Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.
Musk is, in fact, absolutely right, as anyone who pays any attention to this topic can see. Oil is the life's blood of the modern world, and there is no way that so-called "sustainable energy" can replace it any time soon. But one wonders what his motivation is in saying so, especially when the current environmentalist line is that the war in Ukraine's knock-on effects on oil and gas prices demonstrates definitively that, in the words of Jen Psaki, "we need to reduce our dependence on oil in general and we need to look at other" sources of energy. You'd think Musk would be doubling down on his bread and butter, alternate energy sources.
It would be tempting to take this as a signal that he's planning on running for president, except that as a naturalized (that is, not natural-born) U.S. citizen, he is ineligible. It is also possible that he's just honestly saying what he thinks, something which has gotten him in trouble with the Karens who police prominent public pronouncements in the past. But one intriguing possibility is that he's looking to get off the ship before anyone can admit that it has hit an iceberg, projecting that the market for luxury electric cars will become increasingly limited in the next few years, as inflation lingers, the war in Ukraine drags on, and the economy tightens.
Whatever the case may be, his observation is both accurate and welcome. Hopefully other members of our ruling class listen.
Diary of an Acclimatised Beauty: Electrifying
Oh California what are you doing to me? I don’t like that I’m getting caught in what is obviously a war between Elon Musk and Governor Newsom, and in the meantime our planet suffers.
Truth be told, I’ve been away from my home in Los Angeles for a bit. Okay, pretty much since the beginning of the pandemic, but they’ve not made it easy for me. In early 2020 there was the confusion of different quarantine rules for different counties (some of them forced and scary), but mostly it was the very unpleasant phone call to Los Angeles County who said, ‘It will be up to the officer’ so I decided not to leave the airport terminal and hopped a plane to Hawaii.
But today I’m finding that owning (and neglecting) my Tesla is kind of a lot of work. In the first few months when I couldn’t get back to the States anyway I shut off notifications on my phone. Yes, I know that was dumb but who needs to be reminded that you are helpless and failing on a daily basis? And in two month’s time my car ran completely dry. So even when I got someone to go there, it was in ‘hibernation', and he couldn’t even open the door.
And optional accessory.
The second attempt to ‘wake up’ the vehicle required the combined efforts of my housekeeper, a neighbour’s ‘guy’, and the mobile Tesla person. This too was a flop because my housekeeper ditched me despite having cashed four months-worth of checks to look after things. It’s possible she was mad because I refused to pay her in cash ‘like the other ladies’ but I can’t afford to break the law, and I really do think $25/hour in cash is extortion for unskilled labour. Which reminds me to get the number of a housekeeper from one of my friends who moved to Florida.
Nonetheless, I texted my father for advice and he wrote back: ‘Sorry J, in a meeting, try Steven Henkes’.
Who is Steven Henkes? I called daddy’s secretary who assured me she had no such person in his contacts and promised to ask him the minute he was free. Five minutes later she sent an email titled ‘Steven Henkes’. With the note: ’Might this help?’ Attached was a BBC piece detailing Henkes’ dismissal from Tesla and his filed complaint that Tesla solar panels were known to catch fire, and that the company had failed to notify the public or shareholders. UGH.
The only reason I’m on this tack today is because a lot has happened separate from general electric-vehicle anxiety. Planet-friendly was always going to be my choice even if it meant a few hiccups, but I didn’t bargain on the war between Elon Musk and Herr Newsom. First, there was the issue of asking us not to charge our cars, which didn’t sit well with anyone. It was one thing to ask us to run laundry and dishwashing machines in the evening, well after our housekeepers had gone home, but then the request not to even charge our cars due to drain on California’s power grid, was seen a shot across the bow.
I for one didn’t see this coming. Even with California’s commitment to ban the sale of gas-powered vehicles by 2035 it became apparent to everyone that California didn’t value the business or personal tax revenues of the richest man in the world. And so Musk moved his Tesla headquarters out of California and into Texas, citing ‘overtaxation’. Musk even said California was no longer the land of opportunity that it once was. I would have wanted to work on his messaging but I didn’t need my father’s input to tell me he was telling the truth; suddenly, 2035 was looking further away than ever.
Austin or bust.
I really didn’t think he'd do it because it meant so much upheaval, billions of dollars in taxes just to leave, and he risked upsetting his largest customer base, but customers get pretty testy when there’s no product to buy. And what was the man to do when on top of its draconian taxes, California was determined to win the Covid standoff?
Then last week California proposed new net metering rules to include a ‘grid access’ fee, in addition to the fees we already pay, which will add $50-$80/month to the electric bill. If they go ahead with it, (and what do they have to lose at this point?) it will be the highest solar fee anywhere in the country, including states hostile to renewable energy. AND they propose to change the rules for customers who have already signed contracts and purchased a solar system.
My phone rang… it was my father calling me back—‘How may I be of service?’ he asked.
‘Well… I don’t want you to denigrate my choice to buy an electronic car, but…’
‘OK. Excellent choice then.’
UGH! ‘Daddy,’ I began, ‘I just need advice on keeping my car.’
‘I see. Well…excellent choice to purchase, bad choice to keep. Is that helpful?’
‘No. Not helpful! I just don’t know what to do because I will need a car when I return to California.’
‘Which you haven’t wanted to do for nearly two years now.’
‘But I will return.’
Something like this, more or less, but cheaper.
‘… As you keep saying. But may I remind you, that house… which your mother and I were happy to buy for you… is entirely set up for that very car. I believe you told us it was an investment, by which I assume you meant a good investment. But as I recall the powerwall was $10,000, the solar panels were $30,000 and I calculated seventeen years to recoup this investment, or more like twenty-five when you calculate the decline of energy from the panels over the years. But that was assuming you were allowed to charge your car, and that they didn’t renege on the original agreement that categorically violates basic principles of fairness.’
Of course I wanted to scream, but I decided to just keep quiet until he said something else.
‘So as I understand your question, you want to know what to do with a car, for which a house was designed, in a land you no longer wish to remain. Is that putting too fine a point on it?’
‘I expect to return.’ I insisted, calmly.
Now he was silent. It was a standoff. I didn’t want to talk and he knew it.
'Jennifer, I can’t advise you. You alone know what is going to work for you, and since you’ve been living everywhere but there for the last two years, I see no reason to rush to a decision.’
Wow. He really wasn’t going to help.
‘Sweetheart, take your time. Everyone has been finessed into this green push. Even your beloved California had to pay neighbouring states to take their excess solar lest they blow out their own power grid. Germany can’t afford to convert electricity to methane, France spent $33 billion on a solar farce, and even my own petroleum industry spent a billion on advertising and lobbying for climate-related ventures. And speaking of lobbying, think about whether or not you need to keep a base of operations there just to impress your tree-hugging clients’.
My industry is not a farce. And I wanted to say this to him but I was afraid I couldn’t make a good point just now. And why did he have to be so nice when he really did tell me so? As I’d decided against the train, I rented a car and will have plenty of time to think about it all as I drive to the Cotswolds.
A Tesla Goes Boom
A play in three acts:
Act One -- A man in Finland named Tuomas Katainen bought himself a 2013 Tesla Model S for tens of thousands of dollars.
Act Two -- He drove the car for awhile until it broke down. He brought it to the mechanic and, after a month of working on it, they told him the battery pack was dead. So he called Tesla about a replacement, and was told that, since it was out of warranty, a new battery pack would cost him $22,000.
Act Three -- He briefly considered paying up, but in the end he decided on a more sensible course -- he gathered a bunch of his buddies, went out into the woods, and blew the car up with a bunch of dynamite: 30 kg (or more than 66 lbs) of dynamite, to be exact, and with an Elon Musk dummy strapped into the driver seat.
Check out this video for the fun (I've set it to start a few moments before the blast):
While enjoying an post-explosion cigarette, Mr. Katainen was asked if he'd ever had this much fun actually driving the Tesla. "No," he replied, "No, I never enjoyed [myself] this much [in the] Tesla." Spoken like a true man.
Anyway, enjoy, and remember -- don't make Tuomas Katainen's mistake. Stick with internal combustion engines. That is, unless you've got 60 lbs of dynamite laying around and just want to have yourself some expensive fun.
Electric Vehicle Fires: Nearly Impossible to Extinguish
Here's something you won't hear much about in the mainstream media -- America's firefighters are struggle to develop procedures for dealing with electric vehicles that have crashed and burst into flame. "The problem," explains Jazz Shaw, "is that despite not having a tank full of gasoline, electric cars burn longer and more fiercely than automobiles with internal combustion engines." Why is that?
Damaged banks of lithium-ion batteries contain a lot of residual energy and can keep driving up the temperature (and reigniting everything around them) for many hours. There is currently no official training for how to deal with these fires. Tesla’s own first responder’s guide only advises firefighters to “use lots of water.”
"Lots" seems like an understatement. Shaw reports that back in April it took eight fireman seven hours to get a burning Tesla under control outside of Houston, and they used roughly 28,000 gallons of water to do it, "more than the [entire] department normally uses in an entire month." And that bit about EV batteries "reigniting" is no joke either -- one veteran fireman likened them to a trick birthday candle, the kind that light up again every time they're extinguished.
So, EVs burn like crazy, they require a massive increase in mining for raw materials like lithium and cobalt which are extremely damaging to a variety of ecosystems, and, since they run on electricity which is mostly generated by fossil fuels, they aren't meaningfully reducing carbon emissions anyway.
Why are nations across the world moving towards mandating them again?
Eyes Wide Shut
I read a report in the Wall Street Journal in April about a Tesla car crashing into a tree in Texas, killing the two occupants. Sadly, fatal car accidents are all too common. Striking however was the reported time of four hours that it took emergency crews to finally put out the fire that engulfed the car. Apparently, the batteries used in the car are hard to extinguish once ablaze; or at least they keep on reigniting after the job is seemingly done. The car was also equipped with so-called ‘Autopilot’ and, reportedly, neither of the occupants was behind the wheel at the time of the crash. Now, to be fair to Tesla, Autopilot does not quite mean autonomous; it is just a step on the way.
There is a lot of hype about autonomous vehicles. No doubt they will have their place in well-contained situations. Australian mining companies lead the way in using them on-site to shift material from one spot to another. There are trials afoot, including on dedicated lanes on public highways across North America and Europe. Imagine. Millions of cars and heavy trucks tearing down highways, through towns and suburban streets without drivers. What could possibly go wrong?
Call me a techno-skeptic. I can’t see anyone being clever enough to devise a system to safely control millions of speeding intersecting vehicles while orchestrating appropriate responses to untoward situations. To wit, avoiding or not avoiding, and how, that dog wandering into the road. And I’m still trying to figure out how motorcycles and push bikes fit in.
Fahrvergnügen?
Of course, there’s always artificial intelligence (AI) to come to the rescue. Nothing is beyond AI apparently. Elon Musk himself, along with other far-sighted people, including the late Stephen Hawking, is on record as believing that it might even subdue us and take over the world. Self-driving cars would be a doddle. However, I remain unconvinced.
In any case, it doesn’t matter because autonomous vehicles, so far as I can tell, will live or die in the marketplace. It a question of whether lots of people who like driving will take to them. Whether bolder trials will end in too many crashes for comfort. Whether algorithms can ever be devised to replace human judgement in handling the myriad of different, and subtly different, situations arising on the road. That story will eventually be told by technology and market forces acting together.
Electric cars belong to a different storyline altogether. Their development is inorganic. It’s artificial. It can’t be quelled by antibodies -- in this case by economic realities. Bad things can happen and will go unpunished.
Pound for pound, electric cars are more expensive to make than are petrol or diesel cars. They are heavier and impart more kinetic energy when they crash; they create a bigger fire hazard. They will require massive amounts of electricity overnight when the sun isn’t shining and the wind is often still. They depend on the extraction of rare earths which, by all accounts, is a dirty business for the environment and which increases dependency on communist China, the overwhelmingly dominant producer. They require massively expensive, power draining, ubiquitous roadside charging infrastructure. Then there’s the challenge of disposing, year after year, of millions upon millions of toxic defunct batteries.
And, pray tell, what to do during those extreme-weather events (threatened by John Kerry et al as the doleful wages of anthropogenic climate change) when a community’s electricity supply has been snuffed out by one of those weather events and families whose cars have flat batteries are advised to flee the area? Back to horses?
Make hay while the sun shines, comrade.
To reiterate, none of this would matter a jot, if governments were not forcing the issue and taxpayers were not picking up the tab and thus hiding the costs and damage that would ordinarily be revealed and quickly punished by the marketplace. At this stage only about 0.5 percent of vehicles on the road are electric and most of those are hybrids. That leaves just about ninety-ninety percent to go. There is no way of knowing how far-reaching and irreparably damaging making such a wholesale changeover will be. And, if that’s an unknown, put it together with growing dependency on electricity generated by wind and solar. Unknown unknowns.
No one has this secret knowledge of the future. Nor do markets. But markets, ever alert, tend to weed out bad ideas not too long after they germinate. In other words, we seldom find out how bad things could get. The marvel of markets is that we don’t have to think too hard about what to produce and how to produce it. That’s a good job, because we don’t have sufficient knowledge. It’s a pretence of knowledge, as Hayek put it, to think that we do.
Communism is built on a pretence of knowledge. The means and makeup of production are directed from above. That things turn out badly is no surprise.
Proud papa of the Trabant.
The response of western governments to ‘climate change’ is essentially taken from the communist playbook. Transport and energy are at the core of modern economies. Determining how they will evolve by government edict is not fiddling around the edges. It is bound to end in tears. And those tears will inevitably go beyond economics to every facet of life.
It’s hard to imagine, if it were not happening. The ways of fuelling transport and generating electricity being foisted on us would never have powered the industrial revolutions which have led to today’s prosperity. And, to make matters worse, if that is at all possible, none of it will cool the planet.
The Automobile of Tomorrow -- and Always Will Be?
Yesterday was “Battery Day,” the long-awaited moment when Elon Musk was to reveal Tesla’s breakthrough in battery technology that would make the electric car a real economic rival to the internal combustion engine. It was therefore a significant moment not only in the evolution of electric cars but also in the development of policy by governments and international agencies towards a switch from fossil fuels to cleaner and renewable sources of energy.
There’s an obvious link between these two trends. Petrol is the fossil fuel that provides the energy for the internal combustion engine that still powers the overwhelming majority of automobiles on the world’s roads. If it’s gradually replaced by electricity as the fuel powering cars, then one major source of demand for the world’s oil companies will shrink very substantially. And where automobiles go, other forms of energy consumption are likely to follow, notably home heating.
That at least is the intention of most Western governments. Britain’s Tory government, for instance, has decreed that the sale of petrol-driven automobiles will be prohibited by 2035. Ministers are considering bringing forward the date to 2030. There are pressures to speed up the transition from MPs in all parties—notably from a 100-strong group of moderate “One Nation” Tories. And this policy has received support from some unexpected backers, notably the company formerly known as British Petroleum, which, under its new CEO, Bernard Looney, has adopted an almost missionary stance in promoting an ambitious Green agenda.
Quick off the mark, but what about the long haul?
As Ambrose Evans-Pritchard also pointed out in a fascinating analysis of the future trends in the energy market, Looney intends to free his company “from the fossilised grip of his predecessors. Not content to declare a rhetorical Net-Zero target by 2050 -- who doesn’t these days? -- he has called for the U.K. to pull forward its ban on the sale of diesel and petrol cars to as early as 2030. “We’re up for it,” he says.
Mr. Looney is not quite the revolutionary he seems, of course. As Evans-Pritchard points out in the same article, BP is also “doubling down on liquefied natural gas” which is another fossil fuel. And placing a large bet on the proposition that “natural gas with carbon capture” will become a far larger part of the energy market once the technology for carbon capture and storage has broken out of the laboratory. And having his research department look closely at the coming prospects for hydrogen as a fuel for everything from aircraft to home heating (at least as I read between Evans-Pritchard’s eloquent lines on that last point.)
Even with these qualifications, the push for electric cars and the switch from oil go hand in powerful hand. Are there any reasons for caution on the side of the skeptical investor? Though most investors have not been very skeptical until now, I think there are.
To begin with, there is likely to be some consumer resistance to electric cars for the reasons that were first outlined by Thomas Edison to Henry Ford in 1894 when evaluating the latter’s petrol-fueled Quadricycle:
"Electric cars must be kept near to power stations. The storage battery is too heavy. Steam cars won't do, either, for they have to have a boiler and a fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke, and no steam. You have the thing. Keep at it."
Both men changed their minds about electric cars subsequently, and Ford embarked on developing one, but in the end abandoned the attempt. That said, some of Edison’s complaints about electric cars are echoed by drivers today. There’s still debate over whether they’re too slow—with admirers saying they’re actually quicker off the mark than conventional autos and detractors responding that quicker is not faster once they’re actually off the mark.
Genius at work, 1899.
Some of these deficiencies will doubtless be remedied by what is a self-consciously innovative industry, but whatever the reasons, polls suggest that consumers are for the moment nervous. A nationwide survey by the U.K.'s automotive trade body (admittedly an interested source), quoted by the Telegraph, found that 44 percent of motorists don't think they'll be ready to run a battery vehicle in 2035. Many say they can't see themselves ever owning one. So it’s not surprising that according to the same report, industry insiders now want, as so often, better government incentives for consumers to purchase electric cars. And when the politicians are talking of bringing the ban on selling petrol- and diesel-based vehicles from 2035 to 2030, the producers are talking of pushing it forward to later than 2035.
The second basis for caution is that as another Telegraph report points out, the minerals needed for the production of car batteries--nickel, cobalt, and lithium—face a number of market obstacles. They’re scarce, difficult to mine or refine, located in countries with bad environmental records, dangerously volatile (lithium), and all in all their supply looks to be falling behind demand.
“Their growing scarcity is a problem that is weighing heavy on not just Musk, but the entire electric car industry,” writes the Telegraph. “Demand for nickel is expected to increase six-fold by 2030, and supply isn't keeping up.” When that happens, prices rise. And the price of electric cars, though becoming more competitive, is higher than other cars and so already a negative market factor.
The third consideration is that electricity doesn’t grow on trees—that is, not until they’re cut down, transported, and fed into power stations. Or as the intellectually lively former Tory MEP, Daniel Hannan, tweeted earlier this week: “I am often struck, in discussions about energy, by how many people talk of electricity as if it were a source of power rather than a medium. Your phone is probably coal-powered.”
So in order to replace disgraceful gas-guzzling, carbon-emitting conventional automobiles with vehicles powered by “clean” electricity, we have to generate much more electricity and make it available to drivers across the country via EV (or electric vehicle) charging points. That means more coal, gas, oil, or timber being fed into the power stations.
What also flows from this reality is that electric cars, however expensive in themselves, will be the cause of much larger costs in the form of a nationwide network of EV (for electric vehicle) charging points, not only as now in public places but in future in people’s homes as well.
In The Hidden Costs of Net Zero, Mike Travers, a distinguished engineer, estimates that the cost of installing EV charging points alone will be a considerable one—something on the order of £31 billion. (At present the U.K. has just five percent of the target number of public devices promised for the end of the decade.)
He goes on to estimate the impact not only of switching to electric cars but also of wider policies of decarbonizing, for instance, home heating, and concludes that the extra demand for electricity would overwhelm the existing system of electricity distribution and require massive infrastructure repair and development at a total bill of £410 billion, an average of £15,000 per household.
Even if we assume, as we must, that the second-order costs of electric vehicles alone would be much lower, these are such staggering figures that we look naturally look for alternatives to current policies, and that takes us down the route of innovation.
As Evans-Pritchard noted above, the titans are doing so. BP’s policies include both banking that carbon capture will give natural gas a longer life expectancy as a respectable energy source and, in the longer term, developing the potential of hydrogen as a versatile fuel, presumably by overcoming its dangerous volatility as tragically seen in the destruction of the Hindenberg.
The problem with innovation is that while it can be depended upon in general, it’s not a reliable solution in particular. Carbon capture is far from a sure thing. If it does ever emerge from the laboratory, however, its benefits need not be confined to natural gas. In principle at least it might make all fossil fuels clean or cleaner—gas, oil, and even coal. Given that these fuels have far lower prices than the accumulated costs of the electricity that powers the Tesla, that would revive their market appeal. The same would be even truer for a new clean fuel emerging from a safe hydrogen.
These rivals to the electric car would have looked smaller yesterday if Elon Musk had unveiled a battery that enables EVs to travel further, faster, and with shorter refueling times at a price that competes with conventional autos and perhaps with other innovation-based cars and that can plausibly claim to leap over the obstacles listed above.
Did he do so?
He said he did. He promised a new battery that would enable Tesla to market EVs at $25,000, a fifty per cent cut from the present $50,000. That would be a game-changer. But industrial history is littered with the bones of true innovators who were over-taken in the final stretch.
