combustion cars become roughly as marketable as a buggy and horse
You are making a rather huge assumption that the electric battery energy density will drastically improve. Without that electric cars will still be limited to cities and commuting.
a sudden dire interest in more baseload during that time period
California had some significant electric shortages recently and that did NOT make them fans of building more power plants, never mind nuclear ones. If the demand spikes, high (electricity) prices will downregulate it at which point, given the cheap oil, the ICE (internal combustion engine) cars could turn out to be a sensible option :-)
No I’m not. I am assuming the exact batteries that are going to be coming out of the factories currently being built. Because when it comes to it, nobody is going to give a half a damn that they have to take a mid day break of thirty minutes the one time a year they visit aunt Greta three states over.
Tesla is aiming at 200 mile range. At legal speeds, that is just under four hours of driving on the highway. Try and recall the last time you did more than that in one day? Now, for that trip, would a 30 minute lunch break have ruined your life?
The actual pattern of use for everyone in their day to day lives is going to be “jack the car in when you come home for the day, unplug in the morning”. Total time spent; 22 seconds. This is more convenient than a weekly stop at the gas station, and vastly cheaper. At this point everyone I discuss with will bring up road trips. Except. People plan those. Including a stop at a super charger station is not a hardship. It is certainly not a hardship severe enough to justify paying 6 to ten times as much to keep your car running on a day to day basis. Is avoiding those semiannual 30 minute pitstops really worth 4 and a half thousand dollars to you? Assuming gas drops in price by half, is it worth 2250 dollars?
I guarantee that avoiding them is not worth it to the average consumer. And given a sane discount rate, that difference in fuel costs means nobody is going to buy a gasoline car. You would have to give them away for free! average car turnover; 7 years. 7 x 4.5 = 31.5 thousand. The tesla E is aiming at price point of 35k. So, basically, the fuel savings are going to pay for the car.
The only flaw in Elon Musks design I can spot here is that I think his planned production facilities are way to small. That provides an opening for panicked retooling for the production of “Me Too” cars from the traditional car makers. This is the main reason I said ten years for full switchover rather than 7 - most car manufacturers are currently being idiots and acting like they will be making gasoline burners in the year 2025. The panic rethink is going to delay things a bit.
worth 4 and a half thousand dollars to you? Assuming gas drops in price by half, is it worth 2250 dollars?
Y’know, that number bothered me so I decided to check. Are the annual gas expenses really $4,500?
Let’s see. An average American car drives somewhere around 12,000 miles per year. A contemporary sedan running on gas goes for around 30 miles per gallon (EPA combined numbers). This means that a car burns about 400 gallons of gas per year. I filled up yesterday for $3.15 per gallon, but let’s say the average current price is $3.25. 400 * $3.25 = $1,300 per year. This is the average annual gas expense.
And if you buy a small (still ICE) car, you can get gas mileage up to about 40 mpg, I think. For such a car the annual costs of gas would be below a thousand dollars.
Uhm.. That looks a heck of a lot like the reasoning I used, except I did something stupid with imperial/metric conversion, and then it didn’t trigger any “That must be a mistake” bells because gas in these parts is 2 dollars.. per liter. Why can’t you use metric like everyone else? ;)
200 mile range. At legal speeds, that is just under four hours of driving on the highway. Try and recall the last time you did more than that in one day?
No need to try, I drive long distances on a fairly regular basis.
The actual pattern of use for everyone in their day to day lives
I trust you’ve heard of the typical mind fallacy? People are different. Trying to pretend everyone does the same thing isn’t particularly useful.
Assuming gas drops in price by half
And assuming electricity costs go up by how much? One reason gas costs so much is because it’s a source of revenue for the government. Do you think the government will just forget about this revenue or maybe electric won’t be so cheap after all? You are predicting a huge spike in demand, right?
nobody is going to buy a gasoline car.
LOL. OK, then, it’s a simple way to become rich. Short the stocks of everyone who depends on ICE engines—engine manufacturers, most obviously, but there’s a large ecosystem around that—and go long Tesla and its ecosystem. In ten years you should be swimming in money.
On a bit more serious note, clearly electric cars make sense for some people and some uses. They also clearly do NOT make sense for other people and other uses. Of course there will be more electric cars on the road in ten years. But there will be ICE cars as well.
In ten? sure. As I said, 80% penetration. It might be higher, but that /does/ depend on better batteries than conservative forward extrapolation of trends predict. Most of them will be used, because you will be able to get a used ice car for junk value and a dollar, and then junk them the first time they have any kind of major problem.
And the government wont be able to tax the electricity to the extent they do gas—no good way to do that without being lynched because electrons are electrons. Most likely, we will wind up with.. I dunno, ridiculously high taxes on tyres?
So, to take the used cars out of the equation, you’re saying that in 10 years no one will be producing ICE cars..? Or, to avoid absolutes, given 80% penetration and the existence of used cars, do you claim that in ten years something like 95% of cars produced will be purely electric?
And the government wont be able to tax the electricity to the extent they do gas—no good way to do that without being lynched because electrons are electrons.
More or less. Technology transitions have reinforcing feedback loops—once the transition starts, the bottom falls out of the market for used ICE cars (the junk value and a dollar thing..) which makes new ICE cars very difficult indeed to sell. After a couple years of that, gasoline is no longer sold in nearly as many places...
It’s not blind optimism—look, the oil barons currently bribing the US congress (and various european politicians..) fall into two categories; “Marginal producers” and “Funny looking/weirdly dressed foreigners”. That means that once the price of oil falls to any significant extent, the political lobby for oil rapidly gets reduced to 90+% “Guys in turbans with no vote”. That is an interest group which politicians will loose absolutely no sleep over burning all bridges with. So there shouldn’t be any pressure from the top to keep the ICE alive artificially. That will cost revenue, yes, but it will save consumers lots of money. Which they will spend. And that will create revenue, and reduce expeditures, and again.. Being the politician that steps up and says “I know you just saved thousands of dollars that were heading down to the kingdom of sand, but I just cant stand to see a commoner with money so I’m going to slap a 3 thousand dollar surcharge on your electric bill” is a good way to end up on a literal pike. No matter how much economy speak you try to dress it up in.
Well, we’ll see. In the meantime, Chevy Volt, an electric car selling for $27K (with applicable tax credits, that is, a government bribe to make you buy it) is selling rather poorly, I believe.
Being the politician that steps up and says
Heh. No, the politicians have gotten quite good at saying “Look at the shiny!” while they’re rifling through you wallet..
And the united kingdoms are still happily paying the poll tax, the american war of independence never happened.
Some taxes are much more.. annoying.. to the general public than others. And in this case, what you are envisioning just can’t happen. You can not collect high taxes on gasoline and electricity both—the transition is fast, not instant, and so if you do that low income people who are obliged to use gasoline will actually run out of money all-together. And riot.
In theory, it is possible to stop taxing gas and start taxing electricity instead, but that is so painfully stupid an idea you wouldn’t be elected dogcatcher after suggesting it.
You can not collect high taxes on gasoline and electricity both
Well a lot of European countries are doing just that. Or rather they have “sustainable energy” mandates, which from the consumer’s point of view function as a high tax on electricity.
Not high enough to make gasoline competitive with electricity on price. which is the subject under debate. Not that I’m happy about the mandates, because they have failed. The only policies that have ever worked to clean up electricity generation are dams and nukes. Barring technological breakthroughs, I fear they are the only ones that are ever going to work outside of a band near the equator where solar might eventually become sane.
Humans aren’t that rational; as someone here (Yvain, I think) once mentioned, they will rent/buy houses with an extra bedroom just in case aunt Greta comes over, even though the money they’d save with a smaller house would be enough to buy a stay in a five-star hotel every time aunt Greta comes over.
Also, electric cars just aren’t that cool among a large segment of the population, and social status is a major part of the reason people buy expensive-ass cars.
.. And for the irrational and moneyed segment of the population willing to blow money on cool factor for conspicuous consumption EV motoring offers total freedom of design space. The basis of an EV is a skateboard. 4 wheels on the corners with electric steering, batteries and drive by wire on top of which you can drop any chassis you care to. So, blow the money needed to get the jumbo-tron extra large battery pile, and stick any chassis you care to on top. Areo-dynamics? Who cares, it isn’t like the kind of person who would ignore that price gap on the fuel side of things is going to feel the pain that their car is eating watt-hours like a house decked out in Christmas lights.
If my model of the people I’m talking of is correct, the very idea of electric cars reminds them of granola-eating hippie wusses. (But I haven’t interacted with such people on a regular basis since 2009, so my model may be outdated.)
You are making a rather huge assumption that the electric battery energy density will drastically improve. Without that electric cars will still be limited to cities and commuting.
California had some significant electric shortages recently and that did NOT make them fans of building more power plants, never mind nuclear ones. If the demand spikes, high (electricity) prices will downregulate it at which point, given the cheap oil, the ICE (internal combustion engine) cars could turn out to be a sensible option :-)
No I’m not. I am assuming the exact batteries that are going to be coming out of the factories currently being built. Because when it comes to it, nobody is going to give a half a damn that they have to take a mid day break of thirty minutes the one time a year they visit aunt Greta three states over. Tesla is aiming at 200 mile range. At legal speeds, that is just under four hours of driving on the highway. Try and recall the last time you did more than that in one day? Now, for that trip, would a 30 minute lunch break have ruined your life?
The actual pattern of use for everyone in their day to day lives is going to be “jack the car in when you come home for the day, unplug in the morning”. Total time spent; 22 seconds. This is more convenient than a weekly stop at the gas station, and vastly cheaper. At this point everyone I discuss with will bring up road trips. Except. People plan those. Including a stop at a super charger station is not a hardship. It is certainly not a hardship severe enough to justify paying 6 to ten times as much to keep your car running on a day to day basis. Is avoiding those semiannual 30 minute pitstops really worth 4 and a half thousand dollars to you? Assuming gas drops in price by half, is it worth 2250 dollars? I guarantee that avoiding them is not worth it to the average consumer. And given a sane discount rate, that difference in fuel costs means nobody is going to buy a gasoline car. You would have to give them away for free! average car turnover; 7 years. 7 x 4.5 = 31.5 thousand. The tesla E is aiming at price point of 35k. So, basically, the fuel savings are going to pay for the car. The only flaw in Elon Musks design I can spot here is that I think his planned production facilities are way to small. That provides an opening for panicked retooling for the production of “Me Too” cars from the traditional car makers. This is the main reason I said ten years for full switchover rather than 7 - most car manufacturers are currently being idiots and acting like they will be making gasoline burners in the year 2025. The panic rethink is going to delay things a bit.
Y’know, that number bothered me so I decided to check. Are the annual gas expenses really $4,500?
Let’s see. An average American car drives somewhere around 12,000 miles per year. A contemporary sedan running on gas goes for around 30 miles per gallon (EPA combined numbers). This means that a car burns about 400 gallons of gas per year. I filled up yesterday for $3.15 per gallon, but let’s say the average current price is $3.25. 400 * $3.25 = $1,300 per year. This is the average annual gas expense.
And if you buy a small (still ICE) car, you can get gas mileage up to about 40 mpg, I think. For such a car the annual costs of gas would be below a thousand dollars.
Where does your $4,500 number come from?
Uhm.. That looks a heck of a lot like the reasoning I used, except I did something stupid with imperial/metric conversion, and then it didn’t trigger any “That must be a mistake” bells because gas in these parts is 2 dollars.. per liter. Why can’t you use metric like everyone else? ;)
This is the case of your government being greedy, not of gasoline being intrinsically expensive :-P
The US is special—haven’t you heard of the American Exceptionalism doctrine? X-D
No need to try, I drive long distances on a fairly regular basis.
Your estimate of half an hour for a full recharge also seems to have nothing to do with the current reality.
I trust you’ve heard of the typical mind fallacy? People are different. Trying to pretend everyone does the same thing isn’t particularly useful.
And assuming electricity costs go up by how much? One reason gas costs so much is because it’s a source of revenue for the government. Do you think the government will just forget about this revenue or maybe electric won’t be so cheap after all? You are predicting a huge spike in demand, right?
LOL. OK, then, it’s a simple way to become rich. Short the stocks of everyone who depends on ICE engines—engine manufacturers, most obviously, but there’s a large ecosystem around that—and go long Tesla and its ecosystem. In ten years you should be swimming in money.
On a bit more serious note, clearly electric cars make sense for some people and some uses. They also clearly do NOT make sense for other people and other uses. Of course there will be more electric cars on the road in ten years. But there will be ICE cars as well.
In ten? sure. As I said, 80% penetration. It might be higher, but that /does/ depend on better batteries than conservative forward extrapolation of trends predict. Most of them will be used, because you will be able to get a used ice car for junk value and a dollar, and then junk them the first time they have any kind of major problem.
And the government wont be able to tax the electricity to the extent they do gas—no good way to do that without being lynched because electrons are electrons. Most likely, we will wind up with.. I dunno, ridiculously high taxes on tyres?
So, to take the used cars out of the equation, you’re saying that in 10 years no one will be producing ICE cars..? Or, to avoid absolutes, given 80% penetration and the existence of used cars, do you claim that in ten years something like 95% of cars produced will be purely electric?
I wish I shared your optimism :-/
More or less. Technology transitions have reinforcing feedback loops—once the transition starts, the bottom falls out of the market for used ICE cars (the junk value and a dollar thing..) which makes new ICE cars very difficult indeed to sell. After a couple years of that, gasoline is no longer sold in nearly as many places...
It’s not blind optimism—look, the oil barons currently bribing the US congress (and various european politicians..) fall into two categories; “Marginal producers” and “Funny looking/weirdly dressed foreigners”. That means that once the price of oil falls to any significant extent, the political lobby for oil rapidly gets reduced to 90+% “Guys in turbans with no vote”. That is an interest group which politicians will loose absolutely no sleep over burning all bridges with. So there shouldn’t be any pressure from the top to keep the ICE alive artificially. That will cost revenue, yes, but it will save consumers lots of money. Which they will spend. And that will create revenue, and reduce expeditures, and again.. Being the politician that steps up and says “I know you just saved thousands of dollars that were heading down to the kingdom of sand, but I just cant stand to see a commoner with money so I’m going to slap a 3 thousand dollar surcharge on your electric bill” is a good way to end up on a literal pike. No matter how much economy speak you try to dress it up in.
Well, we’ll see. In the meantime, Chevy Volt, an electric car selling for $27K (with applicable tax credits, that is, a government bribe to make you buy it) is selling rather poorly, I believe.
Heh. No, the politicians have gotten quite good at saying “Look at the shiny!” while they’re rifling through you wallet..
And the united kingdoms are still happily paying the poll tax, the american war of independence never happened.
Some taxes are much more.. annoying.. to the general public than others. And in this case, what you are envisioning just can’t happen. You can not collect high taxes on gasoline and electricity both—the transition is fast, not instant, and so if you do that low income people who are obliged to use gasoline will actually run out of money all-together. And riot. In theory, it is possible to stop taxing gas and start taxing electricity instead, but that is so painfully stupid an idea you wouldn’t be elected dogcatcher after suggesting it.
Well a lot of European countries are doing just that. Or rather they have “sustainable energy” mandates, which from the consumer’s point of view function as a high tax on electricity.
Not high enough to make gasoline competitive with electricity on price. which is the subject under debate. Not that I’m happy about the mandates, because they have failed. The only policies that have ever worked to clean up electricity generation are dams and nukes. Barring technological breakthroughs, I fear they are the only ones that are ever going to work outside of a band near the equator where solar might eventually become sane.
Humans aren’t that rational; as someone here (Yvain, I think) once mentioned, they will rent/buy houses with an extra bedroom just in case aunt Greta comes over, even though the money they’d save with a smaller house would be enough to buy a stay in a five-star hotel every time aunt Greta comes over.
Also, electric cars just aren’t that cool among a large segment of the population, and social status is a major part of the reason people buy expensive-ass cars.
.. And for the irrational and moneyed segment of the population willing to blow money on cool factor for conspicuous consumption EV motoring offers total freedom of design space. The basis of an EV is a skateboard. 4 wheels on the corners with electric steering, batteries and drive by wire on top of which you can drop any chassis you care to. So, blow the money needed to get the jumbo-tron extra large battery pile, and stick any chassis you care to on top. Areo-dynamics? Who cares, it isn’t like the kind of person who would ignore that price gap on the fuel side of things is going to feel the pain that their car is eating watt-hours like a house decked out in Christmas lights.
If my model of the people I’m talking of is correct, the very idea of electric cars reminds them of granola-eating hippie wusses. (But I haven’t interacted with such people on a regular basis since 2009, so my model may be outdated.)