Is Tesla’s Model-S the Beginning of the End for Oil?

Why battery technology could drive the electric vehicle to new heights – and disrupt the fossil fuel industry in the process

July 02, 2015

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Photograph Bluefish Studios

The Tesla Model-S is one of the most beautiful and interesting automobiles to ever get made. It might also be one of the most dangerous. That’s because it’s managed to do something that no other electric vehicle has ever achieved: become an object of desire. Previous generations of electric cars, from the Nissan Leaf to GM’s famous (and infamous) EV-1, have tended to be high on cost and low on drivability. But the Model-S managed to bridge that divide, and as the reviewers at Car and Driver said in their review of the car, “it dispels conventional thinking about EVs – it’s a glimpse of the future.”

That future is at the core of The Powerhouse, a new book by Quartz journalist Steve LeVine that documents the race to build a better battery. It’s a race LeVine thinks could create a global battery market worth as much as $100 billion a year by 2030, and a global electric vehicle market that’s multiples of that. Given that most of those vehicles wouldn’t need much in the way of liquid fuels, that would have an obvious impact on the demand curve for oil – and the price upstream companies get for it. Creative disruption has already wracked most major industries, and it’s wrecked more than a few of them in the process. If it’s going to visit itself upon the fossil fuel industry, it’s almost certain to take the form of an electric vehicle. As LeVine’s book makes clear, that could happen a lot sooner than some people might want to think.

An excerpt from The Powerhouse: Inside the Invention of a Battery to Save the World

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In February 2012, about a thousand men and women assembled at an upscale Orlando golf resort called ChampionsGate. There are two types of battery conferences – scientific gatherings that attract researchers and technologists attempting to create breakthroughs; and industry events, attended by merchants and salespeople. Orlando was the latter. A pall hung over the assembled businesspeople. Americans were not snapping up electric cars: GM sold just 7,671 Volts the previous year against a forecast of 10,000. There was no reasonable math that got you to the one million electric vehicles that Obama said would be navigating American roads by 2015, even when you threw in the Japanese-made Nissan Leaf, of which 9,674 were sold in 2011.

That became even clearer when just 603 Volts sold in January 2012. No one seemed consoled that China was doing even worse, selling just a combined 8,159 across the country, fewer than half the American number. Nor especially when, in a conference session, they witnessed the following exchange between a Japanese presenter and an American salesman:

American:

“Do you have any advice for us new entrants into the business?”

Japanese:

“Get a new job.”

The Japanese believed the race was already over. They – and their Prius – had won. Toyota was nearing four million cumulative hybrid sales worldwide, including 136,463 Priuses in the United States alone – the world’s second-largest car market behind China – in 2011. The Japanese themselves bought 252,000 Priuses. There could eventually be the type of market shift that both Obama and Wan Gang had forecast. But it would not be in the current decade. Until at least the 2020s, electric cars would remain at best a niche product. That would be late for most of the Westerners at ChampionsGate. Unlike the Japanese and the South Koreans, few if any had budgeted for a long struggle. The fever of the prior two or three years began to evaporate.

About this time, ExxonMobil released a 51-page outlook of the world of energy in the year 2040. Such great stabs at the future could not be entirely accurate, particularly in the years furthest out; companies such as ExxonMobil made adjustments along the way. But the forecasts were necessary given the multibillion-dollar cost of oil and gas projects, in which even successes take decades to pay off. They helped the companies form a general picture of the world to come so that they could make coherent investments.

The outlook made notable prophecies for batteries and electric cars. It started by forecasting that oil and gas would supply 60 per cent of the world’s energy a quarter century ahead. That actually represented an increase from 55 per cent in 2010. The prediction was almost categorical – the company foresaw no specific threat to this continued dominance. Biofuels, solar, wind, and other non-fossil fuels and technologies all seemed destined to remain permanently marginal. But batteries were a different matter. Perhaps recalling the company’s hasty surrender of lithium-ion to Japan three decades earlier, the ExxonMobil scenarists flagged batteries as one of the few wild cards with the potential to disrupt its world. ExxonMobil did not spell it out, but if researchers somewhere made a serious advance in battery technology, a jump in performance by a factor of four or five, they could grievously undermine oil. The car and truck fleet would require much less gasoline as consumers made economically driven choices to buy quiet electrics. The number of cars on the road around the world would still double to about 1.6 billion by 2040, but if many were electric, oil companies would have to become different animals, both smaller and sleeker.

In fact, ExxonMobil did forecast a shift to electrics of a sort – it thought that almost half the global fleet would be electrified in 2040. But most of these would be hybrids – glorified electrics like the Prius, with baby-size batteries that could propel a vehicle five or six miles with the engine shut off. Plug-in hybrid and pure electrics would capture 2.5 per cent of the market. That added up to around 40 million of them, a highly impressive number. But it paled next to the 680 million Prius-like hybrids that would be on the road. This was not a genuine electric picture.

It was a shift: at least two-thirds of all cars sold after 2025 or 2030 would be equipped with some form of electric technology. And you could reach your own conclusions as to why it would take place. One significant influence would probably be consumer taste. At some point, Americans would probably reject pure gasoline-fueled cars, just as they largely stopped throwing garbage from their car windows amid Lady Bird Johnson’s Keep America Beautiful campaign in the mid-1960s. Only a narrowing niche would even contemplate a model unequipped with some form of gasoline-saving electric propulsion. Other factors would contribute, too, but the main idea was that motorists would make the shift. – The Powerhouse

Buckle Up

Steve LeVine on existential threats, engineering breakthroughs and whether oil and gas companies have already missed the boat on electric cars

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Steve LeVine

Alberta Oil: What’s the response been like to your book from people in the fossil fuel industry?
Steve LeVine:
I was just at a dinner at the overseas press club in New York, and two Chevron guys both said they were reading the book – and enjoying it. I guess, for them, this is the one outlier that they worry about. They’re not worried about biofuels, and they’re not really worried about any of the renewables posing any kind of existential threat. But if there is a big breakthrough in batteries, that’s something that would be a huge risk for them. So when someone comes along with a book that tries to look into it, then of course they’re interested.

AO: Is it fair to say that the race to build a better battery is one of the most important business and science stories in the world right now?
SL:
I think it is. In terms of science and engineering, artificial intelligence is one. Genomics, of course, is another. But I don’t put those in the same area as batteries or electrochemistry, because this is something that could really change everything on Earth. These other areas are purely commercial. Now, I could be biased because I do have a book in this area, so obviously I do have an opinion on the subject. That said, I think I can make a very firm case that batteries are one of the single most important engineering and scientific pursuits currently going on. It’s the Holy Grail.

AO: Given the sheer volume of capital chasing that Holy Grail, is it safe to assume that the widespread adoption of electric vehicles is a matter of when rather than if?
SL:
You cannot say flatly that the battery guys are going to make a big breakthrough in the near future. But my own thinking, having spent two years in the lab and knowing what’s going on around the world now and the commercial need for this big breakthrough, is that it does happen – and it does happen in the next few decades.

That said, it doesn’t have to happen in the way some people are imagining. A big breakthrough can happen by twinning a hybrid model of battery – a super capacitor with a battery, or a fuel cell with a battery. These are all different forms of electrochemistry. There can also be a partial breakthrough in batteries and a partial breakthrough in manufacturing that, together, get you to where you need to be on the cost curve to be fully competitive with combustion.

AO: You’ve said that the race to build a better battery isn’t restricted to automobile companies. Can you expand on that?
SL:
Put aside the electric cars and just look at a big industry that already exists, and that’s electronic devices. The iPhone 7, when it comes out, and the iPhone 8, and various versions of the [Samsung] Galaxy that will come out, and all the electric devices and autonomous functionality in cars, they all have to have an equally revolutionary increase in the density, the capacity and the performance of batteries. They have to have this breakthrough, and this is why you have Apple hiring hundreds of battery scientists and why Google is in the race and why all the automakers have now established laboratories and their own VC firms in Silicon Valley. When you see these kinds of players that have a very, very respectable commercial record getting into batteries,
you know that there’s critical mass going after
this breakthrough.

AO: As you point out in your book, Exxon was the one that built the first rechargeable lithium ion battery. Could ExxonMobil or any of the other supermajors in the fossil fuel industry get into the battery business or did they miss the boat?
SL:
They’re monitoring this very, very closely. Generally, the big incumbent companies tend to hold back and assume that when a new technology reaches the critical stage, it can swoop in and buy up anyone. I think that’s where they are. And it’s not just ExxonMobil that feels that way. Now, I don’t think you can say they’ve missed the boat. They think they can get on the boat. And they could – but it would be very expensive. The notion has been raised (I’ve raised it too) of Google buying Tesla. Google wants to market commercial autonomous vehicles, and it’s further ahead than anyone in the pure research into a self-driving vehicle. But it’s very expensive and it’s risky to actually make a vehicle. If it bought Tesla and then installed its autonomous technology into an already very cool car, that would be a powerful combination. But people who are a lot smarter than I am in the M&A field have said that it would cost $26 billion for Google to buy Tesla. It obviously has the cash in the bank, but it’s a big pile to spend. So could ExxonMobil or Chevron buy a battery company that made this big breakthrough? Yes. The question is, given shareholder value at that point, whether they would.

AO: It’s widely accepted that demand for oil in North America is in terminal decline, and that new demand growth will come from the developing world. Given the growing concerns about pollution and climate change there, not to mention the investments that China in particular has made in battery technology itself, is that a dangerous assumption to be making?
SL:
I couldn’t have said that better. The oil and gas industry does have a lot on the line if it’s wrong. But what are you going to do? They’re under threat from so many quarters at the same time. This is why one of the arguments about what Saudi Arabia is doing is that it’s trying to monetize its biggest economic asset as fast as it can. A few months ago at a conference in Dubai, Ali Al-Naimi posed a rhetorical question: What if the Black Swan out there is that in 50 years demand for oil disappears? Demand for oil isn’t going to disappear. It’s going to be with us. It’s such a convenient and powerful and dense store of energy – even if every car on the planet was an electric car, for example, using fuel in jets is much more efficient than batteries will ever be. There’s going to be liquid fuel for a long time. But the demand for it could plunge. It could really plunge.

More posts by Max Fawcett

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Issue Contents

Comments

38 Responses to “Is Tesla’s Model-S the Beginning of the End for Oil?”


  1. I agree that Tesla is changing minds. It is a very high performance car that puts conventional autos to shame. Having a car that handily beats Corvettes, Shelby Cobras or sport BMW’s is one thing but at the same time having the fuel cost to be half that of the Prius is just hard to wrap one’s mind around. Then add to that I now make my own fuel easily from rooftop solar, cleanly, it is the future.

  2. Krishna Ramrattan says:

    The TESLA cars are for the Hollywood crowd and other people with more money to waste on toys etc.

    The author does not take into account that gasoline is one product from oil. What about all the multitudes of products which are made from the refining of the crude oil.

    Anyone with huge government subsidies can make any product in the world. Ask Mr Musk of Tesla.

    • James Brady says:

      Oil makes a lot of good things including parts for EVs, but you don’t burn 20 gallons worth of plastic a week, do you?

      To be fair, you should look at the subsidies for the rest of the auto industry.

    • Robb Stark says:

      Better than Tesla ask Boeing,which has received $65B in Federal subsidies the last 15 years and Ford ,which has received over $6B in subsidies the last 10 years, about building products with taxpayer money.

      16% of Tesla cars this year have been sold in CA and Silicon Valley has purchased far more Teslas than Hollywood. The biggest Tesla market outside of CA is Norway. You know those Norwegians, very Hollywood.

      Teslas are for people that want a premium sports sedan,spend 1/4 on fuel vs ICE sports sedans, and don’t want to spend 10-15 minutes per week driving to the gas station and pumping gas.

      And in 2017 we will have the Model 3 that starts at $35k with total cost of ownership lower than a Toyota Camry v6. That will be affordable to half of America’s new car buyers.

    • Graham says:

      I have a Model S, I keep my cars for 10 years. I maintain my own, Im an engineer I do not live in Hollywood. I cover a lot of miles per year, after 5 years the Tesla owes me nothing as I charge from my rooftop solar. The Tesla is simple compared to an ICE and light years in front so I will keep it for 15 years……I win, the world wins.
      Crude is so valuable for many products but lets not burn it if we can help it ….we all win.
      Tesla has paid back its subsidies early, Elon Musk sunk his wealth into Tesla thow the guy a bone for all our sakes.
      If your talking cost to the ta payer what cost solving the devastation of global CO2 what cost the Oil wars? Oil has been miss sold for years its a means to provide many products but not at the expense of lives thats just wrong.

    • Jens says:

      Krishna, the subsidies that is given to Musk or rather his buyers are infinitely small compared to what the oil industry is getting. Read this and forget the subsidy argument. http://www.theguardian.com/environment/2015/may/18/fossil-fuel-companies-getting-10m-a-minute-in-subsidies-says-imf

    • Leptoquark says:

      The Model S is, no doubt, pricey, but remember, just as many Nissan Leaf’s (to name but one model) are on the roads as well (see sales data at http://insideevs.com/monthly-plug-in-sales-scorecard/). Our all-electric Leaf has absorbed 95% of our family’s daily driving, with our hybrid in reserve for road trips.

      I agree that EV’s aren’t the end of oil, since we’re still going to need petrochemicals. But, they have a great shot at being the end of gasoline. I’m working as hard as I possibly can to make it so by showing as many folks as possible what a great car it is at public events like the upcoming National Drive Electric Week (driveelectricweek.org).

      See you on the road!

    • Don Eyermann says:

      Tesla is coming to market with a $35K Model III, and that is going to happen, just as surely as the battery Gigafactory in Nevada is well underway in construction. You live in a silly dreamworld that Oil is needed. BS We can refine plant oil to make plastics. I am a retired senior engineer in the aerospace field having worked for McDonnell which is now Boeing. The major aerospace companies ARE fully engaged in electric propulsion systems for large aircraft, because it IS more efficient. Burning thousands of gallons of fuel at 10% to 20% efficiency is fully recognized as wantonly foolish. Electric vehicles at 95% efficiency are far smarter. So of course we are examining the feasibility of electric propulsion. And so is Air Bus (both companies already have fuel cell or battery powered electric “experimental” aircraft flying). You can count on there being an ongoing series of battery technology breakthroughs. And all of this is because we real scientists and real engineers fully understand that man made climate change is real and only fools think otherwise. (Phony actors are paid to enroll gullible people with anti-climate lies and propaganda, so the OIL Industry can stave off the inevitable for a few more years of trillions in profits).

  3. Oleg says:

    I already have Prius V . It is cheaper than Tesla. tesla very expensive. If calculate price TESLA and Prius it is 50% difference. Prius after my update firmware ( chip tuning )use 3.8 L per 100 KM on town. In my project to buy Plug In electric and charge it from solar panels on my home. Electric car it is future. Same like Hard Disk drive and Solid state flash inside computers. Need couple more years.

    • Paul Scott says:

      I got solar in 2002 and bought my first electric car, a Toyota RAV4 EV. For 13 years, I’ve been powering my home, cars and motorcycles on sunlight-generated energy. My solar paid for itself around 2010, and for the rest of my life, I get free energy from the sun. Nobody was poisoned, and no soldiers died.

  4. nitpicker says:

    What about the staggering subsidies given to oil companies every year? If you’re going to trot out that pathetic argument you better have a ready explanation for the hundreds of billions going to Big Oil and Gas and Fracking.

  5. Mike999 says:

    Sure, focus on batteries, but 3.9 Cent per kWh is now sitting in the Nevada desert owned by not Rex Tillerson, but Warren Buffet.

    Solar just beat all carbon sourced pricing, without any of the hidden costs ( negative externalities ) of the pollution industry. Who can take advantage of that cheap clean energy source? Tesla or Exxon?

    The oil industry has to start Firing the Martini Sipping CEO class, and hire INNOVATORS. Elon Musk should have been made an offer he can’t refuse to Run Exxon.

  6. Stephen Pace says:

    @Krishna Ramrattan: I live in Houston, not Hollywood, and I’m fortunate to have invested in Tesla early to help pay for my Model S. As for your ‘toy’ comment, I’ll just point out that not only did Model S get 2013 Motor Trend Car of the Year and pretty much every other automotive award possible, it is quicker than a Ferrari, greener than a Prius, and can beat a snowmobile on a frozen lake. Maybe you thought similarly about mobile phones when they were the size of a briefcase, or flat screen TVs when they were $20k at CES, but I bet you own both of those products now. Such is the nature of technology. The people buying the Gen 1 and Gen 2 Tesla vehicles are funding the development of the Gen 3 vehicle that is targeting 2017 for a base $35k vehicle that has an annual operating cost of a car closer to $25k. If Tesla achieves this goal, they will sell every car they can make, and you can take that to the bank.

  7. Omer Mohammed says:

    @ krishna,

    the same can be said of oil companies – govt subsidies. any business needs that in its infancy – oil companies needed it, and so did Tesla. not much of an argument there.

    please see this link : http://www.teslacost.com/
    comparing a run-of-the-mill family mini-van to a Tesla. I drive an electric-only car, and i am by-far NOT in the Hollywood crowd. this is a misconception and once tesla launches a more affordable vehicle, this will also go away.

    I do agree with you, petro-chemical derived products will keep companies like exxon in business, but the market share for fuel will definitely take a dive.

    long story short, Tesla is definitely a game changer and I hope we can reduce our dependance on oil, foreign or national.

  8. daniel says:

    The headline and big picture of the model S is good for generating views,
    But as the article itself points out, the focus here is not so much the car, but the battery.
    If Tesla can get that $100/kWh target by 2020, we will see a huge shift in both transportation as well as power generation and distribution.
    And its a good idea to not forget they are not the only game in town. Sakti3, QuantumScape have promise within the 2020 timeframe.

    Anyway this is not about the end of oil. But the end of oil in transportation, and in a best case will take 30 years – that is assuming in 2025 all new cars will be electric, 20 years later the entire fleet will be electrified.

  9. Thanks for the lucid article, pointers to Levine, and even an interview! It is delightful to see that Tesla and batteries have the attention of the oil industry, and hugely interesting that Exxon was the first to build a Li-ion battery! That’s a hopeful sign that the oil industry has the wherewithal to reposition itself as an “energy industry” and evolve toward the future that has long been anticipated, in which demand for oil and release of CO2 both both plunge dramatically and our climate is stabilized.

  10. Nathanael says:

    It would now cost at least $32 billion to buy out TSLA — probably more like $48 billion, as a premium would be demanded.

    Not gonna happen.

  11. Jeffrey Hudson says:

    I enjoyed reading this article but I was slightly concerned that the author Steve Levine of The Powerhouse at least as reported in the article thought it will take a battery breakthrough or a manufacturing breakthrough or a combination of both to bring widespread EV’s into existence. Note that I used the term EV rather than PHEV. I believe the PHEV will ultimately only be a short term evolutionary dead end on the way to a fully functional EV fleet of personal transportation vehicles.

    Here is a link to a lecture by Jeff Dahn on “Why do Li-ion batteries die and can they be immortal?” It is a lengthy video but informative and entertaining nevertheless. The information presented by Dahn boiled down to its essence is that today’s Li-ion technology is up to the task of motivating personal transportation vehicles if the thermal issues of the battery in operation are properly addressed.
    https://www.youtube.com/watch?v=9qi03QawZEk

    It should be noted that Tesla has reached an exclusive agreement with Professor Dahn to provide research support for Tesla’s Li-ion batteries.

    I feel confident that Li-ion battery technology is being publicly underestimated by the major auto manufacturing companies while privately they are internally scrambling for how to incorporate Li-ion battery technology into their products without cannibalizing their current catalog of internal combustion motivated products.

  12. Keiron Herbert says:

    As a Model S owner I have gone way out on a limb to buy the dream he in Australia. Tesla is the very catalyst that we all need to rethink. Oil has such a diverse and vital role in the well being of mankind but it is criminal we burn it for propulsion. The core battery technology is – today- Lithium based but the reality is is doesn’t matter a damn what the core chemistry is other then – capacity and re-cyclability. The vehicle itself has the advantage of huge miles/kms lifespan and indeed WHY do most of trade in our cars?. 100,000miles/160,000kms is currently about the longest economic lifespan- Teslas design has an expectation of 1,000,000kms/620,000miles- just a little more economic but we need to change our mind or how often we change cars over.

  13. Bob Wallace says:

    It is unlikely we need a battery breakthrough for EVs to become a serious contender.

    According to a Oct 2014 Navigant Research report Tesla was paying Panasonic $180/kWh for cells. The Gigafactory is expected to drop that price 30% to about $130/kWh. Add in 30% for converting cells to battery packs and a finished battery pack would be about $165/kWh. That would mean a 50 kWh pack, 200+ mile range EV would be cheaper to purchase than a same-model ICEV.

    The general rule of thumb is that when battery packs reach $240/kWh EVs will reach manufacturing cost parity with ICEVs.

    Visit a car dealer and see a 2018/2020 Whatever. $28k for the ICEV version, $25k for the EV version. 8+ cents per mile to operate the ICEV and 3 cents per mile for the EV. The EV will be a lot more convenient and there will be plenty of rapid chargers in place for long distance driving. What decision is the typical purchaser likely to make?

    Battery breakthroughs would simply be icing on the cake. We have adequate battery technology, we just need to continue dropping the cost of what we have.

  14. Bob Wallace says:

    “Generally, the big incumbent companies tend to hold back and assume that when a new technology reaches the critical stage, it can swoop in and buy up anyone. I think that’s where they are.”

    There’s a very large and likely very flawed assumption underlying that assumption. Do you really think companies like Tesla are driven only by money?

    Most of the better educated, smarter people in the world are very concerned about climate change. Extremely concerned.

    Tesla was not founded as a way to make more money for people who were already billionaires. Tesla was founded to accelerate our transition away from petroleum. Musk and the other key players are extremely unlikely to sell out to a company that might bury EVs.

    The same holds for many of the people doing battery research. Helping to protect the world from extreme climate change is likely much more important that dying with a few more billion dollars. (Big battery breakthroughs are going to make some people extremely rich.)

    Google? Google has just announced that they are going to pull back from getting involved in areas outside their expertise. Google has done a wonderful job with search engines and maps but they’ve done poorly in other areas. I have the impression that the leaders of Google either don’t have the skills to think outside their box or don’t have the fire in their bellies to create another ‘big thing’.

    Then there are the EV/battery companies that Big Oil/Google can’t buy.

    We pay little attention to what is happening in China but China is likely to become the world leader in EV manufacturing. BYD has had to play catch up when it comes to car body quality but that seems to now be behind them. BYD is a very major battery manufacturer. The Chinese government is pushing EVs very strongly, both as a way to reduce petroleum imports, to clean up their air, and to reduce CO2 emissions. And China has several more EV manufacturers.

    China has hundreds of millions of citizens now riding electric motorbikes. Moving from two wheels to four wheels and continuing to plug in will be a natural transition for them. Saving money by simply plugging in will be a major driver for EV adoption.

    Big Oil might be able to buy some minor companies. They might be one of the many owners of Chrysler or they could be a future owner of Fisker. By the time Big Oil gets the message they are likely to have suffered major capital shrinkage (look at what has happened to coal stock prices). Best strategy for Big Oil is probably to extract as much profit as they can from their dying businesses and pay it out to stockholders so that they can invest in other areas.

    EV and battery companies might be a very wise investment…. ;o)

    • Paul Scott says:

      Apple is hiring auto manufacturing and EV technologists. Apple is also hiring autonomous vehicle people. Apple will make a play for their own EV company. They probably will skip doing a consumer car and go straight to autonomous fleets.

  15. Bob Wallace says:

    “The TESLA cars are for the Hollywood crowd and other people with more money to waste on toys etc.”

    That can be said about the Model S and upcoming Model X. Luxury cars for those who typically purchase luxury cars.

    The upcoming Model 3 is expected to be a 200+ mile range EV which will sell, without subsidies, for $35k. ($28,500 after the federal subsidy). The average price for new US cars is $32k. That means that the Mod3 is an option for about half of all new car purchasers.

    And Tesla is expected to launch a less expensive EV a few years after the Mod3. Something like a 200+ EV priced and outfitted like a Camry. An EV for almost all new car purchasers.

    That is the strategy that Tesla adopted from day 1. Start with a luxury car which would generate a lot of profit and allow them to expand into more affordable/less profitable cars.

    It would have been pretty much impossible to start with an inexpensive car on which they made almost no money and grow their business.

    BTW, Tesla makes 27% profit on each ModS it sells. The “loss” that Tesla, the company, reports is due to them investing money on expansion.

    Just like Amazon and other very successful companies which invest profits rather than sending them to the ‘bottom line’ and distributing their profits to shareholders.

  16. NLQ Jones says:

    From the article, projection of 40% fleet being electric of some sort, certainly shows some threat to oil demand. But that’ll just mean our supply will last much longer, so that we can continue to manufacture goods that use oil as feestock, instead of burning it for a very short term use. Don’t forget that electric vehicles still need electricity, and from this same article, it’s pointed out that power stations will be fueled by fossil fuels (though that may be better for the coal industry than the oil industry) by that 40 year forecast.

    It’s not like people are going to start building dams everywhere NIMBY is strong, and hydro is the only thing that challenges fossil fuels in power generation, unless you live on a volcano, like Iceland and can build geothermal. The only other option is nukes, and NIMBY is even stronger with that. Unless we suddenly have some fusion breakthrough

    • Bob Wallace says:

      You might want to pay attention to what is happening to coal consumption in the US. From a high of 54% of electricity generation coal is now below 40% and continuing to fall.

      All around the world coal is on the skids. China appears to have hit peak coal and dropped consumption a bit. India is ramping up solar installations in order to drop coal use. Coal use is once again dropping in Germany following a small upturn post Fukushima. Even Australia is realizing that they can no longer expand their coal industry.

      Coal stocks have lost over 50% of their value in the last couple of years. Several coal companies have shut down due to financial problems.

  17. Bob Wallace says:

    Renewables are growing much faster than you probably realize. The cost of wind and solar have greatly fallen over the last few years and continue to fall. Wind and solar installations are growing exponentially. There’s an excellent chance that almost none of our electricity will come from fossil fuels 35 years from now.

    Nuclear is likely to continue to fade from the picture. Nuclear produced 17.6% of the world’s electricity in 1996. By 2013 nuclear’s market share had dropped to 10.8% and shows every sign of continuing to drop. Wind produced more electricity than did nuclear in China in 2013 and again in 2014. Even in the most ‘nuclear expansive’ country nuclear is falling behind.

    • NLQ Jones says:

      There are not enough hydro dams to make wind and solar work. The only way wind and solar work is if you can store their power, for use when the sun doesn’t shine and the wind doesn’t blow. The only practical storage is pumped hydro. And NIMBY sucks with hydro dams

      (Not that it matters in California, what with no rain to fill those reservoirs) “Drill Baby Drill” really needed to be “Build Baby Build” to build enough hydro dams to satisfy demand, and that’ll never happen.

      • Leptoquark says:

        If the Tesla Gigafactory performs as expected, we’ll have first MW of battery storage available, then GW, no dams needed.

  18. Bob Wallace says:

    We have about 80,000 existing dams in the US and use about 2,500 for power generation. At least 10% of the other 77,500 dams should have ample head and be close enough to transmission lines to be used for pump-up storage.

    In addition we have thousands of abandoned rock quarries and abandoned mines, both open pit and subsurface, which could be used for storage. At the moment a large rock quarry outside Chicago is being converted into a PuHS facility.

    There there’s closed loop PuHS where both reservoirs are excavated and connected by a tunnel penstock. Plans are been drawn up for seven closed-loop PuHS facilities in Utah.

    But it may turn out that batteries are the preferred storage technology. EOS Energy Systems should be shipping their zinc batteries early in 2016 at $160/kWh. Alevo has stated that they are about ready to start shipping lithium-ion grid storage batteries at $100/kWh and Ambri’s liquid metal batteries are suppose to start manufacturing within a few months. Inergy’s vanadium redox flow batteries look promising as well. Somewhat more expensive but with very long lifespans.

    We’re at least a decade from needing serious grid storage for wind and solar. We’ve converted a lot of coal to highly dispatchable natural gas. And EVs are growing in number which provides a dispatchable load, allowing higher wind and solar penetration. It might be 20 years before we need serious storage.

  19. A breakthrough in cheap batteries is not required for EVs to win. Ultralight, ultra-low-drag autos that have 3x lower tractive load and hence need 3x FEWER batteries (or fuel cells) can achieve the same results with less time, cost, and risk: see *Reinventing Fire*, RMI, 2011, http://www.reinventingfire.com, or the 15-y-old but still useful work technically reported at http://www.rmi.org/Knowledge-Center/Library/T04-01_HypercarsHydrogenAutomotiveTransition.

    To be sure, electrification is getting cheap faster than Reinventing Fire expected, so both that and the ultralighting path are worth pursuing for best optionality, to capture both the joint and the differentiated benefits of both approaches.

    Now a third vector—autonomous, shared, mobility-service-business-model vehicles—can greatly accelerate EVs: autonomy’s high utilization (km/vehicle-y) makes EVs’ 10x lower fuel cost/km outweigh the higher capex, so total cost/km falls by ~40%. Cost-effective ultralight structures also win in this world because carbon-fiber composites don’t dent, rust, or fatigue, so at least a half-million-km vehicle life becomes realistic.

    • Leptoquark says:

      Amory, I agree on the efficiency advantages lightweight ev’s, but where are they? It seems they are perpetually under development. The BMW i3 is the only carbon fiber EV I’m aware of, at $42k. I can get more range for less money in a metal Nissan Leaf, of which I run mine at 3 cents/mi. I would rather see folks dump whatever ICE car they’re driving (typically 15-20 cents/mi), buy any EV and drive at the cost I do in my Leaf. It can be done today (see eBay), no need to wait for lighter materials.

      -A Fan

    • Tim Wiebe says:

      Amory Lovins, you are a genius. I have followed you over the years.

  20. Elaisa says:

    Tesla, why don’t you add a more practical option like a “never needs charging feature”, using an AuroraTek PUP3000UC, or a Keshe Magrav-Power system.

    Either of these power sources:

    http://www.keshefoundation.org/shop-et-livres/product/view/7/147

    http://intalek.com/AuroraTekInfo/PUP3000UC_SpecSheet.pdf

    Totally eliminate the need to plug-in, ever.

    Stop pretending like you don’t know about the http://www.DisclosureProject.org

  21. Ted Daimon says:

    Lol! The tipping point with the Model 3 and new EVs from China (https://youxiamotors.com) will come at 2017. Sorry guys, the future belongs to renewable energies.

    ALL OF YOU WILL LOSE YOUR JOBS MUCH FASTER AS YOU EVER EXPECTED!!!

  22. Tim W says:

    Let’s not forget that the Iraq War was a $3 Trillion dollar subsidy for Big Oil. Iraq was all about ramping up oil production. When Saddam was in power Iraq was pumping out about 2 million barrels per day. And Saddam was adamant that Iraq develop and control it’s own oil. Now that we have had regime change, Iraqi production is already up to 4 million barrels per day. And the goal of the Iraq government is to take it to 12 million barrels per day, and they are letting in the big oil companies to do the work, and they are bringing in a new oil law that will mean big money to Big Oil……so yes, there was a $3 Trillion dollar subsidy to get Iraq on track to start pumping out more oil.

    And of course America has a huge military, the purpose of which is to keep the oil flowing, so how big a subsidy is that? Don’t talk to me bullshit about Elon Musk getting a few dollars, in light of all the other subsidies that go on.

  23. Tim Wiebe says:

    “The TESLA cars are for the Hollywood crowd and other people with more money to waste on toys etc.”

    That’s the most insane comment on this thread. “Hollywood” is code for “liberal”…..still a dirty word in many circles. I have noticed that some of my incredibly smart conservative friends…..good guys who are top-notch business leaders and even some engineers, who should know better….sneer at “Hollywood”, and think electric cars are a gimmick. Maybe it’s just because they are “long in the tooth” like I am…..lol…. My point is that when someone says Tesla is “Hollywood”, they are dragging politics into a business and engineering discussion. That’s crazy. An awful lot of engineers and business people I know are very conservative and smart people. We need them in this discussion. They need to be respected for their views. But we need to keep politics as much out of it as possible….thx

  24. Michael says:

    I think that there is an accelerating change in the attitude of the car buying public that is not at all dependent on the next big breakthrough in battery tech or charging infrastructure or price. Todays car buyers are more concerned about the environment, willing to buy smaller fuel efficient vehicles or simply forgo ownership and choose to car-share. Vancouver is now the largest market for car-sharing. I see lots of older people in a Smart Fortwo, which I assume fits their retirement budget. I think each EV sold, breaks down a barrier for the next buyers, hopefully leading to a geometrical growth. We don’t see it yet since we are just at the beginning of the trend. A reasonable analogy might be the breakneck adoption of recycling by the mainstream.

  25. Alastair says:

    I can see EVs taking some of the market share away from Oil. However, remember that batteries, no matter how good are only a means of storing energy, the real question is if EVs take a significant percentage of the market share where is all that energy going to come from of not from oil? Can renewables alone (solar and wind etc) really replace such a dense energy source such as oil? How many solar panels and wind turbines will be required to replace the energy we get from oil? Is this realistically possible? Remember that renewables such as solar and wind are currently a tiny percentage of global electricity production even without considering the extra demand required to replace oil.



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