Regulatory policy

Opinion: Will electric cars ever come out of critical care policy?

The electric mobility paradigm must be recognized for what it was: a technical and fiscal flop

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When babies are born prematurely, suffer from health problems, or endure a difficult delivery, they are taken to a hospital’s neonatal intensive care unit. There, they receive round-the-clock attention from a team of experts.

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Governments sometimes treat the birth and infancy of new technologies as if they also require special attention. It’s no exaggeration to characterize the electric vehicle as still being in its own version of critical care politics. Its long stay there – at least 15 years – and complete failure to get started is finally starting to make people wonder: precisely why is the electric car taking so long in its incubator, being kept alive by subsidies? seemingly endless governmental, warrants and other life-sustaining measures?

For better or for worse, Canadian governments seem committed to a low-carbon future. Much of their efforts consist of subsidies for buyers and manufacturers of electric vehicles, as well as increasingly strict regulations that discourage and soon even ban the sale of internal combustion cars.

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The Achilles heel of vehicle electrification is the lithium-ion battery, an inefficient, expensive and vulnerable energy storage system plagued by issues of weight, energy density, poor cold weather performance and grid adequacy – and now also by soaring prices of the critical minerals it needs: lithium, cobalt and nickel.

The lithium-ion model was a well-meaning move driven largely by unfocused enthusiasm rather than hard science and budgetary prudence. But experience shows that it is simply not a suitable energy storage technology for the mobility sector. One would have hoped that after prolonged intensive care, the lithium battery would now be strong and healthy enough for its real-world debut. But this is not the case, as proven by the financial performance of several manufacturers of electric vehicles. Tesla closed last week down 41.9% YTD, Rivian down 72.4%, NIO down 45.8%, and more.

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The electric mobility paradigm must be recognized for what it was: a technical and fiscal flop. It should be put aside before it precipitates a serious collapse in the auto industry. Anemic consumer adoption is the most compelling evidence of the lack of market demand. Despite the constant torrent of optimistic forecasts, electric vehicle sales represent an anemic 2.5% of total global sales, according to a recent McKinsey study.

Voices that are less invested in the success of EV batteries have started asking tough questions about the whole company. Challenges related to cost, range, performance, stability, ease of recharging, etc. have long been well documented. But the questions now focus on the batteries’ insatiable appetite for rare earths and other minerals and the environmental damage associated with mining.

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  1. Demonstrators hold signs outside the Australian Open site during a climate protest rally in Melbourne on January 24, 2020. – The months-long bushfire crisis has sparked fresh calls for the Australia's Conservative government is taking immediate action on climate change, with Minister Scott Morrison to reduce the country's dependence on coal.  (Photo by Manan VATSYAYANA / AFP) / IMAGE RESTRICTED TO EDITORIAL USE - STRICTLY NO COMMERCIAL USE (Photo by MANAN VATSYAYANA/AFP via Getty Images)

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Megatons of earth are moved to extract these materials, mostly with diesel rigs, but also in some places by children armed with chisels and hammers working in oppressive conditions. The carbon footprint of extracting, transporting and processing these raw materials should also not be ignored in the emissions equation.

The fundamental question is whether promoting the commercialization of a single technology is an appropriate role for governments. Governments have a long-established role in funding broad-based research and development. There are also respectable arguments that they should provide support for proof of concept and initial market penetration of new technologies. But when they seek to choose the “right” technologies and impose market outcomes at scale, they set themselves and their companies up for failure.

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Our governments’ current approach does not offer a general roadmap, but rather a set of micro-interventions that run counter to clear consumer preferences. In these challenging times, with national treasuries under severe strain and runaway inflation, policymakers must revisit their costly and single-minded focus on vehicle electrification.

We are still in the early stages of deploying this profound miscalculation. This means there is still time to recalibrate and move away from the false hope of electric mobility imposed on us by government mandates. That’s not to say we don’t need effective, efficient, cost-effective and easily deployable technologies to build a sustainable low-carbon future for the land mobility sector. In particular, we need to look at alternative non-electric powertrain technologies (including the type my company is currently developing for the bus market: a hybrid pneumatic powertrain, in which a traditional engine, powered by renewable natural gas or hydrogen, compresses air to power a pneumatic motor).

Without a significant flow of new energy storage and powertrain innovations, the auto industry will continue to be stuck in an expensive, complex, and unsustainable lithium-ion model that is plunging toward its functional and fiscal end.

Michael Nitefor is founder and president of Air Lab, Inc.



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