and emissions and the electric drive provides virtually unlimited torque and acceleration.
Another hybrid option would be to use a Solid Oxide Fuel Cell (SOFC) with a battery. The vehicle could start up on battery power only while the fuel cell heats up and comes to operating temperature and there-after provide drive power and recharge the batteries. SOFCs can use liquid fuels and are more efficient than an ICE.
The energy density of a capacitor is determined by the dielectric constant of the insulator between the capacitor plates. We know enough about the properties of materials that there doesn’t seem to be much probability of discovering some insulating material with a significantly higher dielectric constant than what we already know about. So, it isn’t just a situation of ‘developing higher density capacitors.’ Just as the laws of thermodynamics put an upper limit on the efficiency of internal combustion engines, the electronic properties of materials suggest that there is little opportunity for even an order of magnitude improvement in the energy density of capacitors. The best we have at the moment are probably based on tantalum, which is not all that abundant. Electrolytic tantalum capacitors are subject to failures not all that different from what Li-ion batteries experience.
You can increase the capacitance by moving the two plates closer together. This is done by making the dielectric thinner.
The problem with this is that you reduce the operation voltage of your capacitor.
When you reduce the voltage across the plates, you reduce the number of electrons that can be squeezed into the plates.
Low energy density and relatively high self discharge rate.
A one-Farad oil-filled capacitor is extremely dangerous, these devices can self-charge to lethal voltages if not kept shorted.
Yup. Imagine 100+ kWH discharged in a fraction of a second. That my friend is bang for your buck.
Anyone who has worked with HV high capacity eg350V 50uF knows the first thing you do is discharge it, then do it again.
As karlomonte said, not only do you want to do it again, it’s good practice to leave it shorted while you are working on it.
Fifty years ago my first job was in a factory making various types of capacitor. Amongst them Aluminium Electrolytic, and a few Tantalum. The electrolyte was liquid a fairly thick mixture of Ethylene Glycol*, Borax and a few other things I can’t remember now. The mix was known as “Jam” by the workers.
*There was a thriving trade in anti-freeze every winter.
By definition, The Electrolyte has to be liquid.
A battery, any battery, all batteries require ‘ions’ of one variety of another to move from anode to cathode and back again
That is simply impossible in a solid.
It is the prime reason why all batteries lose performance in the cold – the ions need the thermal agitation to help them do that forwards/backwards movement
Closest they’ll get is probbbly what we all know and love as AGM batteries – where the (still liquid) electrolyte is absorbed into a (looks/behaves like a solid) glass-fibre mat
A true solid battery is a physical impossibility
From the post:”…mechanical obsession of mine was tractors…”
Mine too. When I lived on the farm we had 3. A small Ford for taking hay wagons around. An IH (international Harvester) narrow front wheels for the fork lift/hydraulics. And the bull was a John Deere A-R two cylinder with six forward gears and two reverse. A battery for each cylinder.
External fly wheels for attaching wide belts and steel lug wheels were common then. Steel lugs were finally outlawed.
EV’s will never take their place.
mkelly >> I moved to a farm when 16 and we had a Ford 8N, 1939 John Deere B (hand flywheel start) and a JD 4020. I rebuilt and restore the JDB. Amazingly the local dealer had a complete decal set for it in stock.
Reminds me of the popular joke about Arab tanks after the Six-day War: They had one forward gear, and 6 gears in reverse — with backup lights.
When the government is literally handing out billions and billions and are willing to foot the bill for much. How can any CEO say no? The government SAYS it’s the future.
Therein lies the problem. The government idiots need to HEAR feedback from industry executives that (at least through their access to subordinates) MIGHT actually have a clue what an industry destroying “initiative” the attempts to shove worse-than-useless BEVs down everyone’s throats IS.
Otherwise, the idiot politicians just continue to float around in their delusional bubbles doing stupid, damaging things.
In 30 years, after the US auto industry is destroyed, we will be buying our cars from Mexico and China.
And Mexico will have a shoot to kill order for all illegal immigrants.
Replace the starter motor in the ICE with an integrated electric motor and increase the battery size. Use this for start and stop city driving where the ICE is inefficient. Use the ICE on highways.
No new parts, minimal extra cost.
Don’t we call those hybrids?
You’d need a decompression facility.
Yeah, like the 100-plus year old system used in some hand cranked cars.
This is about automobiles but the same economic fact applies across all manufacturing.
China has a large domestic market to support its industry. The losses at the start of
production can be absorbed far more quickly if you have larger domestic market.
If 1% of potential consumers are early adopters then having a billion potential
consumers is twice as good as what the EU or USA can support.
In short, the cheaper workforce, larger domestic market and beneficial government support means that China will increase its dominance of global manufacturing. And the West needs to find a value-adding advantage (technology or marketing) that can slow the relative decline.
What is China doing with all the unsold EVs recently exposed on the internet….
” all ” ? How many? A few thousand — no one seems to know exactly.
Meanwhile:
In the USA, at the end of June, it was estimated that exactly 1,953,512 vehicles were sitting unsold at dealerships. Likely more have accumulated since then.
If a U. S. company wants to give me one, install a charger, pay the license and fees — I might give it a home. Someone living in a 10th floor apartment might not make the offer I am making.
We are in this mess because — no one knows anymore. I think it was about the Great White Bears.
Tens of thousands of brand-new EV’s are piling up in fields and parking lots in China.
No. There are no technology nor marketing strategies that can make up for pure manufacturing might. It was manufacturing might that allowed the West, particularly the U.S., to develop their technological and financial institutions.
The world doesn’t need Silicon Valley as much as in the past; innovation is spreading worldwide as rigid political ideology fades in the face of economic pragmatism. The financial institutions in New York and London no longer have locational advantages as economic power moves toward the larger developing economies. That, along with the ongoing Leftist debasement of the U.S. dollar, we are at real risk of losing its dominance in world commerce.
At least Cuba has the advantage of no ice and snow in Winter, therefore no salt put on the roads as in the UK. Here, cars used to rot in 5 years, nowadays it’s nearer 20 but they still do eventally.
” therefore no salt “
I just checked — Cuba is a small island in the midst of a salty sea.
Cuba also has a more fully tested authoritarian regime, supported in part with Canadian and EU tourism.
For most of the past 50+ years I’ve owned second hand, gas guzzling V8’s. The savings in simplicity, maintenance, purchase price, insurance, and survivability more than paying for the extra gas. Unfortunately these vehicles are increasingly hard to find.
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Yes, I want a small runabout plug in hybrid. I’d buy one in a New York minute.
Our old 2010 Ford Escape got maybe 21 mpg. Our 2022 Ford hybrid Escape
gets 40 mpg.
EVs aren’t for the great American road trip to Yellow Stone. But that’s what the
bone heads running the show are selling. “Oh you can stop for lunch while your
EV charges up.” What a colossal joke!
You need a Citroën Ami electric. 28mph top speed and range 46 miles (80km) room for two people.
Good luck racing Usane Bolt, or Chevy Bolt
Along with the other several hundred vacationers wanting to charge at lunch time, all queuing up for their turn at the charging station. “Oh well, we might as well get dinner while we’re still waiting for a spot to open up.”
The problem with Plug-in Hybrids is eventually the Dims will eliminate FF sales for cars and you will have a plug-in EV with a 35mile range which will be worthless on the resale market and have zero trade in value
“Recently, Toyota announced that they had made breakthroughs in solid state batteries; by 2026-27 they expect to have EVs on the road that can charge far faster, with batteries that don’t overheat and catch fire, and with more range.”
The additional range could be a useful improvement for the charge-at-home case using, say, a Level 2 charger at 7 kW. But it is delusional for the rapid-charge-on-a-trip case. For example, suppose a 100 kWh top-off charge for a solid-state battery takes about 10 minutes. The charger needs to put out 600 kW FOR A SINGLE VEHICLE. A system to serve such extreme intermittent loads will NOT be economical to build or maintain. All the costly materials for the transformers, feeders, converters, etc. would have very poor capacity utilization. And don’t even ask about where the electricity will originate from. So my expectation is that even with improved batteries and range, EV users will have to give up lots of time on road trips for slower charging.
And yes, this gearhead started out on farm tractors too. 🙂
Thanks for voicing my thoughts on this problem. At 600 KW, on a 415V three phase circuit comes to 1500A! Can you imagine the size of the mains cable supplying ten charge points!
And in Wyoming and elsewhere where there’s no electricity for miles in places.
The UK Motorway network has a problem already.
Electric car owners issued dire warning by motorway services boss – ‘It’s a major problem’
Charge points for electric vehicles are ‘sitting there with no power’ due to a lack of capacity, a motorway services boss has warned.
Ken McMeikan, chief executive of Moto Hospitality, which operates motorway service stations across the UK, said the lack of power capacity for charge points is a “major problem” facing the electric vehicle industry.
Is he the bright bulb in charge of building charging stations without a guarantee of sufficient power supply anytime in the foreseeable future?
“Ken McMeikan, chief executive of Moto Hospitality, which operates motorway service stations across the UK, said the lack of power capacity for charge points is a “major problem” facing the electric vehicle industry.”
I’ll bet that’s a problem!
The genuises running this show have obviously not planned ahead. Their only focus is eliminating CO2 and damn the consequences. So what if we have too many EV’s and not enough charging points?
Governments command economies are doomed to failure. Democrats should butt out of trying to run our economy. Of course, they aren’t capable of restraining themselves, so voters have to do the restraining by voting the radical Democrats out of office. That’s what needs to happen if we are to get back on the right track.
Putting that kind of charge into a battery that fast, is going to cause a lot of heating just from internal resistance, unless they want to claim they are using super conductors.
Musk was yapping about liquid cooled charging cables which sounds like a nightmare.
For some reason, this announcement makes me think of Microsoft and their habit of making big announcements about all the great features their next version of software was going to have.
In 2 or 3 years.
Patience. Musk said he’ll have the million mile battery any day now. That was only 3 or 4 years ago, so it can only be a few decades until all these niggling little problems are solved.
Is that a “Mister Fusion” like the one mounted on top of a DeLorean in the movie Back to the Future ?
Ooh can you imagine, charging you car at home and getting a million miles on a single charge? Yes please!
Or isn’t that what he meant?😁
When he offers a million mile battery warranty he will have my attention.
In a sane world, automakers would morph first into hybrid vehicle manufacturers, which can make pretty much everyone happy.
Well that’s certainly been Toyota’s view that 40 motorists can be satisfied for every BEV one and they can’t make their world leading hybrids fast enough to meet demand.
I test drove a hybrid back in 2007. I wasn’t impressed, I could get better mpg from a diesel car. Yup I appreciate that hybrids have improved, but have diesels.
My son’s current car gets better mileage than his previous that was a hybrid, and has more power too.
The autos depicted in the up-top photo were (relatively) easy to repair. Even I managed a few replacement repairs.
In the last 10 years or so, EVs and modern vehicles might as well have repair manuals written in Latin.
Ahead of us is one of Donald Rumsfeld’s “unknown unknowns”.
While I’m not discounting issues with EV adoption, I don’t think this will be a big problem. One doesn’t have to know advanced electronics and signal processing to swap out boards in electronics. EV repair will become more like electronics repair over time, just with bigger screws and bolts.
Swapping out the battery is rather a problem though.
Small point about all three Directors et al flying in separate aircraft from Detroit: I figure the insurance companies might just have had something to say about the risk involved if all three were involved in an air-crash.
They were directors of different companies.
Which makes it all the worse if the leaders of ALL the major American companies were to die simultaneously! It might even provide some motivation for eco-terrorists if they knew ahead of time that all the executives could be taken down at the same time.
Unless you took out the entire leadership team at the same time, I doubt the loss of just a CEO would cause more than a slight disruption to a company’s operations.
CEO’s primary jobs tend to be along the lines of assembling a team and setting direction.
Unfortunately, it did not happen.
No sympathy for the car manufacturers, they should have paid attention when the first rumblings of EVs started. Instead their arrogance had them stood on the sidelines, allowing that ‘upstart’ Musk with his Teslas to persuade ideological politicians that batteries we clean, and the solution.
Instead they should have been lobbying those self same ideologues and educate them of the folly and shortcomings of an all electric transport system.
Gas mileage is only a portion of the the expense of an ICE vehicle. There’s also purchase price, financing, insurance, maintenance, tires, maybe even a wash now and then. The correct measure of economy is cost per mile, which is true of any form of transportation.
The fact is that since “the government” takes a major share of corporate profits, decides how cars should be designed and built, designs the pathways that these cars take, determines how they are disposed of when no longer useful, then the government is an owner of all the car companies. It only makes sense that they bail out manufacturers that make bad decisions. Car manufacturing is so important to the country that a free market of any dimension can’t be allowed to have a negative effect on that industry, even though hundreds of car companies have failed since the introduction of the motor car. This is the same kind of socialism that kept the Soviet Union staggering along for decades. The capitalist economy that the US supposedly cherishes is no such thing when businesses aren’t allowed to fail and the state determines their product.
This past week, one of the bond ratings agencies, Fitch downgraded US debt from AAA to AA+.
If this trend spreads to the other ratings agencies, it’s going to have several impacts.
First, the direct impact, the government is going to have to pay more in interest in order to get people to buy its bonds. This will directly cause an increase in the deficit, and the growing debt/deficit was the prime reason behind the downgrade in the first place.
Secondly, banks are required to maintain reserves. Say the reserve requirement is 10% and the bank has $1B in deposits. This means the bank has to keep $100M in cash or cash equivalents, in its vaults in order to cover withdrawls.
Now what is a cash equivalent? Cash equivalents are things like treasury bills that are also kept in the company’s vaults. When bond that is rated AAA, the bank is allowed to treat it at 100%. That is, if a bank has $1M in AAA bonds, they get to treat this as being the same as $1M in cash in their vaults. The reason is that the bonds can easily be sold for face value, should the need arise.
What happens when a bond is rated at less than AAA? The bond gets de-rated for purposes of determining cash equivalence. WARNING, MADE UP NUMBERS AHEAD.
Let’s say a AA+ bond is rated at 99% cash equivalent, this means that if a bank as $1M in AA+ debt, it only gets to treat this as having the equivalent of having $990K of cash on hand. The reason is that other companies will no longer be as willing to buy those bonds at face value, because of the increased risk.
This means the bank has to hold more bonds in it’s vaults in order to meet its reserve requirements. This means the bank has to spend cash in order to buy more bonds. This means a bank will have less money available to make loans. Banks will also have to charge more on the loans they do make in order to keep the same income. A bank’s expenses are primarily wages and real estate. Neither of those is impacted by the amount of loans a bank has outstanding.
Fewer loans at higher interest rates, means the economy slows.
A slowing economy means less in tax revenue to the government.
Less tax revenue means an increased deficit, which once again is the problem that started this mess.
These battery-powered vehicles should be called Emission Elsewhere Vehicles. The power to recharge them comes from coal- or gas-fired power plants.
EEV – I like it.
I’ve also read of DEV – Displaced emission vehicles
It isn’t just the auto makers. The states, like California, have bought in big with dates of when ICE vehicles will not be allowed to be sold.
I say no backsies.
More likely than not, the government will cover any and all financial losses American auto makers suffer in trying to replace their current lineup of ICE vehicles with EV vehicles.
In any case, they will separate me from my 2010 Mazda 6 only after they unwrap my cold dead fingers from around the steering wheel.
“it’s hard not to feel a bit sorry for that bungling brigade”
I don’t know – they didn’t really push back (at least not that I’ve seen).
As an 86yo with a 1959 electrical engineering degree and 30y in the nuclear power industry, some of you might think I’d be the first in line to buy an EV, but not so. Parked in our driveway is a 1996 Tahoe w 210k miles. Like my wife and me, it has had many important parts replaced, including the engine, transmission, steering column, radiator, etc. (Mostly due to towing a travel trailer about 120k miles over mountains, and hill and dale.) We bought the Tahoe just before I retired with the expectation it would be our last car, and it will be. We will keep it running as long as we can get parts and I’m able to drive. Since I’m undoubtedly close to my “here today, gone tomorrow” date, I won’t get to see how Biden’s stupid energy transition works out (I don’t think it will.), We’ll pretend we’re in Cuba or somewhere else in the “3rd world” where they manage to keep ICE vehicles running for a long, long, time.
As a 60yo with a 1984 EE degree and 15 years in naval nuclear propulsion I would assume no such thing. On the contrary I think the numerate and practical, in particular individuals who are able to do quantitative assessments grounded in sound engineering and economic reality are among the least likely to buy into EVs or other net zero fantasies.
The US and the west are a disgrace. If government would stop sticking its nose into everything we wouldn’t have these problems. One promise by the government would solve our problems. They must promise no mandates, no subsidies and no bailouts. Our problems would shrink massively.
It’s not complicated, as the author reports:
Toyota calculated that they could make 90 hybrids for the same battery material that goes into a single EV, and that those 90 hybrids over their life could offer electrical motivation of a magnitude no single EV could even hope to.
Back in 2018 and 2019 (which feels like the distant past now), when the USA became a net exporter of petroleum for the first time in many decades, car company commercials were pushing the biggest and most powerful SUV’s and pickup trucks (powered by gasoline), fuel economy be damned, since gasoline was plentiful and relatively cheap (<$2.00 / gallon in many states).
Then came the Covid PLANdemic of 2020, and people were scared to drive for fear of catching the “dread” disease, and the price of crude oil actually turned negative for a few months, since refineries had more gasoline and jet fuel in inventory than they could sell.
In 2021, Biden entered the White House and slammed the brakes on oil production and pipelines, and pushed his Green New Deal, which was watered-down but not completely eliminated by the Senate. Highly-subsidized electric cars were part of this program, but those pushing them didn’t give much thought to what would produce the additional electric power, and the cost of setting up thousands of recharging stations.
Gasoline might cause twice as much as it did in 2019, but it is still readily available, as in cities and suburban areas, there is usually a gas station within a few miles of anywhere. So, most people will continue to drive their used gasoline-powered cars, even if it costs more to travel than before, rather than invest $50K+ in an unreliable electric car. All those SUV’s and pickup trucks sold in 2018-2019 are less than five years old now, and could stay on the road through 2030 or beyond.
Terry Etam is right to point out that “in a sane world”, car companies would be pushing hybrids instead of pure-electric cars, since hybrids can about double the miles per gallon of an ICE-only car, which can cut emissions in half for the same miles driven. The emissions reduction for an electric car depends on the fuel used to produce the electricity, but for electricity produced from coal, CO2 emissions actually INCREASE for electric cars.
But if one election (2020) can transform the USA from energy dominance to self-inflicted energy starvation, the next election could reverse this trend. When President Trump came to office in 2017, he immediately pulled the USA out of the “Paris climate accord”, authorized the construction of the Keystone XL pipeline, and opened up ANWR for oil production. If Trump were re-elected in 2024, he would likely repeat these policies in 2025, and American carmakers would go back to building ICE cars, which is what they do best.
This has happened before. Grover Cleveland won the Presidency in 1884, lost his bid for re-election in 1888, then won again in 1892. It could happen again.
Another home run for Terry
Another under commented issues with the current EV design is insurance.
The battery packs are an unknown quantity in terms of repair. So even minor fender-benders are leading to write-offs.
And then – related to batteries – is the used car residuals….
The problems that the US automakers are facing aren’t at all surprising….no more so than throwing a ball up into the air and then expecting it to fall back down. I knew years ago that this would happen (piles of unsold EVs clogging up lots). In all of this history of capitalism and consumerism, products/services that are unpopular (for various reasons) simply don’t sell well. Even if they have a whole boat load of government incentives and subsides.
You can put lipstick on a pig and you still have a pig….and EVs are a real pig in a poke.
And yes, clearly there is something untowards going on with automakers doing little or anything to fight their own demise. As we all have seen, big companies can have big clout. They can lobby to get laws passed, or stop laws from being passed. The automakers must have been offered a very sweet deal by politicians, otherwise surely they would not go gung ho into oblivion. They must realize that EVs are, at least on a massive scale, a flop. Tesla is the only one that’s made it, so to speak. but that’s IMO because it is a Tesla, not because it is an EV. It is sort of like some kind of high end designer product. It doesn’t need to perform any better (or even as well) as its non designer counterparts, but as long as it has that name, people will seek it out and covet it. For everyone else, who just want a practical product, what’s tried and true is what they want.
Details details….
story tip
Tesla cars only reach half the range advertised, drivers claim (yahoo.com)
Tesla faces California class action on its EV range claims | Reuters
Toyota can do it, as long as they don’t get sidetracked by the hydrogen stupidity.
And that is why the end of last May I placed an order for a premium dark horse mustang. It’s very likely it will be the last car I purchase and I expect to get many years of enjoyment out of it. Besides that, the old one is a 1996 and it’s getting a little hard to get parts for it. It should show up this month.
‘EVs Are Piling Up on Dealer Lots as Supply Outpaces Demand’
I hope they are all kept 30 or 40 feet apart: otherwise this particular problem might go away very quickly!