The article in the first url below sheds some light on the economics of the electric car:
"Electric cars have come a long way. They are no longer ugly, impossibly expensive and impractical, thanks to technological advances that have slashed battery storage from $1,000 per kilowatt-hour in 2010 to $273per kwh last year."
In particular, it highlights the extent to which Tesla (and other car companies) have so far relied so heavily on government subsidies – a prop that will soon come to an end:
"Nonetheless, … a 75 kwh battery (about 250 miles of range) still adds about $20,000 to a car's cost. So how do the cars sell? Public largess helps a lot. The federal government offers a tax credit of up to $7,500 each for the first 200,000 electric or plug-in hybrid cars a manufacturer sells. Throw in state tax credits, subsidies for recharging infrastructure, relief from gasoline taxes, preferential lanes and parking spots and government fleet purchases, and taxpayers help pay for every electric car on the road."
Anecdotal evidence suggests that, when this support is taken away, the cars are not so competitive, at least in terms of the mass market:
"When Hong Kong slashed a tax break worth roughly $55,000 fora Tesla in April, its sales ground to a halt. In Georgia, electric vehicle sales plummeted 80%the month aftera$5,000 tax credit was repealed."
The future for the market for electric cars, as envisioned by Tesla, also relies on certain assumptions that, while not impossible, are also far from guaranteed:
"… such scenarios hinge not just on the cost of batteries but on the price of oil and the efficiency of competing vehicles. [Economists] estimate that if batteries cost $270 per kwh, oil would have to cost more than $300 a barrel in 2020 to make electric and gasoline equally attractive. If battery costs fall to $100, as Tesla Founder Elon Musk has targeted, oil would have to average $90. … in an optimistic scenario, where battery costs fall 10% a year starting now and gasoline begins at $5 a gallon, electric vehicles will be competitive in five years. If battery costs fall just 5% a year and gasoline starts at $2.25, it will take more than 20."
At a more fundamental level, the author questions the extent to which electric cars have helped reduce climate change. This is principally because they are recharged at night, which is when electricity is more likely to be generated by coal:
"Economists … estimate electric vehicles account for more carbon dioxide per mile than existing cars in the upper Midwest, where coal-fired plants are more prevalent, and more than comparable hybrids in most of the U.S."
While I recognize that the oil companies and traditional car companies also get their fair share of government subsidies, it is instructive to realize that electric cars (at least using current technologies) might not be the silver bullet that Elon Musk often suggests. Strategic CSR, of course, argues for a level playing field – remove all subsidies, impose a lifecycle pricing that accounts for all costs incurred during production (in this case, a carbon tax for carbon-based fuel consumption), and allow the market to determine where to invest to optimize returns. In the meantime, we are stuck with government subsidies and, as a result, distorted market outcomes. As the author concludes:
"These subsidies have clearly accomplished one goal: They've accelerated innovation when the private market had little incentive to invest. Yet they may not be the most efficient way to combat carbon emissions. A carbon tax, for example, would incentivize conservation and alternative fuels regardless of oil prices."
In short, as summarized in a recent report by Morgan Stanley on impact investing:
"… the carbon emissions generated by the electricity required for electric vehicles are greater than those saved by cutting out direct vehicle emissions."
The article in the second url below suggests additional possible additional harm caused by electric cars -- this time in terms of e-waste:
"The number of electric cars in the world passed the 2m mark last year and the International Energy Agency estimates there will be 140m electric cars globally by 2030 if countries meet Paris climate agreement targets. This electric vehicle boom could leave 11m tonnes of spent lithium-ion batteries in need of recycling between now and 2030, according to Ajay Kochhar, CEO of Canadian battery recycling startup Li-Cycle."
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Electric Cars Are the Future? Not So Fast
By Greg Ip
July 13, 2017
The Wall Street Journal
Late Edition – Final
The rise of electric cars could leave us with a big battery waste problem
By Joey Gardiner
August 10, 2017