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Electric Vehicles
Electric Vehicles
The interesting aspect of this history is how electric vehicles were initially the dominant technology but lost out to internal combustion engines due to infrastructure and energy density advantages. Now, with improved battery technology and growing environmental concerns, we're seeing a return to electric propulsion, though with far more advanced technology.
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With over a dozen all-electric vehicles on the market today, and manufacturers committing billions to research and development, the transition to zero emission vehicles is accelerating. The electric vehicle has returned for good, and will soon dominate older, dirtier, less-efficient internal combustion engines.
Lifecycle Overview
This narrative includes a high level model that describes the most critical economic issues related to Total Cost of Ownership (TCO) and Return on Investment in a representative electric vehicle investment.
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Assumptions
First, let's define our "average" American driver for this scenario:
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- Commutes 50 miles per day (12,500 miles annually)
- Lives in a single-family home
- Has access to home charging
- Income around $65,000/year
- Drives current vehicle for 8-10 years
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Now, let's break down EVs by their core functionality:
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EVs work by using stored electrical energy in battery packs (predominantly lithium-ion) to power electric motors that drive the wheels. The key components that determine their value proposition are:
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1. Battery & Storage Systems:
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- Current mainstream EVs offer 60-82 kWh battery packs (e.g., Tesla Model 3, Chevrolet Bolt)
- Usable range typically 250-320 miles per full charge
- For our 50-mile daily commute, this means charging roughly twice per week
- Battery degradation averages 2-3% capacity loss per year under normal conditions
- Idle discharge rate is minimal, typically 1-2% per month when parked
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2. Charging Capabilities:
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- Home Level 2 charging (240V): 7.2-11.5 kW
- Can fully charge overnight (6-8 hours)
- Installation cost: $500-$2000
- Public DC Fast Charging: 50-250 kW
- Can charge 10-80% in 20-40 minutes
- Higher cost per kWh ($0.30-0.45/kWh vs $0.14/kWh home
average)
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3. Implementation Costs (2024 market):
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- Mid-range EV: $40,000-45,000 before incentives
- Federal tax credit: Up to $7,500
- State incentives vary
- Home charging installation: $1,500 average
- Insurance: 15-30% higher than comparable ICE vehicles
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Analysis Summary
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Economic Considerations for our Average Driver:
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- Fuel savings: $800-1,200 annually (versus 25 MPG gas vehicle)
- Maintenance savings: $400-600 annually
- Battery warranty typically 8 years/100,000 miles
- Resale value retention becoming comparable to ICE vehicles
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In addition to the economic issues above, "the evidence of the eye" gives significant evidence that is driven by the adoption of electric vehicles by the most forward-thinking companies in America.
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One of the best examples is seen on the roadways in the form of the fleet of Amazon's electric delivery vans. Amazon would not employ such a fleet without there being a clear economic advantage!
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"We hope our custom-designed electric vehicle helps create a sense of urgency in the industry to think big about embracing sustainable technology and solutions - whether you're a package delivery company, a logistics company, an ice cream manufacturer, or almost anyone else with vehicles on the road," declared Ross Rachey, the director of Global Fleet and Products.
Topics (TBD)
A Brief History of The Electric Vehicle
The interesting evolution of electric vehicles, which has a cyclical history with multiple rises and falls.
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Early Era (1830s-1900):
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- First crude electric carriage was built by Robert Anderson in Scotland in the 1830s
- Practical rechargeable batteries emerged in the 1870s
- By 1900, electric vehicles accounted for around 38% of US automobiles
- Notable vehicles included Baker Electric and Detroit Electric
- Popular in cities for their quiet operation and lack of exhaust
- Primarily marketed to urban women as clean, quiet, easy-to-operate vehicles
- Land speed record held by electric vehicle "La Jamais Contente" (1899) - first vehicle to exceed 100 km/h
Above: Thomas Parker Electric Car circa 1884
​​Decline (1920s-1960s):
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- Mass production of Ford Model T made gasoline cars more affordable
- Discovery of cheap Texas crude oil lowered gas prices
- Better roads demanded longer-range vehicles
- Electric starter invented in 1912 eliminated hand-cranking of gas engines
- Electric vehicles virtually disappeared by 1935 except for niche uses like milk floats in the UK
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First Revival (1970s):
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- 1973 Oil Crisis renewed interest
- CitiCar produced by Sebring-Vanguard (1974-1977)
- Limited by primitive battery technology
- Range and performance remained inadequate
- Mostly experimental and low-volume production
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The Modern Era (1990s-Present)
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1990s:
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- GM EV1 program (1996-1999)
- California Zero Emission Vehicle mandate
- Toyota RAV4 EV first generation
- Limited production, mostly lease-only programs
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2000s:
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- Tesla Roadster development begins (2004)
- Growing environmental concerns
- Lithium-ion battery technology matures​​​
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2010s-Present (Exponential Growth):
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- Tesla Model S (2012) proves premium EVs viable
- Nissan Leaf brings mass-market EVs
- Global EV stock grew from ~17,000 in 2010 to over 10 million by 2020
- Major automakers commit to electrification
- Battery costs dropped from $1,200/kWh (2010) to ~$130/kWh (2023)
Above: 2020 Tesla Roadster
​Current Market Status (2023-2024):
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- EVs represent about 7% of new car sales in US
- Over 14% globally
- China leads with highest adoption rate
- Over 40 EV models available in US market
- Range anxiety is decreasing with improved infrastructure
- Prices starting to decrease with scale and competition
Options and Choices! (2024-2025):
Above is a random/subset of the selection of contemporary of
2024/2025 EVs ...
Clockwise from top left: Kia EV5, Honda Prologue, Volvo EX30,
Polestar 3
Electric Vehicle Misconceptions
Let's address some common misconceptions about electric vehicles (EVs) that aren't supported by current evidence:
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"EVs are worse for the environment because of battery production"
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While battery production does have environmental impacts, multiple life-cycle analyses show that EVs have lower total emissions than gas vehicles over their lifespan. The initial carbon debt from manufacturing is typically offset within 1-3 years of driving, depending on the local electricity grid mix.
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"The power grid can't handle mass EV adoption"
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Power utilities and grid operators have been planning for EV adoption. Most charging happens overnight when grid demand is low. Time-of-use rates and smart charging technology help distribute the load. Grid upgrades are happening gradually alongside EV adoption.
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"EVs don't have enough range"
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Modern EVs typically offer 200-300+ miles of range, while the average American drives about 40 miles per day. For occasional longer trips, fast-charging networks continue to expand.
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"Batteries need frequent replacement and create massive waste"
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EV batteries are typically warranted for 8-10 years/100,000+ miles, with many lasting longer. They retain significant capacity for energy storage after automotive use, and recycling technology is advancing rapidly.
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"EVs are too expensive"
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While upfront costs can be higher, total cost of ownership analyses show EVs are often cheaper over time due to lower fuel and maintenance costs. Prices continue to decrease as technology improves and production scales up.
"EV charging takes too long"
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While home charging overnight typically takes several hours, modern fast chargers can add 200+ miles of range in 15-30 minutes. Most EV owners find home charging more convenient than gas station visits.
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"EVs perform poorly in cold weather"
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Cold weather does reduce range, but EVs remain reliable in winter conditions. Features like pre-conditioning while plugged in help maintain performance. Many EVs are popular in cold-weather countries like Norway.
Analyzing Rhetoric:
"Companies are just looking for more and different products to sell"
Let's examine this claim critically ...
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While companies certainly aim to profit from EV sales, the transition to EVs isn't merely a corporate marketing strategy. Several key factors demonstrate this:
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1. The shift is driven by pressing environmental necessities and government policies worldwide, not just corporate initiatives. Many countries and regions have set mandatory phase-out dates for internal combustion engines based on climate science and public health data.
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2. Traditional automakers initially resisted the EV transition, as it disrupted their existing business models and required massive investment in new technologies and manufacturing processes. Companies like GM and Volkswagen only embraced EVs after Tesla proved market viability and regulatory pressure increased.
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3. The automotive industry is actually taking on significant risk and cost in this transition:
- Retooling factories
- Retraining workers
- Developing new supply chains
- Writing off investments in internal combustion technology
- Building new charging infrastructure
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4. Many established oil companies and parts manufacturers stand to lose significant revenue from this transition, which is why some have actively lobbied against EV adoption.
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5. The push toward EVs aligns with independently verified environmental and public health benefits:
- Reduced urban air pollution
- Lower greenhouse gas emissions
- Decreased dependence on oil imports for many countries
- Potential for integration with renewable energy systems
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The profit motive certainly exists, but it's more accurate to say that companies are responding to a necessary technological transition rather than manufacturing one purely for sales.
They're adapting their business models to align with environmental imperatives (supported around the world by overwhelming science) and changing consumer demands, rather than creating artificial demand.​​
Economic Factors
Let's break down the key economic factors driving and affecting the EV transition
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Market Forces and Competition:
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- New market entrants like Tesla have forced traditional automakers to innovate or risk losing market share
- Chinese manufacturers are rapidly scaling up production, creating competitive pressure on pricing
- Battery technology advancements are creating opportunities for new suppliers and reshaping supply chains
Infrastructure Economics:
- Major investment in charging networks by both private companies and governments
- Power utilities seeing new revenue opportunities from EV charging
- Real estate developers incorporating charging as a value-added amenity
- Job creation in installation and maintenance of charging infrastructure
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Manufacturing Economics:
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- EVs have fewer moving parts than internal combustion vehicles, potentially reducing long-term manufacturing costs
- Battery costs have fallen roughly 90% since 2010, making EVs increasingly cost-competitive
- Economies of scale are beginning to kick in as production volumes increase
- Supply chain realignment creating new economic opportunities in mining and processing of lithium, nickel, and other battery materials
Labor Market Impact:
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- Creation of new jobs in battery production, charging infrastructure, and electrical systems
- Shift in skillsets needed for automotive manufacturing and maintenance
- Need for retraining programs for existing automotive workforce
- Growth in related tech sector jobs for software and electronics
Consumer Economics:
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- Lower operating costs through reduced fuel and maintenance expenses
- Higher upfront purchase costs being offset by various incentives (tax credits, rebates)
- Potential for vehicle-to-grid technology creating new revenue opportunities for owners
- Impact on resale values as technology and battery life improve
Government Financial Factors:
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- Shift in tax base as gas tax revenues decline
- Investment in public charging infrastructure
- Costs of grid upgrades and renewable energy integration
- Healthcare cost savings from reduced air pollution
- Economic benefits from reduced oil imports for many countries
Secondary Market Effects:
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- Impact on auto repair industry as maintenance needs change
- Growth in battery recycling and refurbishment industries
- Changes in insurance models due to different risk profiles
- New business models around battery leasing and swap services
When Business Invests to Be More Competitive ...
Businesses cannot survive without being economic "rational actors" responding to real world events, competition, and innovation.
Here are some notable companies making significant commitments to EV adoption in their fleets and logistics ...
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Major Delivery & Logistics Companies:
- Amazon: Ordered 100,000 Rivian electric delivery vans with plans to have them all on the road by 2030
- FedEx: Committed to 100% electric pickup and delivery fleet by 2040; already using thousands of EVs
- UPS: Ordered 10,000 electric delivery vehicles from Arrival and invested in the company
- DHL: Aims for 60% electric vehicles in delivery fleet by 2030, already operating thousands of EVs globally
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Retail Companies:
- Walmart: Plans to transition entire fleet to zero-emissions vehicles by 2040
- IKEA: Committed to 100% zero-emission home deliveries in all markets by 2025
- Target: Converting stores to EV charging stations and gradually electrifying supply chain vehicles
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Ride-sharing & Transportation:
- Uber: Pledged 100% EVs in major cities by 2030
- Lyft: Committed to 100% EVs by 2030
- Hertz: Ordered 100,000 Teslas and 65,000 Polestar EVs for rental fleet
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Food & Beverage:
- PepsiCo: Operating Tesla Semi trucks and converting delivery fleet
- Anheuser-Busch: Ordered hundreds of Tesla Semi trucks and testing electric delivery vehicles
- Coca-Cola: Transitioning to electric delivery vehicles in multiple markets
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Note:
This content may seem "geek-ish" but it may be important towards your development as an informed buyer.