Why governments are (more or less) mandating electric vehicles
       |           

Welcome, Guest. Please login or register.
Did you miss your activation email?
May 26, 2024, 04:19:45 PM
News: Election Simulator 2.0 Released. Senate/Gubernatorial maps, proportional electoral votes, and more - Read more

  Talk Elections
  General Politics
  Economics (Moderator: Torie)
  Why governments are (more or less) mandating electric vehicles
« previous next »
Pages: [1]
Author Topic: Why governments are (more or less) mandating electric vehicles  (Read 390 times)
Benjamin Frank 2.0
Frank 2.0
Jr. Member
***
Posts: 1,213
Canada


Show only this user's posts in this thread
« on: March 28, 2024, 06:22:14 AM »
« edited: March 28, 2024, 06:34:06 AM by Benjamin Frank 2.0 »

I've mentioned many of these things before, but tying them all into electric vehicle mandates...

When I was growing up, I used to hear this completely incorrect phrase "build a better mousetrap and the world will beat a path to your door." I know some marketing person later finally basically corrected it to "There's no point even attempting to build a better mousetrap because people are already satisfied with the mousetraps that they have."

Behavioral economists explain this as 'status quo bias.'

This has two components, generally on the consumer side of 'inertia' and on the producer side of 'loss aversion.'

So, given that consumers have already learned how to use mousetraps that already exist, it's very difficult to get them to learn to use something different Even if it's supposedly better.
That's inertia.

The 'supposedly' part is very important in the concept of 'loss aversion.'

Back in the early 2000s I had a friend who tried to sell the then new LED lightbulbs. He would say 'yes they have greater upfront costs, but they use a lot less electricity and they last years longer' to businesses. And he was constantly given the reply 'If they actually are better like this, get back to me in 10 years when you have the data to show it, because until you can show me that, I'm not willing to pay the greater upfront cost.'
That's loss aversion.

So, let's take this to electric vehicles. You can agree or not, but these nine governments genuinely believe that global warming is real and that's it's mostly caused by CO2 emissions. But, due to this status quo bias, it's very difficult to create an entirely new industry to displace the ICE vehicle industry. It doesn't just take making the electric vehicles of course, but it also takes creating the power to charge the electric batteries and, of course it takes building the electric charging stations. And it also takes building all the electric car repair facilities. So, some regard this as a distasteful side of capitalism, but due to this status quo bias that makes people want to keep ICE vehicles, in order to create a new industry, and where there isn't a dominant industry player, it can take government mandates to ensure this market, so that investors will have the confidence to invest in the charging stations, the repair shops....

For a non government example of something similar to this, the best is probably when Microsoft in the early 1980s used its market monopoly power in P.Cs to force standards that ensured that printers would easily work with word processors  and so on so that consumers wouldn't have to learn how to separately learn to use every new piece of hardware or software and how to get them to all work with every other piece of hardware and software.
This ensured that P.Cs would remain the dominant computer ahead of Apple which created the confidence for new software and hardware companies to make products for the P.C.


One more point on the other side of ensuring markets to overcome status quo bias and other issues of supply chains.

I can understand the sentiment of people saying "I don't want to give up my ICE vehicle." But, assuming electric vehicles have become the standard by around 2040, you might own an ICE vehicle, but other than people who will start up 'rogue' (not illegal) gas or other types of charging stations that power ICE vehicles (think of movies like Mad Max I think), how is the average person going to gas up their ICE vehicle? Sure, there will be people who still want to own gas stations, but think of the supply chains and take a step back.

These gas stations don't make their own gasoline. They get gasoline from expensive trucking operations who get their gasoline from enormously expensive refineries. Does anybody seriously think there is enough profit to maintain these things if you have 1,000 towns of 1,000 people dotted across America whose citizens want to continue use ICE vehicles?

Logged
Open Source Intelligence
Jr. Member
***
Posts: 902
United States
Show only this user's posts in this thread
« Reply #1 on: March 28, 2024, 07:55:02 AM »

https://johnhcochrane.blogspot.com/2023/07/electric-vehicles-carbon-taxes-supply.html

Quote
If you have not been paying attention, our government has decided that all electric vehicles are the solution to the climate problem. At least as long as they are made in the US with union labor and benefits. California has committed to banning the sale of anything else. In today's post, a few tidbits from my daily WSJ reading on the subject.

From Holman Jenkins on electric cars:  

Quote
If the goal were to reduce emissions, the world would impose a carbon tax. Then what kind of EVs would we get? Not Teslas but hybrids like Toyota’s Prius. “A wheelbarrow full of rare earths and lithium can power either one [battery-powered car] or over 90 hybrids, but, uh, that fact seems to be lost on policymakers,” a California dealer recently emailed me.

[Note: that wheelbarrow of rare earths comes from multiple truckloads of actual rocks. Also see original for links.]

Quote
...The same battery minerals in one Tesla can theoretically supply 37 times as much emissions reduction when distributed over a fleet of Priuses.

This is a shock only to those who weren’t paying attention. It certainly isn’t lost on government. Chris Atkinson, the Ohio State University sustainable transportation guru whose slogan I’ve cited before—“the best use of a battery is in a hybrid”—was a key official in the Obama Energy Department.

Our policies don’t exist to incentivize carbon reduction, they exist to lure affluent Americans to make space in their garages for oversized, luxurious EVs so Tesla can report a profit and so other automakers can rack up smaller losses on the “compliance” vehicles they create in obedience to government mandates.

...

Quote
California as always leads the way on the beau geste:

Quote
... in California, ... drayage trucks, which carry containerized cargo to and from ports and rail centers, face a looming deadline. The state will require any new drayage trucks added to fleets starting next year to run on electric batteries or hydrogen fuel cells. California also plans to phase out sales of new gasoline-powered passenger cars, pickup trucks and SUVs by 2035 and require all new medium- and heavy-duty truck sales be zero-emissions by 2036.

... Trucks represent 6% of the vehicles on California’s roads, but a quarter of the state’s on-road greenhouse-gas emissions,.... California plans to spend $1.7 billion for medium- and heavy-duty infrastructure for zero-emission vehicles by 2026.

$1.7 billion, for state-provided "infrastructure," on top of the costs to industries... for a benefit of...?  

The central problem: How are they going to recharge those trucks?

Quote
[Truck operators] They position trucks near highways, rail or ports, not available power. As fleets add trucks they may need to draw an additional 6 to 8 megawatts of power or more.

“That’s about 1,000 homes,” said Steve Powell, chief executive of utility Southern California Edison. “We may need a new substation or something like that and a line to be built.”


It has not been built, and the truck deadline is now. So what do operators do?  

Quote
Southern California Edison has come across some fleets powering chargers using diesel generators...so that new EV trucks don’t sit unused.

Another solution: more batteries.

Quote
[Pacific Drayage Services President] Gillis is installing a system of chargers paired with battery storage. It can discharge power to trucks even during times of grid stress. The battery storage itself can recharge at a time of day when electricity prices are the cheapest.

There is an important point here on just how many batteries are needed for the "transition."  Don't just count the batteries in the trucks. Count the batteries in the charging stations too. And the utility. Even California knows that it does no good to electrify and then power the grid with coal and natural gas. The plan is for solar and wind electricity, but that needs utility scale battery backup. A week or more of power. The sources of my last post only added up the batteries needed for the cars. That's too low by many multiples.  

Quote
He is also hedging—Gillis tripled his usual order of new diesel trucks from 30 to 100, which will arrive by year-end, just beating the deadline before California phases them out.

I get the idea. Build it and they will come. Put the trucks in place now, so what if at huge cost, and so what if we burn coal to power them. Then when solar and wind and utility scale storage arrive, the users will be there. But trucks don't last that long. By 20 years when all that infrastructure finally has its permits, today's electric trucks will be long gone.

That article to me covers how people see a problem, come up with a solution, but put zero thought into how their solution works or gets implemented. And then at the end of the day are surprised it was not effective. It represents the worst of what people view the stereotype of a McKinsey consultant as.

The article below from the same economist from around the same timeframe of summer 2023 is a much more wide-ranging long-term-focused solution from the same place criticized above: California. However, it's largely about regulatory reform, which is much less sexy, does not grab headlines, and fractures coalitions, but is absolutely necessary if you want to really solve the problem. If you want to solve huge problems, sorry, you're going to step on toes and piss off some of your friends. That's how it works. Otherwise, to quote the wonderful TV series The Expanse: "Man with big plans to save the world...as long as no one gets hurt."

https://johnhcochrane.blogspot.com/2023/06/hope-from-left.html
Logged
Benjamin Frank 2.0
Frank 2.0
Jr. Member
***
Posts: 1,213
Canada


Show only this user's posts in this thread
« Reply #2 on: March 28, 2024, 08:07:00 AM »
« Edited: March 28, 2024, 10:03:18 AM by Benjamin Frank 2.0 »

https://johnhcochrane.blogspot.com/2023/07/electric-vehicles-carbon-taxes-supply.html

Quote
If you have not been paying attention, our government has decided that all electric vehicles are the solution to the climate problem. At least as long as they are made in the US with union labor and benefits. California has committed to banning the sale of anything else. In today's post, a few tidbits from my daily WSJ reading on the subject.

From Holman Jenkins on electric cars:  

Quote
If the goal were to reduce emissions, the world would impose a carbon tax. Then what kind of EVs would we get? Not Teslas but hybrids like Toyota’s Prius. “A wheelbarrow full of rare earths and lithium can power either one [battery-powered car] or over 90 hybrids, but, uh, that fact seems to be lost on policymakers,” a California dealer recently emailed me.

[Note: that wheelbarrow of rare earths comes from multiple truckloads of actual rocks. Also see original for links.]

Quote
...The same battery minerals in one Tesla can theoretically supply 37 times as much emissions reduction when distributed over a fleet of Priuses.

This is a shock only to those who weren’t paying attention. It certainly isn’t lost on government. Chris Atkinson, the Ohio State University sustainable transportation guru whose slogan I’ve cited before—“the best use of a battery is in a hybrid”—was a key official in the Obama Energy Department.

Our policies don’t exist to incentivize carbon reduction, they exist to lure affluent Americans to make space in their garages for oversized, luxurious EVs so Tesla can report a profit and so other automakers can rack up smaller losses on the “compliance” vehicles they create in obedience to government mandates.

...

Quote
California as always leads the way on the beau geste:

Quote
... in California, ... drayage trucks, which carry containerized cargo to and from ports and rail centers, face a looming deadline. The state will require any new drayage trucks added to fleets starting next year to run on electric batteries or hydrogen fuel cells. California also plans to phase out sales of new gasoline-powered passenger cars, pickup trucks and SUVs by 2035 and require all new medium- and heavy-duty truck sales be zero-emissions by 2036.

... Trucks represent 6% of the vehicles on California’s roads, but a quarter of the state’s on-road greenhouse-gas emissions,.... California plans to spend $1.7 billion for medium- and heavy-duty infrastructure for zero-emission vehicles by 2026.

$1.7 billion, for state-provided "infrastructure," on top of the costs to industries... for a benefit of...?  

The central problem: How are they going to recharge those trucks?

Quote
[Truck operators] They position trucks near highways, rail or ports, not available power. As fleets add trucks they may need to draw an additional 6 to 8 megawatts of power or more.

“That’s about 1,000 homes,” said Steve Powell, chief executive of utility Southern California Edison. “We may need a new substation or something like that and a line to be built.”


It has not been built, and the truck deadline is now. So what do operators do?  

Quote
Southern California Edison has come across some fleets powering chargers using diesel generators...so that new EV trucks don’t sit unused.

Another solution: more batteries.

Quote
[Pacific Drayage Services President] Gillis is installing a system of chargers paired with battery storage. It can discharge power to trucks even during times of grid stress. The battery storage itself can recharge at a time of day when electricity prices are the cheapest.

There is an important point here on just how many batteries are needed for the "transition."  Don't just count the batteries in the trucks. Count the batteries in the charging stations too. And the utility. Even California knows that it does no good to electrify and then power the grid with coal and natural gas. The plan is for solar and wind electricity, but that needs utility scale battery backup. A week or more of power. The sources of my last post only added up the batteries needed for the cars. That's too low by many multiples.  

Quote
He is also hedging—Gillis tripled his usual order of new diesel trucks from 30 to 100, which will arrive by year-end, just beating the deadline before California phases them out.

I get the idea. Build it and they will come. Put the trucks in place now, so what if at huge cost, and so what if we burn coal to power them. Then when solar and wind and utility scale storage arrive, the users will be there. But trucks don't last that long. By 20 years when all that infrastructure finally has its permits, today's electric trucks will be long gone.

That article to me covers how people see a problem, come up with a solution, but put zero thought into how their solution works or gets implemented. And then at the end of the day are surprised it was not effective. It represents the worst of what people view the stereotype of a McKinsey consultant as.

The article below from the same economist from around the same timeframe of summer 2023 is a much more wide-ranging long-term-focused solution from the same place criticized above: California. However, it's largely about regulatory reform, which is much less sexy, does not grab headlines, and fractures coalitions, but is absolutely necessary if you want to really solve the problem. If you want to solve huge problems, sorry, you're going to step on toes and piss off some of your friends. That's how it works. Otherwise, to quote the wonderful TV series The Expanse: "Man with big plans to save the world...as long as no one gets hurt."

https://johnhcochrane.blogspot.com/2023/06/hope-from-left.html


Well yeah, but the point is that humans aren't perfect and have biases like status quo bias, and because of that, overcoming that requires less than ideal fixes as well such as government mandates of imperfect technologies in the hopes that the mandates will ensure a large enough market to ultimately get enough investment to improve the technology.

Carbon taxes that allow people to make their own choices as we see in Canada aren't popular either (visible, so, easy to scapegoat) and people can't see that they actually work because there is no guaranteed end product that produces less GHG, just abstract arguments of 'incentives.'  Even seemingly easy things like the LED lightbulbs that would have been an end product result of a carbon tax had to mandated as well because there was so much resistance even to that.

Of course, one problem with hybrids (which in some cases are allowed under the mandates - hence why I said 'more or less') is that they require duplication - having both electric charging stations and gas stations and duplicate repair shops and all the other duplicate infrastructure. I like redundancy in some areas, but this really would be a waste if it were to continue for an indefinite period of time.

Also, one thing we are seeing due to these mandates is a great deal of investment into research into the batteries and there are already credible prototype alternatives to these heavy lithium batteries, I gather the main problem is scaling these alternatives batteries up so that they can work as needed to run an automobile for years and then scaling up their manufacturing.

So, a lot of the complaints from Holman Jenkins are basically the standard complaints that go along with starting up any new industry.

I guess it's Holman Jenkins who mentions the carbon tax, but when either somebody from the Wall Street Journal or 'the Grumpy economist' who works for the 'the solution to every problem is to help rich people become richer' Hoover Institution claims to be for the carbon tax, I see Trojan Horse.

Sorry, but I don't take any economist who works for the Hoover Institution as credible. He can call himself the 'grumpy economist' but he's the garbage economist as anything he writes is agenda purpose junk and is not sincere.

For instance, had California implemented a carbon tax instead (which California has a form of through cap and trade) I have no doubt the Garbage Economist would be arguing 'carbon taxes don't work, what is needed are specific mandates.'

These paid junk writers aren't sincere, there sole purpose is to obfuscate and delay.

For one thing, one reason why governments are having to resort to these sorts of mandates is that the cold calculations of GHG emissions are as bad as they are as anybody with any sense can see with the weather extremes of the last few years. Had governments and industry started 35 years ago, the changes required could have been eased in more gradually, but people like Rupert Murdoch, the owner of the Wall Street Journal and a major financier of the Hoover Institution, fought and blocked as many of these changes as possible.

Nobody with any sense regards either the Wall Street Journal or the Hoover Institution as credible.
Logged
Upper Canada Tory
BlahTheCanuck
Jr. Member
***
Posts: 1,040
Canada


Show only this user's posts in this thread
« Reply #3 on: March 29, 2024, 11:10:36 PM »
« Edited: March 29, 2024, 11:23:33 PM by Ontario Tory »

I think the main problem with mandating electric vehicles is that it makes it harder to afford them.

Let's say you have 100 vehicles on the market and 100 potential buyers. Half (50) are ICEs and the other half (50) are EVs.

Then you make it illegal to sell an ICE. That means there are fewer goods on the market, since only the 50 EVs can be sold and 100 prospective buyers are competing for the resource, so the supply of vehicles falls but the level of demand remains the same. So the price goes up. People will either use public transit or find illegal ways to keep using ICEs, or if people have no other choice and are forced to buy EVs, they are screwed over financially.

A better alternative would be to gradually incentivize EVs and disincentivize ICEs. The government saying 'you are not permitted to purchase this consumer good' just creates a lot of problems in the long run.
Logged
Benjamin Frank 2.0
Frank 2.0
Jr. Member
***
Posts: 1,213
Canada


Show only this user's posts in this thread
« Reply #4 on: March 30, 2024, 02:44:41 AM »

I think the main problem with mandating electric vehicles is that it makes it harder to afford them.

Let's say you have 100 vehicles on the market and 100 potential buyers. Half (50) are ICEs and the other half (50) are EVs.

Then you make it illegal to sell an ICE. That means there are fewer goods on the market, since only the 50 EVs can be sold and 100 prospective buyers are competing for the resource, so the supply of vehicles falls but the level of demand remains the same. So the price goes up. People will either use public transit or find illegal ways to keep using ICEs, or if people have no other choice and are forced to buy EVs, they are screwed over financially.

A better alternative would be to gradually incentivize EVs and disincentivize ICEs. The government saying 'you are not permitted to purchase this consumer good' just creates a lot of problems in the long run.

Well, this is what is happening, California and the eight other states are mandating electric vehicles by 2035, it's not illegal to buy or sell an ICE until then. And, after that, it's legal to buy a second hand ICE, but the problem with that is what I said at the end: for how long will the gas stations and other services for ICE vehicles exist if new ones can't continue to be sold?

I think the real issue with the cost and supply and demand is with the inputs/raw resources.

This is one of those things in economics that go both ways.

On the one hand, when the producer demand for raw resources/inputs increase, all else being equal, that will increase prices for these resources obviously leading to higher prices for the vehicles.

On the other hand, there is the notion of economies of scale both with the manufacturing of the E.Vs themselves, but also through increasing the investment in mining for the raw resources. This is what I was referring to when I said that it's important for the government to force the development of the market to ensure that the investment in mining and other things will be there.

Of the 'other things' I'm mainly referring to investment in the battery technology, whether it's finding alternatives to lithium, to the degree that's necessary, or simply in making the batteries lighter, since I think it's the heaviness of the batteries themselves that make them need so much energy.

So, how these countervailing effects play out of increasing prices due to greater demand for raw resources and decreasing prices spurred by economies of scale and increased investment is unknowable. Certainly I agree that E.V prices need to come down for these governments to be able to stick with banning new ICE vehicles by 2035.
Logged
Pages: [1]  
« previous next »
Jump to:  


Login with username, password and session length

Terms of Service - DMCA Agent and Policy - Privacy Policy and Cookies

Powered by SMF 1.1.21 | SMF © 2015, Simple Machines

Page created in 0.239 seconds with 13 queries.