BACK TO THE FUTURE
Electric cars still represent just a tiny proportion of cars on the world’s roads today, having a minuscule impact on CO2 emissions so far. That’s all going to change and fast. Over the past ten years I have witnessed many statements by politicians, read reports by research groups and listened to the CEOs of legacy car makers talk about a linear, gradual switch to electric cars. The 2040s and 2050s were commonly claimed to be the time frames when electric cars overtake ICE cars. These predictions were made, at best, in ignorance or, at worst, in ‘survival mode’ self-interest.
History has repeatedly shown that once a new, and better, technology gains traction it often starts slow but then quickly goes exponential. We have reached that point in the electric car transition, the tipping point. Every indicator now points to a rapid adoption of electric cars. This is accelerating because of the climate imperative, consumer demand, government bans and now, finally, the OEMs waking up to the electric reality.
This is third time lucky for the electric car. From 1890 to 1910 the electric car almost made it before being wiped out by the gasoline engine. Again, in the early 1990s the EV almost made a comeback, only to be swiftly wiped out again. This time it’s different. This time there is no going back. The Big Oil ICE Age will end, faster than most people think. I predict that by 2025 EVs will dominate and few in developed economies will be purchasing an ICE car. The resale values of ICE cars, starting with diesel, will begin to collapse from 2024. The world’s major fleet owners, like rental companies, government fleets, corporates, and industry (who typically replace their cars in three-year cycles) will realise that replacing ICE cars with new ICE cars in 2024 would be financial suicide. A 2024 ICE car will be financially obsolete by 2026, its resale value will be near scrap as EVs go mainstream. EVs have already crossed the point where the total cost of ownership versus an ICE is better (more on this later). By 2026, with ever reducing battery pack costs, a deluge of new affordable models and range anxiety all but banished as a myth, buying an ICE car will make zero sense.
Before we go forward, we need to get closure on the past. Thomas Edison’s first car was electric, a Baker. The 1909 Baker Electric car was a revolutionary car for its time; simple, low maintenance and with a range of over 100 miles. Over 15,000 6volt Bakers roamed the streets, supported by on-street charging stations. They were run on Thomas Edison alkaline batteries that could be used over and over by just occasionally cleaning and adding water.
However, the 1912 invention of the electric starter eliminated hand cranking ICE cars every time you wanted to move. This innovation combined with better paved country roads and gas stations, allowing for longer journeys out of the cities, doomed the EV. It was another 80 years before a serious resurrection looked possible.
In 1990 the State of California enacted the Zero Emissions Mandate. This new regulation set a production target of 2% of cars to be produced by automakers to be zero emission by 1998, increasing to 10% by 2003. In response, General Motors produced the EV1 in 1996. With a 70-100 mile range and a maximum speed of 80 miles per hour, the odd looking but futuristic machine gained popularity when celebrities such as Tom Hanks and Danny DeVito bought and lauded praise on them. Other manufacturers began retro fitting ICE models with batteries so as to be compliant with the new law.
Whilst there appeared to be baby steps towards electrification, in the background the automakers were fighting and lobbying to have the law scrapped. Between Chrysler, Toyota, Nissan, Ford and GM, 5,000 EV’s were produced. As with the tobacco companies in the past, major automakers spent millions on lobbyists and lawyers to have the law repealed. In the 1990s the SUV began to become extremely popular. These gas guzzling monsters produced high profit margins for the OEMs and they tried everything to get rid of the forced EV production targets.
The campaign was highly orchestrated; for example, the Western States Petroleum Association financed lobbying to prevent utility companies from building public charging stations. Demonstrating Jekyll and Hyde behaviour, GM even ran Super-Bowl advertising for their EV, whilst at the same time running negative campaigns highlighting the technology deficiencies with electric cars, most of which were not even present in their EV1.
In 2002, then president, George W. Bush, joined the auto-industry in the suit against California. With relentless pressure on the California Air Resources board, eventually the auto makers’ and Big Oil’s persistence won out. The law was reversed. GM recalled all their EV1s and crushed them.
This public, book burning-like display, took place despite EV1 owners pleading to keep their cars, even forming a protest outside GM’s premises. Despite some owners pledging $1.9m dollars to pay the residual value on their EV1, GM ignored the offer, recalled the cars and destroyed them.
The auto-industry didn’t stop there. For years after, they continued to keep the electric car down. GM teamed up with the Trump administration to successfully rollback President Obama era emissions standards. The second coming of the EV was over, confined to history by the victorious oil and ICE industries.
However, Tesla resurrected the EV and grew from being an annoying thorn in the side of the auto-industry into a disruptor that has shaken it to its core – the EV is back for the third time and this time it will be different…
