Free market EV success

December 29, 2017 by Denis Pombriant

The free market is gearing up its profile in the electric car market and the immediate results are so-so. Perfect! Nothing goes in a straight line or preferably like a hockey stick when markets are new. You see hockey sticks in hindsight after the great investment opportunities have come and gone. Not that this is a financial advice column since I am not trained in advising nor am I seeking that recognition.

It’s just that the LA Times ran an end of year story this week about electric cars. Reporter Russ Mitchell said that although US EV sales will rise just about 30 percent when the books close on 2017 with nearly 200,000 units sold. But it’s a drop in the bucket compared to the 17 million cars and light trucks sold that run the old fashioned way.

Okay, we get it. That 200,000 units is less than 1 percent but the number I fixate on is 2017. You see

Jaguar EV concept car. Yup, EV’s are ugly and slow.

2017 is the year when Volvo said they’d only sell pure EV’s or hybrids in 2019—two years away. It’s also the year Ford and GM said they’d bring out fleets of EV’s beginning as soon as 2019 and going deep into the next decade along with the likes of VW, BMW, Toyota, Honda and others. And 2017 was also the year that the year that the English luxury carmaker Aston Martin will deliver a totally electric version of its 12-cylinder Rapid to be called the RapidE in 2019.

Aston Martin really has no business in the electric car market; their high-end customers aren’t swayed by the price of gas. But they know that they’d be dinosaurs without it.

In a glass-half-full world, you ought to see 2017 and a 30 percent increase as the ramp-up to the hockey stick. More than this, 2017 is the year that the free market took over the discussion that was looking too much like a low calorie beer commercial from the 1970’s. The car makers know that the discussion isn’t about whether or not humans cause the pollution that drives climate change. They know that the fundamental issue is how their future products will get the energy they need to move. Propulsion, not pollution is driving this free market invasion of the EV market.

Forget the niceties and utter fantasies of driverless cars if we don’t solve the fuel issue because fossil fuels are running out. Forget also the dream of other fueling options like hydrogen. It’s volatile, hard to make in a form usable in a car, and hard to safely inject into a car. The free market can only afford to sponsor one infrastructure for fossil fuel-less driving and it has placed a logical and sensible bet on electric motors and batteries.

Is electric driving everything we want it to be? No, not yet and not by a long shot. Batteries don’t have the capacities we’d like, charging stations still have to be built and charging times are barely acceptable. But that’s how paradigms start. You place a bet and then everyone works to make a profit at improving the original idea. The process drives economies. Remember how it happened with computers? Punch cards and paper tape (look it up), room-filling mainframes that could cook eggs on their cabinets. Water-cooling. Then, suddenly mini-computers and just as suddenly minis were gone. It took 5 decades before you could put something in your pocket that really rocked the world.

But throughout that process profitable work got done and big fortunes were made. We made kludge work-arounds in spreadsheets, wrote business plans on cocktail napkins, and changed the world.

That’s what’s beginning right now it you have the vision to see it. The 200,000 units of 2017 might look puny except that they loom large in everyone’s future. The number is only small in the rear view mirror but you know what they say, images in the mirror are larger than they seem.




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