Pawtucket Times

Electric cars don’t live up to the hype

- By CHARLES LANE

With a new decade starting shortly, it’s time for conscienti­ous columnists to undergo their self-administer­ed decennial performanc­e reviews.

I’ll start – and try to keep it focused. For the past 10 years, I’ve waged a quixotic counteroff­ensive against electric-car boosterism, raining skepticism on the vehicles’ potential to cure climate change, much less to be the clean, green wave of the transporta­tion future.

More than a few people (my Tesla-owner friends very much included) have questioned this fixation, and I freely admit it’s an odd one.

I just figured that someone in an otherwise credulous press had to sort through the cloud of wishful thinking, political rhetoric and sheer commercial hype surroundin­g this subject, and it might as well be me.

Mass adoption of electric cars, however, cannot occur unless they can do everything gas-powered vehicles can do – including the ability to go hundreds of miles before refueling, and refueling easily – at a comparable total cost of ownership. Otherwise, electric cars will be a niche product for upper-income folks. And government subsidies for them will be a regressive transfer of social resources in return for little climate benefit, given that the U.S. power grid the cars draw from is 64% fueled by coal and gas.

Nothing happened in the past decade to undermine this basic critique. Government, both federal and state, subsidized electric-car sales and production to the tune of several billion dollars, yet as of March 2019, there were 1.18 million electric vehicles on the road in the

United States – less than one-half of 1 percent of the total. Households earning $100,000 or more per year own twothirds of EVs, with many of the owners benefiting from a $7,500 federal tax credit.

Globally, electric-car adoption is also modest relative to optimistic forecasts. Of the 86 million cars sold in the top 54 world markets in 2018, 1.26 million, or 1.5%, were EVs. That’s nowhere near then-Nissan chief executive Carlos Ghosn’s 2010 prognostic­ation that EVs would account for 10 percent of global sales by 2020.

My biggest error, in hindsight, was to underestim­ate the financial staying power of Elon Musk’s cash-burning Tesla Motors, which I thought would exhaust investors’ patience long before it conquered the complexiti­es of mass-producing quality vehicles. Tesla’s Model 3 is the most popular electric car on the market, with 111,000 sold in the first nine months of 2019. Owners swear by it.

Tesla’s survival, though, may be the exception that proves the rule. (And we’ll see how it does now that Congress has allowed that tax credit to lapse.) Ballyhooed start-ups such as Coda, TH!NK and Fisker all went bankrupt before 2015- Fisker after defaulting on an Energy Department loan at an ultimate cost to taxpayers of $139 million.

Chevrolet discontinu­ed its Volt, a plug-in hybrid, in 2019 after selling only about 150,000 since the car launched in 2011. That same year, President Barack Obama had set a goal of having 1 million plug-in vehicles on the road by 2015.

But wait. What about recent reports that Volkswagen is making big new investment­s in electrics? Or Ford’s announceme­nt of a new all-electric

Mustang crossover? GM, Chevy’s parent company, says it, too, is preparing a new generation of EVs.

Establishe­d automakers are indeed about to ramp up electric offerings, providing Tesla with its most serious competitio­n yet.

They are doing so, however, more as a response to regulatory pressure from government­s – even after the Trump administra­tion scaled back fuel-economy standards – than as a response to demonstrat­ed customer demand, which lately has favored gas-powered SUVs and pickups.

The problem, as industry leaders acknowledg­e in their quieter moments, is still the same: getting the total cost of owning an EV down to that of a gas equivalent. There’s uncertaint­y about key variables such as how much more battery costs will fall and the global supply of rare-earth elements.

GM President Mark Reuss recently wrote that EV-gas cost parity may happen “within a decade.” Honda CEO Takahiro Hachigo told Automotive News Europe: “I do not believe there will be a dramatic increase in demand for battery vehicles, and I believe this situation is true globally.”

A mid-2018 report by JPMorgan Asset Management noted that the median global forecast by industry experts is 125 million EVs on the road worldwide by 2030, which would be less than 10 percent of the total. “I’m taking the ‘under’ rather than the ‘over,’” the report’s author, Michael Cembalest, added.

Me, too. Let’s reconvene in 10 years to see who wins that wager, and to assess the true costs and benefits of the bet that big government and big business have placed on the electric car.

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