Electric Charge

August 2017

In 2014, after receiving yet another four-figure car mechanic bill for work on our beloved old 525 diesel, I decided enough was enough. 

 

Within a week the car was gone (via webuyanycar.com) and we had put down a deposit on an all-electric Nissan Leaf.  It is probably fair to say that our lives have been transformed by those decisions.  I’ll come back to our experiences of electric motoring later.

It has been interesting to see the sudden surge in media interest in electric cars this year.  Some of it has been startlingly ill-informed; perhaps we will look back at the debate in the same light as late 19th century worries about the demise of horse-drawn transport.  So much of the discussion has focussed on practical challenges (Where will all the chargers go?  Will my kettle explode if I charge my car at the same time?) that will surely be overcome through human ingenuity.

Of course, none of us knows the precise path that the future will take.  The world of finance provides ample evidence for this.  Huge resources are devoted to impossibly precise forecasts which are then rapidly revised as reality unfolds.  A century of overwhelming evidence suggests that financial markets are only loosely predictable.

There is similar uncertainty about the future for electric cars.  Forecasts of the take-up of electric cars vary hugely.  A recent Economist article (1) referenced forecasts of electric vehicle sales in the year 2040 at between 100m (according to ExxonMobil…!) and over 500m.  What is more, each of the forecasts has been revised (upwards) substantially in the last 12 months alone.

What is behind the upward revisions?  We often talk about the power of compounding with our clients when it comes to investments.  Even relatively low growth rates, compounded over many years, can result in startling changes.  The take-up of electric cars and, more broadly, renewable energy worldwide is still low but increasing rapidly.  Compounded for several more years, the world’s car and energy markets may look very different in a generation.

The green optimist in me wonders if, as a result of these changes, the majority of the oil and gas currently in the ground might end up staying there.  What if, in the future, the market for cars powered by internal combustion engines becomes a luxury niche, like Swiss watches since the invention of the battery-powered quartz watch?  Perhaps there will be a “Detroit Biennale” at which enthusiasts will gather to marvel at beautifully crafted, wonderfully complicated car “movements”.

What of our experience of all-electric motoring?  Like any new technology, it took some getting used to.  (Mrs Sheikh did not enjoy crawling at 5 mph on the hard shoulder to make it to the next rapid charger the first, second or third time I misjudged the range on a long journey.)  We got better at planning our routes in different conditions.  And just two years after joining the electric revolution, battery technology has improved so rapidly that our new Leaf easily does 50% more miles than the old one – and Nissan has just launched a new model with a range of more than 200 miles, joining Tesla, Renault and Chevrolet and others to have achieved this milestone.

Before we bought the Leaf we were probably as “green” as most well-meaning middle class folk.  Now, our impact on the environment, whether local, national or global, or in our travel, work or diet, is a daily consideration and one that meaningfully affects our choices.  The speed of that change in attitude, like the technologies bringing electric cars into the mainstream, is higher than we could possibly have imagined just a few years ago.  The realistic chance that I will never buy a car powered by an internal combustion engine again is both bewildering and uplifting.

- Faisal Sheikh

Notes

(1) https://www.economist.com/news/briefing/21726069-no-need-subsidies-higher-volumes-and-better-chemistry-are-causing-costs-plummet-after

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