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Business | Schumpeter

How green is your electric vehicle, really?

EVs are in the middle of an obesity epidemic

An obese electric SUV weighing itself and breaking the scalesimage:
Brett Ryder
Aug 10th 2023
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Your columnist has just had the bittersweet pleasure of driving along
America's Pacific coast, wind blowing through what is left of his
hair, in a new Fisker Ocean electric SUV. Sweet, because he was in
"California mode"--a neat feature that with the touch of a button
lowers all windows, including the back windscreen, pulls back the
solar-panelled roof, and turns the car into the next best thing to an
all-electric convertible. Bitter, because once he had returned the
trial vehicle, he had to drive home in his Kia Niro EV, which is
smaller, shorter range and has no open roof--call it "rainy Britain
mode". The consolation was that it is about a tonne lighter, and if
you drive an EV, as Schumpeter does, to virtue-signal your low-carbon
street cred, being featherweight rather than heavyweight should
count.

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Except it doesn't. Just look at the future line-up that Fisker, an EV
startup, unveiled on August 3rd. It included: a souped-up, off-road
version of the Ocean, which Henrik Fisker, the carmaker's Danish
co-founder, said would be suitable for a monster-truck rally; a
"supercar" with a 1,000km (600-mile) range, and a pickup truck
straight out of "Yellowstone"--complete with cowboy-hat holder.
Granted, there was also an affordable six-seater called Pear. But
though Fisker says sustainability is one of its founding principles,
it is indulging in a trait almost universal among car firms: building
bigger, burlier cars, even when they are electric.

There are two reasons for this. The first is profit. As with
conventional cars, bigger EVs generate higher margins. The second is
consumer preference. For decades, drivers have been opting for SUVs
and pickup trucks rather than smaller cars, and this now applies to
battery-charged ones. EV drivers, who fret about the availability of
charging infrastructure, want more range, hence bigger batteries.
BNEF, a consultancy, says the result is that average battery sizes
increased by 10% a year globally from 2018 to 2022. That may help
make for a more reassuring ride. But eventually the supersizing trend
will prove to be unsustainable and unsafe.

Already it is verging on the ludicrous. General Motors' Hummer EV
weighs in at over 4,000kg, nearly a Kia Niro more than its
non-electric counterpart. Its battery alone is as heavy as a Honda
Civic. General Motors also recently unveiled a 3,800kg Chevrolet
Silverado electric pickup, which can tow a tractor and has a range of
up to 720km. This year Tesla plans to start production of its
electric "Cybertruck", described by Elon Musk, its boss, as a
"badass, futuristic armoured personnel carrier". Such muscle trucks
may be the price to pay to convince hidebound pickup drivers to go
electric. Yet size matters to suburbanites, too. The International
Energy Agency, an official forecaster, calculates that last year more
than half the electric cars sold around the world were SUVs.

For now, carmakers can argue that however big the electric rigs, they
have a positive impact on the planet. Though manufacturing EV
s--including sourcing the metals and minerals that go into
them--generates more greenhouse gases than a conventional car, they
quickly compensate for that through the absence of tailpipe
emissions. Lucien Mathieu of Transport and Environment, a European 
NGO, says that even the biggest EVs have lower lifetime carbon
emissions than the average conventional car. That is true even in
places with plenty of coal-fired electricity, such as China.

But in the long run the trend for bigger batteries may backfire, for
economic and environmental reasons. First, the bigger the battery,
the more pressure there will be on the supply chain. If battery sizes
increase there are likely to be looming scarcities of lithium and
nickel. That will push up the cost of lithium-ion batteries,
undermining carmakers' profitability.

Second, to charge bigger batteries in a carbon-neutral way requires
more low-carbon electricity. That may create bottlenecks on the grid.
Third, the more pressure on scarce resources vital for EV production,
the harder it will be to make affordable electric cars critical for
electrifying the mass market. That will slow the overall
decarbonisation of transport. Finally, there is safety. Not only is a
battle tank that does zero to 100 kilometres per hour in the blink of
an eye a liability for anyone that happens to be in its way. Tyres,
brakes and wear and tear on the road also produce dangerous
pollutants, which get worse the heavier vehicles are.

Governments have ways to encourage EVs to shrink. The most important
is to support the expansion of charging infrastructure, which would
reduce range anxiety and promote smaller cars. Taxes could penalise
heavier vehicles and subsidies could promote lighter ones. At the
local level, congestion and parking charges could have similar
effects. At a minimum, carmakers could be required to label the
energy and material efficiency of their vehicles, as makers of
appliances do in the European Union.

Derange anxiety

Ultimately, the industry is almost sure to realise the folly of
pursuing size for its own sake. The penny is starting to drop. Ford's
CEO, Jim Farley, recently said carmakers could not make money with
the longest-range batteries. His opposite number at General Motors,
Mary Barra, has taken the unexpected step of reversing a plan to
retire the affordable Chevy Bolt EV. In Europe, carmakers like
Volkswagen are building smaller, cheaper EVs. Tesla is said to be
planning a compact model made in Mexico.

The pressure is partly coming from competition. Felipe Munoz of Jato
Dynamics, a car consultancy, says China prizes battery efficiency
above bigness and is hoping to muscle in on overseas markets with
lighter, cheaper brands, such as BYD. Innovation in batteries based
on solid-state or sodium-ion chemistry may also make EVs more
efficient. For the time being, drivers with money to splurge will no
doubt relish flaunting their low-carbon credentials from the vantage
point of a large SUV or monster truck. And so they should--until they
realise that they may be making electrification less accessible to
the rest of humanity. #

Read more from Schumpeter, our columnist on global business:
Meet America's most profitable law firm (Aug 2nd)
Why Walmart is trouncing Amazon in the grocery wars (Jul 24th)
Hollywood's blockbuster strike may become a flop (Jul 19th)

Also: If you want to write directly to Schumpeter, email him at 
[email protected]. And here is an explanation of how the Schumpeter
column got its name.

This article appeared in the Business section of the print edition
under the headline "The EV obesity epidemic"

Business August 12th 2023

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