The promising of a ‘green’ future has been over-sold, over-anticipated, and is no where near viable in the short term
Last week, Tesla’s stock crashed from a peak of about $880 share to its current value, where it is hovering around below $700. At its peak, the market believed that Tesla, a relatively small and untested luxury car maker, was valued at more than every other car maker on earth combined.
Does that sound over-valued to you? It did to me. A year of lockdown madness and fluctuating bond yields has pumped up a number of tech stocks to unsustainable highs. Tesla also has an army of hype-men touting it as not only a maker of popular products, but as a sort of corporate savior that will rescue the world from the supposed threat of “catastrophic” climate change. Tesla also enjoys the headwinds of being part of the ‘green’ corporate movement, which the federal government is now trying to push in order to remove sales of all gas powered vehicles on the extremely aggressive an impossible deadline of 2035 – a mere fourteen years away. If a child is born today, they will – supposedly – never drive a gas vehicle.
I find this extremely unlikely. Not only are electric vehicles going to take a long, long time to catch on with consumers, but even if we did somehow pull off this hail-mary and rebuild 100% of the U.S. infrastructure in under two decades, oil would still be required for our ‘green’ civilization to function.
Promoters of the 2035 deadline seek to force their own consumer preferences on the entire population. Choosing to buy a more expensive, and less useful electric vehicle instead of a normal car is being promoted as a sort of moral failing. Yet the last I checked, the cheapest available Tesla was still a solid $25k more expensive than a basic economy car. Tesla profits from this false moral indignation, as seen by its soaring valuation.
Meanwhile, consumers – other than the high-end Silicon Valley types that Tesla is catering to – don’t seem to even want electric vehicles. Sales are low compared to gas vehicles, despite all the marketing push. The reason is quite simple: electric vehicles are inferior products. Most people do not think of their car as a vessel for their politics. For 99% of the population, a car does one thing only: it gets you from point A to point B. Therefore, cost and operation are the main factors. Economy cars sell the best because most Americans are just looking for a dependable way to get to work or pick up their kids from school. Additionally, gas vehicles are quick and easy to recharge at one of the approximately 10^90 gas stations across the country. Gas vehicles get a far better range than electric. Even the high capacity Tesla is limited to about 300 miles range as of this writing. It is not only feasible but trivial to rely on a gas vehicle to get you to work, or drive halfway across the country to visit your grandma. No need to make plans to stay overnight at a motel while your car recharges. Gas vehicles are better vehicles from the point of view of a normal person who just needs to use their car to get around, instead of using it as a vessel for their politics.
In short, electric vehicles today are simply inferior products, held aloft only by investor hype and government spending. The only way to make the ‘revolution’ happen, then, is to force consumers to buy inferior products at higher prices. Hence, the 2035 deadline.
I’m all for electric vehicles and reduced emissions if it translates into better quality of life for common people. Under the moral indignation of averting a “climate catastrophe” , however, we are masking the act of coercion being promoted here – the act of forcing ordinary working-class Americans to buy products they don’t want to buy.
The great irony is that in our zeal for cleaner cities, we’ve accepted this coercion. If I were to tell you that your money is better spent at a children’s charity to feed starving children in Africa, rather than a nice $100 dinner with your wife, I doubt that you could counter the moral weight between these two purchases. In a free society, I would be free to make such an argument to try to compel you to give up your $100 dinners in exchange for helping a village in need – and you would be free to change your mind or not.
But imagine if I pulled a gun on you and robbed you of that $100, and then donated the money to that charity, while justifying the robbery as necessary to correct your moral failing. This is effectively what the 2035 mandate is trying to do.
2. Oil Is In Everything
So Tesla is enormously over-valued and EVs are going to take a hell of a lot longer to catch on with the public than the pundits may lead you to believe. But as I said above, even if we somehow either a) make EVs better products to compete on fair terms with gas vehicles, or b) force everyone at gunpoint to buy them anyway, we still are not going to get away from oil.
The main reason for this is simple: oil is in everything, Namely, plastics are in everything.
Plastic is a miracle substance developed in the 1950s from petrochemicals. Prior to the invention of plastics, products were clunky and expensive. Imagine the old-timey cars from the 1940s. Chrome and glass and steel were the material of the day. Plastics brought an extremely lightweight, durable material that could be molded to fit into almost any product.
Today, plastics are a vital component for everything around you, everywhere you go. Hell, I’m even typing on plastic keys right now. Plastic is used in medical supplies (yes, PPE included), home furnishings, vehicles (including electric!), household appliances, books and educational materials, construction, consumer electronics, the space shuttle, networking infrastructure…
I could go on.
My point is that our society is built not on driving around gas-powered vehicles. It is built on plastics. To borrow a promotional phrase from my youth, “Plastics Make It Possible®.”
So I am betting on oil. We are going to need oil for a long, long time. We’ll either have to pump it ourselves (and the U.S. has plenty of oil, despite what you may have heard) or we’ll have to buy it from someone else.
3. Avoid Utopian Thinking
What is the point of going to EVs? If it is to move to a utopian society with NO reliance on petroleum, then that is extremely unlikely to happen in our lifetime, because we rely so completely on petroleum byproducts like plastics.
If, instead, we decide that our goal is to reduce emissions, that might be a more achievable goal. Drivers are a source of emissions, and reducing emissions will improve air quality and have reduce runoff, which damages our parks and waterways. I’m all in favor of controlling these known factors.
I’m skeptical about EVs because when people talk about them, their eyes light up. They’re imagining an advanced ‘city of the future’ powered entirely by solar panels. Birds are chirping and there’s a blue sky. It sounds like a nice place to live. It also reminds me of these utopian images of the future produced in the 1950s, at the height of the nuclear age, which is how people at the time imagined the year 2020 would look.
How close are we to this vision? Compare it to reality. Now imagine your EV-powered utopian dream city and try to apply the same transformation – that’s what the future will very likely look like. Grubby and not at all what you predicted.
Remember that ‘utopia’ is Greek for “no such place.” When we cling to these utopian visions, we can overlook the real problems in front of us. Utopian thinking also tends to veer toward the coercive mindset exemplified by the 2035 deadline.