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Your columnist just enjoyed driving along America’s Pacific coast, the wind blowing through what’s left of my hair, in a new Fisker Ocean electric SUV. Sweet, because it was in “California mode” – a neat feature that with the touch of a button lowers all windows, including the rear windshield, retracts the paneled roof solar, and turns the car into the next best thing to all. – electric switch. Bitter, because once he had returned the test vehicle, he had to drive home in his Kia Niro EV, which is smaller, shorter range and does not have an open top – it is called the “wet British method”. The joy was that it is about a ton lighter, and if you drive the EVas Schumpeter does, to demonstrate your low-carb street cred, you should be a featherweight rather than a heavyweight.
Because it’s not. Just look at the future series that Fisker, the EV beginning, published on August 3. It included: a souped-up, off-road version of the Ocean, which Henrik Fisker, the carmaker’s Danish co-founder, said would be suitable for a monster truck rally; a “supercar” with a 1,000km (600-mile) range, and a pickup truck straight out of “Yellowstone” – complete with cowboy hat holder. Granted, there was an affordable six seater called Pear. But while Fisker says sustainability is one of its founding principles, it’s engaging in an almost universal trait among car companies: building bigger and burlier cars, even when they are electric.
There are two reasons for this. The first is profit. Like normal cars, only bigger EVs generate higher margins. The second option is consumer choice. For decades, drivers have been choosing SUVs and pickup trucks rather than smaller cars, and this now applies to battery powered ones. EV drivers, who are concerned about the availability of charging infrastructure, want more range, and therefore larger batteries. BNEF, consultancy, says the result is that average battery sizes increased by 10% per year worldwide from 2018 to 2022. That could help make a more confident trip. But eventually the superstitious movement will be unstable and unsafe.
It is already going on the stupid. Hummer General Motors EV weighs in at over 4,000kg, close to Kia Niro’s larger than its non-electric counterpart. The battery alone is as heavy as a Honda Civic. General Motors recently unveiled a 3,800kg Chevrolet Silverado electric pickup truck, which can tow a tractor and has a range of up to 720km. This year Tesla plans to start production of its electric “Cybertruck”, described by Elon Musk, its boss, as a “badass, futuristic weapons carrier”. Muscle trucks like this may be the price to pay to get pickup drivers to go electric. But size matters for suburbs too. The International Energy Agency, an official reporter, estimates that more than half of the electric cars sold worldwide last year SUVs.
For now, car makers can argue that no matter how big the electric rigs are, they have a positive impact on the planet. Although manufacturing EVs – including finding metals and minerals that go into them – generate more greenhouse gases than a normal car, they quickly compensate for that without tailpipe emissions. Lucien Mathieu from Transport and Environment, European NGOsaying that even the greatest EVs with lower lifetime carbon emissions than the average conventional car. That’s true even in places with plenty of coal-fired power, like China.
But in the long term the trend for larger batteries could backfire, for economic and environmental reasons. First, the bigger the battery, the more pressure there is on the supply chain. If the size of batteries increases there will likely be shortages of lithium and nickel. That pushes up the cost of lithium-ion batteries, undermining the profitability of carmakers.
Second, to charge larger batteries in a carbon-neutral way requires more carbon electricity. That may create bottlenecks on the grid. Third, the greater the pressure on scarce resources that are vital EV production, the harder it will be to make affordable electric cars necessary to electrify the mass market. That will slow down the decarbonisation of transport. Finally, there is safety. A battle tank that does zero to 100 kilometers per hour in the blink of an eye is not only a liability to anyone who happens to be in its path. Tires, brakes and wear and tear on the road also produce dangerous pollution, which is worse than heavier vehicles.
Governments have ways of encouraging EVs decline. The most important thing is to support the expansion of charging infrastructure, which would reduce range anxiety and encourage smaller cars. Taxes could penalize heavier vehicles and subsidies could encourage lighter ones. At a local level, congestion and parking costs may have a similar effect. At the very least, carmakers could be required to label the energy and material efficiency of their vehicles, as will appliance makers in the European Union.
Anxiety disorder
In the end, the industry is almost certain to realize the folly of pursuing size for its own sake. The penny is starting to drop. Ford CEO, Jim Farley, recently said that car manufacturers could not make money with the longest batteries. His number one at General Motors, Mary Barra, has taken an unexpected step to plan to withdraw the affordable Chevy Bolt. EV. In Europe, car makers like Volkswagen are building smaller, cheaper cars EVs. Tesla is said to be planning a compact model made in Mexico.
The pressure comes partly from competition. Felipe Munoz of Jato Dynamics, an automotive consultancy, says China values battery efficiency over size and hopes to tap into overseas markets with lighter, cheaper brands such as BYD. Innovation in batteries based on solid-state or sodium-ion chemistry can also do it EVs more efficient. At this time, there is no doubt that drivers who have money to splurge will be happy to flash their low carbon credentials from a big perspective. SUV or a monster truck. And so they should – until they realize they may be making electrification less accessible to the rest of humanity. ■
Read more from Schumpeter, our columnist on global business:
Meet America’s Most Profitable Law Firm (August 2)
Why Walmart is beating Amazon in the grocery wars (July 24)
Hollywood’s big strike could turn out to be a flop (July 19)
Also: If you want to write directly to Schumpeter, email him at [email protected]. And here is an explanation of how Schumpeter’s column got its name.
