The EV 'Boom' is a Bust

Investors Got Fooled; EV Stocks and Metals Are Way Down

this chart is an example - Chargepoint, maker/installer of EV charging stations - down 83%

SCIENCE and TECHNOLOGY

what happened?

It’s amazing how quickly things can change. Not much more than a year ago, all the big car manufacturers (except perhaps Toyota), charging station makers, lithium battery makers and lithium miners, solar and wind energy companies were still on track for riding the overwhelming profitable future in those fields. Investment analysts were still recommending stocks related to renewable energy.

But something happened on the way to the bank. Wind turbine farm projects started running into trouble, especially the off shore projects, even though massively subsidized. EV sales started hitting resistance, and even solar farms, which had been growing rapidly to take advantage of the subsidies, were starting to have trouble convincing people that carpeting farmland with solar panels was a good idea. Solar farms are especially questionable in northern latitudes, where the hours of daylight are shorter in winter, and the temps are colder and reliable 24/7 power is crucial.

Today, investors are more apt to sell stock in these kinds of companies than to buy. Big companies like Ford, GM, Volkswagon, and Mercedes Benz and others are losing billions in their EV departments. Small companies like Nikola*, Lucid, and Rivn, that had no sales of gas powered cars to offset EV losses are in or near bankruptcy. The companies that make EV charging stations, like Chargepoint, EVGO, and Plug, are losing their shirts. *Nikola is trying to make a comeback - they’re selling EV semis in California, where the big EV trucks are being mandated in the LA port area. Note: Mack trucks may be an exception - they have found a niche market for EV garbage trucks, which seem to be doing ok in urban areas on daily routes and where they can be recharged every night. I’m not sure how much subsidies are involved.

What happened, and how did it happen so fast? There was simply no sound foundation to the hype. People had initially started buying for the wrong reasons. Government subsidized wind farms were launched on the lie that the electricity produced would be cheaper. Instead, it’s far more expensive. Another major factor is that the “transitory” inflation wasn’t so transitory, and costs have gone way up.

Mario Loyola wrote in The Hill “Rising electricity prices could not come at a worse time. The revolution in artificial intelligence heralds a new age in America’s technological dominance, but only if America can keep its electricity prices low. The power requirements of AI are staggering. In 2021, Google alone consumed 18 terawatt-hours of electricity, more than many of the world’s nations. According to John Henessy, chairman of Google’s parent company Alphabet, a Google search assisted by AI can consume 10 times more electricity than a normal Google search. Powered by AI, Google’s energy consumption could triple by 2027.”

investors weren’t the only ones who got fooled

Consumers bought electric vehicles because they thought they were just as good or better than gas powered vehicles and at the same time they were “saving the planet”. It was nonsense. The EVs cost more, but they weren’t better. The mining of minerals in batteries that power them are actually damaging the planet. EVs are about 1000 lbs heavier than similar size models of internal combustion cars, so the tires are wearing faster and filling the air with particulates, some of which are toxic. EVs are practically worthless in extremely cold weather, and that’s exactly what you don’t want in a car, or a truck, or a bus – you want reliability above all else. The word started to get out – trade-in values were not good, largely because the batteries don’t last very long and are very expensive to replace. In comparison, a stubborn, frugal person (like me and my ’04 pickup) can drive a gas powered vehicle for 20 years with normal maintenance.

the hype is fizzling

If EVs are not going to sell, then the whole system of hype collapses. We won’t need more wind and solar farms if we’re not going to ‘transition’ to EVs and the electrification of everything*. See earlier post on “Imagine the Electrification of Everything”. We won’t need thousands of charging stations. We won’t need more battery production.

*One caveat – AI, streaming, social media, and crypto mining continue to grow and are creating a demand for huge data centers that do need lots of electricity, but that is a completely different subject. Let it suffice to say that any real demand for more electricity will need reliability; not unreliable intermittent wind and solar. Dependable 24/7/365 electricity comes from fossil fuels, hydroelectric, and nuclear power plants.

Chinese EVs slowing

China subsidized EVs and now is cutting back. Many startups will go bankrupt. BYD, China’s largest EV producer, has lowered prices and surpassed Tesla in sales, but still has a surplus of production due to decreasing demand. BYD plans to step up their exports in an attempt to increase their sales. That will hurt sales of EVs in other countries. It’s a downward spiral. They have a plan to take advantage of a loophole in our trade agreement with Mexico to start selling their EVs in the US.  

Mercedes cutting EV goal in half

Mercedes Benz had a goal to go 100% electric by 2030. They have changed their minds after seeing how fast the EV market is slowing. They have cut their goal in half, to going 50% EV production by 2030. That’s a huge change in plans, and I suspect that’s only the beginning. I wouldn’t be at all surprised if by 2030 they could be down to producing zero EVs, if they’re not mandated. EV manufacturers are not making money; they’re all losing money. Ford is losing somewhere around $40,000 - $70,000 on every EV they make, depending on who you talk to and how it’s figured.

Mercedes fire  best to park EVs in street; not garage

This wasn’t even on the charger. It was a few years ago, and hopefully the batteries are a little safer now.

Vaccine Reversal

One of the best evidences that something is true is when a well known figure reverses their earlier position. Why would they risk the loss of their followers unless they’re valuing the truth as more important than their own status? People don’t lie or pass on lies unless they have a motive. In The Emperor’s New Clothes we saw everyone in the story (except the little girl) pretending to see the invisible, non-existent clothes. They had to have a motive to agree with such nonsense. Their motive was simply that they didn’t want to lose the status of their position or to be thought ‘simple’.

A week or so ago I saw a great evidence that the vaccine mandates were in fact a terrible policy. Dr. ‘Boz’ had to have an awful lot of evidence before she was ready to change her mind. In her case, it took great courage to publicly reverse the stand she had previously taken. Read on…

Jeff Childress’ Coffee&Covid brought it out:

“Annette Bosworth, MD, also known as “Dr. Boz,” has a popular YouTube channel (600,000 subscribers) and website focusing on the health benefits of keto dieting and intermittent fasting… She wrote about some research that changed her mind about mRNA vaccines- “This is a peer-reviewed article. If you’re like me, you’re not going to want to believe it. I don’t WANT to believe this. I’m so irritated by this article. This is a difficult thing for me to talk about. The dozen peers who reviewed this paper took two and a half months to cross-check and verify everything they said. I’m just going to point out a few things that made me sleepless. During the pandemic, we broke some of the rules to serve the public. One of the rules was this emergency use act.”

FINANCE and INVESTING

reiterating the bust in EV stuff

We could have placed the first part of this article under this section on investing, but I consider the renewable energy field to be mainly a science and technology issue. But the chart showing the plunge in the stock price of Chargepoint says just as much to investors as it does to scientists. For the most part, battery powered EVs don’t work. They are a niche item. They will never become universal like the internet or the discovery of electricity or TV or AI or the internal combustion engine.

There is a possibility that hybrids could become fairly universal, and I expect their sales to continue increasing even as battery vehicle sales slow down. Time will tell. See “Hybrids are a Pretty Good Compromise”.

I’m writing a piece comparing hybrids with plug-in hybrids. There is a difference.

bitcoin and gold taking off?

Bitcoin broke above its all time high of $69,000 the other day. It backed off with some profit taking the next day, but then on the third day it started up again, to about $66,000. Gold also has hit a new high of about $2150 as I write. Why? Most analysts attribute the rise to the probability that interest rates have peaked, inflation has persisted, and the $34 trillion debt is only going to get worse.

FAITH and CHRISTIANITY

another example of the best kind of evidence

As said above, “One of the best evidences that something is true is when a well known figure reverses their earlier position.” Saul of Tarsus hated the new ‘sect’ which we now call Christianity. He saw it as an apostasy from Judaism, and he was doing his best to stamp it out - seeking out believers in the new sect, arresting them and throwing them in prison. His opinion was so well known that even after he was converted, Christian churches around Jerusalem were still suspicious and afraid of him.

If Jesus isn’t real, and if Saul (Paul) didn’t really have that famous experience where the resurrected Jesus Himself intercepted him on the road to Damascus, then how can we explain his drastic and very public change of heart? This is a very strong evidence for the authenticity of Christianity.

Chinese dragon discovery

This caught my eye last week.

“Dinocephalosaurus orientalis had an unusually long neck and reminded the researchers of the snake-like representation of dragons in Chinese mythology.”

While I disagree with the ‘millions of years’ time scale, the similarity to a dragon in Chinese mythology is actually a strong evidence that 1) dragons were real, and 2) dragons were what we call dinosaurs today. see earlier post - Dragons or Dinosaurs?