Electric cars to be here faster than we expect

The US has learned once again that when it engages in Vietnam, Iraq and Afghanistan-style wars it loses. But don’t write off the US because we are about to see its strength in action. When the US decides to mobilise its industrial base there are few countries in the world that can match it.

So it’s not surprising that after a slow start the US thrust towards electric vehicles is nothing short of staggering.

The piston engine, along with the old lead acid-style battery which have dominated global transportation since Henry Ford’s “Model T” was launched in 1908, are on the way out. The major motor makers led by Ford, GM and Stellantis (Chrysler, Fiat, Peugeot) plan to achieve half their sales volumes via electric vehicles by 2030. And that’s just the start.

To replace petrol (Americans call it ‘gas’) will require enormous investment in power generation, usually by renewable energy facilities, new power grids and a new distribution system as new battery chargers appear in shopping centres and convenience stores.

Americans will shop or dine while charging. Homes with garages will require charging stations and the second car may be the home battery storage that takes in solar panel power generated during the day. And all those US trends are going to be duplicated in Australia, China, Europe and around the world. We are looking at an industry transformation of huge magnitude.

You will remember that I explained yesterday that in 2019 BHP set up four US / world decarbonising scenarios, with “scenario one” the biggest change, resulting in a substantial rise in demand for steel, copper, nickel and other minerals. BHP’s “scenario one” has been embraced by the US and that contributed to BHP’s decision to shed its oil and gas assets and concentrate on maximising participation in the change.

The US has been slow to start and at the moment China and Europe are way ahead, but that will change.

According to the International Energy Agency the US last year had only about 17 per cent of the world’s total stock of 10.2 million electric vehicles. China has 44 per cent of all the EVs in the world (more than 4.5 million), and Europe at 3.2 million represents about 31 per cent. In Europe, Daimler’s plans that its Mercedes-Benz brand will go all-electric at the end of the decade “where market conditions allow”. Even more importantly, from 2025, all of Mercedes-Benz’s “newly-launched vehicle architectures will be electric-only”. If it is not designing petrol-driven cars it will not be making them.

In the US President Biden’s “Build Back Better Plan” includes purchase incentives, help in develop a comprehensive charging network, investments in research and development, and incentives to expand the electric vehicle manufacturing and supply chains in the United States.

Had electrification been delayed there may have been an opportunity for other technologies like hydrogen cars to drive decarbonisation. But the motor companies have made the decision and there will be no going back. Roads are set to be a lot less noisy because once cars go electric trucks will not be allowed to have their current exhaust and noise levels.

But there is a separate and even more revolutionary development in the US and elsewhere —the self-driving car. Uber in its investor briefings makes no secret of the fact that its long-term objective is to use its brand and market share to embrace driverless vehicles. They will reduce the taxis’ market share and make an impact on public transport.

If low-cost driverless Ubers become prevalent it will also reduce car ownership for those unable to charge vehicles at their residence. They will simply order a driverless Uber from their home. At this stage there are a lot of obstacles but the driverless car research is gathering intensity.

Here in Australia we no longer make cars so as world motor makers switch to electric vehicles that require charging, so exactly the same sort of revolution will take place Down Under.

Accordingly we will require a big increase in power generation. Just how this increase should be achieved and the backup required for renewable generation is a huge debate in Australia, with the states tending to have a different view to the Commonwealth.

We will need to sort it out because whether we like it or not the transportation revolution around the world will have Australians driving electric cars much faster than they currently anticipate.

Advocates of wind turbines say that the way turbines are now spread around different Australian regions is substantially reducing the need for an enormous back-up when the wind does not blow. It’s highly unlikely all wind generators will cease generating at the same time. There is also work taking place to increase the productivity of solar generation.

Many Australian families will link the battery storage in their cars to their solar panels. But power networks will offer those with electric car battery storage cut price deals to be able to use those batteries for network storage.

Like so many other areas power generation is going to be about data bases and networks. That’s why Telstra is looking to enter the arena and the Commonwealth Bank names it as a possible extension if its services.

But in any revolution like this one there will be endless surprises.

Extracted from The Australian