Thursday, September 15, 2011

"It's Time to Kill the Electric Car, Drive a Stake Through its Heart and Burn the Corpse"

I remembered that headline when I saw this Der Spiegel story yesterday:

A Slow Farewell to Fossil Fuels
Electric Car Revolution Remains a Distant Prospect
The Frankfurt Motor Show is devoting an entire exhibition hall to electric mobility this year -- but truly marketable electric vehicles are conspicuous by their absence. The technology is being developed more slowly than expected. It will be a long time before the world can bid farewell to the combustion engine.  

There will be a new type of racing car soon. It's supposed to look something like a Formula 1 car and drive just as fast -- but with an engine that makes no noise.

The International Automobile Federation (FIA) has announced that a new racing championship series is being developed for the circuit that could ideologically decontaminate the racing world. The plan envisions having automobiles with 700 horsepower electric engines zooming about with absolutely no emissions.
The vision of a green Grand Prix is exactly the kind of message that the 64th International Motor Show (IAA) wants to send. The show, which kicks off this Thursday in Frankfurt, is the industry's premier trade fair, held in the land where the revolution of motorized vehicles once made legends out of names like Daimler and Benz.

With this pedigree, the IAA is meant to provide an overview both of where things are and where they're going. And the direction has rarely seemed so clear-cut: The German government and the domestic automotive industry are both set on transforming Germany into the "lead market for electromobility."

Ambitious Goals
To get closer to this goal, they did something typically German: They set up a committee. Mostly made up of executives and politicians, it is called the National Platform for Electric Mobility (NPE). One of its leading members is a business veteran and auto industry outsider who unfailingly exudes optimism. Henning Kagermann, a former CEO of the German software giant SAP, views the world of transport as facing a "paradigm change." His mission is to get one million electric vehicles on German streets by 2020.

Still, when the IT expert enters Hall 4 of the IAA, it might quickly dawn on him that things take much longer to evolve on the real highway than on the information one. For the first time in IAA history, an entire 20,000-square-meter (5-acre) area will be devoted to electric mobility. Matthias Wissmann, the president of the German Association of the Automotive Industry (VDA), says this "Hall of Electric Mobility" will provide visitors with a "unique overview of this form of propulsion."

Automotive Irrational Exuberance
But the hall will also highlight the slow the pace of development for this type of drive system. It will still take years for the technology to become viable for the mass market.
"To me, this electric hype is inexplicable," Fritz Indra, a doyen in vehicle development, recently told the trade magazine Automobil Industrie. The honorary professor at Vienna University of Technology and former head engine developer at Opel and General Motors still sees a good deal of "open questions" -- and no satisfying answers....MORE
Here's the headline story from Alt-Energy Stocks:
I was recently invited to prepare a memorandum on the battery industry for the electric mobility working group of the World Energy Council, a global thought leadership forum established in 1923 that includes 93 national committees representing over 3,000 member organizations including governments, businesses and research institutions. Since my memorandum integrated several themes from this blog and tied them all together, I've decided to publish a lightly edited version for readers. To set the stage for the substantive discussion that follows, I’ll start with an 1883 quote from Thomas Edison:

“The storage battery is one of those peculiar things which appeals to the imagination, and no more perfect thing could be desired by stock swindlers than that very selfsame thing. Just as soon as a man gets working on the secondary battery it brings out his latent capacity for lying.”

At the time, Edison was a customer who wanted to buy batteries to improve the reliability of the Pearl Street Station, the first coal-fired utility in North America. An essential truth even Edison failed to recognize is that battery developers don't lie, but potential customers consistently lie to themselves. They hear about gee-whiz inventions, overestimate the practical importance of the innovations and then make quantum leaps of imagination from the reasonable to the absurd. Therefore, the most important task for investors is to critically and objectively examine their own assumptions and avoid hopium induced hallucinations.

Cleantech, the Sixth Industrial Revolution

I believe we are in the early stages of a new industrial revolution, the Age of Cleantech. The cleantech revolution will be different from all prior industrial revolutions because the IT revolution forever changed a dynamic that has existed since the dawn of civilization. It gave the poor and the ignorant access to the global information network, proved that there was more to life than deprivation and sparked a burning desire for something better in billions of people who were once content with mere subsistence. It's long-term significance will be more profound than the discovery and settlement of North America.

The inescapable new megatrend is that six billion people have been awakened to opportunity and are striving to earn a small slice of the lifestyle that 600 million of us enjoy and typically take for granted. If the six billion are even marginally successful and attain a paltry 10% purchasing power parity, global demand for everything must double. Therefore, the most important challenge of our age will be finding new ways to satisfy insatiable demand for water, food, construction materials, energy and every commodity you can imagine.

The first and easiest step will be to eliminate waste in all its pernicious forms to make more room at the economic table. After that, the challenges become far more daunting.

The Everything Shortage

There is a widely held but grossly inaccurate belief that energy prices and CO2 emissions are the most pressing problems facing humanity. The reason is simple – in advanced economies everybody buys energy commodities in minimally processed form several times a month. Each of those purchases reinforces a belief that energy prices are an intolerable burden. While few of us purchase other minimally processed commodities beyond energy and food, the following graph compares the prices of non-ferrous industrial metals with the price of crude oil and highlights an inescapable and highly inconvenient truth that almost nobody understands –


6.23.11 Metals vs Oil.png

To compound the problem, global production of energy resources is several orders of magnitude greater than global production of critical metals, as the following table based on data from the U.S. Geological Survey clearly shows.

7.10.11 Energy vs Metals.png

Metric tons per person vs. kilograms per person is an insurmountable disparity.

Most alternative energy and electric drive technologies can’t be implemented without large quantities of scarce metals. All of the metals in the table have critical competitive uses in other essential products and significantly increasing global production of any of them is problematic if not impossible. While improved recycling practices have the potential to help alleviate shortages of critical metals, a recent UN study of global recycling rates for 60 industrial and technology metals found that only 18 had end of life recycling rates over 50% while 34 had end of life recycling rates under 1%. The metals that are most important to alternative energy and electric drive are very difficult and expensive to recycle. So with the exception of lithium, which is a plentiful resource that only represents 5% or 6% of the metal content in Li-ion batteries, the world cannot produce enough technology metals to permit a widespread transition to alternative energy or electric drive.

Any alternative that can't be deployed at relevant scale isn’t an alternative at all. It’s merely an expensive distraction for the masses, a bit like the circus in ancient Rome.

The Diminishing Marginal Utility of Batteries

Once you understand that metal supplies are far more constrained than energy supplies, every evaluation of electric drive becomes a simple exercise in optimizing the fuel savings from each unit of metal used. The five generic levels of electrification and the typical fuel savings at each level are summarized below....MORE