Electric car investment opportunities beyond Tesla

Now that the early adopters have catapulted Tesla to stratospheric valuations, are there investment opportunities in other electric vehicle companies? To me that means that electric cars become a viable option for a large number of people and not just a second car for super wealthy Silicon Valley yuppies.

I did some research and I think we are a long way from that so to me there’s not much of an opportunity. But as Lord Keynes said, “the market can remain irrational longer than you can remain solvent”. Here’s the rational case:

The first question is what is the reality today about electric car use? Here’s a recent article in USA today, no Neanderthal Trump supporting publication they.

The White House wants $174 billion of that directed toward boosting electric car sales. Fossil fuel use in transportation is significant, and gas-guzzling autos are one reason why. Electric cars — admittedly cleaner by almost every metric — offer relief. Well, they would if people could actually afford them. Forgoing gas is pricy, preserving the status quo less so. Which explains why only 2% of autos soldannually are powered by electricity.

Norway and electric cars

The answer purportedly lies in subsidies. Nothing — we are told — woos consumers like handouts do. Just look at Norway, where the local government has been doling out generous incentives for electric car purchases since the early 1990s. The result? Just over 54% of all new cars sales there are electric, a global record, and up from a mere 1% of the overall market a decade ago.

Impressive stuff. At least it would be were it not for a few minor — yet important — details. For one thing, Norway’s electric car experiment has cost billions, and the majority of the vehicles sold have been to households that also own gasoline-powered cars. Put simply, consumers seem to treat electric cars as complements, not substitutes. More worrying, electric car owners still rely heavily on gasoline-powered cars to get around. The average Norwegian household drove 7,500 miles in 2018, a mere 515 of which were in electric cars.

One of the main impediments to adoption of electric cars is the distance problem. Just like the intermittency problem dooms solar and wind energy to being bit players for electric power, the problem of driving long distances in electric cars has not been solved.

Here’s a 2018 article but I don’t think the situation has changed since then:

The article lists eight requirements none of which are met by current electric cars.

So my bottom line is that there really aren’t good investment opportunities with electric car manufacturers. But the Democrats and Rinos are going to pump $trillions into this so there may be opportunity with rent seekers like Tesla

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I think that’s a symptom, not the problem. Range is a factor because there is no recharging equivalent to filling up at the plethora of gas stations you find every couple miles - hit “E” and you’re stuck wherever you’re at for an hour. Once you can fully recharge in the same time and with the same ease as filling up your gas tank, range will disappear as a deterrant.

The business that can reinvent electric power as a swappable battery pack will win mass auto market. I dont know if that company even exists yet.

that could be a tall order. The battery packs are huge and heavy. Here’s a list of the weights of Tesla’s compared to internal combustion engine vehicles. notice that all the Tesla’s except the Model 3 are heavier than a medium size truck. The model 3 weighs more than a large car or SUV.

Internal combustion engine vehicles

Vehicle Class Curb Weight in Pounds Curb Weight in Kilograms
Compact car 2,919 pounds 1,324 kilograms
Midsize car 3,361 pounds 1,524 kilograms
Large car 3,882 pounds 1,760 kilograms
Compact truck or SUV 3,590 pounds 1,628 kilograms
Midsize truck or SUV 4,404 pounds 1,997 kilograms
Large truck or SUV 5,603 pounds 2,541 kilograms

Electric cars

Model X Long Range – 2459 kg without passengers or fuel (7 adult capacity).
Tesla Model S Performance – 2241 kg without passengers or cargo (5 adult capacity).
Tesla Model S Long Range – 2215 kg without passengers of cargo (5 adult capacity).
Model 3 Performance and Long Range AWD – 1847 kg without passengers or fuel (5 adult capacity).

Thus why I said reinvent, not improve. Current storage technology is highly unlikely to be improvable to that point.

Regardless of all the other issues, I believe the sticking point will reman the ability to get from “E” to “F” in a matter of a couple minutes. Solve that (and make the solution readily available, of course), and all the other obstacles go away too.

EV acceptance is more about drivers/owners gaining familiarity with the technology than about the technology itself. I commute 100+ miles daily in a BEV and only charge outside my home a handful of times per year. Charge speed is virtually irrelevant for 99% of my driving. The car charges at night, I drive it during the day. People get so hung up on the 1 day/yr where they want to drive 500+ miles and lose focus on how annoying it is to stop for gas 1-2x/week. Once you’ve owned one, you just don’t want to go back.

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I disagree. There are some very affordable EVs on the market now, even without government subsidies, and the additional cost is easily recouped through fuel and maintenance savings over 1-5 years (depending on how much you drive, fuel prices, etc.).

Current EVs aren’t ideal for everyone, but their capabilities are getting better and each year they work for more and more people. The long road trips thing is the only sticking real point. I laugh at all the Tesla owners stuck in a fast food parking lot for an hour while their car recharges. For two-car families, that’s not an issue at all, you get an electric car for the heavier commuter and a gas car for longer road trips.

Even better, just rent a car when you need one for longer trips. That way you can be flexible with the type of car you need. You don’t have to waste money on buying/fueling an SUV for daily driving when you really only need it once or twice a year for family road trips. Admittedly, that requires a level of logical thinking that most people are not capable of.

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You seem to be an outlier. Norway data indicates that there are a lot of owners but they only drive on average 500 out of 7500 miles a year in their electric car. Your use case is also very predictable allowing you to charge at night for the next day’s commute. What about people who do a random number of errands in addition to driving to work?

Only about 2% of car sales in the US are electric. Do you own a gas powered car?

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…and other people like to ignore the fact that a whole bunch of people simply cannot park within reach of a power outlet. :slight_smile:

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The Chevy Bolt EV range is 260 miles. I have never driven anywhere close to that on a day-to-day basis, including when I drove back-and-forth to customer sites all day. I don’t even bother plugging it in most days when I get home, even though the cord is right there.

And growing as more vehicle styles become available, range improves, and price comes down. Supply is also an issue: many manufacturers only offer EVs in certain markets to meet fleet efficiency regulations. EVs are still relatively new and you can’t expect full adoption overnight.

The majority of Americans live in houses and many apartment complexes are installing chargers. EVs don’t work for everyone, but this is not a valid objection for most people.

Can you provide examples or link to a study that shows unsubsidized electric cars are competitive with gas powered cars on a cost of use basis?

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Ahh, words can be misleading. Read carefully:

‘The average Norwegian household drove 7,500 miles in 2018, a mere 515 of which were in electric cars.’

Not the average Norwegian electric car owner, the average Norwegian household.

They are taking the total miles driven electric and dividing by total miles driven. 54% of new car sales are electric, but do you think 50% of the total on-road fleet is electric?

On to my use-case, my wife’s car is a Toyota Highlander hybrid. Outside of the Model X (way more than I was willing to spend), there is not much in the way of BEVs in the size that we need (2 adults + 4 kids). So yes, we do own a gas car. My BEV has 165k miles on it.

I’ve had this conversation with glitch before, so I’ll save most of the arguments. While he definitely has some valid points, he unfortunately gets a little caught up on the outliers who aren’t good candidates for BEVs, and loses focus on the vast majority who are good candidates. We don’t need to go 100% on any one technology. In PA there is still a good percentage of horse+buggy going on. That’s fine. :slight_smile:

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Actually I do think that’s true. Apparently they’ve been subsidizing for a long time according to the original story.

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12.06% as of the end of 2020:

The mileage numbers are from 2018. Going in to 2018, 5.11% of the cars on the road were electric. If 515 / 7500 miles were driven, that’s 6.87%. Meaning people that drove BEVs drove more miles than average. The exact opposite of what they imply in the article.

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From the original article:

The average Norwegian household drove 7,500 miles in 2018, a mere 515 of which were in electric cars.

So the question is how to define “average Norwegian household”. Unfortunately we don’t have a link to the source of the data. I think it’s safe to say that the 7500 miles figure is averaged over all the households in the country. To me, the only logical way to define the 515 miles figure is for households that own an electric car. But I admit the wording is ambiguous.

Edit. I live in Silicon Valley and take an afternoon walk through my neighborhood every evening. Every time I see an electric car in the driveway there’s usually a gas powered car beside it

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The original article also cites a study of usage of electric cars in California. The conclusion is the same as for Norway. Electric cars are driven many fewer miles than gas powered cars

We provide the first at-scale estimate of electric vehicle (EV) home charging. Previous estimates are either based on surveys that reach conflicting conclusions, or are extrapolated from a small, unrepresentative sample of households with dedicated EV meters. We combine billions of hourly electricity meter measurements with address-level EV registration records from California households. The average EV increases overall household load by 2.9 kilowatt-hours per day, less than half the amount assumed by state regulators. Our results imply that EVs travel 5,300 miles per year, under half of the US fleet average. This raises questions about transportation electrification for climate policy.

https://www.nber.org/papers/w28451

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I live in a house, and recharging would require high voltage extension cords laying around where kids play. And that’s just one car, not the 3 we have.

Apartment complexes are not installing one charger per parking spot , or even per resident, meaning it’s not anything close to “plug it in when you get home, and go to bed”. In fact, this only validates the concerns, because you are now counting on a station being available when you need a charge, and you are pretty much screwed if one isnt available.

I’m sure plenty of people can make it work for them. But this isnt about ripping on the technology, it’s about the obstacles to mass adoption. And claiming an objection isnt valid based on your own set of circumstances doesnt help any.

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Yeah, that number would be meaningful if it were “households that include at least one electric car”, where the drivers have a choice of which to drive. That is a stat that would be interesting to see.

I’d think this would mean that first we should be focusing more on how to generate more electricity, before driving (pun intended) more people into vehicles that use it.

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You can charge with a standard outlet using the L1 charger that comes with most cars, or install an L2 charger. They’re quite safe and are only energized when connected to your car. You’re talking like you’ll have live wires hanging over your child’s bathtub.

I think you’re doing the opposite. I’m up-front that EVs aren’t right for everyone, but the objections of many people (apartment living, drive too far, etc.) really only apply to a relatively small percentage of the population.

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