Electric vehicles (EV) are not new, they have been around much longer than Internal Combustion Engine (ICE) vehicles. The first ones appeared around 1828 to 1840 in Europe. Now 180 years later they are still not economically viable solutions and there’s a reason why: physics. The energy density, cost, weight, and size of onboard energy storage can’t even come close to matching that of ICE vehicles and never will, it’s a physical impossibility. This means EVs will always be the inferior market choice.
Most current EVs use lithium-ion batteries that store no more than the equivalent of 16-24 kWh of energy in a single charge, short of the 36kWh of energy in a single gallon of gasoline. The Tesla, currently among the most powerful PEVs on the market, can store the equivalent of 53 kWh when fully charged. If you do the math, a subcompact car with a 10-gallon gas tank can store the energy equivalent of 7 Teslas, 15 Nissan Leafs or 23 Chevy Volts.
Batteries suffer from four limitations, limited range, heavy weight, long charging time and limited charge-discharge cycles. In order to compensate for the heavy weight, EV manufacturers look for ways to make the cars lighter by limiting the size, the materials they use and using adhesives, glues, rather than welding parts together. In October 2020 a new Tesla owner had his roof blow right off on the road and another had his entire rear bumper fall off.
There is also an inherent danger of fire in car batteries due to ‘thermal runaway’ exacerbated by high voltage ‘quick’ charge which only takes 10-20 minutes rather than the normal four hours that people don’t want to wait for. EVs have spontaneously burst into flames and tens of thousands have been recalled.
The large discrepancies between ICE and EV vehicles is why so many automobile manufactures have scaled back their investments in EV and allocated more resources towards hybrids. It’s also why all EVs are subsidized by government. The private venture capital markets have billions to invest and are experts at assessing risk and potential return yet EV manufacturers must go to the state for financing because the private venture capitalists won’t invest the necessary amounts. That tells you everything about the market right there. They enjoy low interest loans, subsidies, tax breaks and receive carbon credits by law from manufacturers that don’t produce EVs. Only after securing the insurance of government subsidies will private venture capitalists risk their money.
Eric Peters, a respected car reviewer, writes that GM and Tesla are both lobbying the Biden administration to literally ‘pay consumers to buy their cars’. Neither company has ever made a market profit because the market simply doesn’t exist at current market costs.
Ostensibly, it seems like a good thing to have financial support from the government but there are potentially serious problems as well with committing resources in a government controlled market. It makes the manufacturers and their suppliers dependent upon and beholden to political policy which has nothing to do with cars or the market but politics. They can and have changed their minds on a whim as to what they will continue to support and how they’ll support it. And if support gets to the point that even with the subsidies it’s not viable, then those resources have to be reallocated at the company’s expense.
Bottom line is that EVs can never be economically viable and profitable on their own. After 180 years they are still always ‘right on the edge’ of the next great breakthrough in technology if they can just get a few more billion dollars. The ability to ‘profit’ from them is a matter of finding ways to get the state to ‘throw more money at them’ but in the long-run it looks like a money pit.