Forget the EPA Ruling - Gas Cars Will be Obsolete by 2025

No matter that EPA chief Scott Pruitt wants to roll back the phase Corporate Average Fuel Economy (CAFE) standards of 2015 which require fleet gas consumption to be cut in half over 2010 values by 2025, this horse is out of the barn. 

It will matter little what Pruitt does with the CAFE standards

The brewing federal fight is not just between California, which vows to maintain the higher standards,  but also with the rest of the world. Chiefly it won't be a fight about regulations but fighting economics and technology. Clearly the US government doesn't have an enviable position in this. It can't possibly win because nothing that becomes as uneconomical as the privately owned internal combustion engine car will endure in the long run, no matter how many incentives it has been given and no matter how long it already endured in spite of its inherent non-sustainability.

The US is also in a bad position because its auto-industry makes most of its profit from pick-up trucks and SUVs, both gas guzzlers which are artificially propped up by low gas taxes and by an energy policy favoring fossil fuels. The exception and shining star, when it comes to pivoting to the future, is Tesla and its all-electric fleet. But the Trump-Pruitt edict won't help Tesla in its financial difficulties. and it will also make it more difficult for GM to hold a significant segment in the electric market, no matter that its small and perky Chevy Bolt is an attractive product.

Electric cars in the $30-40k range

Japan and Korea already sell all electric or plug-in hybrid vehicles for under $30,000, i.e. at the price-point of regular gas powered middle class vehicles. The 2018 Toyota's Prius Prime and Hyundai's Ionic plug in hybrids can be bought for $25,000 and already achieve 55mpg in the gas powered mode. Plus they can be shifted anytime to an entirely emission-free all electric mode, for example, when driving through cities.  The technology clearly exists.

In the US electric cars are still an exception with less than 1% of the market, except for some cities in California where they are more frequent. If EV sales continue to double every year they did so far, they will occupy 64% of the market by 2024. In Norway electric and hybrid cars made up 52% of all cars in 2017 and even in huge still developing China EVs are 50% more common than here. Those pundits here who say that the electric car will never come should wake up and smell the coffee!  Or better, take a few trips to countries where cities enact congestion charges and Diesel bans.

Several battery factories are currently under construction, one by Tesla, each bigger than any battery company the world has seen before. A reduction of battery cost has already occurred and it is central to providing fully electric cars with a range that is comparable to gasoline. Tony Seba, a MIT trained disruption expert is predicting that the exponential curve of disruption has already reached the auto industry and that it will not only propel the electric car to the forefront but relegate gas powered car to obsolescence by 2025. And with the internal combustion engine (ICE) goes the model of private ownership of cars into the dustbin of history.

Economic forces will dictate the future (Tony Seba)

New registrations of electric cars hit a new record in 2016, with over 750 thousand sales worldwide. With a 29% market share,2 Norway has incontestably achieved the most successful deployment of electric cars in terms of market share, globally. It is followed by the Netherlands, with a 6.4% electric car market share, and Sweden with 3.4%. The People’s Republic of China (hereafter, “China”), France and the United Kingdom all have electric car market shares close to 1.5%. In 2016, China was by far the largest electric car market, accounting for more than 40% of the electric cars sold in the world and more than double the amount sold in the United States. (Global EV Outlook 2017)

There is no doubt that already today an electric car can be operated way below the cost of its gas powered brethren with the possibility to recover all of the still common extra purchase cost, even at current low gas prices (US) and before applying any of the currently available significant US federal and state tax refunds. If gas prices would go up again, the amortization would be faster and translate into actual savings early on.  If battery prices will further fall, purchase prices of electric cars could easily drop below gas powered cars which are much more complicated to build. There is also a real potential that electric cars would last much longer than internal combustion engine (ICE as Sabia calls them) vehicles, although at this point this is likely not true for the batteries. 

Capital and operation cost of the EV (red) and the ICE (blue). Chart: Tony Seba

In short, Seba's prediction that electric cars will outperform ICE vehicles isn't as outlandish as it may seem, if one considers how often the end of the internal combustion engine had falsely been predicted before.

This time the confluence of technological factors is right, namely cheaper and better batteries, quicker charging, and  autonomous vehicle technology, all areas with rapid recent advances. Seba further points to the drastically reduced cost of solar cells (photovoltaics) which makes electric charging clean and sustainable even if it occurs in numbers that would jeopardize a conventional grid powered by fossil fuels. 

2025 is seven years away. At today's pace of disruption technologies, technology could easily outpace regulation. Who in the world will listen to Pruitt? The future will not be dictated by a group of people who stick their head into the sand but by the economics of emerging technologies, increasing challenges from climate change and the increasingly urgent questions of equity in mobility and transport.

China is dominating the markets

In other words, at this point it may make no real difference what Pruitt says or regulates, the electric car will come anyway. It took about 15 years to shift individual mobility in the US from horses to gas powered cars. It stands to reason that it could take less to make the internal combustion engine obsolete.

Electric vehicles reach critical mass

The US auto industry better not jubilate too much about Pruitt's reprieve. They are given a poisonous pill.     

Klaus Philipsen, FAIA

Tony Seba Talk about the impending obsolescence of gas-powered  cars
Review video of 10 long range electric cars

Calling Car Pollution Standards ‘Too High,’ E.P.A. Sets Up Fight With California (NYT)
See also on Community Architect:

Electric cars can fly into space but not charge in the city

"The History of the Future - The Post Oil City"

From the 2015 regulation setting the CAFE fuel standrads

In June 2013, the President

announced a comprehensive Climate

Action Plan for the United States to

reduce carbon pollution, prepare for the

impacts of climate change, and lead

international efforts to address global

climate change.2 In this plan, President

Obama reaffirmed his commitment to

reduce U.S. greenhouse gas emissions in

the range of 17 percent below 2005

levels by 2020. More recently, in

December 2015, the U.S. was one of

over 190 signatories to the Paris Climate

Agreement, widely regarded as the most

ambitious climate change agreement in

history. The Paris agreement reaffirms

the goal of limiting global temperature

increase to well below 2 degrees

Celsius, and for the first time urged

efforts to limit the temperature increase

to 1.5 degrees Celsius. The U.S.

submitted a non-binding intended

nationally determined contribution

(NDC) target of reducing economy-wide

GHG emissions by 26–28 percent below

its 2005 level in 2025 and to make best

efforts to reduce emissions by 28

percent.3 This pace would keep the U.S.

on a trajectory to achieve deep

economy-wide reductions on the order

of 80 percent by 2050.

As part of his Climate Action plan,

the President specifically directed the

Environmental Protection Agency (EPA)

and the Department of Transportation’s

(DOT) National Highway Traffic Safety

Administration (NHTSA) to set the next

round of standards to reduce

greenhouse gas (GHG) emissions and

improve fuel efficiency for heavy-duty

vehicles pursuant to and consistent with

the agencies’ existing statutory