These prophecies are true if by that time the opposition is banned.

From Climate Scepticism

BY JIT

By Order

If you crawl around the drainpipes of the internet enough, you will see plenty of news about how great things are going for EVs. An example this week from Mr. Bloomberg is shown in the featured image.

[Visit the link for the entire self-congratulatory marmalade.]

This excerpt hints at what is actually going on:

COLIN McKERRACHER (BloombergNEF’s head of Advanced Transport): But policy really matters and what you can safely say is that in places where there is no supportive policy, there’s very, very little EV adoption. And in places where there’s a lot of policy, there’s a lot of adoption.

JIT: And in places where packs of starving feral dogs roam, people don’t take their families on picnics.

In a car review a fortnight ago, it was reported that the Lucid Air is the best EV around. According to Auto Express,

It’s a crying shame we won’t get the Lucid Air in the UK, for it is arguably the best EV in the world right now.

OK Kevin, how much is it?

The basic version available in some European countries…

costs the equivalent of just 80 grand and delivers a real-world range of over 400 miles, a 0-62mph claim of less than four seconds and a top speed of 140mph. And that’s just the base model.

Just 80 grand! For just the base model. Remarkable!

The story of Lucid Motors (so far…) is an interesting one. In 2021, Lucid was the next big thing:

In fact, some smart guy called Mr. “On the Pulse” got so excited by Lucid that he bet the farm on it.

What happened next? This headline – coincidentally also from Mr. Bloomberg – hints that not everything is rosy.

This is what happened to the share price after Mr. “On the Pulse” invested half his net worth in the project (at about where the blue dot is).

The good news for Mr. “On the Pulse” is that he still has the 50% of his net worth that he didn’t spend on Lucid shares. However, it is fair to say that he is ruing his punt:

I count my investment in Lucid Motors as the largest investment error I have made so far.Mr. On the Pulse

Well, you can say that again.

I count my investment in Lucid Motors as the largest investment error I have made so far.Mr. On the Pulse

Thanks. I heard you the first time. Lucid has gone for the luxury EV market, which of course is low volume and rife with competition. Maybe they will make a go of it. They do have the serious backing of the Saudis, so they will not go bankrupt any time soon. Obviously Lucid are not really going to be affected by EV mandates or quotas, which will mostly benefit mass market vehicles.

And what about those mandates-slash-quotas themselves?

Well, the air started going out of Rishi Sunak’s EV mandate “concession” before he had finished speaking.

Hooray! No new car buyer will be forced to buy an EV in 2030. Except they will. Oh.

That’s because rather than ban ICE vehicles entirely, he’s merely offering the sop of an allowable quota of 20%, sliding rapidly down from a 78% allowable quota of ICEs next year. Yeh, Mr. Denier, but any one of us could be in that 78% next year or 20% in 2030, so we aren’t banned from buying an ICE car. No indeed. But the back of my envelope tells me that we will be paying a lot more for our ICE car than otherwise.

I’m not going to go over the numbers here, but my toy estimate of the effect of the quota is of an additional cost to consumers and businesses of £4 billion per quarter in 2030 at the low end (should we fully comply with the 80% mandate). This just accounts for the extra costs of EVs: there are no fines, because the proportion of ICEs is within the quota.

That’s just for sales of course. You may argue that there will be savings on fuel so the net cost is lower.

Note also that my estimate of £4 bill does not include the additional costs created by the new zero-emission van mandate (10% next year and cranking up). You can probably add a billion per quarter in 2030 for that. The ball-park is £20 billion a year in added costs for no improvement in productivity.

This all adds to inflation of course. However, it may marginally reduce CO₂ emissions and/or particulates, with the caveat that the heavier EVs will produce more particulates from their tyres, if anyone cares about that.

ASTERISK: Everything I know about economics I learnt from Economics for Dummies, so I am very much Jon Snow on the topic. My estimate of these costs is not science. Although I can show my working if it is demanded. The cost to the country if we fully comply is easy to compute given reasonable assumptions: (i) £10,000 average cost advantage for ICE vs EV and (ii) no reduction in overall sales volumes. Numbers for partial compliance are a bit harder to work out but are easy enough with a spreadsheet. Of course the real picture is far more complex than my toy model; there are not two kinds of cars, one costing £10,000 less than the other but subject to a £15,0000 fine for each vehicle over a 20% quota.

DOUBLE ASTERISK: The toy model implies that the Exchequer would rather we carried on buying ICEs. That way, they get the full VED, the fuel duty, and the VAT on it, plus the value of all the fines. If we comply with the mandate fully, the tax take from the fines will be diverted to paying the costs of the car companies, while the fuel duty etc goes up in smoke.

That’s the non-U-turn U-turn, which was accompanied by a mixture of indignation and credulity and not enough cynicism.

One would have thought that the future should have a certain inevitability about it. Do EVs? I don’t think so. EV sales can limp along with a burly man on each arm, but once the burlies let go, the sales fall over. EVs will eventually have to stand on their own four wheels. Naturally if by that time the opposition is banned… well, then the prophecies are true.

EVs are the future.