Electric Car Fairy Stories

By: Andrew_McKillop

Ernst & Young reports, October 3, that 52% of its market analyst respondents think Europe will be the first mass market for electric vehicles, by 2022, while 39% say that dubious honour will go to China. Many are uncertain on the USA's rank in the EV boom, and often place the prospective US market  lower than Europe, China and Japan. About 37 % of Ernst & Young's respondents think that Japan, with its $12.7 trillion sovereign debt (but only $9 trillion according to the CIA) will strive to find new ways to drive up its debt with massive state subsidies to electric car builders, buyers, battery suppliers and all-comers to the EV spending party.

This last category, in Europe, includes the clean green dream merchants of massive, massively expensive, subsidy swilling offshore windfarms and solar power stations even more expensive, if less dangerous than nuclear power. Teamed with EVs, and given unlimited government subsidies, they sing in union that we can beat the terrifying menace of Global Warming - and save oil.

The 11 year timeline to Europe's mass market for EVs was based on a widely ranging set of criteria according to Ernst & Young, but the consulting firm was able to find some respondents who believe the European electric car market could exceed 1 million units a year by 2015. Ramping on and up, European EV sales could or might reach 10 million a year by 2022. Dreaming always helps.

Adding a little reality to the responses, Peter Fuss, Ernst & Young's European automotive analyst however said there was “A growing diversity of opinion in the debate on how quickly the mass market for electric vehicles will take off in Europe". In particular, Fuss identified economic growth doubts in Europe, and the low confidence of consumers faced with shelling out 35 000 euro for a Renault-Nissan Leaf, the present market reference all electric family car. 

NOT ECONOMIC BUT POLITICAL
When asked to assess the challenges faced by electric vehicles in the marketplace, 65 % of car industry  executives say that delay in adopting electric vehicles is mainly related to fears concerning their lack of range and battery recharging problems, but getting the biggest-possible government handouts is considered the ultimate need by EV financing, leasing and marketing analysts.

In Europe, these handouts are above all political. They are almost certain - as long as uncertain and shifting political forces keep France's Nicolas Sarkozy and Germany's Angela Merkel atop the greasy pole of power. With each day that passes this is less certain.

But while they cling to power, like the true democrats they are, the formal and official engagements of Sarkozy to electric car fantasy and subsidy-gouging, and the verbal support of Merkel to the same massive and irresponsible waste of government funds are nearly as good as gold to electric car shills and boomers. Sarkozy's formal engagement is to hand out 7000 euro of French government cash to every buyer of a French-made electric car - despite this national preference being purely discriminatory and forbidden by the WTO and European Union law. Other handouts already engaged by Sarkozy's probably last government include nearly 500 million euro for Renault's always delayed electric car battery plant at Flins, and nearly unlimited engagements for wiring up city centres for recharging EVs.

POLITICIANS ARE STILL SHY
Merkel is imagined out loud by the EV megamarket shills who hover close to president Sarkozy as also wanting to hand out 7000 euro to every buyer of a probably German all electric car. In Merkel's weekly podcast on Saturday, May 14 the almost certainly soon-to-depart German Chancellor said it was Germany's intention, or at least her own, to become a leader in the emerging EV industry. She said that one million "e-cars" would be cruising silently on German streets by 2020, to be followed by another five million well before 2030. The biggest EV subsidy grubber in Europe, Carlos Ghosn of Renault-Nissan, says the EV fraternity is safe and sure, because of Merkel's attachment to throwing money at lost causes. Germany has so much spare cash it can even bail out Greece and the French banks which feed off its debt, as well as hand out cash to buyers of overpriced EVs !

In the US, EVs are now a key player in the escape strategy that green energy and cleantech business players are throwing together as their bubble starts to sag - still using the lure of job creation to grub new handouts. EV promoters in the US claim they have bipartisan support in Congress, and wave the Electric Vehicle Deployment Act of 2010 to prove it. Sponsored by low ranking senators however, the bill's targets are in reverse proportion to their ranking. The bill’s goal is to electrify a half of America’s cars and trucks within 20 years - around 125 million vehicles. The bill proudly states this could cut America’s dependence on foreign oil by a third.

Like their European counterparts, US EV shills have almost no limits to their imagination on how much big government can hand out. The US bill of 2010, which has been followed by zero action on the ground, demands the funding of local recharge stations where motorists would recharge their cars’ batteries. Each proud owner would get a $10 000 tax credit to buy their EV. Toppings and side dishes would include almost free electricity for EVs when recharged in city downtowns, and a $1.5 billion grant for research aimed at improving EV charging times and battery lifetimes.

Only a quick hit with the pocket calculator is needed to work out what it would take in government subsidy payments to electric car builders and buyers to ramp up European and US EV fleets to key levels of their road fleet numbers - for example 5%, then 10%, and then 50%.

The current car fleet of Europe is about 225 million cars and light commercial vehicles below 2.5 tons weight, meaning that EV hucksters are waving the image of sales hitting 10 million EVs per year in Europe by as early as 2022. Greed for government handouts has no limits. At a cool 7000 euro for each EV they knock out of the high-tech factories they will build only if they get huge grants and aids from the state, or will not build them at all, their subsidy grab would run at 70 billion euro-a-year.

At the high ground 50% car fleet replacement target, the subsidy gravy train could go as high as 700 billion euro of accumulated government handouts showered on EV boomers by as early as 2025. This explains exactly why Ghosn and his lookalikes are pushing EVs the same way the Medellin cartel pushes coke and marijuana.

EXTRA WAYS TO WASTE MONEY
Other consumer doubts, and therefore challenges to speeding the penetration of EVs in the car fleets of developed counties cited by the Ernst & Young study started with a lack of high-power accelerated recharging stations for EVs in city centres. This was cited by 57 % of analysts. These would be 10kW to 15kW, perhaps even 20kW power offtakes located in the downtown and necessitating vast public works in every major city. Even for entry level penetration of EVs in city car fleets, say 50 000 vehicles for a midsize city, we can work out the costs of that - and we can be sure that Renault-Nissan, Chevrolet, BYD, Reva or Tara International will not be stepping forward to pick up the bill.

Governments and city authorities will. The taxpayer will.

Charging 50 000 EVs, an unimpressive 0.02 % of the current gasoline and diesel fuelled car fleet of Europe, with fast charge high amperage 380V power at 10 - 15 kW per car would suck down an impressive 500 - 750 MW of power capacity. To be sure, shills for the EV solution are never short of a windfarm image in their powerpoints (they had nuke power plants in the same PPTs, last year) so we can work out what this part of their scam would cost.

With a friendly green-clean offshore windfarm supplying the power to charge 50 000 EVs, fast style because their owners are such very important persons (they are saving the planet, and each of them got 7000 euro of subsidy money) the image is just perfect. The costs are different. At 6000 euro per kilowatt installed for the offshore windfarm saving the planet, when the wind is blowing, the capital cost of the fast power back up needed for this entry level city car fleet, greedy for cheap power, will be around or above 3.6 billion euro. That is is for one small sized city.

Add this to the bill for Sarkozy, Merkel and Obama - for as long as they stay up the greasy pole.

Possibly even more incredible, car market analysts cited by Ernst & Young and other firms examining this "epoch making business development" claim to believe subsidy payments as high as 7000 euro for each EV are not enough. Crazy as it may seem, they say that prospective and potential EV buyers still think they may not be getting all the aids and subsidies they think they deserve for "saving the planet". Perhaps stricken by a form of mass schizophrenia and personal megalomania, some interviewees seem to want their governments to buy them a second, conventional car as a back up for their EV. Or free holiday travel the rest of their lives ?  Car owners are getting eccentric.

The analysts say that up to 50 % of interviewees believe that after the possible aids and subsidies they expect to get, the price of EVs is still too high, and add that a large number, as high as 33%, say they wouldn’t intend using their EVs every day, if they bought them !

SPEND MORE - AND STAY CUTE
One answer, as a bye-bye gift from Sarkozy, Merkel and Obama when they are massively voted out of power and thrown in the trashcan of history for ruining the lives of so many of their fellow citizens, ruining Greece, and letting the banking fraternity go AWOL for a second time in three years, might be to pen a farewell law raising the subsidies paid to eccentric EV buyers to 9000 euro per car, or $ 12 000 in the US. At this subsidy level, the handout to EV boomers would in fact be comfortably more than the price of a midsized all-new conventional family car, imported from China or India, Slovenia or Turkey and totally suited to trundling the average daily motorist to their average daily motorway tailback and traffic jam, sniffing the car fumes from the 99.8% non-EVs around their high priced EV freakmobile.

But this however conflicts with another key finding on EV user psychology we noted above, well before the things are even  produced and sold in volume.

Around one-third of future prospective users perceive them as unsuitable for day-to-day use. They do not want to go to work in them. They think EVs are right for weekend driving and, much more bizarrely, long range driving. To be sure this would mean regular 5-hour stops to charge the battery and take cute photos for the family album - but private enterprise has already come to their rescue.  Better Place and its lookalikes will meld highway battery swap stations with McDonalds and Hard Rock Cafe, and result in each and every EV needing 2 or 3 batteries to keep it running. Each of the batteries will cost at least 12 000 euro, but who cares ? The state will pay.

Like we know, another mass psychotic fear of prospective EV owners is keeping the battery charged. Even though many of these strange users also think their future 35 000 euro EV is mainly for keeping at home, it has to have a full battery. Japanese EV boomers, including Mitsubishi Motors and Nissan on its home base have already come up with the great new idea of treating EV batteries as power sources to use in emergency conditions - when the next friendly nuclear power plant blows, for example - to run low watt fairy lights in the family bomb shelter. Anything goes in the crazy world of EVs.

The bottom line is however always sure and certain. All future market studies for EVs, like the Ernst & Young report say the same thing. On one topic all car executives are in complete agreement: Around 85% to more than 90% of them rank government grants as the key to pushing out EVs and swamping the market with them. Otherwise, it simply will not happen.

It simply will not happen. Fairy stories are like that, you know.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

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