Electric Cars?
Some predict that by 2030 50% of new car sales in the U.S. will be electric. Others come in at 30%. That is a wide margin. Who is right? The one who predicts consumer demand and price correctly will get the prize.
Consumer Demand?
Almost universally, consumers, when given the chance; prefer driving an electric car. They are quieter, more fuel efficient, and just much more convenient when charged at home and used for a daily commuters’ needs. Despite the press about the on-the-go charging stations, most of the time they are not convenient enough and take up too much time to make long road trips practical. Adding 2 hours to an 8-hour road trip for finding and charging your vehicle will not be most people’s choice. How many times will you make a road trip over 250 miles in a year is the real question? Well, just over 50% of us will take a road trip of over 250 miles or longer sometime this year. 76% of commuters in the U. S. use cars. I will make a bet that by 2030 despite efforts to make mass transit better this percentage will not change much. It just makes sense that most 2 car families will have a gas car and an electric car. Electric for commuting and gas for both with the convenience of just filling up on longer trips. Eventually, charging an electric car will get faster and more convenient. It will take a long time to get the infrastructure and battery tech widely available to compete with just filling up a tank. We may get to the tipping point by 2030, but that is being optimistic. Word to the wise: just because the range of an electric car says 200 miles, on long interstate travel trips you will not get that far. Electric cars need regenerative braking to kick in to help increase mileage; and that just does not happen enough on most interstates.
Price?
Electric cars are pricier than their gas burning cousins. Mostly, that is due to demand and supply for the cars and battery pack expense. Over time we will see better pricing due to competition. China is either there or almost there on competition in electric car sales. In the U. S., not so much. We still have more demand for electric cars than supply. No matter what, the biggest factor on pricing is supply and demand. Despite the $4,000 government rebates, car companies will sell their cars for more when supply is less than demand. That is where we are today. The supply demand differential should change a great deal by 2030. When that happens there is a real chance that electric cars will be cheaper. Electrics are just not as complicated as a gas burner. A gas burner has over 200 moving parts vs an electric having just 18.
Batteries?
For electric car prices to really start being more competitive with gas burners the price of batteries must go down. All the ingredients for a battery: lithium, aluminum, nickel, cobalt and so on, are in short supply vs demand. Most predict the difference between the two will not change much until 2025 on. It takes a long time to get the mines and raw material refineries up and running. Multiple years will be required. Over the last 10 years battery pricing has dropped precipitously. From $700 to today’s $135 per kw/hr. Most electric cars have anywhere from 50 to 100 kw/hr. A point of reference, your home air conditioner uses 3 to 3.5 kw/hr. on average. A 50 kw/hr. battery won’t keep your air on for 24 hours, depending on how often it cycles on and off. Over time increased production, the use of cheaper raw materials, and battery tech should kick in and battery prices will come down. When and if we reach parity with a gas burner, depends on the price of oil more than anything. If oil stays high battery-operated cars will be less expensive to operate.
Environment?
The average car commuter spends 19 workdays per year stuck in traffic burning fossil fuel. Electric cars are better for the environment long term. Despite all the naysayers, way too many factors put electrics on top when it comes to the environment.
Thanks, Andy McClung CFPtm
RE: www.esource.com; World Economic Forum Felix Richter; New York Post Max Knoblauch; Energyright.com; Americanhomewater.com; Instituteforenergyreasearch.org
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Source Wall Street Journal 01/10/23