The graphic above is from an article at Bloomberg by Mark Gongloff:
As Conor Sen points out, investors are throwing money at EVs while dooming fossil-fuel-burning cars to the same fate as brick-and-mortar retail and print media: being stripped by private equity for parts and profits and left to die.
That’s sort of a good thing — except that putting all polluting companies into shadowy private hands could leave them free to roll coal without any investor oversight, as Mark Gilbert notes.
And anyway, electric cars don’t just grow on trees, to be gently harvested by well-paid union workers. They are built of aluminum and rare metals and other stuff that must be dug from the ground and smelted and mashed into car-like shapes at great expense of energy, writes Anjani Trivedi.
What conclusions should we draw from that chart?
US Steel, Alcoa, Freeport-McMoRan are going to make a lot of money.
US Steel, Alcoa etc are going to provide materials for EVs and/or gasoline powered vehicles. I think they make pretty much the same with either kind of car. Otherwise I dont think we are seeing anything new here are we? Did anyone think we could make an EV without producing CO2? I dont see EVs taking a big share of the market until they figure out how to get chargers in place.
Steve
I don’t think EVs will take a big share of the market until they can start producing batteries in quantity with a lower reject rate.
Batteries:
That can be subsidized.
As I’ve noted many times, steel and aluminum (most extractive industries) are very energy intensive. Steve is correct, unless you want to drive around in a death trap (remember the plastic Fiero?) a battery powered car will have all the skin panels, structural framing and most of the key wheel and drive components – except the engine block – as an internal combustion engine. And in an EV you have a battery, with its attendant environmental problems.
And as Dave points out, or if you have any manufacturing background at all, yield (basically the ratio of useable stuff, not scrap or rework, you produce to inputs), is a huge cost factor. In many cases #1. That and throughput and you generally define the low cost producer. Don’t think that marginal improvements in battery efficiency are going to save you. What does it all mean? Perhaps a month ago I noted a relatively new study in which the current breakeven for carbon emissions of an EV vs ICE was over 100,000 miles, because you have to amortize the upfront impact over a lifetime savings in ongoing energy usage. Perhaps it was 140,000. EV’s? Not in our lifetimes. I think the major auto companies are playing politics and collecting subsidies (as Grey points out) with their stated EV goals.
Separately, I found the PE vs brick and mortar retail or print media comments bizarre. Those industries are declining and its not exactly a hot PE space. And most PE in retail is about new concepts or revitalizing worn out brands.
Of the top 25 models sold (according to Car & Driver), the engine blocks of 18 are made somewhere else. Probably Japan and South Korea with some Chinese components. They account for several million of the vehicles sold annually.
From an environmental standpoint that makes no difference but it does make a difference in the energy intensity of their production.
I agree. See my comment above.
Nevertheless, EV’s are inevitable, right?
Keep an eye on Musk, king of subsidies.
He just sold $25 Billion in stock.
Interesting, no? Take the money and run?