Are We Reaching the Electric Car Tipping Point?

HughPickens.com writes: Geoff Ralston has an interesting essay explaining why it is likely that electric car penetration in the U.S. will take off at an exponential rate over the next 5-10 years rendering laughable the paltry predictions of future electric car sales being made today. Present projections assume that electric car sales will slowly increase as the technology gets marginally better, and as more and more customers choose to forsake a better product (the gasoline car) for a worse, yet "greener" version. According to Ralston this view of the future is, simply, wrong. — electric cars will take over our roads because consumers will demand them. "Electric cars will be better than any alternative, including the loud, inconvenient, gas-powered jalopy," says Ralston. "The Tesla Model S has demonstrated that a well made, well designed electric car is far superior to anything else on the road. This has changed everything."

The Tesla Model S has sold so well because, compared to old-fashioned gasoline cars it is more fun to drive, quieter, always "full" every morning, more roomy, and it continuously gets better with automatic updates and software improvements. According to Ralston the tipping point will come when gas stations, not a massively profitable business, start to go out of business as many more electric cars are sold, making gasoline powered vehicles even more inconvenient. When that happens even more gasoline car owners will be convinced to switch. Rapidly a tipping point will be reached, at which point finding a convenient gas station will be nearly impossible and owning a gasoline powered car will positively suck. "Elon Musk has ushered in the age of the electric car, and whether or not it, too, was inevitable, it has certainly begun," concludes Ralston. "The future of automotive transportation is an electric one and you can expect that future to be here soon."

Comments

quickly to be followed by self-driving cars

[AttillaTheNun]

At least that is my hope. The concept of car ownership is archaic. I look forward to the offloading all the associated penalty costs of car ownership in favour of a service model.

Re:quickly to be followed by self-driving cars

[Anonymous Coward]

I hope you enjoy having the service track everywhere you go and when you do so, so they can sell it to marketers.

Car ownership is a form of freedom from those who control other forms of transportation, and I'd hate to see that go away.

Re:quickly to be followed by self-driving cars

[Jason Levine]

We've owned a home for 11 years now. (Yes, in NY.) There are definitely days where I see something's broken and I wish I could just call the landlord, say "have this taken care of", and not have to worry about the details. Then again, when we were living in our apartment, our rent would increase every year and our landlord would blame the repairs he had to make. "The central air conditioning system was broken and needed to be fixed so your rent is going up next year." (As if leaving everything broken was a valid option and he was doing us some big favor by fixing what broke.)

Re:quickly to be followed by self-driving cars

[Anonymous Coward]

I couldn't be the recession that we've been suffering through for the last 8 years.

Or the increasingly reliable nature of vehicles in the past 30 years.

Or the higher cost of vehicles driven by crazy Government mileage requirements.

Nope, it has to be because everyone wants to be some communal hippy living in dense housing and riding stinky buses.

Re:quickly to be followed by self-driving cars

[MozeeToby]

At some point, the freeway system will go autonomous only with no set speed limit. That will be the day the last non-autonomous, non-just-for-fun car gets sold. When you can hit the freeway at 120mph, getting nearly the same gas mileage as today thanks to drafting, no one is going to want the alternative.

Re:quickly to be followed by self-driving cars

[FuegoFuerte]

More and more, as the hipster commies push their $15/hr minimum wage agenda, these stores will go away and you'll have to get to the suburbs to get your groceries. Have fun doing that on your bicycle.

Re:quickly to be followed by self-driving cars

[ExekielS]

Service models are pretty much universally converted to consolidated markets which extract rents from whatever economy you live under. The more poor people are, the more they use service models, and the more those things cost. A tv via. Rent to Own is 100x+ more expensive than just buying a tv, renting a place to live is universally paying far more for a lot less and by the Iron Law of Rents, extracts all disposable income from a community possible. Transportation, durable goods, network connectedness all come with the same dangers. Not only that, but the ownership comes with rights, so those who aren't owners have all their rights removed and given to those they purchase services from. You can drive a car in your boxers but if you do that on the public transit here you will be literally shot by the police for your wicked crimes. You can smoke, grow food in your own home, apartments can prohibit you from doing that, they can even tell you how to dress in your own home. You become a slave when you have to submit to paid usage of others services when there isn't enough market competition to guarantee your freedom or when all market players have equal restrictions. We need to tax rents on land and exclusive access rights in order to guarantee people's freedom and individual liberties, but that doesn't do enough, we also need a massive increase and expansion in people's guaranteed rights in various public situations and for renters. Until that day comes, the more we move to a service model, the more we move towards a horrific dystopia that haunts my deepest nightmares.

Re:quickly to be followed by self-driving cars

[bluefoxlucid]

I own a home, but don't own it as an investment. When I inevitably dispose of it, I won't make any sort of return on that home; in fact, homeownership will be a financial loss--possibly even a loss compared to renting, although it'll likely be some small gain. Homeownership gives me more temporal control over my finances, however: I've invested quite a lot of money into small returns, such that the amount of money I must spend month-to-month is lower.

If we could get an interest rate market around the 14% mark, homeownership would easily be an attractive option, since you could spend very little to clear your debt. At 2.5%, a home with a payment of $1180 requires an extra $500+/month to skip a payment in the very early months, and more as you get deeper into payments, with the total interest paid at around $26,000; at 14%, a home with a payment of $1180 comes to the same projected total cost at the end of a 30-year loan period, but allows you to skip early payments with as little as $18 additional payment. If you raise your payments by $150, that 30-year loan at 14% interest becomes a 15-year loan, saving you $162,000 in interest--more than six times the total interest cost of the same home in a 2.5% interest rate market where buyers can afford (and do pay) much higher sale prices.

In the end, a house's investment return is a gamble at best, and one that doesn't really work out unless general market interest rates are high when you buy and suddenly drop just before you sell, ratcheting the sale price of your house up extremely high. What we need most is financial education in the next high-interest-rate market, creating a cultural habit of 15- or, better, 10-year mortgages, where people reject the idea of banker fiefdom for 20-30 years. Even if your home is a complete write-off, hitting an age of 30 and realizing you suddenly have $1500-$2500 more to spend every month creates quite a different economic climate--both in your personal finances and in the wider market.

I'd make one hell of a banker, but I decided to go economist on that front. Bankers obviously want people to go for long, high-balanced loans; as an economist--as *the* economist, since I've developed a formal economic theory which unifies and correctly explains all current theory--I see the great value in accelerating and strengthening the wealth cycle. The mortgage market behaviors I've described don't really make banks (much) poorer--in fact, taking the full function of banks into account, they probably only reduce the proportion of bank income from consumer mortgages, and increase its income in business loans and other consumer loans--but they leave more residual wealth in the consumer's hand, creating market opportunities for businesses to sell more goods and services, thus creating demand for new labor.

Even automation would only cut production costs, having the same effect--unfortunately, at an excessively high rate, leading to a serious economic disruption that would require several decades to heal in exactly the same way--with an interesting difference in that you'd need much less new labor to produce new products, and so would produce a much greater volume of new products and services to capture that residual wealth, so long as dynamics of competition come into play (fortunately, competition can be outside market: does the consumer want your overpriced diamonds, or my overpriced cakes? Perhaps one of us--or both of us--must reduce our prices to come closer in line to our actual costs, slimming our profit margins while still retaining a healthy profit... no guarantees there, though).

I'm sure you can imagine why, while I want to protect the income of businesses and high-earners (meaning I'd like to minimize any new taxes), I'm also chiefly concerned with maximizing the wealth of consumers. Many of my economics policies proposals focus on reducing labor costs, increasing income security, and doing so with little expansion or, interestingly, a reduction of total taxes necessary to fund these new sy

Re:quickly to be followed by self-driving cars

[ShadowRangerRIT]

Funny, for all those "crazy Government mileage requirements", I find that the cost of new cars has generally risen at slower than the rate of inflation, even as they offer more features, better reliability, and (thanks to said mileage requirements) lower fuel costs.

Case example: My parents bought a Geo Prizm LSi (also marketed as the Toyota Corolla) back in 1990. At the time, it cost ~$12.3K. It was much smaller than the current Toyota Corolla, the electrical system sucked (adjusting the power windows dimmed the headlights and radio), etc. The LSi add-on features (power windows) are all standard now, the MPG has gone from 21-22/26-28 MPG city/highway under the old system (that rated all cars better than what you'd actually get), to 27-29/36-38 MPG under the new, more realistic rating system (and remember, the car is actually bigger now than it was), which reduces your fuel costs by a third or so. Yes, the cost is up, between $19.5K and $22K for most models (remember, the 2015 low end model is still better on features than the top end model of 1990). But that $12.3K from 1990 is ~$22.4K in 2015 dollars (according to U.S. Inflation Calculator). So the price actually dropped in inflation adjusted dollars, while the car got bigger, more efficient, and got more "luxury" features.

Remind me how big bad government mileage requirements are making cars so expensive?

Truck Stops, Gas Stations, etc

[Sir_Eptishous]

I have a relative who is a part owner of a truck stop. I have heard how low the profits/margins are for selling gas. He tells me all the profit at those places is from the junk food inside... Apparently the deals they make with the gasoline/diesel suppliers are so bad there is almost no profit in selling gas.

Re:Truck Stops, Gas Stations, etc

[DigiShaman]

Randomly, the pump will display "please see register for receipt" upon selecting the print option. I've see it being random as the person after me (a friend), had his receipt print just fine. It's a fucking scam to lure people into the store and buy shit.

Doubtful

[Snotnose]

EVs cost significantly more than gas cars, don't have the range of gas cars, and apartment dwellers have no way to charge them overnight.

A friend has an electric, she loves it. She also drives 20 miles to work, charges the car in her garage overnight, and her road trips are with her kids and grandkids, who drive their gas vehicles.

Re:Doubtful

[BasilBrush]

There's no point listing the cons without listing the pros too. EVs are nicer to drive, cleaner (in all senses), often have a lower total cost of ownership, need far less servicing, and you can make it's fuel yourself at home.

Re:Doubtful

[Sir_Eptishous]

need far less servicing

This is the big one.

Electric cars will be commodities like pc's and phones. Gone will be the days of thousand and thousands of dollars being drained away from car owners doing repairs, etc;

Mechanics, oil change places(Jiffy Lube, etc) will go out of business once the threshold is passed.

How do they fare in colder climates?

[gaudior]

How reliable are they in winter driving conditions? How is the battery efficiency affected by temperature? What about cabin heating? I'm having a hard time seeing any of the current crop being adopted for year-round use in areas that get more than a smattering of snow, or a few days below freezing per year.

Re:How do they fare in colder climates?

[Guspaz]

Tesla has been very successful in very cold climates. They'll sell you the cold-weather version. Range suffers a bit, but not dramatically. Anecdotal evidence indicates 10-20% range reduction for very cold temperatures. The batteries aren't a problem because they would get very hot if they weren't actively cooled, so they simply need to be cooled less, and they need a bit of heating when you start.

Batteries

[willoughby]

Some folks believe the key to Electric car adoption is better batteries. The Powerhouse by Steve Levine follows the quest for better battery technology. It's not written as well as it might be, but it's still an interesting read...

http://www.goodreads.com/book/...

Quite a few obstacles remain.

[nimbius]

Living in Los Angeles, the age of the electric car has been upon us for quite some time. everyone from BMW to nissan makes popular electric cars and sells them for a reasonable price here. The problem comes when you aren't in the second largest city in america.

During a business trip to an office in Ohio I learned firsthhand how awkward it must be to own one of these vehicles. In Blue Ash, Ohio I saw one or two teslas, but Ohio doesn't have a tax incentive like Los Angeles gives people to buy them. So, owners in Ohio aren't exactly the average joe. It seemed a status symbol, as though they mostly buy the car out of a desire to be perceived as 'elite' and progressive. Charging also seemed cumbersome. In LA we charge at parking garages for low cost, or free. most employers offer ChaDeMO charger stations as a perk in their garage. taking your car into the shop? its charged when you get out. Finally dedicated charging ports at some gas stations are also prevalent. None of this infrastructure existed in the cities I visited in Ohio because none of it had to. Gas was $3 a gallon, or less. Traffic was smooth flowing and quick, and mileage largely adherent to highway driving conditions above 50 miles per hour. There is also no public transit, no park and ride to charge the car at while you commute the rest of the way in by light rail.

Ohio also has winter weather to contend with. Most people owned larger SUV's or cars with all-wheel-drive in anticipation of snowy or icy roads, and temperatures well below those we're accustomed to in southern California. The car has to warm and cool much more actively, which im not sure is something electric cars can handle.

Disclaimer: I own a tesla. owning it in the midwest would seem to be a chore.

Trucks will be hybrids, not pure EV

[sjbe]

And frankly, current ranges on EV's make them pretty much useless for trucks. Who really wants to stop for a couple hours a couple times a day?

You won't see pure EV trucks for a long time. What you'll see is a power train similar to that on locomotives. Diesel engine charging electric motors with a battery bank to deal with the excess. It's very efficient, huge torque and the technology is well understood. I'm kind of surprised we aren't seeing it already.