EV Version 2.0

“All is rotary, beautifully perfect and wonderfully efficient. There is not that almost terrifying uncertain throb and whirr of the powerful combustion engine… no dangerous and evil smelling gasoline and no noise. Perfect freedom from vibration assures both comfort and peace of mind.” 

 That is not from a Tesla advert or a quote from Elon Musk. That quote is by  American inventor and businessman, Thomas Edison, from the year 1903. 

 Wait, what…? 

So, we’ve had electric vehicles for more than 100 years!? Why then, do electric vehicles only account for a tiny fraction of what’s on the roads today?  

 

AN INCOMPLETE PICTURE 

In 2020, EV sales accounted for approximately 2% of car sales – and that is already a large increase from previous years. 

The conventional wisdom for why EV version 1.0 lost to petrol-powered cars in the first decade of the last century is that the latter were cheaper, more practical, and just plain better. A recent paper by Josef Taalbi and Hana Nielsen of Lund University argues otherwise. They believe the main cause of EV V1.0’s demise was lack of infrastructure. 

Taalbi and Nielsen looked at various possible causes such as cost and range. They ruled out both of these as the main factors. EVs and petrol-powered cars were similarly priced in 1900-10. EVs had a reasonably good range (at least by 20th century standards) at about 90 miles (145km).  On the flip side, petrol was widely available compared to a near-complete lack of infrastructure supporting EVs. 

The researchers also ran some simulations to estimate what would have happened if there was more of a power infrastructure to help make EVs more practical. The outcome was that if the amount of electricity America produced by 1922 had been available in 1902, 71% of cars would have been EVs. Compare that 71% (in 1922!) to 2022’s 2% of EV sales. 

 

A LONG STORY SHORT 

What killed the electric vehicle 100 years ago was not the electric vehicle itself. It was the lack of infrastructure compared to the prevalence and convenience of gas stations. Fast forward 100 years and things are not all that different. Petrol cars still have a significant convenience advantage for consumers – the main reasons why people don’t opt for EVs when buying a new car these days are range anxiety and ease and speed of charging. 

 If the world is serious about electrifying ground transportation, infrastructure is a serious challenge that needs to be addressed and resolved. Electrifying all cars on the road will roughly double electricity consumption. In 2019, the world consumed about 27 million gigawatt hours of electricity, while cars and trucks consumed the equivalent of about 28 million gigawatt hours of energy – almost all of it from fossil fuels. 

 

 

THE REAL CHALLENGE 

 But maybe the doubling of electricity consumption is the easier part of the EV conundrum, as there will be natural economic incentives for investment in new electricity generation assets to gradually catch up with increased demand. The challenge of distribution and the infrastructure gap compared to petrol, are in many ways more difficult.  

 Even in countries with liberalized industries, there is still significant involvement from various types of governments – federal and local – that complicates the economics of infrastructural improvements, such as upgrading existing transmission networks and adding new ones. And let’s not forget the ‘charging station landscape.’ 

As we all watch the meteoric rise of Tesla’s stock price (market capitalization of more than$1 trillion), maybe it’s good to realize the biggest risk factor towards justifying that stock price is the willingness of the global energy industry.  

Along with the world’s various governments and other governing bodies’ success to mitigate the worries of EV drivers of when, how, and how fast they can charge their cars. 

 

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