Article: Aftershocks of the EV transition

[Jac]

Interesting article on the consequences of public policy-driven rapid transition from ICE to EVs:

”EVs are a new class of cyberphysical systems that dynamically interact with and intimately depend upon both energy and information systems of systems to function. When used as the catalyst to fundamentally transform an economy in a decade like the Biden Administration desires, EVs profoundly change both concurrently, affecting society on the scale of a magnitude 8.3 earthquake followed by the 1,700 foot mega-tsunami it creates.

Nothing in modern society operates without reliable access to both energy and information, and they are connected in ways we do not fully understand. Agitate one or the other, let alone both simultaneously, without comprehending or actively planning contingencies for how the countless and frequently fragile interactions between them will be affected, is asking to be unpleasantly surprised by the aftershocks created. Creating far-reaching technology policy first and then figuring out the myriad of engineering details needed to implement it second, is always going to be a high-risk strategy that needs an appropriate level of wariness.”

Full article link: https://flip.it/DHazLo

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[electruck]

Not saying the article doesn't contain valid points but here are a couple of counter points for consideration:

• Change will always inconvenience someone.
• Global scale changes with an entangled web of considerations can not wait for a big up-front design to be completed before moving forward. There will always be unforeseen complications that can't be solved for in advance. Sometimes the best path forward is to pick a direction and then course correct as necessary based on lessons learned along the way.

 

[COdogman]

The author seems to be a little obsessed with the point that EV adoption is being pushed by government In the form of incentives and subsidies. Nearly every form of energy, transportation we have used over the last 200 years has benefited from government interventions In some form. The oil industry gets tax breaks and cheap leases. The nuclear industry wouldn’t exist without government research and the Price Anderson Act. The TVA helped bring Appalachia out of the dark ages.

Are they picking winners and losers? Maybe. But if they didn’t help push technology forward we might still be driving Stanley Steamers and using whale oil to light our houses. As @electruck said, change is always inconvenient and uncomfortable for someone. If we wait until we think conditions are perfect to make a switch it will likely be too late and we will realize we actually weren’t ready for every possibility anyway.

 

[Zoidz]

While not identical, a fairly similar scenario has occurred in the past 30-40 years - mobile phones and computers. Massive demands and investments in various types of infrastructure, significant impact on business and personal economics as well as business and personal interaction, and plenty of political wrangling and positioning over regulating the technology.

Plenty of road bumps along the way, but I don't see it as dire as the author might make it seem to be.

 

[Jac]

I agree with the observations each of you have made. I do think there will be second and third order impacts of the transition from ICE to EV transportation that will present challenges and opportunities. The author’s point that aggressive transition timelines can compress the emergence of these related challenges and opportunities is valid — and makes living in these times interesting.

 

[zipzag]

The only reason the transition is not market driven is that the pollution externalities of ICE are not priced into the product.

Aslo, public policy design did not create tesla. What major technological change has been managed from the top down by the experts the author seems to believe exist?

 

[Coast2Coast]

It's never one, public policy, or the other, the market, but the only one that can be changed quickly, in a year or two, is public policy. Plus, in the midst of a climate crisis and growing super power rivalry with China, the only one that can be moved RIGHT NOW is public policy and that's not saying anything about the efficacy of those policies.

 

[COdogman]

I agree with the observations each of you have made. I do think there will be second and third order impacts of the transition from ICE to EV transportation that will present challenges and opportunities. The author’s point that aggressive transition timelines can compress the emergence of these related challenges and opportunities is valid — and makes living in these times interesting.

I think you are exactly right. One that has been on my mind lately is the Wild West situation with charging networks. I could see a situation where the cost of charging anywhere but home gets out of control quickly.

 

[Guy]

I think you are exactly right. One that has been on my mind lately is the Wild West situation with charging networks. I could see a situation where the cost of charging anywhere but home gets out of control quickly.

I can see your concern but I would expect the market to sort this after, messily for sure for a period of time, but you will see national chains with uniform standards (as much as state laws allow) emerge. EA is already there and others will follow. There will be a consistency and minimum standards and if someone tries to charge way more than others then they will lose customers. That will take some time as networks are built out but if EA could have a viable national network for under $2billion (of which 40% had to be spent in California) then imagine what the $7 billion in the IRA should provide.

 

[Donald Stanfield]

I agree with the people who are saying that every technological change has unforeseen consequences. I don't think the article is being 100% fair with blaming the government for accelerating this change. The reality is EV's are technologically superior and the massive investment in Manufacturing them has a lot less to do with government than it does with Tesla.

Since Tesla has proven you can mass produce EVs that are good enough today for probably 80% of people's use case and they are a superior vehicle it has reached a tipping point. Rivian then proved that you can do it with a pickup truck and have said truck be a pretty good sports car too. When the majority of EVs still looked like the bolt only the hardcore environmental people drove and bought them. Tesla gave EVs mass market appeal and now people want them.

This sort of thing has played out in literally every major technological transition. It starts off slowly, then eventually reaches a tipping point where it gets mass market appeal. Then the change cannot happen fast enough. Look at the PC revolution, the first PCs were DOS based and more or less useless unless you were in the industry yourself. Then the GUI was invented and the price came down to where it wasn't a useless novelty for the super rich. More people bought them until it reached the tipping point with a computer in most middle class households. Kids started doing homework on them even.

We are already past the equivalent point of the GUI with EVs and they have just reached mass market appeal. The transition is not only inevitable but will happen in this compressed timeframe organically. Tens to hundreds of billions of dollars are being invested in EV manufacturing from all major manufacturers now and once they start rolling off the line they will be commonplace enough to get widespread adoption. I could see by 2026 or 2027 half or more of all new cars sold being EVs.

Yes this is going to squeeze infrastructure but necessity is the mother of invention and this adoption has played out thousands of times in human history. There are always luddites admonishing progress, and it doesn't matter. It happens anyways.

 

[emoore]

Great post Donald. I 100% agree. I laugh at all the EV sales projections saying that they will only be 50% of new car sales in 2035. We always tend to underestimate big changes like computers or smart phones, etc. Once you get mass appeal then adoption takes off (S-curve).

 

[zipzag]

Great post Donald. I 100% agree. I laugh at all the EV sales projections saying that they will only be 50% of new car sales in 2035. We always tend to underestimate big changes like computers or smart phones, etc. Once you get mass appeal then adoption takes off (S-curve).

I have difficulty seeing how batteries can ramp fast enough to exceed 50% market share by 2035. The experience curve for solar wasn't reliant on increasingly hard to get mined minerals.

But I do agree that the transition to new technology is often inevitable long before it becomes dominate in the market.

 

[emoore]

I have difficulty seeing how batteries can ramp fast enough to exceed 50% market share by 2035. The experience curve for solar wasn't reliant on increasingly hard to get mined minerals.

But I do agree that the transition to new technology is often inevitable long before it becomes dominate in the market.

Yeah it might be difficult but where there is demand there is a way. Many terawatt hours of battery capacity is coming online in a few years with many more to follow. Going to be fun to see how quickly the transition happens.

 

[TexasBob]

Sorry but that article is mostly fatuous mental self-gratification. A guy who makes his living selling risk management consulting concludes that we need a lot more - I mean way, way more - risk management experts writing reports and advising policy makers if we are going to successfully transition to EVs. Eye roll.

Electric vehicles have the following fundamental advantage: they move society from a single-fuel transportation system to a multi-fuel transportation system. EVs can run on oil or wind or nuclear or solar or coal or wood or hydro or natural gas or (you get the idea). ICE vehicles can run on refined oil. That is all. Why do you think China has been so aggressive in moving to EVs? They are massively diversifying their energy feedstock for transportation.

The necessary information component of this transition is massively overstated. You can disconnect EVs from any information feed and they (along with their energy supply) will operate just fine. Yes, they are a new load with a different load profile. We deal with major shifts in electric load and load profile every few decades. We deal we major shifts in generation sources every few decades. We folks in the energy industry do this. We know how to do it and the small (yes, it is small, around 0.8% per year addition generation growth) bump in new generation required to manage the shift to EVs is a thing we can handle.

The writer also has it simply backwards wrt to the policy shift. Long-term, stable policy de-risks all engineering challenges like this one. It is the volatility of US policy (will they / won't they) on green energy that causes risks to exponentially grow. To the extent that the Biden policy represents a structural shift toward EVs (I think it does), it simplifies and de-risks everything downstream.

Yes, there will be a bit of buffeting from the nationalistic nonsense in the IRA. But - and the writer reveals his lack of international business awareness here - the IRA is simply mirroring a global trend of the moment. India, China, Southeast Asia, Europe, LatAm all have similarly nationalistic policies that preceded the IRA. Are they dumb? Yes. Did the IRA prompt them? No. Indonesia is not going to export nickel unless it is upgraded to batteries in country. India is going to require solar modules to use Indian glass. Etc. Etc. ad nauseam.

It seems to me that this article is little more than another self-serving consultant-speak bit of nonsense.

 

[Donald Stanfield]

Great post Donald. I 100% agree. I laugh at all the EV sales projections saying that they will only be 50% of new car sales in 2035. We always tend to underestimate big changes like computers or smart phones, etc. Once you get mass appeal then adoption takes off (S-curve).

The iPhone came out in 2007. How many people had a smartphone by 2017? Pretty much everyone had a smartphone by then. Now batteries might be a limiting factor except for the demand being there spurring innovation. With a constrained lithium supply the pressure is on to build better battery technology. Just like the iPhone 1 compared to the current generation they aren't even recognizable in under 20 years even the 2007 to 2017 transition of 10 years took the phone from a novelty to a mass market device for everyone's use case.

Sulphur ion batteries have been proven to work with the new electrolyte catalyst with more energy density and lighter weight for longer cycles in a lab based setting. I'm willing to bet a tech like that is on the horizon which will eliminate the lithium constraints. All we need is the economic incentive and if supply constraints keeps people from building enough EVs to satisfy consumer demand the market WILL respond with better tech.

Batteries are still pretty much in their infancy technology wise with only a couple companies even working on innovations up until now. With the major manufacturers getting in the game and demand for new EVs rising there is incentive for many other players to enter the game and money to be spent on R&D where there wasn't before.

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