US, Canadian governments wasting tax dollars on immature electric vehicles

Tesla Model D.

California has only 223,700 electrics and plug-in hybrids. Vancouver, BC has far more Ferraris, Lamborghinis. etc. than EVs

California will fail to meet its goal of 1.5 million electric vehicles by 2025 in Hollywood blockbuster fashion, according to a recent report from the Natural Resource Defense Council.

California Gov. Jerry Brown.

That failure should be a warning to other governments, some of whom hold up California as an example to follow. British Columbia, for example, recently asked its Climate Leadership Team (chock full of eco-activists) to provide recommendations for the next update of its climate change plan.

The Team’s report had this to say about California: “Leading jurisdictions, such as California, have used this standard [a zero-emission vehicle standard] to successfully drive electric vehicle adoption.”

That’s some serious California dreaming right there.

Sure, California has  223,700 electrics and plug-in hybrids, 46 per cent of the American total. But that’s far less than 1 per cent of all cars registered in California, which totaled 27.7 million in 2012.

If the state did meet its goal of 1.5 million EVs nine years from now, electric cars would still make up only five per cent of the vehicle fleet.

But the NRDC report says the number will likely be 1 million, or 3.6 per cent of California vehicles.

Permian Basin oil and gas producers are switching from rod pumps to plunger lift, with significant cost savings.

And that forecast is suspiciously optimistic because it would require California drivers to buy over 100,000 EVs a year over the next seven years. That’s not likely to happen. Consumers bought only 62,000 in 2015 and sales dropped in the first quarter of 2016, likely due to the low cost of gasoline and automakers introducing ever more fuel-efficient gasoline vehicles.


Not even subsidies of $2,500 from the State of California and $7,500 from Washington (federal incentives disappear after a manufacturer reaches 200,000 units sold) are helping that much. In fact, changes to California’s incentive program designed to weed out rich Tesla owners may contribute to more sluggish sales.

As if those subsidies weren’t enough, California utilities have proposals to spend over $1 billion on public EV charging stations, the costs to be charged tacked on to customers’ bills. Since EV owners do 85 per cent of their charging at home and work, according to a 2015 National Laboratory of Idaho study, the emphasis will be installing chargers in the workplace and multi-unit dwellings (like apartments and condominiums).

California’s only hope to make even the NRDC estimate of 1 million EVs by 2050 probably lies with the Tesla Model D and Chevy Bolt, both of which will sell for $35,000 and get 200 miles (320 kilometres) to a charge.

Click here for video: CEO Mike Swihart explains how well automation reduces costs, boosts production for Permian Basin operators. Systems start at $3,000 fully installed by Production Lift Technologies of Midland, Texas.

But those EVs don’t hit showrooms until late 2017 at the earliest. Over 400,000 buyers have ponied up $1,000 deposit on a Model D, but there is no guarantee all of them will follow through or that Tesla – which has a reputation for not hitting its target dates – can deliver on time.

A market penetration of less than one per cent means EVs are at the very bottom of the technology diffusion S-curve. On a par with the big brick cell phones of the late 1970s, for example.

Who’s buying EVs? If you think of EV buyers on AE Rogers bell curve, it’s the very, very early adopters who are willing to pay a very large price premium to have the coolest gadgets. You know, the type of folks who line up in front of the Apple store three days before the next generation iPhone release.


In other words, not the Early Majority (willing to pay a small price premium) or Majority (no price premium) adopters needed to push EV sales into respectable numbers.

There is a lesson here for those with ears: electric vehicle technology is still too immature for primetime. EVs cost too much to buy and their range is too short for most drivers.

Governments like California and British Columbia are getting too far out in front of the technology. If they must subsidize something, they would be better off to invest taxpayers’ money in research and development to bring down EV battery costs and extend range.

That, at least, might achieve something useful.

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