Update Feb 19: It seems the audio upload to SoundCloud was cut short for some reason, making this episode ~12 minutes instead of ~32. I just re-uploaded the audio file and it is now the full episode.
In another episode of Cleantech Talk, Matthew, Kyle, and I run through a healthy serving of EV topics. We discuss impacts of British Columbia electric vehicle purchase rebates, the importance of Tesla Supercharging and a well developed “EV ecosystem,” and some Tesla Gigafactory myths and facts.
In Joseph Conrad’s Heart of Darkness, narrator Marlow travels to the inner Congo and uncovers the madness of an ivory trader ted to create new jobs (thus multiplying the employment effect of that first new job). Unfortunately, there doesn’t seem to be any agreement among economists about how big multiplier effects really are. Which gives us the scenario where one economist might conclude that military contracts create huge multiplier effects but renewable energy projects don’t … and their arch-nemesis might conclude exactly the opposite.
When this week’s Cleantech Talk was recorded, co-host Matthew was at an the airport in Kansas, near the headquarters (and “heart of darkness”, in a manner of speaking) of pollution profiteers the Koch brothers.
And just to make sure visitors know who rules the roost in Wichita, this advertising banner greets travellers leaving their flights – positioned along the outside of a Chick-Fil-A, no less!
$5000 Electric Rebates’ Effects on Electric Sales in British Columbia
In the spring of 2015, the Canadian province of British Columbia restored an earlier program of ($2500 to $5000) electric vehicle purchase rebates, which had been allowed to expire the year before. This made for an almost-textbook A/B/A study, where one could compare electric vehicle sales trends with rebates in place (the first “A”) then without rebates (“B”) and then with the same rebates back in place again (“A”).
When he crunched the numbers, Matthew found that the proportion of Chevy Volt and Nissan Leaf sales doubled when those rebates were available. (To try to minimize the impact of gasoline prices, the national economy and so forth, he compared electric vehicle sales in British Columbia to those in Ontario and Quebec, where rebates have been in place the whole time.) Which does seem to suggest that buyers of these early mass-market electric vehicles were stretching a bit to afford them; the rebates definitely had an impact.
In contrast, the availability of rebates didn’t seem to impact the proportion of BMW i3 or Tesla Model S sales in the province. Perhaps buyers of these luxury vehicles simply aren’t as price-sensitive? We can probably safely infer that high-end electric vehicles sell themselves on their own merits, too.
Supercharging and the Electric Vehicle Ecosystem
The idea that widespread Supercharger-class infrastructure is necessary for an electric vehicle to really succeed, is an example of the business concept about the importance of providing a whole product solution. Admittedly, the term “ecosystem” is flashier, and just as accurate.
As for the analogy with the human body, there was an influential back-of-the-envelope estimate forty years ago (!) that only 10 percent of the cells in the human body are actually human. The other 90 percent are mainly symbiotic bacteria, mainly in our digestive system. More recent estimates put the ratio at maybe 50–50. (That last link refers to the back-of-the-envelope estimate.)
Gigafactory Facts and Fiction
After Kyle mythbusted a popular allegation about the Tesla’s Gigafactory, explaining how an actual look at the documents showed that the company is in fact on-schedule in terms of its job creation promises, Matthew read that the reason for the discrepancy in figures between Tesla and the state economist might relate to a mismatch in the assumed project start date. Once corrected for, the discrepancy largely disappeared. Unfortunately, he thinks he read this in one of the dozens of 100+ comment threads on the Seeking Alpha message boards, meaning that unless someone can provide the link in the comments, you’ll have to take his word on it!
One of the most contentious points in economic modelling relates to the calculation of “multiplier effects” where the economic activity associated with a new job is estimated to create new jobs (thus multiplying the employment effect of that first new job). Unfortunately, there doesn’t seem to be any agreement among economists about how big multiplier effects really are. Which gives us the scenario where one economist might conclude that military contracts create huge multiplier effects but renewable energy projects don’t … and their arch-nemesis might conclude exactly the opposite.
Interestingly, it was Thomas Carlyle who labelled economics “the dismal science”. He’s probably best known for popularizing the Great Man theory of history, which suggests that heroic figures periodically dent the universe and change the course of human affairs, by unleashing their creative genius. People who, say, facilitate our transition to solar power, revolutionize the automobile, or commercialize space exploration… that sort of thing. ☺ named Kurtz.