Costs The Earth

Electric vehicles are fun but expensive and not the sole future of motoring or a climate change solution, writes marketing expert John Kananghinis.

The Electric Vehicle (EV) revolution is about to hit. Or is it? Full disclosure: I am a lifelong petrol-head. The type who loves sophisticated thoroughbred German, Italian and, sometimes, American V8s and V12s. A believer in the maxim that the speed with which you can turn dead dinosaur into noise is directly related to the degree of fun. But then, along came Elon Musk. Thanks, Elon. No, genuinely, thanks. He made electric cars sexy, stylish, desirable virtue signals. Despite the lack of noise, I love modern performance EVs. Their instant delivery of power is like fast forwarding the world around you.

The Rimac Nevera (pictured left) is the current Big Daddy of performance EVs. I say current, but it is very hard to see how anyone can improve on the 0-100km/h time of 1.85 seconds without mandatory provision of a G-Suit. It is so rapid that Porsche bought into the company that makes it, then asked them to make all future Bugattis.

Meanwhile, Rolls Royce has taken the covers off their first EV. The new Rolls Royce Spectre is a 5.5m, 3-tonne behemoth with the turning circle of the Ark Royal. It offers a 500km range and has two electric motors that can catapult it from standstill to 100kph in 4.4 seconds. And it’s a coupe!

At a minimum of $800,000 it is, doubtless, targeted at the denizens of the oil-rich Arab states and, perhaps less so—currently terminally clumsy—Russian oligarchs. The range and utility of such technological marvels is entirely irrelevant. The Rolls Royce Spectre is a car designed to arrive in, whereas the Rimac Nevera is a rocket designed for arriving before you left. Both ably demonstrate why EVs can be fun and fabulous.

So, what of the more common or garden-variety EVs, more of which are announced every day?

Largely as a result of European and Californian incentives and deadlines, every vehicle manufacturer is busy making, launching, or marketing a bewildering array of EV options. Many grand claims have been made by manufacturers that their entire fleets will be EV by a given date. However, the get-out-of-jail-free card is usually hidden in the fine print, with a comment such as ‘where market conditions allow’. One doubts that in developing nations (where if there is any power it is less reliable than a Soviet-era Lada) that charging an EV will be the highest of priorities.

The F150 is the reason Ford did not go broke during the GFC.

Also, the Americans have given themselves another out. They generally do not include what they call pick-up trucks, and we call monster utes. Which is handy, because Ford, for one, sells an astounding 900,000 F150 V8 light trucks every year. That is almost one delivered every 30 seconds, 24/7, 365 days of the year. The F150 is the reason Ford did not go broke during the GFC. For a vehicle designed last century, the profit margin on that one model is like having the Fed’s ‘Quantitative Easing’ money-generating computer in your shed.

To be fair, Ford has recently launched, to great acclaim, the F150 Lightning Electric Truck. Apparently it’s a great thing, with usable range, prodigious shove, and lots of storage space. But it cannot tow much more than a trailerful of grass clippings, because towing drains the battery. Nonetheless, more than 200,000 of them were ordered before launch. So, that’s a success. Well, yes, but in the time between the Lightning’s announcement and launch a further 1.8 million internal combustion engine (ICE) F150s hit the road and their sales show no sign of slowing down.

The question remains, are we all going to be driving EVs within five or 10 years?

The answer depends on how much money governments are prepared to spend to try to bridge the 100 years lead that ICE vehicles have on EVs. Even then it is worth remembering there are still lots of places on the planet, including many in Australia, where you need to carry your own fuel. So, the answer is: no we will not all be driving an EV, certainly not in remote and underdeveloped regions.

We may be driving a healthy mix of ICEs and EVs in urban centres, where range anxiety should not be an issue. On average Australians travel about 22km daily. Therefore, plugging in at home or work will be perfectly fine, and there will be a growing network of arterial route fast-charging stations to cover the occasional excursion. That is great, as far as it goes. Our cities will be a little quieter and the air a bit cleaner.

However, as with any alleged panacea, there are always one or two catches. In this case, four:

• The full carbon footprint of EV production, operation, and recycling
• The availability and cost of extracting the raw materials necessary for EV batteries
• The utility offered, even with the most extensive charging infrastructure roll-out
• The source of the power and its effective delivery

THE FULL LIFECYCLE CARBON FOOTPRINT OF EVs

More than one billion ICE vehicles are in the current global fleet. One only need view images of the murk that descends on cities such as New Delhi and Beijing to realise that if even half the operating fleet were EVs the results would be obvious and very beneficial. Working towards such an outcome is highly laudable, more due to the health benefits than for any reduction in global CO₂ output.

The issue is that the production and powering of EVs, in many cases, simply displaces the production of the CO₂ to the mining, manufacturing, and power creating locations. Much research has gone into trying to establish if the CO₂ debt incurred by the higher levels of energy required to manufacture EVs is paid off during their operational life. Under the most optimistic scenario, envisioned by the International Council on Clean Transportation (ICCT), over an assumed life of 150,000km an EV operating in EU nations generates 28% to 72% less CO₂ than an equivalent ICE. Except the equivalent ICEs are only a small proportion of the entire market. As yet, there are no EV equivalents for the wide range of automobile market sectors, such as large SUVs, light trucks, and heavy commercial vehicles. To have near the same utility as such vehicles, EVs would require much larger batteries—the manufacture of which would easily count against any reduction in lifecycle CO₂ emissions.

An EV does not generate CO₂ benefit until almost the end of an assumed 150,000km life.

Interestingly, the reductions in EV CO₂ output, indicated by the ICCT study, are greatest in countries reliant on green baseload power and—with the exception of Norway’s abundant hydroelectricity supply, paid for from North Sea oil and gas royalties—much of that is sourced from nuclear power plants. In developing nations (including China, seeing as they pretend to be one) a high proportion of electricity is produced by burning coal and gas, adding to the CO₂ footprint of any EVs. Add the tendency to run older and dirtier vehicles in the developing world, and any gains made in developed nations could be easily erased.

Consider two more factors. First, the ICCT study assumes an operative life of an EV is similar to that of an ICE. However, as the durability of ICE vehicles has increased, their service life is extending. At the same time there is increasing evidence that continual fast-charging of EVs decreases battery life. For example, Nissan offers only an eight-year warranty on a Nissan LEAF’s battery. Other manufacturers claim a lifetime warranty, with the duration of that lifetime deliberately left vague. Even with the most optimistic ICCT projections, an EV does not generate CO₂ benefit until almost the end of an assumed 150,000km life. With most EVs running up far fewer kilometres than ICEs, they may never reach the cross-over point to CO₂ reduction.

Second, calculate the CO₂ cost of eventual recycling of EV batteries. For now, the vast majority of EV batteries ever made are still in cars but the time will come when millions of such batteries reach end-of-life. The batteries appear to be lasting longer than expected. Nonetheless millions of EV batteries will, in the foreseeable future, need to be recycled or dumped. There is a possibility ex-EV batteries can be repurposed as storage batteries in support of renewable energy generation. That would be a good outcome. However, with predictions of more than 150 million EVs on the road by 2030, not all the batteries are going to find a second life in energy storage. Old EV batteries becoming strong secondary sources of key materials such as cobalt and nickel may be possible, although heavily used lithium and graphite are currently too cheap to be recovery candidates.

Once more, there is a rub. EV batteries are complex packs of cells, held together with heavy industrial glues and shells. Extracting the valuable materials is energy intensive and one of the most common methodologies is pyrometallurgy, which is basically shredding the whole battery pack and then burning it to separate the various elements. Not exactly CO₂ neutral. Alternately a process known as hydrometallurgy involves dunking the batteries in pools of acid, producing a metal-laden soup. Once more, requiring significant energy and presenting a not-inconsiderable health and disposal risk. To make a true CO₂ full lifecycle emission comparison to ICE vehicles, the calculation must include the total CO₂ cost of remanufacture, reconditioning, and repurposing.

Tesla Model 3: The most popular Tesla in Australia.
Photo: Tesla Press

RAW MATERIALS

The modern world runs on lithium-ion batteries. They power your mobile phone, your computer, and any number of other gadgets and devices including EVs. Australia is the world’s largest and most cost-effective producer of lithium. Our continent has about 2.7 million tons of the stuff, although that’s a long way behind Chile which has 8 million tonnes in the Atacama Desert, at an altitude of 2,400 metres and extracted from underground salt water. In Australia we mine lithium from ore. In 2020 we produced 40,000 tonnes of the global supply of 82,000 tonnes. The global annual production of vehicles in 2021 was almost 80 million, and the figure is rising. An average EV uses 8kg to 11kg of lithium. Even if only half of the annual vehicle production were EV it would consume over 350,000 tonnes of lithium.

With a 2021 known global resource of 89 million tonnes, we should not run out anytime soon. The challenge is one of creating enough capacity to mine and refine the lithium for use in EV batteries. With global production around 100,000 tonnes we are a little shy of the requirement for half the global fleet. Inevitably, due to the investment required to increase mining and processing capacity, the cost of lithium will rise. With various governments placing deadlines on the end of ICE sales the race is on to secure enough supply, at a viable price, to produce all the EVs necessary

Let us also remind ourselves of the CO₂ emissions cost of such mining. Cobalt is even more problematic. Almost 70%—more than 100,000 tonnes—of global cobalt production comes from the Democratic Republic of Congo; a country that proves the rule that if it has ‘democratic republic’ in the name, it is not. Poor working conditions in Congo cobalt mines is creating increasing concern.

Cobalt mining by hand in the DRC.
Photo: Adobe Stock

The second-largest cobalt producer is Russia so that is also a bit of problem, especially right now. Australia sits in third place. As for global reserves, DRC sits on 3.6 million tonnes, Australia on 1.4 million tonnes, and then Cuba at just 500,000 tonnes. Total global reserves are estimated around 6.5 million tonnes.

Most power for EVs comes from burning coal or gas.

An EV requires, on average, 6kg to 12kg of cobalt. Once more the amount of cobalt is not the issue, the capacity to extract and refine it is the choke point. Just to provide a frame of reference, here are some numbers on the materials required to build the average Tesla EV battery: lithium 10kg, nickel 27kg, manganese 22kg, cobalt 12kg, copper 90kg, and aluminium, steel, and plastic 180kg; all of which is in addition to the materials needed to build an ICE vehicle.

UTILITY

The current crop of EVs sit within the sedan and small-to-medium SUV market sectors. A few pick-up trucks (utes) are also soon to arrive but not enough or with adequate capabilities to compete with the two leading new vehicles on the Australian market, the Toyota HiLux and Ford Ranger. Those two utes make up more than 10% of annual new car sales. Add the ubiquitous small, medium, and large SUVs, and more than 75% of Australian new car sales are actually not cars, in the traditional sense. Why? The answer is simple. We want maximum utility from our vehicles. We want to be able to carry the kids, the dog, bikes, shopping, and camping gear, sometimes all at once. We want to go anywhere without thinking about how much range we have or where to recharge.

Not electric: the ever-popular Toyota Hilux 2022 range.
Photo: Toyota

The EV recharging network is growing, but has barely a fraction of the nationwide footprint of petrol stations. Traditional fuel is everywhere, still relatively cheap, and you can fill the tank in less than the time the kids take for a tinkle and to buy ice creams.

Recently, I drove a very capable EV from Byron Bay to Brisbane. This small SUV was great to drive, responsive bordering on the exciting, and beautifully built. Recharging was relatively easy: just download yet another App, go to the charge station indicated as closest, and plug in. Except a Tesla already was there. Not to worry, off for a quick lunch and back to the charge point. Tesla gone: good. Beat-up old ute illegally parked in the charge point spot: bad. After 10 minutes, very nice barefoot girl comes back to the ute, offers profuse apologies and, finally, EV plugged in. Off for another drink. After 23 minutes the App says my car is at maximum charge, 90%. Not too bad. Back to the car, unplug (a Nissan LEAF owner waits patiently) and off we go with 318km of range for just under $8. Couldn’t be easier … well, yes it could. We could have filled a petrol tank for a range of about 500km in five minutes and be halfway to Brisbane. Granted it would have cost $80, but the car would have cost $25,000 less.

These are pioneering days for EV owners who choose to venture anywhere further than half their available range. With enough government incentives and a bit of time the EV charging network will improve, but it is not an overnight process.

It is all good if you have the resources to own a second car—with an internal combustion engine—that can stand in for those longer trips. That is the main reason why EVs remain, for now, principally the secondary vehicle for the well-off and inner urbanites.

California already has a fleet of more than 700,000 EVs, but almost every owner of an EV has another car which is often a massive SUV or pick-up truck such as the Lincoln Navigator or the aforementioned Ford F150/250/350 (yes, each increase in number denotes an even bigger vehicle with a larger V8). We are still a way off from EVs being the outer suburban family’s primary car.

SOURCE OF THE POWER

Which brings us to the point at which every sensible discussion about EVs ends. Where is the power coming from? For most of Australia, it is from burning coal or gas and despite the political posturing—if we want the lights to stay on—it is likely to come from those sources for some time.

The move to renewable energy sources is positive, but the technologies are still not sufficiently efficient and robust to provide secure base-load power. Solar farms are at best 26% efficient; that is they do not produce power 74% of the time. Wind farms do a bit better, ranging from 20% to 40% efficiency, but only last 20 years and need six-monthly maintenance. Large-scale battery storages are yet to reach the point at which they can store sufficient power to support 24/7 delivery.

The likelihood of total reliance on renewable energy in the near to medium future is low. IPA Executive Director Scott Hargreaves penned a very thorough piece in The Australian (20 August 2022), aptly titled ‘Labor living in cloud cuckoo land on energy policy future’, that outlined the challenges of relying on renewable energy. Never mind where the solar panels and wind turbines are made; an energy security issue if ever there was one.

I am not sure EVs are going to save the world.

In the autumn 2022 issue of the IPA Review I wrote about the need to include modern nuclear power generation technology in considerations on future emission-free baseload power. Right now, we are excluding the Australian people from benefitting from the use of the resources with which we have been blessed. Until we address the issue of power source, EVs are merely moving the emissions upstream: better for urban air quality, but not much value for reducing CO2 output. Then there is the question of strengthening the electricity supply network. I live in a court of four houses with 10 cars. If six were EVs and all plugged in, on a 40°C evening when everyone is home with their aircon on and Netflix streaming, I wager the nearby transformer would melt down. Just as it did on the last 40°C night, with no EVs charging.

If we are all to have even slow charging at home, a fair bit of work on the delivery network needs to be done.

Here is the silliness of absolutism. California governor Gavin Newsom recently made the grand announcement he was banning the sales of new ICE vehicles in his State from 2035. In the same week he had to ask California’s 700,000 EV owners not to charge their cars because the grid was having difficulty dealing with peak demand during a heat wave.

CONCLUSION

I love EVs, I really do. As a motoring enthusiast I enjoy the outstanding performance they offer. At the hyper-car end of the market, they cannot be bettered. You do not need a lot of range to draw a crowd or to scare the bejesus out of passengers. It is just that I am not sure EVs are going to save the world. It is progress that we have reached the point that EVs can offer a viable alternative for some uses. Yet we witness politicians, from the UK to the Australian Capital Territory, making daft announcements about banning ICEs. They have detached from reality, and instead the policy makers follow the mob. Mobs are seldom all that well informed, or rational. That is why we need leaders.

I fear that their inane projections and even more stupid policies will, in the not-too-distant future, hit a brick wall of reality motivating more back-pedalling than in a shopping mall pedal boat approaching Niagara Falls.

EVs will be an increasingly significant part of the motoring mix, principally because governments continue to throw money at them. Perhaps there will be a huge breakthrough in solid-state or supercapacitor batteries and all the disadvantages of current lithium-ion battery powered EVs will be erased. And we have not even talked about Fuel Cell Electric Vehicles (FCEV) powered by hydrogen. However, I am convinced the internal combustion engine will still be with us for some time.

John Kananghinis is the managing director of a Melbourne-based strategic communication and marketing consultancy. He has more than three decades of working within, and as an adviser to, the motor industry.

This article from the Summer 2022 edition of the IPA Review is written by marketing expert John Kananghinis.