Brain Phrye

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The Three Problems with EVs

Since I’ve had this conversation in person a few times, I thought I’d write it down. The are three problems with EVs that people talk about that aren’t really problems. However, the reality of EVs that makes those issues not-exist causes a number of problems.

The three non-problems people talk about are cost, charging times and range. Costs are coming down and as time goes on the used EV car market is growing. Charging times aren’t really an issue as it normally happens at home - and there are numerous solutions for people in apartments and without driveways. Battery capacity is making range go away - in addition to home charging reducing that worry.

Of the three actual EV problems - roads, rural public charging and dealerships - home charging is a major contributor to two of them. For the third, the reduced complexity of EVs harms dealerships.

Currently roads are paid for with petrol tax. This is a hugely non-progressive tax as wealthier people generally drive less and can afford more efficient cars. However it’s a hidden tax so people don’t really notice it. That revenue source goes away with EVs - but the roads still cost the same. Actually they’ll cost a wee bit more as EVs are heavier.

One idea is to tax electricity at charge points but the problem is that EVs can be charged anywhere. And the bulk of charging is at home. You can charge it off solar panels or wind turbines without a meter being involved. There are solutions if we want to keep a use tax - a weight + odometer tax on EVs would be one idea - but they’re no longer hidden. And congestion-style charges with tracking cameras have obvious privacy concerns. Paying for roads through general taxation, assuming a progressive taxation system, seems more fair.

And since EVs are largely charged at home, the need for fuelling stations is reduced. It’s reduced even further when you realise anyone with a car-park and an outlet can become a charging station. Greater fuel economy is already reducing the number of petrol stations in Ireland and the losses largely come in rural areas where lower populations mean there’s less revenue.

Lastly, dealerships are funded through repairs, not through car sales. EVs need less service than ICE cars. The rise in tech in EVs is a recurring revenue play for carmakers because they know they won’t be making as much money selling branded parts soon.

Tesla is the leader in this so it’s interesting to see what they’re doing. Want heated rear seats in your Model 3 - go to the screen and pay $300 to “install” it. A minute later, the people in back will have warm rears. Want to use streaming services on the big screen when you’re away from wifi? That will be $10 a month. Want to upgrade to full autopilot? Go to the screen and tick the box - and pay them $7,000. A minute later you’ll be able to sit back with a hand on the wheel as the car drives you from point A to B without you doing a thing (well, that’s the theory, not there yet though).

Carmakers have a path forward. And small repair shops that handle regular repairs and servicing, they probably have a path forward. Dealerships though. Where do they fit in the EV world? They don’t. There are 800 car dealers in Ireland. Some might survive selling used cars - though small repair shops do that too - but the rest really don’t have a purpose.

That’s two largish industries - petrol stations and dealerships - that don’t have a promising future.

Of the three problems, rural public charging seems the most solvable. Hotels and shopping centres might fill in the gap. The former will have some economic pressure to do so, the latter might be helped along with public incentives.

The displacement of petrol stations and dealerships will be a huge cost. Some jobs in a dealership transfer, but highly skilled mechanics would be harder to retrain. Perhaps turning older ICE cars into EVs could grow as a business.

The most intractable problem is road tax. Roads have to be paid for somehow. In the end I hope the answer will be via general taxation. It’s the more progressive solution and the least intrusive.