Future of EV vs. ICE | Hacker News Reader

Future of EV vs. ICE

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37 pointshunglee254 comments

His writing is Heavy on opinion and low on fact. The simple facts are these: It takes 20 years to turn over the auto fleet and dozens of millions of ices are still being bought in 2018. That means gas demand well into the 2040s. Much like our emissions overall, our auto sector is transitioning too little and too late.

Small changes in demand have a huge impact on price though.

Remember, the price of a commodity is set on the margin: the price of a commodity is the marginal cost of the marginal producer. And oil production has high capital costs.

So let's pretend in 2018 that the highest cost producer of oil is Canadian tar sands. Let's assume that it costs them $50 per barrel to produce a single barrel excluding capital sunk costs, but $80 to cover both marginal and sunk costs.

So even if demand is rising, nobody is going to build a new tar sands project until the price is well above $80 and they're relatively sure that it's going to stay there long enough to pay back their one time capital costs.

But if demand is falling, nobody is going to shut down one of those tar sands facilities until the price is below $50.

Of course the price of oil has a huge effect on demand, but that demand is pretty sticky. As you said, it takes years for the worldwide fleet to turn over with more or less fuel efficient options.

This effect is horribly bad news for the greenhouse effect, though. It does not operate on the margin. We cannot depend on steadily rising petroleum prices to reign in our emissions. We desperately need a global carbon tax or something equivalent or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities and on other global warming mitigation measures.

Small IC engines are not the total cause of greenhouse gas emissions, not even the bulk of them. Other transport (shipping, rail, trucks, air etc) contribute as does cement, steel, power and fertilizer production. Replacing every "car" with a tesla today wont do nearly what is needed. Coversely, a delay to the switch to EV doesnt spell doom. This is a larger problem.

> or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities

a pretty laughable problem to always bring up instead of the irreparably and rapidly collapsing natural ecosystems on which we depend. (due to pollution, global warming and habitat destruction for human use).

Although unlikely, don’t rule out a tipping point situation. Say in ten years enough people bought E.V.s that gas stations started closing down. So less people buy ice vechiles so more gas stations close down.

At some point if you start getting range anxiety in your ice vechile it might not complete its 20 year turnover.

Note I did say this is unlikely in such a short time frame.

Gas stations probably won't close en masse. They'll have charging stations (where economically possible) because it fits their business model better because. Gas stations make almost no profit on gas (except the ones by the highway or in the rich neighborhood that cost $0.30/gal more than the others). They make their profit on the convenience store they run. Gas is just what gets people to show up. In urban areas where everyone parks on street gas stations will just convert to charging stations. In rural areas gas stations get enough foot traffic from being convenience stores. Suburban areas where everyone owns a house and can put in a charging station and there's plenty of other buying options for what convenience stores sell are where gas stations may close.

Indeed, BP is the world’s largest seller of Coca Cola. As one of their board members said to me, “It’s all selling black sticky stuff”

One thing that has been interesting to me owning an EV for about a year now is how charging and refueling create different needs.

With an EV I rarely need to charge when out and about, because I leave every morning at 100% charge. Those few times I do need to visit a charger it's generally for a full charge, so it'll take 20 minutes to an hour, so I'll much prefer charging stations at restaurants or grocery stores.

I think there will be a big market to reimagine the gas station concept into something more destination oriented, e.g. much more like truck stops, fewer in number but with more services.

Starbucks should be investing all our into chargers! They’d be the perfect place to hang out for an hour. Or Barnes and noble.

Is gas really how gas stations make money? I was always under the impression that gas didn't bring in much profit, but everything within the store did.

Maybe, but why would EV owners would ever shop at a gas station if they can charge their car at home, work or while shopping at other regular shopping venues.

Turnover will be faster than usual for several reasons:

* large fraudulent auto makers are forced to take back their vehicles that cannot conform to required standards

* EV have huge advantages for buyers compared to typical next gen ICE (taxation, running costs, repairs...)

* regulation on ICE/diesel cars in cities

* governments turning to EV for public transport before EOL of their current fleet

So it's not 20 years. Give it 10 from now.

I beg to differ. There are already entire countries that started outright banning ice machines from much earlier than 2040: https://en.m.wikipedia.org/wiki/List_of_countries_banning_fo... India as an example of a growing market is banning them in 12 years, Germany as an example of the western world “capital of cars” the same. These pledges were made well before Tesla model 3 was distrupting the market, and as noted there, Tesla may still be just a minority player if China picks up steam. If things ramp up as fast as it seems we may still have an almost global ban by the 2030s and from there the oil industry is pretty much done. The only showstopper for this scenario is the lithium availability and the alternative battery technologies viability, obviously.

That is not what he said though. He said there would be demand for gas well into the 2040s, and since most (all?) these bans only concern new sales, it will take ~20 years after the bans to get rid of a majority of the ICEs.

The oil industry already knows they will be done in the 40s. Their EUR (well estimated already 50 years ago) shows that growth will be extremely difficult past the 30s. They won't fight a ban on new sales except for the few who cannot diversify in other domains.

Funny how these articles are written by individuals who have never worked in the industry - the author is totally clueless.

Okay, let's start with money. Zoom out to a population view and do $1000 USD increments from $1000 to 100,000. The median/average ASP for a new vehicle in the U.S. is $36,270 - https://mediaroom.kbb.com/2018-02-01-Average-New-Car-Prices-....

That is not going to increase very much year over year, because wages are largely stagnant and the economy is peaking. The U.S. is way over overdue for a recession, European GDP is anemic (0.3% growth in Q3 2018 - https://ec.europa.eu/eurostat/documents/2995521/9102849/2-07...) and China GDP is 6.5% (https://www.cnbc.com/2018/10/19/china-q3-gdp-china-posts-eco...), but China always lies, so it's probably around 2% or 3%. That's not even taking into account that Chinese consumer debt for mortgage holdings has increased eight-fold since 2008 (https://www.zerohedge.com/news/2018-11-10/nightmare-scenario...). The Chinese consumer is tapped out, which is why for the first time in 31 years, Chinese vehicle sales have actually decreased year over year - https://www.autoblog.com/2018/11/09/china-car-sales-fall/

So your vehicle ASP isn't going to increase in the next 10 years - it's probably going to decrease. Total unit volumes in the US will probably go from 17 million units to 11 or 12 million units by 2025.

You're trying to tell me the industrial CapEx required for the OEM/supply chain to switch over EV powertrain in a period of falling vehicle sales and deflationary prices for the second largest purchase a consumer can make, after a home, for the two largest automotive markets (the U.S. and China)? Bullshit.

Funny how you compare Europe gdp growth for the last quarter to China growth for the whole year, just to cheat the readers trying to push your narrative. Funny how, for your admission, you have stakes in the oil industry and you are criticising EV with nothing apart from opinions, exactly the same thing that you accuse other writers to do. Even funnier is that you are actually writing that the ASP for a new vehicle, not for a new EV is 36k$ when in about 6/9 months the model 3 will sell for 35k$. The funniest thing obviously is the last word of your comment. Bullshit. It’s the funniest because it really applies to you, working in the oil industry, and just none the wiser like all your colleagues that were ridiculing ev trying all they can to avoid the inevitable. We have today an electric car that can lap faster than a Ferrari 458 [0] without any changes, apart from the wheels, for a fraction of the price. In 12 years, at worst, India and Germany will ban the sale of all the ice cars, as I highlighted in my previous comment. Enjoy your last years in an industry that was lucrative only at the expenses of the whole world.

[0] https://www.google.co.uk/amp/s/www.carsguide.com.au/car-news...

Haha, seems like the truth hit a nerve and got you all salty. I'll continue drop some knowledge bombs -

Chinese stock market is down 20% on the year - https://www.bloomberg.com/news/articles/2018-09-17/china-s-s...

Chinese GDP is lower than whatever is being reported. Chinese GDP has supposedly been between 6-7% for the last six years, but Chinese consumer debt has increased eight fold (https://www.ft.com/content/5d01b4d8-c1f9-11e8-95b1-d36dfef1b...) during the same period. So that obviously means the Chinese consumer has less pocket in their cash. All the numbers I cited are valid and my point still stands. The US is the only country whose financial markets are positive or flat for 2018 - everyone else is down. China GDP is up in 2018, but slightly. Outside of Germany, all of European GDP is down in 2018 - a lot. Look at Italy and France, negative GDP.

There will be millions fewer vehicles sold in the years to come, globally, and consumers will be more price conscientious in that period than they are today. EVs are toys for the rich, for at least the next 10-20 years.

There will be ZERO $35,000 M3s sold before the US federal subsidy is halved to $3750 starting 2019.01.01. That, at minimum, will make it a $38,750 car. Without any options. Oops.

Musk himself is dead silent on WHEN the $35,000 M3 will sold, but is shilling some $40k+ something variant - https://www.cnbc.com/2018/10/18/tesla-ceo-elon-musk-tweets-a...

There has been talk of extending the federal subsidy it but it's all just talk. Talk means nothing. Tick tock, 2019.01.01 isn't that far away. Less than 60 days.

I don't work for the oil industry, I work in software, but thanks for playing. I can do this all day.

I’ll stop answering your comments, you just write complete nonsense and it’s not worth it. Just to show everyone how much you are wrong I’d like to point out that you are probably the only person on this website ignoring that the model 3 is 35k$ before all incentives. With the incentives, as of today, we are speaking of 27.5k$, so it’s more than 11k$ less of what you thought would happen with the incentives halved. Indeed I would say that “Oops” is the right word. Please stop spreading misinformation based on your fantasies because in that case I might still answer to your comments if they are as mendacious as the previous two.

Fact - There is no Model 3 available for purchase at $35,000 before incentives. Source - https://3.tesla.com/model3/design?#battery

Fact - The federal incentive is reduced to $3750 starting January 1st, 2019. Source - https://3.tesla.com/model3/design?#battery ('Learn More' link)

Fact - Tesla has dropped all mention of the $35,000 vehicle Source -https://arstechnica.com/cars/2018/07/tesla-drops-35000-price...

Fact - Elon Musk is a pathologic liar.

Fact - Tesla will go bankrupt.

ICE Internal Combustion Engine, gas or diesel or propane

EV Electric Vehicle

Thank you, I've never seen ICE used this way before; I assumed the article was somehow about a new immigration department.

I don't really have much comment to make on most of these but "18/ In Britain for example, it's now pretty clear that ICE vehicle sales growth peaked in 2016. The total UK market is declining for a second year in row, down 8.9% this year through October. But EV are going the opposite way, and will reach above 6% market share this year." I'm not sure that the ICE sales drops are down to EV sales. At the very least they seem to be over egging the pudding.

I'm having a hard time trying to work out some of the authors points (this is basically a list of tweets), but I'd find it interesting to hear about the supply demand interplay when oil use starts dropping. Ie oil use falls leading to lower prices leading to static usage at lower prices? Or lower investment, lower supply, increasing prices, and a rapid death spiral.

I imagine industrial users of petroleum will prevent any sort of rapid death spiral. Really right now oil is pretty cheap¹ with lots of production costing much less than the commodity price.

1. the extraction cost is a fraction of what people are willing to pay for it in high tax countries.

Non-transport use of oil is only 32%. 9% is for heating and electricity generation, which presumably will also be replaced with batteries or some other improved technology in the long term.

Falling oil demand is great for the planet, since it means lower CO2 emissions, moving pollution from vehicles to centralised power plants (or removing it completely in the case of renewables) rather than at ground level in dense cities, and oil as a finite resource can be used longer for industrial processes for which there are not yet alternatives before we run out.

I think once the West is on its way to being mostly oil and coal free, we will start to see really heavy international action on climate change, because any taxes or penalties introduced for carbon emissions will hurt non-Western countries much more. Already there is immense behind the scenes pressure on developing nations to cut fuel subsidies.

So with the 32%, we can restate the question about the rapid death spiral:

Will oil companies choose billions of dollars in profits or will they just stop?

If the oil demand drops by 2/3, it will hurt most the expensive oil extraction methods. Meadle East companies will survive as their oil is cheapes. But fracking, tar sands and perhaps sea oil platforms will stop.

Interesting to note that whilst Saudi Arabia can technically extract oil for $9/barrel, they have a gigantic society to maintain on top of all that oil revenue - requiring $70/barrel to break even.

This seems irrelevant, or at best helping the point of the parent comment. If Saudi society has large fixed costs, then they only need to sell more of their large reserves driving down prices even more and increasing the pain of the high-cost producers.

I have some comments...

The article refers extensively to car sales in September 2018, and infers a "death spiral" for ICE vehicles because of a drop in sales that month.

What it neglects to mention is that September's sales, for w/e reason, seem to be an anomaly (possibly because of 5 weekends that month), that monthly sales in August were the highest ever, and that 2018 sales are overall tracking 3-4% higher than 2017.

Data here: http://lmc-auto.com/wp-content/uploads/2018/10/LMCA-Global-L...

The author also implies that the car sales data is a sign of doom for the oil industry. Previous paragraph aside, oil use in transport continues to grow, driven substantially by trucking and air transport. Oil demand will be about 1.5% higher in 2018 than 2017, and is projected to grow at the same rate for the next 3 years at least. Beyond that, you could argue that growing wealth in Asia - with India picking up where China left off - could well outweigh the impact of EVs for many years yet.

Recommended video comparing the environmental impacts of EVs and ICE.

https://youtu.be/6RhtiPefVzM

The first paragraph is full of acronyms. Who is the audience of this?

This is Twitter, so each character matters. Presumably the intended audience is already familiar with the acronyms (which you would be, if you have ever done a report that has required energy statistics from the agencies mentioned) or able to look them up as needed to follow along.

What a horrible place /1 to post a long /2 form article.

Why do people do this, instead of tweeting a link to their blog?

You get more engagement with a series of tweets than one single tweet, would be my guess.

Not everyone has a blog. Even those that do sometimes tweet out a stream recapping the blog post (Erik Loomis being the one I remember most).

(This is such a bizarre complaint to me - it's like insisting that people not speak to you in real time but instead put down their arguments onto paper and present them to you.)

> This is such a bizarre complaint to me

Not really, imho. There are some kind of media that are more appropriate than others for certain type of messages.

For example, would you have liked this as a video or a series of pictures with just text in it? Or as an audio file?

> would you have liked this as a video

True, it wouldn't work as well if it was a video.

> a series of pictures with just text in it?

You mean like a presentation of slides? That sounds perfect (and not all that far from a tweet stream, really - small chunks of information presented in order.)

> Or as an audio file?

Given I've listened to podcasts with episodes on topics like this, yeah, that might also work.

> it's like insisting that people not speak to you in real time but instead put down their arguments onto paper

Thats not the best analogy for the complaint -- its more like insisting that instead of putting your arguments down on paper in words, you're using emoticons and forcing the reader to play charades. Though to your point, listing out your arguments is certainly a boring, bland way of conveying a topic...

Its a poor medium choice; I don't choose a 10x10px image to show you the Mona Lisa...

> you're using emoticons and forcing the reader to play charades.

Except the tweets aren't emoticons and no-one is forcing the reader to guess anything - the authors are literally "putting [their] arguments down on paper in words", just in short paragraphs.

He mentions rising oil prices, and engineering a price spike. But this week, the headlines are all about a glut of oil:

“Crude oil suffers longest losing streak since 1984” https://www.cnn.com/2018/11/08/investing/oil-prices-bear-mar...

Graph: https://www.marketwatch.com/investing/future/clz8/charts

I think photocameras are a good analogy. Early on, it was all about digital storage being so constraining, now an average digital camera can store more photos than a kilogram of film.

I hope you're right. Can we apply Moore's law to batteries and energy storage?! Ah, sarcasm, sorry.

I do hope you're at least a little right, in that we start to see some hugely efficient, lightweight storage of energy in EV batteries. We love headlines about battery breakthrough science, but right now, gasoline is still much more energy dense.

It is not exactly the same, but simple physics says that there is a huuuge potential for further improvement event without changing cell chemistry:

Lighter car bodies, better regeneration, more efficient voltage conversion, better battery management, trend towards smaller cars in general, and relaxing crashworthiness standards.

Tesla cars have close to a third of the total battery capacity being used as a buffer to extend battery life.

Now, imagine a two seater car with CFRP/magnesium spaceframe body, weighting 600kg, and having 200kg battery pack of capacity similar to Model S. You can easily have the range tripled.

I'd say that Model S range is already an overkill, and a typical city car will morph much closer towards what Chinese LSEVs are now:

No crashworthiness whatsoever, no hydraulics, no cooling system, fibreglass body, 100kg battery pack made of brick cells, spaceframe, 2 PMDC hub motors, 70km max speed. Basically a stool with wheels and a tent roof. Something similar is already on the market and is called Renault Twizy

I would like you to be right, but I suspect you probably aren't, a scooter (moped) can get 100mpg+ right now, and the havent taken off, and as you mention the Twizy, that isn't exactly selling like hot cakes.

What I would like to see is temporary, removable, rentable batteries. You size your standard battery to the journeys you make 99% of the time. When you want to make that longer journey you rent an extra battery.

About mopeds, that is only true for North America. Most of Asia is totally in love with two wheel transport. China is a complicated exception (authorities ban motorcycles to force people spending more on cars)

For the second point, the much more likelier outcome is that people will start paying to have their cars being towed to another city, and travel separately.

Surely the issue of digital cameras was mostly quality?

Back in 1998, using the bundled 8MB CF card a Powershot A5 could store 8 (CCD Raw mode) to 236 (small size, normal quality) images, with the "default" (large size, fine quality) being 44. And of course you could swap cards in and out, and 48MB CF were available for basically infinite number of pictures per card (compared to the 20~30 of a film roll). And a CF card was both lighter and more rugged than a film roll.

What you were getting out, however, was 1MP of compressed JPEG (or 0.25MP in small size).

Soon we'll see the beginnings of the death cycle for ICE vehicles. Lower sales means fewer:

Gas Stations

Car Dealers