WHY EVS WILL NEVER REPLACE ICEVS – Part 2
In Part 1 I covered the individual or Micro level problems with EVs. In Part 2 I will cover the bigger national and international level, system wide Macro problems that are major barriers to the universal transition of all personal transport vehicles to fully battery powered.
1 – ELECTRICITY GRID ISSUES
The widespread transition to EVs has many repercussions with respect to three electricity grid issues: firstly, how increasing EV use impacts on how electricity is distributed (the local issue). Secondly, how the volume of additional electricity required can be generated (the system wide issues) and thirdly, how the first and second issues interplay with the separate but related issue of the wider decarbonisation of all electricity generation.
(i) Local issue: As electricity providers plan their grid capacity for cities and towns, the size and amount of power lines is designed to match the reasonably foreseeable future electricity usage of a typical home in that part of a city. There will be redundancies particularly in newer suburbs with room for growth. For established and settled suburbs of urban areas, electricity providers can plan to make reliable supply around very predictable seasonal usage variations. As more homeowners buy EVs then a new very power-hungry device is added to the family’s power usage. A Tesla 3 is a good average size EV to use as an example and this link tells us that, when you add in the 10% recharge slippage of electricity, the Tesla 3’s average overnight recharge if travelling 14,000 miles (20,000 kms) per year (average US annual driving distance), will use about 380 kwh of extra electricity per month. Various government and important electricity industry websites will give you the average monthly electricity usage of the average home in various countries: for example, in the US it’s 900 kwh, in Australia it’s 500 kwh and the UK more like 300 kwh. Obviously, there are considerable home size and regional fluctuations, but these averages will suffice for the point I am making. The average oven uses about 2 kw per hour and a built-in air conditioner running in hot conditions will chew up 4 kw per hour. Charging an average sized EV will use up 64 kwh overnight so it’s like running another big a/c unit AND your oven all night long. Usually this power is used at night at the cheapest rate hence why the addition to an average monthly power bill is not astronomical in most locations, the point is not about the cost of the extra electricity to the new EV owner, it is about the capacity of the local grid to handle a mass conversion to EVs. In the US an average EV charging overnight 5 days a week adds approximately a 40% extra kwh usage load. In Australia, where average driving distances will be similar to the US, this additional load is 75%! Let’s assume that UK and NZ drivers do half the average annual distance so more like 6,000 miles (10,000 kms) and that NZ’s average home electricity use is between that of Australia and the UK. That’s 190 kwh extra per month and that represents an almost 60% additional kwh load in the UK and 45% extra kwh load in NZ.
Let those figures sink in. The average monthly electricity load increase to charge a Tesla 3 for five nights a week across these countries is over 50%! This is the bottom line when it comes to mass EV adoption. The local grid was not built for a massive 50% increase in the kwh load, the power lines are not thick enough, the small transformers that are situated in neighbourhoods and the larger sub stations across cities that process the electricity from the high voltage heavy duty overhead powerlines were all built to handle standard household usage with SOME redundancy but NOT to handle 50% more power. Right now, all I am talking about is the DISTRIBUTION of the extra needed power not the GENERATION of the extra power which will be covered next. In order for societies to successfully transition to an all-EV fleet, all of the often underground electrical wiring down to at least the street level will have to be dug up and either replaced with heavier lines or have a twin line installed. Neighbourhood transformers will all have to be upgraded to handle the larger power load or they will overload and short circuit leading to a localised blackout and the larger sub stations too will all have to be upgraded. Then there are the high voltage heavy duty power lines that feed cities from power stations that will also require upgrading. Then there’s the installation of inverters that enable electricity stored in an EV battery that isn’t being used to feed that electricity back to the grid which in some energy deficient jurisdictions will be necessary to avoid brown outs. The cost of this on a country-wide basis will run into the many billions not to mention the time it will take to upgrade every street in the western world. I could stop Part 2 right here on this issue alone because who pays for all this upgrading? You guessed it – the electricity customer who will end up with power bills double and triple what they used to be utterly negating the one benefit of overnight home charging an EV, cheaper domestic pricing. Mass conversion to EVs will cost all users of electricity a fortune. How long will voters put up with such cost impositions that will not need to be levied if people keep using ICEVs?
(ii) System wide issue: According to CNBC Business News Analyst Catherine Clifford, US total electricity demand is projected to increase 14 to 19% by 2030 and 27 to 39% by 2035. Over the last 10 years, electricity demand has increased by only 5% per annum and the historical long-term growth percentage has been about 1% per annum. The vast majority of the recent increase is coming from the switch to EVs. In order to support the higher overall use of electricity, the entire line network across the US needs a massive upgrade. These upgrades are not only costly but very time-consuming. In some states with very strong environmental lobby groups, even getting a permit (or what we’d call the Resource Consent) can take 10 years. Furthermore, the US has three distinct regional electricity grids (the Western Interconnection covering 12 western states, the Electricity Reliability Council of Texas and the Eastern Interconnection covering the remaining 25 states in the lower 48) that, barring a few interconnection points, are entirely isolated from each other. Thus, a national grid would require signoff from a myriad of utility companies, lines companies, county stakeholders and state and Federal regulators – a mammoth time-consuming regulatory morass. Who pays and how much; and that’s before you get to permitting hurdles? There are 2 Terawatts of potential power generation stuck in regulatory queues in the US versus 1.25 Terawatts of current total US power generation!
(iii) Impact of wider de-carbonisation efforts: Getting drivers to switch to EVs is only a part of system-wide decarbonisation required by net zero targets. Across the western world there are stringent efforts underway to have people switch oil and gas fired home heating to electric heat pumps, switch out gas stoves to electric ones and to switch industrial usage more to electricity. These efforts have begun with incentives and are now being backed by targeted climate charges (Canada) and compulsory phase outs (some US states and the UK). With 60% of electricity generation in the US coming from fossil fuels and only 21% from renewables (of which 18% is nuclear), as the need to increase the capacity of the grid grows due to electrification, simultaneously the economy is supposed to switch the supply of electricity to more renewable sources. Not only must electricity wires cope with MORE electricity, there also has to be more new power lines installed to received electricity from the geographically dispersed wind and solar locations whereas fossil fuel, hydro and nuclear electricity generation sources have generation concentrated at a single plant so transportation from generation point to cities and towns is easier and cheaper to achieve. The California Public Utilities Commission estimated in May 2023 that the total cost of grid investment requirements in only the state of California just to enable the switch to EVs is a staggering $50 billion. Rob Gramlich, President of Grid Strategies, says the US needs to spend another $20 to $30 BILLION PER YEAR on new capacity and new lines miles. When you factor in the fact that private EVs vehicles only comprise 14% of the transportation energy usage, think of the massively greater amounts of power needed to run electric large and small trucks, buses, electric railway locomotives, electrifying the huge diesel engines of container and other ships and then there’s the power needs of air transportation then look at the decarbonisation of other industries dependent on fossil fuel, allowing for the increased power needs of the US onshoring silicon chip manufacturing and the increased computer power needed for the explosive growth of AI, to transition fully to net zero, the total cost to the US economy according to Arum Shumavon, CEO of prominent Environmental Consulting firm Kevala, is going to be $3 to 5 TRILLION!
A preview of what these decarbonisation efforts look like on the ground comes from California. No US state has more stringent green power generation mandates than CA with tough restrictions on electricity sourced from fossil fuels and an aggressive shutdown of nuclear power plants akin to what has happened in Germany. This has led to a greater reliance on more unstable wind and solar power generation sources and with less system-wide resiliency in the event of higher-than-expected usage. These trends came to a head in the summer of 2020 during a heatwave when California power users were subjected to rolling blackouts. Something similar has happened in various Australian cities. These sorts of outages can only be expected to occur more frequently as the transition to non-nuclear and fossil fuel free power sources cannot keep pace with the increasing demand for electricity required by a mass switch to EVs and other forced electricity mandates. The growth in electricity use from EV and other mandates and the need to massively upgrade existing transmission lines intersects with the taking off-line of reliable, instantaneous power sources to create a brewing perfect storm that is progressively going to see certain first world cities, states and countries face the kind of electricity supply uncertainty that bedevils many places in the 3rd world!
2 – BATTERY ISSUES
The ability of the world to be able to find enough of the raw materials to build the massive increase in batteries needed if the western world is to transition all its private motor vehicle fleets from ICEVs to EVs is beyond comprehension. This is undoubtedly one of the biggest hurdles to any successful full ICEV phaseout and, as you will see, even with the advent of newer battery technologies such as Solid-State batteries, supply issues will remain insurmountable for anything other than allowing EVs to be nothing more than a purchasing option for car owners rather than a compulsory transition. I’m going to discuss SSBs first and then go over the supply chain issues for the three major EV battery components: Lithium, Cobalt and Nickel.
(i) Solid State batteries. SSBs are seen as the panacea that will solve the twin issues of battery size/weight and capacity that currently means only incremental increases in range for EVs. The more advanced technology of SSBs holds out the possibility a car battery of half the weight but with double the capacity and with a better safety profile (less fires) and can be made without Cobalt and Nickel and ultimately at prices at scale maybe less than tradition Lithium-Ion batteries. Some of the challenges with EVs discussed in Part 1 would be ameliorated with SSBs and any defender of EVs is quick to point to SSBs as a game changing development. But in the context of the timescale of a mass conversion from ICEVs to EVs, SSB production, in order to be even remotely price competitive, would require massive production scale. The time frame of moving down the cost curve as production increases is going to be very elongated because there are few other pressing technological applications of SSBs that would see any remotely useful production capacity. SSBs will be trapped in the price production trap for at least a decade as no EV manufacturer can install SSBs in cars right now due to their prohibitive cost and the SSB manufacturers cannot get to the kind of scale that brings prices to a competitive level unless there is mass adoption of SSBs by EV manufacturers.
(ii) Lithium: Lithium is the most crucial component due to its unique electrical storage capability. To give you an example of the scale of the lithium required to expand to an all-EV fleet, let’s look at the lithium needs to construct the average EV car which is 8 kgs.
Now let’s look at the approximate number of annual new car sales for the jurisdictions that have banned the sale of new ICEVs by either 2030 or 2035.
* 13 US States (CA, CO, CT, ME, MD, MA, NJ, NY OR, RI, VI, VT, WA) – 5.5 million
* UK – 1.9 million
* Iceland, Norway, Sweden, Denmark, the Netherlands, Germany, Belgium, Israel, Singapore, South Korea – 9.5 million
making a grand total of almost 17 million new cars not to mention all the other uses for lithium aside from car batteries (e.g. smart phone batteries). Annual global lithium production is around 105,000 tonnes. At 8 kgs per vehicle x 16.9 M vehicles that’s an annual demand increase of 135,200 tonnes or 30% more than current total production. What is the likelihood of growing lithium production by such a massive percentage?
Growth in new lithium mines is thwarted by intense environmental and regulatory opposition due to huge water quantities need to flush the lithium impregnated rock. (e.g. Thacker Pass, NV). Major lithium deposits normally are in arid regions with little water, so mines have to compete for a scarce resource.
The lithium market is dominated by only 4 counties: Argentina, Chile, China and Australia. The largest lithium mine at Greenbush, WA, Australia is owned by Chinese company Tianqi Lithium. Whilst Chinese production is less restrained by environmental regulations and hence they dominate global supply of lithium, when you add to the Chinese control of other major lithium mine companies and sites, Chinese dominance of the global market and thus easily available supply is subject to geopolitical stresses between the US and China.
(iii) Cobalt: 70% of global Cobalt is found in the Democratic Republic of Congo (DRC) in central Africa with a majority of cobalt being mined by global mining companies with shady ethics, corrupt dealings with DRC officials and questionable environmental practices combining with a substantial minority of cobalt mining done by illegal artisanal miners who are notorious for hiring cheap child labour with disastrous results such as frequent deadly mine collapses, accidents, deaths and a dramatically shortened life expectancy and fatal birth defects. There is no such thing as ethical cobalt. Furthermore, total global annual cobalt production is around 200,000 tonnes but the average EV has 8 kgs of cobalt so that times 16.9 million new EVs equals 135,200 tonnes or 68% of total current cobalt production. Given the significant environmental problems, how sustainable is a massive increase in the use of cobalt?
(iv) Nickel: Three times as much nickel is used in an EV as lithium on average 30 kgs per car x 16.9 M means an annual INCREASE in nickel production of 300,000 tonnes and current global production is estimated at only 246,000 tonnes
Getting the huge extra amounts of rare earth metals to accommodate the explosion in need to cover EV mandates is going to be extremely difficult if not impossible. Many of the facts above are in a good summary of these issues in Sam Denby’s (Wendover Productions) video (note he’s historically pretty left wing so I cannot be accused of ideologically cherry picking data).
(v) Battery disposal: EV batteries are a physically large component of an EV usually covering the entire floor pan of the car. Unlike ICEVs where their conventional batteries can be recycled because lead and plastic are the major component parts, contrary to the views of EV apologists, EV batteries can’t be recycled in any way we might imagine. You cannot extract from a discarded lithium-ion battery any lithium that can be re-used in a new battery as is the case with an ICEV battery. Yes, the cobalt and a few rare earth metals can be extracted and re-used but because each EV manufacturer has different construction modalities and differing mixes of compounds and locate them in different parts of the battery, there is no simple industry wide affordable mineral extraction protocol and so because there is minimal economic return from such extraction, only 5% of EV batteries are truly recycled. Unless there are costly government sponsored (as in paid for by taxpayers) incentives to safely dispose of EV batteries, most are going to be dumped, incinerated or exported to 3rd world countries with minimal environmental protections. Exposure to degrading nickel, cobalt and manganese has been demonstrated to cause respiratory and other carcinogenic health problems. Hat tip California environmentalist Perry Gottesfeld.
3 – INFRASTRUCTURE COST ISSUES
(i) Bridges and Car Parks: In January 2024, the US Structure Journal published its findings on the impact of EVs on car parks, bridges and roads. Average EV passenger cars weigh 1,400 lbs. (600 kgs) MORE than their ICEV counterparts. With utes/pickups the difference is a staggering 2,000 lbs. (900 kgs). The standard construction loading for multi-level car parks is 40 lbs. per sq foot and the ratio of failure load to working load is 1.6. With the increased weight of EVs, these structures are edging closer to their design limit. An EV ute/pickup exerts over 52 lbs. per sq ft (12 lbs. per sq ft above the ICEV equivalent). The average EV car is 37 lbs. per sq ft (or 8 lbs. above the equivalent ICEV car) and right up to the standard limit of 40 lbs. per sq ft. A Hummer EV is at 54 lbs. per sq ft or right at the failure load! The article recommends that EVs be limited to less vulnerable parts of the car park such as the ground floor and that the spaces be made wider to spread the load over a wider area. For the owners of car parks (often city councils), accommodating mass EV use simultaneously reduces revenue and increases costs which will have to be passed on to all motorists using the building unless they chose to levy EV owners with a higher parking charge commensurate with the higher impact their cars are causing to the structure of the building further adding a potential additional premium to EV ownership.
(ii) Roads: EVs are on average 30% heavier than the equivalent ICEV. As transition is forced to more and more EVs, the impact on the roading infrastructure will mean that road surfaces will degrade more quickly, and more and deeper potholes will emerge adding to the maintenance costs borne by local and national authorities. NZ’s roads are already in a shambles with billions in needed deferred maintenance. In the 1950’s the US Association of State Highway Officials came up with a ratio of weight to roading cost called the Law of the 4th Power which says a 30% increase in axle load is likely to increase repair costs by 185% or nearly triple! Safety barriers will also have to be upgraded to sustain the potential impact of heavier EVs. The same Law of the 4th Power applies to maintenance costs for car parks where costs will increase by the same amount as roads. Who pays for the massive increase in roading maintenance costs that will arise from universal adoption of EVs? You guessed it, large new taxes.
(iii) Future user pricing models: One of the earlier selling points of EVs in NZ was the lower running costs due to no fuel cost or Road User Charges, just the electricity cost. The new coalition government has announced their intention to bring EVs into the RUC regime for the reasons cited above. Now the proposed per 1,000 km charge is well below that assessed on diesel powered cars but the mere fact of having to pay for RUCs adds a layer of hassle to EV ownership that doesn’t exist for ICEVs because their owners pay for their share of the roading and infrastructure upkeep from the excise tax on petrol and diesel.
4 – CAR MANUFACTURER ISSUES
It’s fair to say that most of the major car manufacturers were a little slow to jump on the EV bandwagon content to leave this space to Tesla. But as climate change anxiety began to translate into government policies like the quest for net zero emissions, this began to lead to various jurisdictions (countries and US states) to signal the formal transition of ICEVs to EVs by banning the sale of all new petrol- and diesel-powered private vehicles. This then began an R & D stampede in the direction of EVs and almost all the major car manufacturers began to launch EV products at first mid-range sedans but increasingly now all ends of the market but particularly SUVs, sports cars and pickup trucks/utes. In parallel to the launches from the big traditional ICEV manufacturers were the new EV-only start-ups such as Rivian, Fisker, Bollinger, Polestar and Lucid. For a couple of years, major manufacturers have anticipated a strong transition to EVs and so they announced plans for ever more models in ever more market segments and some signaled their intention to cease manufacturing any ICEVs before the government-imposed deadlines.
Then the explosion in EV sales began to wane. Whilst sales year-on-year were still increasing because of the low numbers base, the growth in the sales of EVs began to slow through 2023 leaving almost all dealers from the major car marques with a growing inventory of unsold EVs. The average time taken to sell an ICEV is around 40 days and the EV inventory at dealerships has now mushroomed out to over 90 days and this trend does not look like reversing. This is because the well-heeled and environmentally conscious car buyers have almost all now bought an EV and the increase in sales must now come from middle and working class car owners who may only have one quality car in the household capable of taking the whole family and all the Micro consumer level issues covered in Part 1 are causing either existing EV owners to return to an ICEV or those expected to transition to an EV are baulking for the reasons covered. The first crack in the dyke appeared when apparently the major German automakers informed the EU that banning petrol/diesel cars by 2030 as planned would have a catastrophic impact on profitability and so the EU quietly moved this deadline to 2035. Britain’s Conservative government soon followed suit also moving their ICEV sales ban to 2035. Over the last few months, as unsold EVs piled up in dealerships globally; GM, Ford, Toyota, VW, BMW, Stellantis (Alfa Romeo, Fiat, Chrysler, Dodge, Citroen, Jeep, Lancia, Maserati, Opel/Vauxhall, Peugeot), Honda, Mazda and Hyundai (KIA) have not only slashed the prices of EVs but have variously announced the deferment of expected EV variants of popular models, the pausing of EV production, cancelling of plans to build new EV plants and also EV battery plants and some have announced greater emphasis on other clean energy options such as hydrogen and some have signaled they are ramping up ICEV production to meet consumer demand.
In a parallel trend, Hertz, the No. 3 car rental firm in the world, reversed its 2022 pledge to purchase 100,000 EVs for its US fleet and announced it was selling off 20,000 of its US EV fleet due to poorer customer uptake and higher than expected costs due to higher repair costs, greater depreciation, and lower profit per rental.
EV market leader Tesla has further scrambled the wider EV market by announcing steep price cuts for its Model 3 and Y cars further eroding the prices of second hand EVs compounding the cost to EV owners due to accelerated depreciation of a new EV compared to an ICEV.
Lastly, the true cost of manufacturing EVs has been masked. The Texas Public Policy Foundation released a study that examines the REAL cost of EVs factoring in manufacturers subsidies, regulatory credits, and other hidden costs and how these costs are “socialized across taxpayers and gas-powered vehicle owners”. They estimate the cumulative hidden subsidies of EVs amounts to almost $50,000 per vehicle! These are broken down as:
$27,881 of regulatory credits to manufacturers
$11,833 of socialized electricity grids passed on to taxpayers and ICEV owners
$8,984 in direct Federal and State subsidies per EV
CONCLUSION
Since writing Part 1 back in November, there has been quite a bit happening in the EV space and all heading in the wrong direction of a mass EV phase-in. The actions of the major car manufacturers in backing away from full steam ahead on EVs became a flood towards the end of 2023. Over the northern hemisphere winter, footage of the impact of extremely cold temperatures on EVs has been rampant across social and regular media with dozens of stories of EV drivers stranded in temperatures below -10 C with long waits for chargers, minimal range if a heater is used and taking many hours to charge due to the extreme cold. It would appear that the approximate 30% range impact of the cold discussed in Part 1 applies for temperatures in the – 5
to 5
C type of winter and not the types of very cold winter temperatures common in Canada, the US mid-west/northeast and northern Europe where the range and charging issues are even more challenging. To witness the spectacle of EV owners having to have their EV towed home due to being stranded in the cold makes a mockery of the drive to force us all into EVs.
The micro and macro challenges discussed in these Posts are not minor transitory adjustment issues that will gradually melt away with technology breakthroughs. They are huge and on the electricity supply and mineral availability fronts alone are pretty much insurmountable if governments are to get their way and force their populations to only be able to buy EVs. Any new technology replaces older technologies because they are quicker, better, and eventually cheaper and such transitions don’t involve massive government subsidies at every level AND punitive mandates that destroy consumer choice. In the end, the race to an all-EV fleet will be stymied by consumers who are voting with their feet to stay with ICEVs because of higher EV sticker prices, collapsing re-sale values, range anxiety and charging station issues, more costly and time-consuming maintenance, rising insurance premiums and safety issues over spontaneous fires. Then there’s the car manufacturers who are essentially defying government mandates and responding to market pressures to stay with ICEVs to stay in business. If governments use more aggressive compulsion to force the issue, then governing political parties wedded to this suicidal mission to destroy the bedrock of modern society (affordable and usable car transport) will be replaced at the ballot box by parties that will see things more rationally where EVs are but an option for certain types of consumers to purchase rather than legislating for them to be the only legal option. For those interested in this issue, a fascinating You Tube channel has emerged run by a Sydney based engineer come lawyer who does short pithy videos covering the myriad of challenges with EVs usually backed by top quality links to solid independent research or reporting.