We believe electric vehicles (EVs) will be a key factor in mitigating climate change, pollution and other sustainability challenges. As more manufacturers begin to offer electric options, adoption will accelerate. But still, we hear many of the same arguments against EVs. Often these arguments begin with the ‘one key thing’ stopping a prospective buyer from purchasing an EV. In fact, there are many key things that trouble buyers, all of which have remarkably straightforward answers.
In the name of supporting EVs to help solve some of our global sustainability problems, we seek to provide answers. So here are thirty-one reasons not to buy an EV, but as you will hopefully agree, most of them are myths. As investors, we believe we can invest in the firms who are driving EVs forward either by manufacturing them or as part of the supply chain. It lets us support a more sustainable future and pick up some investment alpha along the way too.
1. EVs don’t have enough range: Cheaper models can drive between 250km and 383km. More expensive models can have a range up to 600km. Charging at home means you will leave home fully charged.
2. EV batteries decline in range: Tesla batteries have shown an approximate 10% decline in capacity after 250,000km, a better decline rate than traditional engines.
3. Extreme weather conditions reduce their range: They do, but most of us live in temperate zones where extreme temperatures are rare. Driving in those same conditions will also reduce traditional engine range too as you turn up your air con or heating.
4. I don’t want to wait for hours at a charging station: The traditional ‘fill up’ model will not be applicable. 94% of journeys in the UK are less than 25 miles. We will charge our cars like our phones, at home and work. Charging points will also let us top up while we shop
5. EVs have poor performance: The Tesla S P100D does zero to 60mph in 2.4 seconds
6. EVs are not safe: Combustion engines are a huge safety problem in front impacts, a car without one is much safer. Statistically, fires are occur less often in Tesla’s than combustion engine cars.
7. Most people don’t have driveways: According to the National Grid, 57% of homes have off-street parking. Those who don’t will use converted lampposts at home and other innovations will appear.
8. There is a lack of choice: By 2020 there will be 131 pure electric vehicle options.
9. EVs are too expensive: EVs are getting cheaper due to scale and battery density improvements. On the flip side, costs of combustion vehicles have been rising due to regulation and falling residual values.
10. EVs might depreciate faster: So far, Tesla vehicles have held their value better than most competing cars. Partly through rarity but also through low maintenance costs, high levels of reliability and high customer satisfaction. Conversely, diesel engine residual values are falling due to the VW scandal
11. Are they really cheaper to run: Tesla Model S is between $2 and $4 per 100km versus $5 to $8 per 100km for the equivalent BMW 5 series
12. What about maintenance costs: An EV drive-chain has 20 moving parts versus combustion engine with 2000. Nissan and BMW’s EV service plans are between 50 and 70% cheaper than their non-EV service plans.
13. There aren’t enough materials for the batteries: Most 2030 demand forecasts (50% penetration) indicate less than 1% of known reserves will be required
14. Rising material costs will make EVs too expensive: A 200% rise in the price of Lithium will increase a battery pack cost by about 1.1%
15. More carbon is produced manufacturing an EV: A false dilemma. Lifecycle emissions of EVs is much lower. Also, this does not include the carbon emitted producing fuel. Oil is much more carbon intensive to produce than energy from wind and solar. 151 tonnes of CO2 produced per 1000 tonnes of oil.
16. What about all the battery waste product: Unlike oil, batteries materials can be reused and recycled and the materials used to make them are not toxic.
17. We can’t build the infrastructure: US road infrastructure was built out in 13 years. In the UK, the government has just announced funding for further EV infrastructure.
18. The cost of the infrastructure will be too high: Estimates put the cost of EV infrastructure at $1.7 trillion by 2040. Sounds high, but oil and gas capital expenditure in the last 19 years was $7.9 trillion.
19. And what is the cost of climate change? The recent hurricane season is estimated to have cost $100 billion, mostly picked up by the US taxpayer.
20. It’s not just cars that use oil: Greater than 40% of oil is used in transport on the road. EVs would significantly reduce oil demand
21. You will be getting power from the grid and that’s just coal: Coal is quickly declining in the mix while renewables are rapidly increasing. We think the ongoing speed of this change is very underappreciated.
22. Renewables are too expensive: The levelised cost of renewables is already close to or better than existing fossil alternatives without subsidy. And remember, the cost of the fossil alternatives never includes the economic, societal and environmental cost of climate change, which is huge.
23. What about the cost of stranded fossil assets and lost jobs: What about climate change? What about all the jobs created in the renewables and EV industry?
24. Renewables can’t replace coal or nuclear base load: Utility-scale Lithium-ion batteries are now available. Distributed residential battery packs and EV’s themselves will provide off-peak storage. This allows excess renewable energy to be efficiently stored and then used when needed.
25. The power grid will be overloaded: Peak charging times for EVs will be between 11pm and 7am when we’re sleeping. This is when the grid power demand is at its currently lowest.
26. I still think the shift to EVs will be a slow burn: Forecasts of EV penetration have been shifting up every year for the last 5 years. History suggests a classic ‘hockey stick’ or S-curve adoption
27. Hybrids will ultimately be a better solution: They still emit carbon. The lower bound of hybrid costs must be higher than combustion or pure EV because you are deploying two technologies into one car. In fact, pure EVs are already cheaper than hybrids.
28. What about hydrogen fuel cells: The Japanese carmakers have been focused on this for over 20 years and still don’t have a solution. No infrastructure in place either.
29. But it must be a hassle owning an EV? A 2016 Consumer Report ranked Tesla as No.1 globally against all other carmakers on their satisfaction survey (91% would buy again).
30. EVs don’t look good: Completely subjective, we think a lot of them do.
31. Donald Trump’s policies will make EVs uncompetitive: Too late Donald.