Published on June 9th, 2016 | by Zachary Shahan92
What’s Actually New In The Electric Car World?
June 9th, 2016 by Zachary Shahan
We cover electric car news obsessively and enthusiastically. In fact, it’s quite hard for us to keep to 10 or fewer electric car stories a day. Nonetheless, there are some key underlying themes that don’t tend to change much, so I thought it might be worthwhile to step away from the news cycle for a moment to do a long article on these underlying points.
If The Auto Industry Transitions To Electric Cars “Too” Quickly
This is a point that is critical to realize but that flies over the heads of many an EV discussion. Let’s quickly run through the main points:
- The auto industry is big.
- The auto industry has put an insane (for real) amount of money into machines and buildings focused on building ICE (internal combustion engine) cars, money that can’t really be recouped if the industry transitions away from ICE cars — these are called sunk costs.
- To stop using those investments would be like not renting 10 homes you own, just letting them sit there and all the money you put into them go to waste (probably a bad analogy since the scale is hard to present in a comparative manner).
- Auto companies have a lot of their competitive advantages built into IP (intellectual property) related to ICE cars.
- Executives at major auto companies have a lot of their career advantages and knowledge baked into ICE cars.
- To move away from ICE cars without much competitive advantage in EV technology leaves these companies and their executives exposed to competitors, and, like with the sunk costs mentioned above, essentially means throwing away years of investments.
- The larger a company and its dominance of an outgoing tech, the more difficult is the pivot to the incoming tech that replaces the outgoing tech (as a general rule). Think Kodak, Blockbuster, Peabody Energy, etc.
This is not new, and Fiat Chrysler Automotive boss Sergio Marchionne explicitly acknowledged it not long ago, but I think it is still a heavily under-acknowledged point.
Aside from anything regarding dealership networks and the matters I discuss below, a quick transition to EVs just puts the large auto companies in a very difficult and risky situation, so they genuinely don’t want the transition to happen quickly.
For more detail on the topic, I encourage you to watch the following presentation from Tesla Motors co-founder Marc Tarpenning, which I wrote about back in 2013. It is one of my all-time favorite (top 10, or even top 3) cleantech presentations.
This is not going to change anytime soon. Large automakers are going to be desiring a slow transition to EVs for many years or even decades (if they can hold things back that long) to come.
So, what does news regarding the auto industry’s approach to EVs really come to? Basically:
- Announcements about increasingly (or not) competitive electric cars that move us closer and closer to an electric future.
- Interesting tidbits about the current and planned Tesla electric cars that move us toward that future much more quickly.
- Interesting tidbits about the other early-stage electric cars that early adopters are enjoying or considering.
- Overall studies on how quickly (or slowly) the market is actually moving.
- The horserace of electric car sales (which I admittedly enjoy a great deal).
- Policies that will accelerate or decelerate the transition to electric cars.
- Whether or not some automakers will make it to the end of this transition.
Batteries Are The Hearts Of EVs, And As Such…
The heart of an electric car is its batteries. Batteries are also what has held back the industry, because they have been quite expensive, resulting in a higher upfront price for an electric car than for a “comparable” gasoline car. (Note: I don’t think a gas car with the same interior & exterior as an electric car is actually comparable, because of these electric car benefits, but I realize that few consumers are aware of the benefits of electric cars, and still even think that electric cars have more downsides than benefits. Oh, my!!)
But battery tech has been advancing at a rapid clip, even if it doesn’t seem like that on a month-to-month or even sometimes year-to-year basis. The arrival of cost-effective lithium-ion batteries (first through consumer products like laptops) resulted in these batteries replacing previous options (like lead-acid batteries) that could never really compete on a mass scale. Steady and significant improvements in lithium-ion batteries over the past decade have really been key to the EV market’s growth. This could be considered news, but it’s really an experience curve that is quite predictable, has been obvious for awhile, and I’d say cannot be stopped. Tesla has accelerated the progress by scaling up demand and production (thus, economies of scale) and making manufacturing improvements faster than would happen otherwise, and other EV leaders in the industry (such as Nissan, GM & LG Chem, and BMW & Samsung SDI) have contributed to that accelerated progress as well.
Here are a few charts to highlight the progress that has been made and is projected to be made in the coming years:
While we can and do cover news on this progress, if you step back a bit, there’s not really a “need” to do that. We can cover each meter that a wave moves toward the shore, but the bottom line that we are all aware of is that is is headed there and will arrive, at which point we will be able to feel it run up our toes, feet, and maybe even legs. 😀
The important thing within the industry, on a more detailed level, is which companies are pushing forward harder and will lead the way into cheaper and cheaper batteries. But the thing is: most automakers are leaving it to battery producers to scale up the production. Tesla has taken charge and is accelerating the transition via the Gigafactory in Nevada, and there are now signs that Volkswagen is aiming to follow Tesla’s lead. One could also say GM is doing so to some extent through its partnership with LG Chem, and Nissan and BMW are as well with their battery partners, but these are more indirect and slower approaches from what we can see on the outside. (Remember point #1: automakers want the transition to go slowly….)
So, what does news regarding EV batteries really come to? Basically:
- Individual data points on battery prices, and how quickly they are coming down.
- News about battery factories that will help to bring down costs and grow supply.
- Scientific advancements that are seldom useful enough to make it to market and are almost always over-hyped by the universities and startups behind them, and then by the media. (We have tried to step off of this pedal.)
- Tidbits about battery chemistry and design that the nerds in all of us can have some fun reading and chatting about. 😀
Road Trips (aka Super-Fast Charging)
Electric drivetrains are nicer for drivers, since they offer instant torque, a smoother and quieter drive, much more efficient (read: cheaper) driving, and one-pedal driving thanks to regenerative braking. They also offer the superb and convenient benefit of home charging, and sometimes workplace charging, which essentially means spending seconds charging (plugging in and unplugging the charging cord … if you don’t just use wireless charging) rather than spending a ton of time finding gas stations and filling up at their smelly and noisy locations. (Can you imagine having to go stand on the side of the road once a week or so to charge your phone?)
Still, aside from the upfront cost of batteries/EVs, a remaining downside to them is that public charging is slower than filling up a gas tank. As I noted above, this doesn’t matter much of the time since you can often charge at home or work. But it does matter for the famed road trip that we all seem to dream about, and occasionally take.
In a fully electric car made by a conventional automaker, your best option on a road trip is DC fast charging that requires ~1 hour of charging after ~1–2 hours of driving … if you have fast chargers along the route you want to take and located conveniently enough for charging and then making it to your next stop without running out of electricity. Needless to say, that just doesn’t cut it, and the result is that it relegates these electric cars to city or, at best, regional cars. (Note: there are plug-in hybrids that try to get around this, but you are adding a lot of complexity, extra parts, costs, and other tradeoffs with a mixture of two types of vehicles. Plug-in hybrids are good options for many people for the time being, but I think they are unlikely to compete on the mass market.)
Super-fast charging (what Tesla calls Supercharging and I’ve called Level 4 charging) is the bare minimum to get around this blockade. With properly sized batteries, it allows a few hours of driving and then charging while you take a short break to stretch, use the toilet, eat something, and maybe check the latest news on CleanTechnica. 😀
There is talk of super-fast charging for non-Tesla cars, but absolutely no network for that, while Tesla has built expansive networks of Superchargers across North America, Europe, and increasingly China and Japan.
So, what does news on this front really come to? Basically:
- Tesla’s ongoing expansion of Supercharging.
- The increasing potential that another super-fast charging network will one day be developed, but how much later after Tesla’s?
- Growth of the slower charging networks that support EV life but don’t quite cut it for long road trips.
- Tidbits about super-fast charging ideas and advancements.
In sum, am I telling you to ignore EV news sites like CleanTechnica, Gas2, and EV Obsession? Of course not. It is fun to watch the story roll out, and it is fun to see if it changes course a bit from what we expect. I just thought it would be interesting and maybe helpful to step back and look at the bigger picture of the EV industry. This story will really be no different in one year, two years, or (fill in the blank) than it is today. If you enjoy stories, it is fun to read the middle chapters as well as the beginning and the ending, but it is also nice to sometimes step back and think about the whole thing in an abridged way.
With that all said, I’m now wondering, why do you read electric car news? Here’s a survey on that matter:
By the way, if we want to step back and take an even bigger view of all of this, we have this deep EV history. Many of the same matters as above, as well as some others, were a big deal ~100 years ago. One could say that the decades when EVs had all but disappeared were just middle chapters as well.
Check out our new 93-page EV report.
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