Understanding the overall electric vehicle (EV) market, it could be ascertained; EVs will overtake fossil fuel vehicles in the near future; especially in California. While the EV future isbright – California should be cautious – before spending billions of taxpayer dollars without proper due diligence.
Elon Musk is a genius, and Tesla’s are spectacular cars, but Tesla and his other ventures (Solar City) are not profitable while burning through investment funds. Tesla, the leading EV carmaker is burning through cash flow, and that has to be understood why this happens to Tesla and the overall EV market. Further, infrastructure requirements for EVs to thrive in California, and come close to the record amount of new cars Americans purchased in 2015 will be a tough task to accomplish in a state that already needs over $750 billionworth of infrastructure improvements. And EVs are still not growing in percentages as high, when compared against non-EVs.
If EVs grow at the torrid pace that Bloomberg New Energy Finance expects and with far-reaching ramifications then this will require the California business community, local and state governments to work together investing untold billions facilitating EV growth for these vehicles to thrive.
One of the biggest problems is California electrical use will surge, and for the United States’ (US) antiquated, failing electrical grid, how this will play out, is an unknown factor that isn’t being discussed publicly when contemplating EV use.
The US has the worst performing, interconnected electrical grid in the developed world. If EVs reach their projected mark of millions being sold every year in California then local, county and state governments will need to begin planning for and investing in large-scale grids, micro-grids, or some other type of power delivery mechanism for the surge of electrical use that is expected with EVs continued growth.
If millions of potential California EV drivers need a reliable grid to charge their cars, and with climate change a real threat between hotter summers and colder winters taxing the Western US grid, then what happens when spikes in unreliability reach higher proportions? Additionally, when you take into account that even a country such as Norway – which has extremely generous taxpayer subsidies for EVs – still has high oil use, and projects to go higher, what occurs when these subsides are withdrawn? Norway is mulling that option currently. Will California continue their subsidies into perpetuity?
EVs will flourish in the coming future, but with roughly 90 million barrels per day of crude oil consumed worldwide; it seems a giant leap to believe EVs will do away with, or significantly reduce the oil and gas industry. More than likely, a middle ground where EVs and crude oil grow exponentially together will take place. Fossil fuel growth for decades to come in places such as China, India, most of Asia and Africa are a foregone conclusion, but California, parts of the US and Europe will be the drivers of EV growth.
EVs are a smart move for California, but energy-starved nations will choose cheaper, more abundant, and reliable options that the combustible engine provides. According to theBreakthrough Institute, the number one driver of growth to alleviate poverty and bring nations into solid economic growth is low-cost, resilient energy sources. Renewables stand-alone ability and EVs aren’t currently providing that option, and the electrical surges each produces harm electrical grids. Grid security will be a looming negative for EV growth until this issue is resolved.
Until low-cost batteries and energy storage on a mass-scale can be invented, produced, and sold at reasonable prices for California’s middle class citizens then EVs will not sell in a way that shows significant market-led reductions in fossil fuel use, emission reductions, and possible climate change alleviation. California has promised all of these, but so far hasn’t been able to come close to the EV results they predicted.
With so many questions in the near future for EVs, the California legislature and Governor Brown should consider lithium mining in areas like Clayton Valley, Nevada, methane hydrates called “fire ice,” as an energy buffer, and enticing car companies with solid financial outlooks and clean balance sheets back to California
Ford Motors would be a company to cautiously stay away from until their stock recovers, but cogitate BMW, Mercedes, Toyota, Nissan and closely watching Tesla are smart options for California. Each company has strong EV divisions, but Tesla has numerous hurdles to overcome.
The final, larger question to study for EV growth to continue, and the needed technology and infrastructure to follow are how world events will affect growth in this hot sector of the car business. For EVs to overtake non-EVs, crude oil will need to rise, and stay at the $100 a barrel level for an extended period to change consumer behavior. Though California has artificially curtailed oil and natural gas exploration while using more renewable energy this summer, US and California car buyers are still in love with their pickups and SUVs. The automobile industry is on track for record sales in 2016. California taking a more reasoned, balanced approach to EVs and fossil fuel vehicles seems wiser in ever-changing times, instead of choosing one over the other.