New Year Tip: Avoid the Electric Vehicle grift

An EV is not a magical sustainability machine

Let’s get 2024 off with a big swing: electric vehicles (EVs) are a grift. A scam. An unreliable, expensive, unwanted technology that is neither necessary nor useful. Two-tonnes of mobile, middle-class, empty-headed virtue-signalling.

My advice is to avoid EVs on all grounds unless you really like wasting money. If owning a car with an internal combustion engine (ICE) is a loss-making exercise, then owning an EV is potentially ruinous. Worse, your EV won’t do a single useful thing to alleviate congestion or help the environment.

An EV is not a magical sustainability machine: it is still a car, still takes up space, and still pollutes; it just has a different engine.

Offshoring the environmental costs

There are specific, multifaceted environmental costs associated with EVs. These can offset their purported eco-friendly benefits, yet they are curiously absent from most conversations about EVs. At the simplest level, exchanging gasoline power for electricity is only useful if the electricity comes from a low-emissions source. Nuclear is the best option here but the average EV enthusiast is probably also anti-nuclear. Lithium-ion batteries rely on minerals like lithium, cobalt, and nickel. Mining these resources, as well as other necessary rare earth elements, involves extensive land disruption, water consumption, and chemical usage, leading to habitat destruction and potential water contamination. It also often involves extensive worker exploitation, as well as the use of child labour.

Range anxiety and travel restriction

Electric vehicles (EVs) have made significant strides in recent years, yet range anxiety remains a persistent and unresolved concern. Despite technological advancements, the potential to run out of battery power mid-journey persists. While manufacturers have increased the mileage on a single charge, charging infrastructure remains inadequate in many regions. Not to mention it takes five minutes to put hundreds of kilometres of fuel into an ICE vehicle, while it takes hours to charge an EV long enough to drive across town. Perhaps EV owners have evolved beyond the need to care about their time.

Resale values

The EV market is evolving rapidly, and uncertainties surround the future resale values of these vehicles. Rapid technological advancements could render current models obsolete, impacting their resale potential. Concerns about the longevity and performance of EV batteries are ongoing, significantly influencing resale values. Experiences from Europe, where EV uptake is strong in relative terms, are insightful. Most EVs sold in Europe are transacted with three-year leasing arrangements. Currently, automakers and dealers who finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. Some of the biggest buyers of new cars, including rental firms, are cutting back on EV adoption because they’re losing money on resales. These problems are set to worsen this year as 1.2 million EVs sold in Europe in 2021 will come off their three-year leasing contracts and enter the second-hand market. Data from Germany (below) shows that ICE vehicles have held value much better than EVs since 2020. Odds are this divergence will continue.

Small customer base and bad economics

Basic economics assumes people are rational consumers and will use their limited resources wisely. Most car buyers are rational enough to work out that the inflated purchase costs of EVs, and their uncertain resale values, makes them a bad bet over time. While the global market for EVs is expanding, it remains relatively niche compared to ICE vehicles. This limited consumer base hampers widespread adoption and slows down the development of supporting infrastructure. This in turn perpetuates the cycle of limited adoption. The primary reason for the small EV customer base is cost, with most EVs being beyond the reach of the average driver. Government incentives to make EVs more accessible and appealing have only managed to reduce the price point from the exclusive end of the market to the upper-middle end in most countries. Consequently, these incentives often fall short in bridging the affordability gap for many consumers. While government interventions can reduce the initial purchase price or offer tax benefits, they might not be substantial enough to make EVs a viable option for a significant portion of the population.

No cure for congestion

EVs are unlikely to significantly alleviate congestion, and may actually increase it. Transport planners have been saying this for years but have been largely ignored. Congestion primarily stems from urbanisation, population growth, and a surge in vehicle ownership. EVs offer no meaningful solutions for any of this and don't address broader transportation infrastructure issues causing congestion, like road capacity, public transport accessibility, or poor urban planning. The rise in EV adoption might reduce the number of ICE vehicles, but it doesn’t necessarily reduce the total number of cars on the road. ‘Induced demand’ is a big factor too. This suggests that when road space is freed up due to reduced emissions or congestion pricing, it often invites more vehicles onto the roads, negating any congestion reduction benefits. It’s why building more roads, or increasing capacity on existing ones, generally does little to reduce congestion or increase travel times.

Have a great 2024 and make it better for yourself by not buying an EV!