Old Pistons Die Hard

[wayner]

Here is an interesting piece by Peter Tertzakian of Arc Energy in Calgary. Peter is a very thoughtful expert on all types of energy and has published a couple of interesting books. Despite working for an "oil" company Peter has very progressive thoughts and I believe he drives a Model X.

The gist of this story is that there will still be a ton of ICE vehicles on the road in 2050, even if ICE cars are no longer sold/made after 2040 and assuming pretty fast adoption of EVs. The reason for that is that only 3-4% of cars are retired every year so we will keep seeing the global fleet of ICE vehicles increase for a long time.

Commentary – Old Pistons Die Hard | ARC ENERGY RESEARCH INSTITUTE

 

[ecarfan]

Fair enough, though I think that new ICE vehicle sales will be banned in the developed world and much of East Asia before 2040, and the blue area under the curve that represents EV sales will start to be visible a bit earlier than that chart shows.

 

[Phillip L]

I think that once a significant percentage of vehicles are evs, that the adoption will pick up faster than expected because once “only” 60 % of vehicles are gasoline powered a lot of marginal gas stations will start to close their pumps because already it is such a low margin business, and with dwindling revenue they will be hard put to be profitable. That will make it even more inconvenient to own a gas car because they will have many fewer places to charge, while the charge places for evs will just become more and more ubiquitous. It will be the reverse of what it was like at the beginning of the ev revolution.

 

[Saghost]

Here is an interesting piece by Peter Tertzakian of Arc Energy in Calgary. Peter is a very thoughtful expert on all types of energy and has published a couple of interesting books. Despite working for an "oil" company Peter has very progressive thoughts and I believe he drives a Model X.

The gist of this story is that there will still be a ton of ICE vehicles on the road in 2050, even if ICE cars are no longer sold/made after 2040 and assuming pretty fast adoption of EVs. The reason for that is that only 3-4% of cars are retired every year so we will keep seeing the global fleet of ICE vehicles increase for a long time.

Commentary – Old Pistons Die Hard | ARC ENERGY RESEARCH INSTITUTE

3 or 4 % seems unlikely. The US has around 200 million cars on the road, and buys about 17 million a year. Since we aren't rapidly increasing the total number of cars on the road, it follows that the average life of cars is around 12 years (with several owners) - which means we should be retiring 7 or 8 % per year.

I'm not surprised that a forecast by an oil company shows the oil company is still relevant in 30+ years.

Tell me, how many flip phones do you see today?

The first iPhone is only 10 years old today. That's about how long it took to go from the first consumer digital camera to total irrelevance of film, too.

The stone age didn't end due to a lack of stones - and the Model 3 appears to be more than a match point for point and dollar for dollar for the BMW 3 series and Audi A4 and with a better driving experience - without the tax credit.

I think that once Tesla builds a couple million of them and everyone sees what living with a modern EV is like, it's going to be pretty hard to sell ICEs for a profit except for corner cases (towing big loads, etc.) - and if everyone keeps to the announced schedules, that's about when a bunch of Tesla competitors are supposed to arrive in the market. Hopefully folks will have come up with enough battery production capacity by then...

 

[Doug_G]

Old pistons die hard... like this one?

(Another minor Chumpcar disaster...)

 

[Darmie]

We can't determine what will happen in the future. We know what has happen in the past. Like it or hate it, ZEV for California didn't happen as planed.
The idea of the many countries claiming this & that makes for good headlines but time will really tell.
I say that ICE will be around for a L O N G time.

Zero-Emission Vehicle Legal and Regulatory Activities

 

[PLUS EV]

Be prepared for it to become a major political issue in the states. For whatever reason you can be sure the Grand Ole Party will rally around ICE vehicles. Science and progress are huge negatives for them.

 

[Phillip L]

Be prepared for it to become a major political issue in the states. For whatever reason you can be sure the Grand Ole Party will rally around ICE vehicles. Science and progress are huge negatives for them.

True enough. They are the party of free enterprise and small government until it means that industries that have them in their pockets need big government to bail them out. Just look at the pathetic attempt of Rick Perry trying to bail out the coal industry.

 

[sandpiper]

We can't determine what will happen in the future. We know what has happen in the past. Like it or hate it, ZEV for California didn't happen as planed.
The idea of the many countries claiming this & that makes for good headlines but time will really tell.
I say that ICE will be around for a L O N G time.

Zero-Emission Vehicle Legal and Regulatory Activities

China is the wildcard. I think there is a high likelihood that they push very hard for BEVs to take over fast, for a few reasons:

1. Their locally designed/built cars aren't great. the paradigm gives them a chance to compete, since it destroys 100 years of competitive advantage built by western car makers.

2. They desperately need to cut pollution.

3. Lower end BEVs have the potential to be very inexpensive, once the cost of batteries comes down.

4. China can dictate instructions to their industry. If the senior leadership deems BEVs to be in the long term best interest of the country, then that's what will happen. They've got piles of labour to build the cars and to build the infrastructure.

Once China starts churning out BEVs like mad, you can expect the rest of the world to follow suit as quickly as humanly possible.

 

[wayner]

The only issue with widespread EV adoption of China is that their baseload power comes from coal so it doesn't help reduce pollution as much. They are adding a lot of wind and solar but they are still building a ton of coal plants as well. But you are correct about the changing paradigm being a once in a century chance to make major inroads into the auto industry and the fact that the government has more control over industry.

 

[Jaff]

I'm not sure he has the business case down accurately. Once a decent ranged $20-25,000 BEV w/o rebate is available in mass quantity (which should be long before 2040), only the dimmest of the dim will be buying a cheap ICE vehicle...

 

[wayner]

I'm not sure he has the business case down accurately. Once a decent ranged $20-25,000 BEV w/o rebate is available in mass quantity (which should be long before 2040), only the dimmest of the dim will be buying a cheap ICE vehicle...

That may be the case in developed markets but I am betting that the bulk of cars are now sold in Emerging Markets with prices well under $20k. Place like India and Indonesia - a VW Golf in India costs about US$13k.

 

[Jaff]

Perhaps Wayne...still once the economy segment market is "halved" by an entry level BEV, I think it will only take a couple of more years before that segment is "halved" again...not much will remain.

Not so sure I agree about India because they're getting into solar in a big way...low end manufactures like TATA will be manufacturing EVs too.