The Opportunities Lurking In The Transition To Electric Transportation

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Here at CleanTechnica, we see the transition to electric vehicles as a certainty and indeed, consumers are voting with their wallets for electric vehicles in countries leading the charge into plug-in vehicles like China, the United States, and Norway. As the world transitions to connected, autonomous, shared and electric vehicles, the brand new internal combustion vehicles being sold to buyers around the world today will likely be retired before their useful life is over.

The interesting observation was written up in a blog post over on the Lucky Beanz blog where the author ponders the likelihood of this transpiring and some of the implications of millions of vehicles being left unused as the world moves on to cleaner forms of transit.

Inevitable Regulation

Allowing the continued production and sales of millions of gas and diesel vehicles each year that have a horizon that is already coming into sight in so many cities, states, and countries around the world seems quite backwards based on economics alone. Cities around the world are implementing or considering bans on the sale of new gas and diesel vehicles, which creates a compelling brick wall several years out in the future that begs the question: ‘why are automakers still building gas and diesel vehicles?’ or the very similar ‘why are people still buying gas and diesel vehicles?’

The Lucky Beanz blog lays it out nicely: “Governments continue to set dates for banning the sale of ICE vehicles, and while some call these targets ambitious, the truth is that they are all just remnants of a toxic relationship, one everyone knows they need to get out of but just can’t seem to pull ourselves away from.”

With the prospect of looming regulatory action on the horizon, it is not logical to continue buying gas and diesel vehicles, though the reality is that these future regulations are only for a handful of cities around the world and are still many years out in most cases.

The Climate Crisis

If that’s not a compelling enough reason to make a change, climate change and the local air quality emissions people around the world suffer through is yet another compelling reason. Climate change is manifesting itself in more frequent, stronger storms, more frequent, more intense wildfires, more severe droughts, more intense rain, acidification of the earth’s oceans, more severe heat and more severe cold weather around the world, and we are really just beginning to scratch the surface of its effects.

Climate models are some of the most complicated computer simulations in the world and their inaccuracies are constantly being called out as reasons not to believe in climate change. For better or worse, we do not need to look at the future to see these effects. They are in the news everyday.

This week, we are reflecting on the damage done by Hurricane Michael in Florida and at the intense wildfires blazing across much of the state of California. Where I live in Southern California, nearly the entire northwestern half of my county and much of the next county to the west of us burned in the Thomas Fire. This year, the south and the east are burning.

Each additional ton of CO2 we pump into the air, anywhere in the world, adds another blanket onto the planet that traps just a bit more warmth, adding that much more energy to an already highly energized system.

The evidence we see manifesting the underlying condition is one thing, but we also have a body of scientific evidence to lean on. That evidence has been compiled by the leading scientific bodies of our time, resulting in a consensus agreement that climate change is real and it is happening. Denying that climate change is happening and that humans are causing it is now akin to denying that gravity exists or that the earth is round. It’s a scientific fact, for better or worse. The great (and terrible) thing about that is that it really doesn’t matter if you believe it or not, because it’s happening.

Quality Air

Combustion emissions don’t just add more insulation to our atmosphere, it also adds contaminants that affect our health in real, measurable ways. The World Health Organization estimates that outdoor air pollution causes 4.2 million deaths per year.

Air pollution is localized, but because we all share this same bubble of gas we call an atmosphere, the effects of pollution impact the global population. Awareness of just how drastic the impacts of air pollution are is growing as more and more data stacks up against it, but with numbers this large and the effects of air pollution being breathed in and absorbed into our bodies over decades, it is a difficult one for people to wrap their minds around.

It Makes Dollars And Sense

Regardless of your position on climate change, the connection between urban pollution stemming from transportation, or thoughts on future regulation of gas and diesel vehicles, customers are increasingly voting for electric vehicles with their wallets based on the cost savings alone.

The realization of the promise of an affordable, long range electric vehicle hit the US automotive market like a sledgehammer as Tesla built the road out of its production hell with the skeletons of one automaker after another, eventually emerging as the top selling car in the US by revenue.

For those that weren’t paying attention, the Model 3 was the top selling car in terms of revenue among ALL cars, not just electric vehicles. All told, Tesla delivered 55,840 Model 3s in the third quarter — and that’s just in North America, just for cash or loan (no leases yet), and it still isn’t available in the promised $35,000 version, with the most affordable option today being a Limited Edition Mid-Range (aka the LEMuR) version that comes at a base price of $47,000.

That leaves a lot of levers for Tesla to pull to open up the veritable floodgates of demand for its Model 3 as it satisfies early demand and ramps up production. Stacking on that, it is expected to unveil the Model Y CUV in early 2019, which will be followed by an electric Truck, an electric Semi, and an upgraded version of its Roadster that will put literally every other supercar on the market today to shame.

That paints an insanely compelling picture for electric cars based solely on their own merit that has investors around the world both clamoring for Tesla’s stock and at the same time, abandoning legacy automakers as Tesla eats their breakfast, lunch, and dinner along the way.

Hold The ICE, Please

At the end of the day, there are plenty of compelling reasons to switch from clunky, dirty gas and diesel vehicles to electric vehicles. The transition is happening and the only questions outstanding relate to how the nuances of the revolution will play out. Amidst the transition, there is an opportunity to manage the sales of combustion vehicles as they start to give way to electric vehicles in an intentional way to minimize the amount of wasted resources go into the millions of assets produced over the next ten years.

Lucky Beanz postulates that the proliferation of internal combustion vehicles is a simple product of the capitalist model. Without a tax on carbon emissions, the real cost to the planet and to our health is not being taken into account with the purchase, thus making gas and diesel vehicles artificially competitive with electric vehicles. Subsidies, rebates, and incentive programs have helped electric vehicle manufacturers reach scale that allows them Tesla to compete on pricing, but these are being tapered off around the world.

Carbon Taxes

Leveraging an upfront tax on internal combustion vehicles based on their lifetime emissions would discourage the purchase of these assets as the transition to electrified transportation progresses and provide funds that could be directly used to incentivize the purchase of electric vehicles.

Alternately, a gradually increasing carbon tax on the primary fuels is another lever that can be pulled to encourage efficiency and discourage emissions with revenue generated feeding into low or zero carbon technologies.


The rework that comes with gasoline and diesel vehicles is not only the fact that they pollute, but that at a certain point, the world will not have the option to use vehicles that generate emissions, making the entire effort that went into manufacturing the vehicle in the first place a loss. VW’s dieselgate scandal is perhaps the first case of this happening, but similar degrading arcs could be drawn out for older diesel vehicles, diesel buses operating in cities, and even all commercial diesel vehicles looking to operate in city centers.

These categories present opportunities for new businesses to spring up around retrofits that would see kits developed that would allow for predefined classes of vehicles to be converted to electric. The vehicles retired and bought back by VW coming out of the dieselgate scandal could be triaged and re-powered with electric powertrains at a very low cost that would maximize the benefit of the resources that went into the initial manufacturing.

This concept scales up to larger vehicles as well and really starts to get exciting with the entire new passenger vehicle market. Vehicles could be built with powertrains that are more easily removable, with OEM electric conversions kits that could allow buyers to upgrade to an electric powertrain when it made sense for them. Markets for these will inevitably spring up, and indeed, already are in the EV enthusiast market and even from Jaguar directly, albeit, for its classic XK-E.

The transition to electric vehicles may be inevitable, but if the early shakes and bumps to the market are any indicator, it will not be a smooth transition. Companies with decades of history will cease to exist, new multi-billion dollar companies will charge in with new technologies to disrupt what we thought we knew and at the end of the day, we’re hoping that we still have a habitable planet to call home.

With every disruption, there is potential for direct or tangential new businesses to spring up to solve the big wicked problems as well as to define new niches of opportunity. Focusing on the solutions is more effective and exciting, not to mention a better way for us to use our energy, so that’s what we do here.

Source: Lucky Beanz

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

Kyle Field has 1660 posts and counting. See all posts by Kyle Field