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Imagine an American president who, during a press conference, extols the importance of cars made by Mercedes Benz or BMW. The reaction, particularly on Fox News, is easily envisioned: outraged cries of “elitist” and “out of touch” would persist for days or even months afterward.
That, in essence, is exactly what President Barack Obama did last Wednesday. Obama acknowledged the thumping that the Democrats took at the polls on November 2, and went on to discuss the need for more all-electric vehicles, at one point saying “There’s a lot of agreement around the need to make sure that electric cars are developed here in the United States.”
Fine. Both Mercedes and BMW manufacture cars in the U.S. But here are two essential points: Those two automakers each control about the same percentage of the domestic car market that automotive analysts believe electric cars will have by 2020. Second, and perhaps more important: the same people who buy Benzes and Beemers – the wealthy – are the ones most likely to buy a new electric car.
Obama’s electric vehicle fetish reflects much of the inanity of our discussions about energy. The idea that oil is bad, and that we must therefore throw vast sums of money at efforts aimed at fueling our automotive fleet with something else – anything else – ignores both economic realities and the myriad problems inherent with EVs.
First, the economic realities. Earlier this year, Deloitte Consulting released a report on EVs which found that the most likely buyers are people with household incomes “in excess of $200,000” and “who already own one or more vehicles.” Furthermore, Deloitte expects those buyers to be “concentrated around southern California where weather and infrastructure allow for ease of EV ownership.”
Deloitte concluded that the US now has about 1.3 million consumers who “fit the demographic and psychographic profiles” of expected EV buyers. It went on, saying that mass adoption of the EV “will be gradual” and that by 2020, perhaps 3 percent of the US car market could be amenable to EVs. The report also says that the keys to “mass adoption are 1) a reduction in price; and 2) a driving experience in which the EV is equivalent to the internal combustion engine.”
Think about those numbers. Out of 300 million Americans, perhaps 1.3 million of them – with many of those living in areas in or around Los Angeles and San Diego — are likely to buy an EV.
Deloitte’s projections are exactly the same as those recently put forward by Johnson Controls Inc., a company that makes batteries for cars and is building two new plants in order to supply the EV market. Last month, the Wall Street Journal reported that Johnson Controls’ research “found that the pool of US customers for whom an electric car makes financial sense – those who travel many miles a year, but on short trips – is very small, about three percent of drivers.”
Hmmm. Three percent of drivers? In both 2009 and 2010, Mercedes and BMW each controlled about 2 percent of the US auto market.
Why will EVs be playthings for the rich? The answer is simple: the history of the EV is a century of failure tailgating failure. Consider this quote: In 1911, the New York Times declared that the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter” and “much more economical” that gasoline-fueled cars.
Whenever you hear about the wonders of the new hybrid-electric Chevrolet Volt, which at $41,000 per copy costs as much as a new Mercedes-Benz C350, consider this assessment by a believing reporter: “Prices on electric cars will continue to drop until they are within reach of the average family.” That line appeared in the Washington Post on Halloween, 1915.
And since the Volt is being built by GM, ponder this news item which declared that the carmaker has found “a breakthrough in batteries” that “now makes electric cars commercially practical.” The batteries will provide the “100-mile range that General Motors executives believe is necessary to successfully sell electric vehicles to the public.” That story was published in the Washington Post on September 26, 1979.
The problem today is the same as it was in 1911, 1915, and 1979: the paltry energy density of batteries. On a gravimetric basis, gasoline has 80 times the energy density of the best lithium-ion batteries. Of course, electric-car supporters will immediately retort that electric motors are about four times more efficient than internal combustion engines. But even with that four-fold advantage in efficiency, gasoline will still have 20 times the energy density of batteries. And that is an essential advantage when it comes to automobiles, where weight, storage space, and of course, range, are critical considerations.
Despite the all-electric automobile’s long history of failure, despite the fact that EVs will likely only be driveway jewelry for the wealthy, the Obama administration is providing more than $20 billion in subsidies and tax breaks for the development and production of cars that use electricity instead of oil.
Indeed, the administration keeps throwing money at EVs despite a January 2009 report published by the Department of Energy’s Office of Vehicle Technologies, which said that despite the enormous investments being made in plug-in hybrid-electric vehicles and lithium-ion batteries, four key barriers stand in the way of their commercialization: cost, performance, abuse tolerance, and life. The key problem, according the DOE analysts, was—predictably—the battery system. The report concludes that lithium-based batteries, which it calls “the most promising chemistry,” are three to five times too expensive, are lacking in energy density, and are “not intrinsically tolerant to abusive conditions.”
Remember when Barack Obama, the presidential candidate, berated the Bush administration for not paying attention to the science? In December 2008, shortly after being elected to the White House, he declared, “It’s time we once again put science at the top of our agenda and worked to restore America’s place as the world leader in science and technology.”
Restoring America’s leadership in science and technology is a worthy goal. But by attempting to pick winners in the car business — arguably the world’s single most competitive industry — the Obama administration is forgetting history and the panoply of problems that have kept EVs in the garage since the days of Thomas Edison. It’s time to unplug this subsidy-dependent industry and let the free market work.
ROBERT BRYCE’s latest book is Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future.