Electric Cars: Doubling Down On Dumb
Once again, the regulators in California have decided to lead the nation in terms of vehicle emission standards, proposing to require that 15.4 percent of all vehicles sold by 2025 must be electric cars, plug-in hybrid cars, or (currently non-existent) fuel cell cars.
In case you're wondering why this all sounds familiar, it's because California is re-running the same delusional program that it ran in 1990 (Yes, 22 years ago) when "Specifically, the Air Resources Board (ARB) required that at least 2 percent, 5 percent and 10 percent of new car sales be zero-emitting by 1998, 2001 and 2003 respectively."
And how did the past exercise in planner's conceit work out? As one of the first studies I directed in the think-tank world pointed out (1995), "EVs [electric vehicles] will be expensive, yet short on what consumers prize most: range and power.... Massive subsidies and/or cost-shifts would be required that would have depressive effects on the California economy (including higher energy costs statewide). Taxpayers and/or utility ratepayers would also have to pay for new refueling infrastructure. In addition, it is not clear that EV maintenance costs will be below that of conventional autos. If consumers avoid EVs for any of these reasons, and keep their old cars longer, air quality gains will be lost."
Or, as I wrote in a Los Angeles Times op-ed in 1995, "Our state's pollution control authority has to stop thinking of itself as some kind of homespun Japanese MITI that can pick and promote winners in the automotive marketplace. It isn't, and it can't. Conspiracy theories aside, the simple fact is that if Detroit's big three could make a profitable electric vehicle that consumers wanted to buy, they'd be making it at the behest of their own stockholders."
At the time, battery-car rent-seekers were putting out the same propaganda that they are today: that electric cars will produce jobs, and that mandates can "force" technology to evolve exactly as planners want it to. Responding to my op-ed, Malcolm Currie, former CEO of Hughes Aircraft Company, which created the EV-1 technologies (and where, amusingly enough, I did my doctoral internship while he was CEO), argued "In addition to encouraging the development of new technologies, the mandate has also stimulated enormous entrepreneurial activity and private investment in California, which will have a significant impact on our economy and jobs in the years ahead...out of a total potential of some 400,000 new jobs in California that will be created in advanced transportation by the year 2010, Project California anticipates that as many as 70,000 of these can be in EV-related industrial clusters, as a result of building on the large anchor market in our state." We know how that worked out: currently, 98% of advanced battery production is in Asia.
Starting in 1996, the Zero-Emission Vehicle mandate was watered down, and General Motor's first attempt at electric car rent-seeking died when they discontinued the EV-1 in 2003 for lack of sales, recalled the whole lot and junked them. But before that happened, California taxpayers subsidized the well-off eco-conscious people who leased the EV-1 for both vehicles and charging stations. (And those people had to have incomes over $100K, and own a second, conventional vehicle to qualify for the lease. They were the 1%).
But, surely you would say, things must have changed in 22 years, right? Surely developments in technology have made these vehicles competitive in performance and pricing! Alas, no.
The GM Volt sells for a non-competitive $40,000, and is barely selling despite federal tax subsidies up to $7,500, and some state subsidies that further sweeten the pot. Plug-in hybrid technology is more expensive to manufacture, more expensive to repair, more expensive to insure, and, after 22 years, they still have overheating and fire problems.
As Robert Bryce points out in his book Power Hungry, electric cars are the "Next Big Thing. And they always will be." Bryce observes that EV-boosters have been flogging electric cars since 1911, when the New York Times declared that "the electric car "has long been recognized as the ideal solution" because it "is cleaner and quieter" and "much more economical."
And fuel-cell vehicles? In 2007, Ballard Power Systems, a leader in fuel cell research terminated its vehicle-fuel-cell research, and sold the program off to Daimler AG and Ford.
It is long past time (about 100 years past) that planners drop the fatal conceit that they can plan the automobile market, predict technologies, predict consumer preferences, and pick winning and losing technologies in the marketplace. Of course, then they'd have to find a real job.