A Pothole in the Path of the Electrification Agenda

Guest Post by Eric Peters

A number of problems stand athwart the Electrification Agenda, which is supposed to be accomplished fact less than nine years from now – come 2030. Perhaps the single biggest problem is the fact that even if every car maker makes nothing but electric cars by then – or sooner, as several have “committed to” already – there will still be a lot of non-electric cars for a long time to come.

Well beyond 2030.

This is so because non-electric cars have a much longer useful service life – functionally and economically – than electric cars. Almost any car bought today, in 2021, will not only still be in service come 2030 it will still have many years of functional and economically viable service life left.

A nine-year-old car is a middle-aged car.  It is routine for cars with 100,000 miles to go another 100,000 miles, often without a major repair being needed. This is why the average age of a car currently in service as a daily driver is 12-plus and also why it is common to see cars much older than that still in service. Especially exceptionally durable models such as the Toyota Corolla and Camry, the Honda Accord and a number of others that routinely keep on keeping on for more than 20 years and 250,000-plus miles.

There are not many ten-year-old electric cars still in service  – and won’t be – because of the inherently shorter functional and economically viable lifespan of electric cars, especially when they are used as daily driver cars (which most aren’t; see here for more about that).

The reason for both of those problems is the battery problem, which is a problem that hasn’t been overcome and will not be overcome until there is a new type of battery – one that somehow defies the known physics of batteries.

Specifically, the functional problem that all batteries – from the tiny one in your smartphone to the huge one in an electric car – lose their capacity to hold a charge over time as a result of being discharged and then recharged. This is not an economic problem when the battery is small – or rather, when its replacement cost is small relative to the device it is powering. It makes economic sense to spend say $5 to put a new dime-sized lithium-ion battery in a remote control for a ceiling fan rather than chuck the control and spend $12 for a new remote.

But it does not make sense to spend $4,000 – on the low end – to replace an aging electric car’s enormous battery pack due to the fact that by the time it becomes necessary to replace the electric car’s battery pack, the value of the electric car itself has depreciated to such a degree that it does not make economic sense to spend the money on the battery pack.

Electric cars are exactly the same as any other car in that they lose value over time – i.e., they depreciate. But depreciation is a much bigger economic problem for electric cars, because of the inevitable and sooner-occurring need to replace the thing that makes the EV go, i.e., its batteries.

Without which it doesn’t go.

And when it doesn’t go anymore, the EV is worthless. It is also worth less – i.e., it depreciates more rapidly – than a non-electric car because it’s known that a nine-year-old electric car with 100,000 miles on the odometer hasn’t got another nine years and 100,000 miles of life left in it. The nine-year-old electric car’s range is probably already less at this point than it was when it was new – a clear warning indicator of a battery in decline.

Which accounts for the much more precipitous decline in the value of a used EV relative to the value of a used non-EV. 

Most nine-year-old non-electric cars will travel just as far as they did when they were brand-new – and will still be traveling just as far nine years later. So while they depreciate, they don’t depreciate as hard – and as fast – as electric cars, which can and routinely do lose half their value within as little as five years of leaving the dealer’s lot. This being a function of having to spend half what they are worth to keep them going – which even then won’t be as long as a non-electric car goes without having to do anything, usually.

Which brings us back to the problem with the Electrification Agenda:

What to do about all those non-electric cars still in circulation come 2030 – and beyond? It is certain that, absent a powerful nudge, millions of people will “cling” to their non-electric cars far beyond 2030.

Especially cars made years – decades – before 2021.

Cars built before LCD touchscreens and electronic controlling of all the car’s mechanical systems can – and do – last for decades and unlike electric cars and cars with elaborate electronic controls – can be made to last for decades more. Practically any car made before the early ’80s, for instance is essentially a mechanical thing and its mechanical things are mostly rebuildable rather than replaceable. 

Look at Cuba for a demonstration of this fact.

It will be necessary to address the problem of such cars – as well as the problem of modern cars with electronic controls and touchscreens, which are still fundamentally mechanical things and for that reason many of them will still be quite serviceable in 2040 and probably well beyond that. 

So how will this problem for the Electrification Agenda be addressed?

It is already being addressed – via the artificially induced expedient of making it more (and more) expensive to fuel non-electric cars. See here. Or see – the next time you fuel up.

Gasoline – unlike electric car batteries – does not have to be expensive but it can be made expensive by politicians and by making it expensive, these politicians achieve the same effect – or rather, a parity effect – as the passing of a law force-retiring non-electric cars.

By making non-electric cars as expensive to operate as electric cars are to keep operational.     

Other forms of the nudge to come will likely include usurious registration fees for “polluting” non-electric cars and if that’s insufficient to release the grip of the “clingers” then there will probably be the vehicular iteration of the current “masks required” signage on roads, taking the form of “electric cars only.” There is already precedent for this in the form of electric car/hybrid-electric car privileges for HOV – High Occupancy Vehicle – travel lanes in many cities around the country. 

The bottom line is something will have to be done about the problem of non-electric cars lasting far too long – and costing far to little – relative to the electric cars they intend to force down everyone’s throats.  

Unless, of course, we do something about the problem of them.

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