Yves here. Since this article comes from OilPrice, one can expect them to be electric vehicle nay-sayers. Nevertheless, the tacit assumption among many policy makers is that drivers will choose or can be forced to use only EVs. Yet Toyota, admittedly a laggard in the EV race, has not gone full bore for fully electric cars because its believes that the market for EVs is far smaller than advocates believe. From Inside EVs in January:
Former Toyota CEO and current Toyota Chairman Akio Toyoda has long been a proponent of a mixed-fuel future—hybrids, gas engines, hopefully hydrogen eventually, and more… Now, Toyoda says that he believes EVs will soon begin to hit an unofficial market share cap across the globe.
According to Toyoda, that magic number is 30%. He claims that EVs will be capped, unofficially of course, at around 30% of all new vehicle sales. The rest of the market will be satisfied by hybrids, hydrogen fuel cells, and traditional combustion engines….
It’s not clear where Toyoda gets this figure, or if he has a certain date in mind for this cap to happen…
Last year, EVs accounted for around 18% of all new vehicle sales globally. That number is only expected to grow. BloombergNEF, for example, says that EVs will account for 44% of new vehicle sales by 2030 and 75% by 2040. This number, of course, will vary based on country, as some will likely fall behind on existing infrastructure needs.
As an automaker, Toyota has always been fairly conservative with its EV rollout. The brand has been a strong proponent of hydrogen, though it’s looking far into the future for the success of FCEVs. Today, it has accepted EVs as necessary to fill the gap between hybrids and FCEVs, but Toyoda says it will never completely fill the world’s needs—hence the company’s “multi-pathway approach” to the future.
Toyoda says that the infrastructure is one of the largest problems plaguing EV adoption. With more than 750 million people worldwide who lack access to electricity, there will surely be a market where combustion engines continue to exist, however, just because someone has access to electricity doesn’t mean that it is reliable, or that the grid can sustain an influx of EVs in a short period of time without improvements. And this is where Toyoda believes there is still room for hybrids, fuel-cell EVs, and traditional combustion-powered cars.
Having said that, this piece on the EV deterrents seems to go overboard on the purchase price of EVs. Most readers know China has some very competitive offerings that we in the West are not allowed to buy. It also points to long charging times. Some readers will counter with Chinese battery swapping stations. I recall this was under consideration as an option at the time of the very first kinda-sorta serious EV development in the US (I drove an EV prototype in 1993. It was very underpowered). The reason swapping was rejected was that the swapping stations would require markedly more real estate than a gas station and were thus considered too difficult and costly to site.
By Irina Slav, a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice
- Renault, China’s Geely, and Saudi Aramco are investing in new internal combustion engine technology.
- Renault and Geely are opting for an alternative way to achieve it, through fuel efficiency and other tech advancements in internal combustion.
- Affordability is one of the factors that make drivers loyal to the ICE technology.
Virtually every single forecast about the future of transport focuses on its electrification—on the idea that EVs will take over roads, displacing the internal combustion engine and making it history.
Not everyone agrees, however, and that includes Renault, China’s Geely and, as of last month, Saudi Aramco. The three are investing in a company that develops powertrain technology for internal combustion engine vehicles. The future may not be as electric as may expect.
Horse Powertrain came into existence at the end of May as a 50:50 joint venture between Renault and Geely. At the time, Renault’s chief executive said that the company would aim to become a leader in “ultra-low emission internal combustion engines and high economy hybrid technologies.”
Decarbonization, then, remains the top priority. Yet Renault and Geely are opting for an alternative way to achieve it, through fuel efficiency and other tech advancements in internal combustion rather than through total electrification.
It is no wonder Aramco is joining the party, especially in light of the recent performance of its EV darling, Lucid Motors. Lucid has seen its share price plummet from over $50 apiece to less than $9 in three years and has missed its own delivery target for the first half of this year even though it boasted record deliveries—of 2,394 cars.
The Saudi oil giant likes to spread its eggs across several baskets, and it looks like the ICE basket is still quite popular. People are still buying a lot more internal combustion engine cars than electric vehicles. A lot of EV drivers want to go back to their internal combustion engine car. Things are not looking good for the electrification of transport, with the normal glitches of new technology still being sorted out. However, they are looking as robust as ever for internal combustion.
“It will be incredibly expensive for the world to completely stamp out, or do without internal combustion engines,” Yasser Mufti, executive vice-president at Saudi Aramco who was in charge of the Horse Powertrain deal, told the Financial Times. “If you look at affordability and a lot of other factors, I do think they will be around for a very, very long time.”
Affordability is indeed one of the factors that make drivers loyal to the ICE technology. For all the efforts EV makers have been putting into lowering the price of their electric vehicles, and for all the government support of the technology, EVs remain costlier than comparable internal combustion engine vehicles.
Of course, affordability is only part of the car equation. Another is fueling or charging time and on this, the ICE car once again beats the EV. For all the talk about how convenient it was to charge your EV overnight in the comfort of your own garage, it has been dawning on forecasting EV bulls that globally, only a minority of drivers have a garage to charge an EV in, while most would need to rely on public chargers. Also, only a minority of drivers would be willing to spend hours charging their car overnight or not.
Perhaps the best testimonial to the enduring power of the internal combustion engine were the latest car sales figures from China. The world’s biggest market, China has been breaking records in EV sales. This seems to have created a perception that half of all cars in China are electric. In fact, the reality is quite different.
Xinhua reported earlier this week that the total number of cars on Chinese roads had reached 440 million at the end of June. Of these, the data showed, new energy vehicles had a share of 24.72 million. Of these, 18.13 million were plug-in electric vehicles—what we commonly call EVs, and the rest were hybrids. In percentage terms, then, EVs represent barely a 4.1% of the Chinese market. In other words, even in the world’s biggest EV market, with billions spent on charging infrastructure and making EVs dirt cheap, most drivers still prefer internal combustion vehicles.
“We believe that as far out as 2035, 2040 and even beyond 2040 we still see a significant number of ICE vehicles,” Matias Giannini, chief executive of Horse Powertrain, told the FT. “More than half for sure, and up to 60 per cent of the population will still have some sort of an engine, whether it is pure ICE, a full hybrid or a plug-in hybrid.”
The internal combustion engine has survived so long and remained the overwhelmingly dominant transportation technology for one simple reason: it has been superior to alternatives and its benefits have outweighed the costs consistently. It is at the cost-benefit analysis state that the EV revolution tripped and fell—because it seems that no one bothered to do that analysis. So the market made it for them, with the EV surge celebrated loudly last year slowing down before the year was even over. Horse Powertrain may yet acquire new shareholders.
There are two big issues with EV adoption. One is the charging infrastructure, the problem is that EV chargers will not be able to replace ICE infrastructure but will have to be built alongside. Which means planning, real estate, permits, electrical grid support, all of which take years to build out. I often see the logic of “if you build it they will come” meaning that once we reach a critical mass of electric vehicles the infrastructure will spring up to support these. But without infrastructure you’ll never reach critical mass. Existing ICE infrastructure took a 100 years to build and the expectation is that similarly dense EV infrastructure will pop up in 5-10 years.
Second problem, that I don’t see mentioned often, is that modern vehicles, for all their warts are amazingly durable. EPA expected vehicle lifetime is something like 17 years, meaning vehicle sold today is expected to be on the road until 2040. Enshittyfication of the economy means that people can’t afford to replace their old vehicles. My own car is 15 years old and I don’t see a reason it couldn’t last another 5 years at least. So even if new vehicle sales become predominantly EV’s, the mix of vehicles on the road will remain mostly ICE for many years to come, which means that ICE infrastructure will remain in place.
I have a good amount of respect for Toyota from my time in the industry and I think they have a good sense of what the future will look like. In the US people get distracted by flashy media headlines around EV companies, but the real markets of the future are in China, India and Africa, all of which seem to be heavily leaning on the hybrid rather than full EV.
I suppose that the long and the short of it is that the bottleneck for EVs will be cheap, reliable electricity supplies. If it is expensive, if the electrical grid is unreliable (perhaps by an increased number of EVs), if there are not the stations available to recharge EVS, then there is definitely going to be a hard ceiling and that 30% take up of EVs sounds right to me.
This is a point about EVs that gets short shrift – can the grid as it is handle a big switch to EVs? The answer is no, and I have little faith that here in the good ol’ USA that the grid will be updated. Call me cynical because I am.
The bottleneck is that we can’t generate the electricity we need from renewables, cant distribute it using current tech and the copper available to us on the planet. The fact that gasoline is a much more dense energy source than batteries is just the icing on the cake.
Personal EVs should be (well built/maintainable) bikes/Honda super cub type things. EVs otherwise should be for mass transport, or distributing goods. That might be possible, though even that will present some challenges.
The idea that we as a society can continue exactly as we are doing now, just with electric cars instead of stinky gas cars is a stupid fantasy. Where do the simpletons who believe this think the electricity is going to come from? Magic dust? China, with the most massive installation of non-fossil fuel electricity still gets almost 80% of its electricity from fossil fuels, and 80% of this from coal.
Where I live the City has created a department to encourage people to replace their gas-powered heating with subsidized electric heat pumps. They seem completely unaware of the massive GAS-FIRED generating plant in the center of town. SO these people think replacing my 85% efficient gas boiler with an electric heat pump, also ultimately powered by gas, but with more than 20% efficiency loss in generation and delivery, makes sense. I mean, did these people get any education at all? This decarbonisation ideology seems to make people into morons….
Well we do have to decarbonize. The problem is that nobody wants to face up to what that means in practice. So instead we get tinkering at the edges, and feel good stunts.
Heat pumps make a lot of sense *if* you have an energy source that is decarbonized. On the other hand, it’s always better to burn fossil fuels as close as possible to where you use them. An EV that is powered by electricity generated by gas (Or oil I guess if you’re Italian) is probably less efficient that a conventional car.
At the point that we need sophisticated systems thinking – we instead have the dumbest kind of atomic thinking. I truly think our civilization, and maybe species, is doomed.
Cars are a really dumb solution to transportation. We’ve reengineered our world in ways to make it hostile to people, very inefficient, environmentally hostile and ugly – for what, the ability to sit in traffic jams and breathe in toxic fumes? EVs remove the toxic fumes, but otherwise they don’t really solve any of that. And they increase the environmental and efficiency problems. You need lithium (horrible to mine), more copper. And your built environment now needs much more electrical infrastructure (copper), and tougher roads/bridges. You can mitigate some of this, but that would require a major shift in direction (e.g. the US moving from SUVs/F150s to Japanese mini-cars).
It’s hard to predict what will happen with EVs as there may be tech improvements we can’t imagine. Today the problems are the increased need for copper (the real shortage – forget Lithium), lithium and their weight. Maybe those things can be addressed (though that won’t make it to the street in time to save us from global warming), maybe they can’t. The charging infrastructure is a bigger problem (or we could build bus and tram networks. Hell, for short distances you don’t even need batteries, flywheels work just fine). And everyone’s ignoring the bigger problem, which is none of this stuff scales. How are you going to power heavy machinery (diggers), or heavy trucks. Current batteries simply don’t have the energy density.
Hydrogen’s also not a solution, unless someone can come up with a cheap way of creating it (nuclear power… maybe). You lose a ton of your electrical power generating it, more compressing and storing it and then more distributing it. And its an energy storage medium that’s more dangerous than gasoline.
On top of this noone has really explained where the electricity is going to come from. Today around 20-25% of our total energy usage comes from electricty. We’re struggling to replace that 25% with renewable energy – but somehow we’re going to make up the rest of that with renewable (or nukes). Not to mention the problem of distributing that electricity (there’s not even close to enough copper out there).
The elephant in the room for all of this is that we’ve engineered an extremely energy inefficient world, and we’re pretending we can continue to live that lifestyle, while still transitioning to something renewable. Total fantasy. Gasoline, EV, whatever – it doesn’t really matter. Once you commit to energy dense lifestyles, the human race is basically doomed. ‘Sustainable’ solutions are just rearranging the deckchairs.
Perhaps the people considering this issue should also own up to the fact that cars, gas or electric, are the most inefficient transportation option available and that rather than enabling single occupancy vehicle use, a transition to investing in mass transit and active transportation should be a priority.
The damage to society due to single occupancy vehicle addiction goes far beyond just energy and climate, including significant damage to the land, social cohesiveness, and our physical health.
Yeah, but the private personal transportation generates HUGE profits for BigOil, auto companies, insurance, electricity generating monopolies, tires, repair, servicing etc. I haven’t done the math, but in the US, this likely represents two or three trillions of cumulative revenue per year. And since the politicians represent the oligarchy, and not us, don’t expect any changes.
In California, the “bullet train” fiasco turned out to be a multi-billion dollar scam (another example of kleptocracy).
And they are ripping out train tracks in Northern Cal, because “environmental concerns”. As if eliminating rail will be better for the environment. The Cal. gov. are typical hypocrites; they clearly don’t care about the environment.
The EV mandate will take effect in 2035, but the crumbling electrical infrastructure has become a laughingstock and we are headed for another fiasco. Good times eh…
I have never seen the parking garage issue addressed at all
If one looks at a much simpler technology, lithium batteries replacing lead acid, it’s been 40 years since lithium batteries were first developed (1985), and yet car batteries are still almost entirely lead acid. In largely new, “niche applications (power tools, cameras, phones, etc.)” at the time of their development, they were adopted.
Or look at how long it took lithium batteries to replace NiMH (1967), what, about 35-40 years?
Cars (electric) are not a novel application, are far more expensive, rely on enormously greater infrastructure, rare earth metals, etc., etc. And that is aside from the world bifurcating into two economic blocks. As George Gallloway likes to say, “buckle up, its [energy transition] going to be a bumpy ride.”
There’s the small issue of, if the largest vehicle manufacturers say “EV’s unlikely to supplant ICE,” and plan their businesses accordingly, then EV’s are unlikely to supplant ICE.
Not that i advocate greater adoption of EV’s, i agree with many of the previous points raised.
I recently came across a Canadian startup called Edison Motors that is designing bolt-on retrofit electric motors for heavy duty trucks, designed to work in conjunction with an onboard diesel generator. Neat concept, although their website gives off vibes that would possibly land them in “The Bezzle” sub-heading on this site…
I’m going to use something else as an example why the calls for and attempts to force a massive switch to EVs is performative and not based on reality.
Let’s talk about congestion pricing in NYC. There are lots of reasons people were against it, but probably only a couple caused Hochul to ‘postpone’ it.
It all looks good on paper, but to actually do it AND to do it fairly, it means not just forgoing some of the expected revenue for the MTA (the real and only reason the government officials are doing it) and expending a great deal of money prior in order to do it in a manner that lessens the impact on the public to little to nil. There would have needed to be more park and ride locations developed, expanded bus service and utterly reliable public transportation to and from the areas where people needed to get to. In truth the government (state and city) and the MTA did little of what was necessary to put this into effect. They didn’t even really figure out the parking problems on the outskirts of the zone. Lots of problems this would have caused shouldn’t have been but would have been unexpected. Speaking of the unexpected, the first week this was to have been put into effect much of the NJ commuter train system was entirely knocked out by the heat. All the commuter train lines are still dealing with heat delays and cancellations and yes we just had a bridge go out because of it. I don’t even want to imagine the uproar if it had all gone into effect. And as it was a tax credit there is also the affordability issue and how many people were really going to get ‘reimbursed for it’. The public largely rejected it for reason.
Switching a significant portion of our vehicles to electric powered ones sounds great on paper. The obvious drawback being charging – and not just the lack of stations. There is also the time involved in recharging the vehicle. But how about heat problems, or cold problems. How about water. With our extremes in weather can these vehicles even handle short distance commutes, much less long commutes (people with hour and more commutes are more common than is thought of in our society. Then there is the availability of electrical power. Increasing the demand without significantly increasing the supply might mean a windfall for the electric companies but it is a recipe for disaster. There were lots of other caveats in the article, but just as with congestion pricing what I see advocates doing when a problem is brought up and is either denying it is a problem usually citing a study that has little to no connection to reality, or waving the problem away as if it is something that can be solved after the fact, usually with the magic belief in tech and even AI.
I believe that Toyota probably has it right. Largely because they are not in denial about the state of things for either the public or the world. Without significant changes switching to EVs will not happen because they will not work in our actual world and most people cannot afford expensive experiments.
If the government and climate change advocates want this to happen they have to put in real work including real infrastructure improvement before the fact, not after.
Debating who gets to extract what portion of our income for an unnecessary and ultimately deadly product is whistling past a graveyard. Regardless of power plant, the car itself is the problem. There are too many of them; they have poisoned our civic development and our brains. We cannot even imagine a life without personal vehicles and multilane freeways and free parking at this point. Built our own cage, we have.
I drive a 2005 minivan at ~200 k-miles. It has only two seats, and the back holds my tools, supplies, and a sleeping bag for distant jobs. Well (self) maintained, it is good for another 10 years, or until I really and truly have to stop work. I cannot afford a newer vehicle, and do not want one; they need specialty equipment for repairs, another item I cannot afford, and it is hard to obtain (manufacturer-specific) trouble codes. It seems that those who espouse the one-solution-for-all-ills, “the incredible electric vehicle”, do not consider the needs of us “deplorables”.