Peak EV: Electric Vehicles Will Fade As Their True Costs Become Clear
The article argues that electric vehicles are not as environmentally friendly as people think because of the amount of carbon that goes into making them.
The Verge reports that the Environmental Protection Agency will announce new emissions standards for tailpipes on Wednesday. These standards are designed to force the auto industry into phasing out gas-powered vehicles. The headline is provocative: 'The end of gas-powered car sales is near'
Environmental, Social, and Corporate Governance (ESG) has become the new religion. We all know the adherents. Owners of electric vehicles (EVs) sing "Hallelujah" when they leave their garages. Investor-class ESG advocates believe that the new belief in sustainability is just beginning. Investor Harris Kupperman believes that whatever the Biden Environmental Protection Agency does, it's probably just the Church of What's Going On Now.
Maggie Lake of Real Vision, who calls Kupperman Kuppy, said to her: "Well, I believe we're approaching peak ESG. Which is probably a positive thing, honestly." He explained,
It's almost like religions come, peak and then die out. Roman religions are no longer practiced. I know three gods, and I am a Roman History major. This little religion, ESG, has been around for quite a while. It reached its peak. There will be a few die-hards, but the majority of investors are looking to make money. It's wonderful if they are doing something for the greater good, but many of them want to save money for retirement.
Kuppy believes that all those Teslas cutting you off silently in traffic are going the same way as T. rex. Their drivers, brimming with superiority and thinking they're saving the world, will soon follow the path of T. Rex.
I think EV will be something that you'll go to a Museum with my kids, and say, "Wow, this was an evolution dead end, and we [waste] trillions on this." No, I don't think there is a future for EV.
'Really, why?' an aghast Lake wondered.
Kuppy then brings the hard facts that amateur environmentalists, and government enforcers do not consider.
The EV destroys energy. EROI is the return you get on your energy investment. In an EV you have to put in more energy than you receive. It's like the thermodynamic rule: it won't work without subsidies. What is the main reason behind EVs? The EV is supposed to produce less carbon. It doesn't reduce carbon over the life of an EV because it has so much carbon in it. It's better to have a gas-guzzler.
Perhaps EV owners don't believe they are as heroic as you think.
Kupperman claims that consumers would stick with internal combustion engines (ICE) without government subsidies. Even with government subsidies, the majority of people will still buy ICE cars, according to Kupperman. There will always be snobs.
If you want to show off that you have an EV and be a bit of a snob, then do it. If you want to be able to brag about your possession, it's nice to have. For me, it's a truck. It doesn't bother at all, and I am proud of my truck.
If carbon is what you care about, then you are more concerned about the cost of the car, or energy input versus output. You're better off with an internal combustion motor for almost any component. These engines have become more efficient in the past couple of years.
Kupperman says that owners of these EVs will notice a difference in their vehicles as they age.
The cost to own an EV will be astronomically expensive when people realize that battery degradation is a problem with lithium ion.
Kuppy believes that EV adoption will decrease and EV owners may have second thoughts about their EVs and realize they are bad vehicles.
According to Kupperman, ESG is a tax on mankind. Kupperman said that ESG is a tax on humanity.
Kupperman is convinced that the demand for energy will continue to grow and the government's actions will only worsen things.
All sorts of dumb things will be done. In the past, governments have done stupid things that made problems worse. This is the history of government. I'm sure they'll do all kinds of things that will fail. It will only destroy supply because the government interferes with your ability to run your business.
Kupperman responded to Lake's question about possible government interference.
They'll probably try an excess profit tax. They will probably try price caps and export bans. The net result will be that the guys will go to the beach and take their dividends. They won't drill for oil. No, it is almost inevitable that government will turn a problem into a crisis.
The United States is causing an energy crisis.