After many months of rhetoric and hype that Copenhagen would lead to a cementing of international eco ambitions in turn leading to a global policy agreement, the stark economic realities that have beset many members of the G20 & G77 ultimately created the politics of disporia.
As supposedly the successor to Kyoto, the US and UK essentially took charge of matters, though perhaps idealising the application of the international cohesion created by generally united reaction to the financial crisis. Instead, seemingly for many it became a 'trap and pony show', both in terms of downsized ambitions and indeed as a euphemism the political subtleties emerging.
The core script, already previously beset by the recognition that no legally-binding agreements would be made, was written and re-written time and time again until it became almost an academic exercise of oxymoronic word-smithery – grandiose in appearance yet increasingly lacking any substance.
The most progressive proponents early on in talks were some of the fast growing EM nations such as Brazil, India and South Africa, presumably to have greater influence in proceeding and not alienate the US or UK, but early enthusiasm took a back-seat to the big picture economic - and regional social cohesion - interests of the EU and China.
The high ideals of CO2 reduction target of an 80% reduction by 2050, and global warming target of 1.5 degree (as opposed to 2 degree) limit became early casualties. As the high ideals crumbled so the innate, increasingly empty, politicking grew; coming to a head as President Obama & Premier Wen met. Their talks reportedly becoming (not surprisingly) ever increasingly fractious as China resented the US for its accusations of secret coal mines and its self appointment as policy policeman, and in turn the US seeks Chinese transparency given its concerns about China's growing geo-political influence in Asia through its regional exports of minerals and energy.
By the end the US, India, China, Brazil and South Africa agreed upon the disputed areas to be latterly considered, but with even an agreement to post-pone full ratification by a year, the hollowness of Copenhagen shines through, shorn of its central ideals; much as the hair on the heads of the environmental protestors outside were shorn in protest.
Perhaps the greatest symbolic illustration of the failure was the inability to even multi-laterally support the UN sponsored 'REDD' programme. It seeks to protect flora and fauna from the de-forestation effects of the logging industry in EM nations. [NB. it is reputed that the present rate of deforestation actually surpasses the CO2 levels of combined harms of the entire global transport sector, being the 2nd biggest 'emitter' at 20% of global output, only behind energy production].
By the end the only agreement made was that the world's poorer nations would be given $30bn (£19bn) of climate aid over the next 3 years, with that aid to increase to $100bn (£62bn) annually from 2020 – though this was sceptically met regards its power to do good.
Copenhagen reporters state that by the end there was a growing recognition by many that previous high expectations of massive carbon reduction in the near and medium term were unrealistic given the state of play for many national economies, supposedly rich and poor alike, and their political needs wants and desires.
The growing consensus implicitly projects that instead a new routemap should be considered, something beyond the realms of the conventional UN model that some would argue has run its historical course given the very changed geo-political landscape the 'global village' now sits within.
The irony is that this sad end was set in motion some time ago. The highly charged emotional rhetoric of 'green-speak' has set expectations both political and public. But demonstrated itself to be little more than a useful ideological vehicle for politicos and the possibility to align and direct massive public expenditure to big-budget yet ill-conceived schemes and projects across the industrial spectrum.
This emotional irrationality flies in the face of good investment governance and procedure, the sort practiced by the financially driven, results orientated private equity sector; and a mirror mentality of good stewardship of public funds by respected senior ranking officials.
[NB Relative to recent press comment, investment-auto-motives conjects that the reason that the £2.5bn of state aid for the UK auto-industry has not been immediately forthcoming is because Whitehall has yet to be convinced of its direct application towards long-term value creation. And instead seeks greater structural re-form and robustness for the UK auto-sector before providing sizeable monies].
So, looking forward...
We face a period where having convinced the majority of the public of the need for eco-behavior, the very modus operandi of international central governments, and its negative effect on presently unaligned unconvinced private investment, must alter.
Government must become far more concise in its industrial planning and thus provide a stable framework by which commercial enterprise can be guided.
Instead of political grand-standing and the questionable force-fitting of big-number yet shallowly devised economic modelling, far clearer multi-stage roadmaps must be drawn. Roadmaps which combine the virtues of financial conservatism and commercial creativity.
For the auto-industry itself, that means a far broader vision that the over-utopianised, panacea-like ideal swallowed by politicians and the public alike. We will not all be driving electric cars by the end of the decade given the complexity of PESTEL 'headwinds' that must be overcome. The EV does indeed have a role to play and should not at all be discounted, but its role as a solution provider for mass personal transit is specific and requires much social, commercial and product re-engineering. Eco-enthusiam should not overlook the technical frailties of purely electrically powered vehicles.
In relatively stable, circuit-type environments they have a definite role, as we see in factories or commercial premisis, and on golf courses and retirement villages - especially so in mid latitude regions. Environmental cleanliness, minimal temperature variance and other factors seemingly must be created and controlled to give the perfect world for relatively low-tech, low-cost EV solutions. Real world, weather dominant, applications in cities, suburbia and the country present very different challenges.
A graphic example of this surfaced coincidentally and serendipitously with the virtual collapse of Copenhagen.
The Eurostar rail service came to a grinding halt over the weekend because the electric motors of its locomotives could not operate with snow and chill-wind condition interference to the drive and control systems. Cold and moisture, though scientifically conductive for electricity, are not condusive to real world EV drive and control systems - let alone the repletion of stored battery energy.
The Eurostar fiasco serves as a reminder that political hyperbole must work in orchestration with technical achievement and a deliverable reality.
Thus as Christmas fast approaches the festive period offer a good reflective period for politicians and policy-makers around the world, to re-plot a truly tenable course forward. After all. Every element of the P+E+S+T+E+L formula must be balanced to create a progressive result.
Showing posts with label Copenhagen Summit. Show all posts
Showing posts with label Copenhagen Summit. Show all posts
Monday, 21 December 2009
Wednesday, 25 November 2009
Macro-Level Trends – Combating CO2 – Waking Up to a Downsized Electric Vehicle Dream?
Electric Vehicles are seen as a major part of the panacea to 'detox' the planet of its CO2 ills. And of course, theoretically within the whole-system argument of the negative (oil) 'well-to-wheel' versus better (power) 'plant to (battery) pack', the argument stands if the energy is created in a zero emissions manner.
This of course highlights the questionable feasibility of carbon sequestration, wind-generation, solar-power and other new-age clean-tech solutions relative to their proven older counterpart nuclear (fission); which whilst generating clean energy poses the drawback of waste disposal.
And so, like the green recycling logo itself, the never-ending discussion goes round and round and round. Doing so primarily between oppositional extremes: that of the scatter-logical alarmist approach “try anything at any cost to save the planet as quickly as possible!” in contrast to the overtly-cautious approach that posits “need for a balanced cost-risk-reward”.
The climate change campaign origins of meteorological academia obviously provided the (arguably simplistic) graph-based 'shock & awe' effect, as presented by Al Gore on his global lecture tour. That information awoke western society along with the weighty support document compiled by Sir Nicholas Stern.
Thus today, through a process of slow absorption, the western world has largely accepted CO2 cause, even if the argument's dissemination has not been seen to go through the process of 'hypothesis + antithesis = synthesis' that would have added gravitas. Of course, such a process appears 'only academic' relative to the limited time-frame to save the planet. Something all the more ironic given the campaign's origins.
Even so a growing profile of climate change skepticism is appearing, the counter-argument raising its head recently in the financial press. The doubts aired by the fringe deployed by those guarded, economically squeezed, nations which are all too aware of the financial consequences of signing-up to the successor of the Kyoto Protocol, at what will be a water-shed Copenhagen Summit.
Thus, whilst largely 'on-side' with the anti-C02 camp, the public looks on in bemusement, unable to understand the level of eco-hype versus eco-reality. And as a consequence, so the ideal level eco-action versus the attainable level of eco-action, Copenhagen then, becomes yet another milestone of confusion and ideological fragmentation.
As partial arbiters and history-makers themselves, industry sector CEOs and Boards stand in a similar position, being seen to be 'on-side' through green initiatives and good CSR, but also appreciating that they individually cannot be eco-extremists – especially so during such financially constrained times – given their obligation to corporate stability and shareholders. Overt eco-martyrdom has the flip-side concern of share-price suicide....something perhaps best illustrated in the energy sector itself.
So it is within this ethereal, juxtaposed milieu that automotive manufacturers must develop their corporate stance – both implicitly and explicitly.
They must tread a careful path that demonstrates that they are well-attuned to the CO2 agenda – especially in the public arena, are able to leverage their own R&D development, as well as directing such R&D to incorporate available government assisted funding, to create a multiplier effect. Yet still acknowledge that economic rationality must prevail in maintaining the technical conventionality and financial guardianship that underpins the viability of the commercial enterprise to its ultimate owners.
Executives must showcase their long-term corporate vision, yet also demonstrate a viable path to that far-off point. Different companies from different countries undertake this remit relative to their innate cultures, national sensibilities and interests, and executable R&D capabilities.
Thus Japan's historically conservative Toyota has in the last 20 years set out its 100 year plans, done so in virtual secrecy, with the edict that “eco-actions speaking louder than words”. Hence its low-key introduction of original Prius in the mid 1990s, sound technical development and proof of case in the real-world as a precursor to (self-congratulating) marketing campaigns. Choosing the Hybrid route (and so influencing Honda) via proven Ni-MH battery technology, Toyota has sold over 2 million vehicles (primarily in Prius1,2,3 forms) in the last 15 years.
That is an annual average take-up rate of 133,333 per year, excluding the exponential effect of manufacturing ramp-up and broadened geographical reach. This must be regarded as the industry benchmark given its first to market attempt and achievement using proven technology fed into today's (historically little altered) road infrastructure. At its core Toyota objectively appreciated that the Hybrid Ni-MH solution requires nothing outside of the automaker's control, thus was and is the 'de facto' solution.
The company recognised early-on that reliance upon external 'macro-level enablers' dictated by the political & financial circumstances & whims of disperse global governments was not a basis to progress its future. Its own domestic experience with the relatively stable, progressive Japanese government operating a relatively controlled society demonstrated the realistic headwinds. And let us not forget that Japan has been the technical tour de force for much of the late 20th century, which along with its lack of oil independence, is why it was glad to originally host the Kyoto Summit and review alternative auto-industry paths.
In contrast to Toyota's cautious achievement we have other international auto companies that laud the wonders of other technology solutions.
Some high-up the tech-curve are little more than Lab-bench proven. Whilst others (like the Lithium-Ion battery) sit effectively mid-stream and offer technology transfer exercises into the auto-sector in Hybrid guise (eg Daimler) and EV guise (Tesla). But given their respective experiences and volumes, these are hardly proven achievements that encourage mainstream adoption, since these integration cases do not reflect the heavy duty-cycle requirements that an EV version of a conventional mainstream sedan or 5-door hatchback would demand. Such vehicle uses demand far more than Li-on's originally envisaged requirement relative to its adoption in low power uses in consumer electronics.
Thus as with the case of GM's Volt 'range extender' car (offering massaged 200mpg+ figures) the promises of near-term mainstream future-tech seems all the less plausible given a heavily subsidised $35,000 sticker price (vs Prius' $22,000 & Insight's $19,000). Instead it seems a recycled re-run of GM's infamous Motoramas of the 1930s & 1950s - technological 'Tomorrow's Worlds' that never emerge.
But as perhaps the greatest proclaimer of the present day is Renault-Nissan.
Carlos Ghosn's achievements and ambitions at Renault-Nissan are well recognised. Changing times and corporate fortunes means that he has had to evolve from the renowned 'Le Cost-Cutter' a decade ago into the nouvelle 'L' Homme Electrique ' of recent years. Given Renault's part-national ownership (now perhaps under greater grip given the recent financial aid) and France's international push of EDF as a nuclear energy provider, it should be no surprise that there is an alignment of national industrial policy interests and so impetus to parallel EDF's and Renault-Nissan's future fortunes.
Overt EV-mania that has gripped the press in the last 5 years, assisted by automaker proclamations (of which Renault is the loudest), has generated accordant expectancy. Yet that expectancy which still has a long road to travel to be realised en mass, and if/when doing so will provisionally take a different form in terms of vehicle perception to that hyped and expected.
Even for the French, its experience of EVs - whether adapted standard vehicles (such as the PSA 106 EV & Partner EV) or indeed concept EVs (such as the PSA Tulip with associated rental scheme business model tested in La Rochelle) – have been comparatively small and isolated 'baby steps' relative to the size of the task. And let us not forget that these French-centric efforts with amenable government fleets and regional administrations were undertaken within far more conducive economic climates.
Today – even for French bureaucrats - whilst the technology may have improved the situational context has undoubtedly deteriorated. Furthermore, the innate business model(s) required at both ends of the value chain are still being developed.
At one end (upstream/micro-level) :
- the question of whole vehicle packaging
- the massive reduction of vehicle mass
- technology real-world prove-out of Li-on
- battery and EV manufacturing scale-up.
At the other end (downstream/macro-level):
- slack international governmental progress to develop a credible EV routemap
(especially in co-aligning regulatory reform of the road-space to accommodate radically different advanced battery-centric architectures).
- the budgetary pressure on governments not to fulfill their national and state pledges to subsidies the EV agenda.
- the lack of developmental progress regards 'holistic' powergrid development, including vehicle e-feed infrastructure.
- OPEC's apparent determination to maintain 'affordable oil' through additional capacity investment
- the question of merging historically separate oil & electric energy providers at the retail level to sell petroleum/diesel & electricity fuels side by side at the pump.
Already large chunks of public funds have been directed at volume manufacturers, vehicle start-ups and other participant players within energy & transport that appear 'big on talk but little on delivery'. As mentioned in previous posts, part of the reason for such slow progress is that often the era of 'technology disruption' (real or perceived) is that a great number of variables must be aligned to bring in a new norm, and that broad promise of fundamental change can be exploited by less than honourable interlopers that seek to gain from the overt investment enthusiasm of government and privateers. But beyond the opportunity for unethical practices, the very process of the multi-various economic agents working perfectly in orchestra is indeed problematic. [NB that is why historically greater technical progress is made in wartime conditions; when greater use of central planning is enforced, at the literal cost of public finances].
So such a land of promise, like an oasis, often appears closer than the foibles of everyday reality permits.
This oxymoronic state of affairs is highlighted in a recent WSJ interview with Carlos Ghosn, with his counter-point statements that: "our forecast is that sales of EVs will be 10% of the total market...by 2020"... versus... "EVs will move up slowly, not taking the market by storm"
Let us conject upon the credibility of the former statement...”10%..by 2020”. We can project forward (using VW's 2018 figures) that the global market will be 30% higher than today's (55m units) at 73m, and a few years thereafter reach 75m units, that means that Renault forecasts that approximately 7.5m EVs will be sold. This means that over the next 10 years an average of 750,000 EVs must be sold each year, discounting the ramp-up effect. This figure compares to the 133,333 units sold by Toyota using a far more mainstream technology & vehicle type over the 15 year period to date
It is thus no wonder Mr Ghosn must play both roles of optimistic 'preacher' and conservative 'prudent'.
For the present time, with Copenhagen upon us, it seems that the PESTEL context of conflicting issues and agendas that can be encapsulated as “eco-idealism versus economic handicaps” means that neither conventional car-makers, unconventional 'start-ups', the financial community nor governments are truly able to initiate the required change into a true EV world within the foreseeable future. Ultimately, each party looks to the other and rhetoric continues to overshadow tangible progress.
So, the word of warning is that investors must see conditions for true EV traction before the possibly hollow perception is priced into corporate MarketCap valuations. For whilst the auto-industry certainly needs buoyancy aids, they need to be credible and not the stuff of possibly damaging technology story bubbles.
investment-auto-motives objectivity means that it has no axe to grind, except that of that of private investors (the core of capitalism) being fully informed, by competent boards and management, and not led along possible garden paths, no matter how well intentioned.
However, to end on a more positive note that demonstrates a realistic step toward an EV participantt future, at the beginning of the year investment-auto-motives made an informal recommendation that Daimler exploit its use as a licensor/contract builder of its >smart ForTwo vehicle architecture. (It is perhaps the most 'package perfect' product that encapsulates the generic form & lightweight mass of a small 2-seater city car. Perhaps the best proven mainstream vehicle - along with the previous generation 'sandwich floor' A-class - for EV tailorisation. Thus at the recommendation's heart proposing that Daimler become a strategic enabler and benefactor from global JV agreements using ICE and EV powertrains.
That identified and recommended opportunity is now being reportedly taken-up by Daimler & Renault, with mention that the Twizy EV concept will be born from ForTwo, after a conventionally powered 2 seater is created.
The EV dream has been downsized for the near and mid-term, but is all the more 'real-world' practicable for doing so by being familiar and off-setting high-cost EV powertrain and e-control costs with a recently 'break-even' amortised platform.
So whilst there is a long road to still undertake, “Bravo” to Monsieur Ghosn and “Biefall” to Doktor Zetsche for taking the first plausible step.
As the struggle goes on to maintain the world with less than 550ppm (parts per million), the take-up of electric cars will seem indeterminably slow given the reality of government rhetoric over action and relatively tiny funding for such a major societal transition.
In truth, they may continue to grow stature as the 'good taste' preserve of a 'local elite' within the wealthier inner-suburbs of major metropolises within Europe's London, Paris, Berlin, Amsterdam, and the outer reach enclaves elsewhere, such as US's Silicon Valley, New York State Hamptons, Newport Beach, Santa Barbara, Carmel etc.
But whilst such EV popularity grows and has an affect, it will do so only at a comparatively tiny relative to the major CO2 reduction enablers of clean-tech ICE and Hybrid vehicles. Since, given its omnipotence, it will be evolved technology that takes centre stage in the CO2 battle as the economy regains a slow positive momentum between 2011-2013, and so perversely could, along with feeble budget-constrained government infrastructure efforts, suffocate the progress of tentative 'real-world' city-centric EV.
This of course highlights the questionable feasibility of carbon sequestration, wind-generation, solar-power and other new-age clean-tech solutions relative to their proven older counterpart nuclear (fission); which whilst generating clean energy poses the drawback of waste disposal.
And so, like the green recycling logo itself, the never-ending discussion goes round and round and round. Doing so primarily between oppositional extremes: that of the scatter-logical alarmist approach “try anything at any cost to save the planet as quickly as possible!” in contrast to the overtly-cautious approach that posits “need for a balanced cost-risk-reward”.
The climate change campaign origins of meteorological academia obviously provided the (arguably simplistic) graph-based 'shock & awe' effect, as presented by Al Gore on his global lecture tour. That information awoke western society along with the weighty support document compiled by Sir Nicholas Stern.
Thus today, through a process of slow absorption, the western world has largely accepted CO2 cause, even if the argument's dissemination has not been seen to go through the process of 'hypothesis + antithesis = synthesis' that would have added gravitas. Of course, such a process appears 'only academic' relative to the limited time-frame to save the planet. Something all the more ironic given the campaign's origins.
Even so a growing profile of climate change skepticism is appearing, the counter-argument raising its head recently in the financial press. The doubts aired by the fringe deployed by those guarded, economically squeezed, nations which are all too aware of the financial consequences of signing-up to the successor of the Kyoto Protocol, at what will be a water-shed Copenhagen Summit.
Thus, whilst largely 'on-side' with the anti-C02 camp, the public looks on in bemusement, unable to understand the level of eco-hype versus eco-reality. And as a consequence, so the ideal level eco-action versus the attainable level of eco-action, Copenhagen then, becomes yet another milestone of confusion and ideological fragmentation.
As partial arbiters and history-makers themselves, industry sector CEOs and Boards stand in a similar position, being seen to be 'on-side' through green initiatives and good CSR, but also appreciating that they individually cannot be eco-extremists – especially so during such financially constrained times – given their obligation to corporate stability and shareholders. Overt eco-martyrdom has the flip-side concern of share-price suicide....something perhaps best illustrated in the energy sector itself.
So it is within this ethereal, juxtaposed milieu that automotive manufacturers must develop their corporate stance – both implicitly and explicitly.
They must tread a careful path that demonstrates that they are well-attuned to the CO2 agenda – especially in the public arena, are able to leverage their own R&D development, as well as directing such R&D to incorporate available government assisted funding, to create a multiplier effect. Yet still acknowledge that economic rationality must prevail in maintaining the technical conventionality and financial guardianship that underpins the viability of the commercial enterprise to its ultimate owners.
Executives must showcase their long-term corporate vision, yet also demonstrate a viable path to that far-off point. Different companies from different countries undertake this remit relative to their innate cultures, national sensibilities and interests, and executable R&D capabilities.
Thus Japan's historically conservative Toyota has in the last 20 years set out its 100 year plans, done so in virtual secrecy, with the edict that “eco-actions speaking louder than words”. Hence its low-key introduction of original Prius in the mid 1990s, sound technical development and proof of case in the real-world as a precursor to (self-congratulating) marketing campaigns. Choosing the Hybrid route (and so influencing Honda) via proven Ni-MH battery technology, Toyota has sold over 2 million vehicles (primarily in Prius1,2,3 forms) in the last 15 years.
That is an annual average take-up rate of 133,333 per year, excluding the exponential effect of manufacturing ramp-up and broadened geographical reach. This must be regarded as the industry benchmark given its first to market attempt and achievement using proven technology fed into today's (historically little altered) road infrastructure. At its core Toyota objectively appreciated that the Hybrid Ni-MH solution requires nothing outside of the automaker's control, thus was and is the 'de facto' solution.
The company recognised early-on that reliance upon external 'macro-level enablers' dictated by the political & financial circumstances & whims of disperse global governments was not a basis to progress its future. Its own domestic experience with the relatively stable, progressive Japanese government operating a relatively controlled society demonstrated the realistic headwinds. And let us not forget that Japan has been the technical tour de force for much of the late 20th century, which along with its lack of oil independence, is why it was glad to originally host the Kyoto Summit and review alternative auto-industry paths.
In contrast to Toyota's cautious achievement we have other international auto companies that laud the wonders of other technology solutions.
Some high-up the tech-curve are little more than Lab-bench proven. Whilst others (like the Lithium-Ion battery) sit effectively mid-stream and offer technology transfer exercises into the auto-sector in Hybrid guise (eg Daimler) and EV guise (Tesla). But given their respective experiences and volumes, these are hardly proven achievements that encourage mainstream adoption, since these integration cases do not reflect the heavy duty-cycle requirements that an EV version of a conventional mainstream sedan or 5-door hatchback would demand. Such vehicle uses demand far more than Li-on's originally envisaged requirement relative to its adoption in low power uses in consumer electronics.
Thus as with the case of GM's Volt 'range extender' car (offering massaged 200mpg+ figures) the promises of near-term mainstream future-tech seems all the less plausible given a heavily subsidised $35,000 sticker price (vs Prius' $22,000 & Insight's $19,000). Instead it seems a recycled re-run of GM's infamous Motoramas of the 1930s & 1950s - technological 'Tomorrow's Worlds' that never emerge.
But as perhaps the greatest proclaimer of the present day is Renault-Nissan.
Carlos Ghosn's achievements and ambitions at Renault-Nissan are well recognised. Changing times and corporate fortunes means that he has had to evolve from the renowned 'Le Cost-Cutter' a decade ago into the nouvelle 'L' Homme Electrique ' of recent years. Given Renault's part-national ownership (now perhaps under greater grip given the recent financial aid) and France's international push of EDF as a nuclear energy provider, it should be no surprise that there is an alignment of national industrial policy interests and so impetus to parallel EDF's and Renault-Nissan's future fortunes.
Overt EV-mania that has gripped the press in the last 5 years, assisted by automaker proclamations (of which Renault is the loudest), has generated accordant expectancy. Yet that expectancy which still has a long road to travel to be realised en mass, and if/when doing so will provisionally take a different form in terms of vehicle perception to that hyped and expected.
Even for the French, its experience of EVs - whether adapted standard vehicles (such as the PSA 106 EV & Partner EV) or indeed concept EVs (such as the PSA Tulip with associated rental scheme business model tested in La Rochelle) – have been comparatively small and isolated 'baby steps' relative to the size of the task. And let us not forget that these French-centric efforts with amenable government fleets and regional administrations were undertaken within far more conducive economic climates.
Today – even for French bureaucrats - whilst the technology may have improved the situational context has undoubtedly deteriorated. Furthermore, the innate business model(s) required at both ends of the value chain are still being developed.
At one end (upstream/micro-level) :
- the question of whole vehicle packaging
- the massive reduction of vehicle mass
- technology real-world prove-out of Li-on
- battery and EV manufacturing scale-up.
At the other end (downstream/macro-level):
- slack international governmental progress to develop a credible EV routemap
(especially in co-aligning regulatory reform of the road-space to accommodate radically different advanced battery-centric architectures).
- the budgetary pressure on governments not to fulfill their national and state pledges to subsidies the EV agenda.
- the lack of developmental progress regards 'holistic' powergrid development, including vehicle e-feed infrastructure.
- OPEC's apparent determination to maintain 'affordable oil' through additional capacity investment
- the question of merging historically separate oil & electric energy providers at the retail level to sell petroleum/diesel & electricity fuels side by side at the pump.
Already large chunks of public funds have been directed at volume manufacturers, vehicle start-ups and other participant players within energy & transport that appear 'big on talk but little on delivery'. As mentioned in previous posts, part of the reason for such slow progress is that often the era of 'technology disruption' (real or perceived) is that a great number of variables must be aligned to bring in a new norm, and that broad promise of fundamental change can be exploited by less than honourable interlopers that seek to gain from the overt investment enthusiasm of government and privateers. But beyond the opportunity for unethical practices, the very process of the multi-various economic agents working perfectly in orchestra is indeed problematic. [NB that is why historically greater technical progress is made in wartime conditions; when greater use of central planning is enforced, at the literal cost of public finances].
So such a land of promise, like an oasis, often appears closer than the foibles of everyday reality permits.
This oxymoronic state of affairs is highlighted in a recent WSJ interview with Carlos Ghosn, with his counter-point statements that: "our forecast is that sales of EVs will be 10% of the total market...by 2020"... versus... "EVs will move up slowly, not taking the market by storm"
Let us conject upon the credibility of the former statement...”10%..by 2020”. We can project forward (using VW's 2018 figures) that the global market will be 30% higher than today's (55m units) at 73m, and a few years thereafter reach 75m units, that means that Renault forecasts that approximately 7.5m EVs will be sold. This means that over the next 10 years an average of 750,000 EVs must be sold each year, discounting the ramp-up effect. This figure compares to the 133,333 units sold by Toyota using a far more mainstream technology & vehicle type over the 15 year period to date
It is thus no wonder Mr Ghosn must play both roles of optimistic 'preacher' and conservative 'prudent'.
For the present time, with Copenhagen upon us, it seems that the PESTEL context of conflicting issues and agendas that can be encapsulated as “eco-idealism versus economic handicaps” means that neither conventional car-makers, unconventional 'start-ups', the financial community nor governments are truly able to initiate the required change into a true EV world within the foreseeable future. Ultimately, each party looks to the other and rhetoric continues to overshadow tangible progress.
So, the word of warning is that investors must see conditions for true EV traction before the possibly hollow perception is priced into corporate MarketCap valuations. For whilst the auto-industry certainly needs buoyancy aids, they need to be credible and not the stuff of possibly damaging technology story bubbles.
investment-auto-motives objectivity means that it has no axe to grind, except that of that of private investors (the core of capitalism) being fully informed, by competent boards and management, and not led along possible garden paths, no matter how well intentioned.
However, to end on a more positive note that demonstrates a realistic step toward an EV participantt future, at the beginning of the year investment-auto-motives made an informal recommendation that Daimler exploit its use as a licensor/contract builder of its >smart ForTwo vehicle architecture. (It is perhaps the most 'package perfect' product that encapsulates the generic form & lightweight mass of a small 2-seater city car. Perhaps the best proven mainstream vehicle - along with the previous generation 'sandwich floor' A-class - for EV tailorisation. Thus at the recommendation's heart proposing that Daimler become a strategic enabler and benefactor from global JV agreements using ICE and EV powertrains.
That identified and recommended opportunity is now being reportedly taken-up by Daimler & Renault, with mention that the Twizy EV concept will be born from ForTwo, after a conventionally powered 2 seater is created.
The EV dream has been downsized for the near and mid-term, but is all the more 'real-world' practicable for doing so by being familiar and off-setting high-cost EV powertrain and e-control costs with a recently 'break-even' amortised platform.
So whilst there is a long road to still undertake, “Bravo” to Monsieur Ghosn and “Biefall” to Doktor Zetsche for taking the first plausible step.
As the struggle goes on to maintain the world with less than 550ppm (parts per million), the take-up of electric cars will seem indeterminably slow given the reality of government rhetoric over action and relatively tiny funding for such a major societal transition.
In truth, they may continue to grow stature as the 'good taste' preserve of a 'local elite' within the wealthier inner-suburbs of major metropolises within Europe's London, Paris, Berlin, Amsterdam, and the outer reach enclaves elsewhere, such as US's Silicon Valley, New York State Hamptons, Newport Beach, Santa Barbara, Carmel etc.
But whilst such EV popularity grows and has an affect, it will do so only at a comparatively tiny relative to the major CO2 reduction enablers of clean-tech ICE and Hybrid vehicles. Since, given its omnipotence, it will be evolved technology that takes centre stage in the CO2 battle as the economy regains a slow positive momentum between 2011-2013, and so perversely could, along with feeble budget-constrained government infrastructure efforts, suffocate the progress of tentative 'real-world' city-centric EV.
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