Maybe you should have bought an electric car
The Iran War is illustrating the cost of anti-EV nonsense.
This is SUCH a no-brainer. You'd think that even MAGAs would understand.
Oh, wait ... "brains" and "MAGA" is in the same sentence. My bad!!
S E E D E D C O N T E N T
“Without fuel they were nothing. They'd built a house of straw. The thundering machines sputtered and stopped.” — “The Road Warrior”
Here is a chart of U.S. gasoline prices:
$4/gallon gas isn’t historically that high. If you measure relative to typical American incomes, it’s considerably lower now than it was in the early 2010s. But that’s cold comfort to people who have to commute every day to work, and who just saw their weekly gas bill increase by 50%. Those people have every right to be upset about Donald Trump’s war in Iran.
You know who’s not feeling the heat in their daily commute? People who drive electric cars. To them, the war in Iran isn’t a source of daily pain at the pump, because they don’t even go to the pump. Instead, they just park their cars in their driveways and garages every night, and attach a little cable to the back of the car, and in the morning the car is charged and ready to go.
And this means they get to drive around much more cheaply than people who fill up their cars at the pump. Yes, the price of electricity is higher than it was before the pandemic. But even so, an analysis last December by Autoblog found that it cost EV drivers only 5 cents to drive each mile, compared to 12 cents for good old gasoline-powered cars. And that was before the Iran War spiked the price of gas!
For years, whenever I’d say that EVs are the wave of the future , I was met with an absolute torrent of nonsense. “What about range anxiety?”, I’d hear from people who were unaware that EV range has tripled over the last decade . “But it takes so long to charge up,” I’d hear from people who don’t realize that EVs charge up while you sleep. “We’re going to run out of minerals!”, I’d hear from people who had never actually looked up the numbers . And so on.
This sort of nonsense failed to sway Yours Truly, obviously, but it did a number on the United States as a whole. Despite Elon Musk being one of their biggest backers, the Trump administration went on a crusade against EVs, canceling government support for American battery factories and canceling subsidies for EVs. In a free market, the end of those subsidies wouldn’t have mattered, since Chinese batteries and EVs are much cheaper anyway, but U.S. tariffs are so high that they make Chinese batteries and cars extremely artificially expensive. On top of that, Musk’s political antics made people stop wanting to buy Teslas . Ford utterly bungled its own EV rollout. And American consumers became increasingly reluctant to buy EVs in general, probably motivated by the aforementioned blizzard of FUD 1 and nonsense surrounding the technology.
As a result, even as EV sales skyrocketed worldwide , they plateaued and fell in the United States:
Everyone who was paying attention realized that the U.S. was falling alarmingly behind in this crucial technology. Here’s what Hengrui Liu and Kelly Sims Gallagher wrote in January :
Ford and General Motors had recently announced US$19.5 billion and $6 billion in EV-related write-downs, respectively…The message from Detroit was unmistakable: The United States is pulling back from a transition that much of the world is accelerating… In China, Europe and a growing number of emerging markets, including Vietnam and Indonesia, electric vehicles now make up a higher share of new passenger vehicle sales than in the United States...That means the U.S. pullback on EV production is…an industrial competitiveness problem , with direct implications for the future of U.S. automakers, suppliers and autoworkers. Slower EV production and slower adoption in the U.S. can keep prices higher, delay improvements in batteries and software, and increase the risk that the next generation of automotive value creation will happen elsewhere.
And here’s a very illuminating chart:
In some countries, the EV “flippening” is happening even faster. Here’s Singapore:
And here’s Norway:
Now, don’t get me wrong: EV drivers in these countries are still going to be very put out by Trump’s war in Iran. Liquefied natural gas exports are being severely disrupted , both by the closure of the Strait of Hormuz, and by Iran’s strikes on Qatari refining infrastructure. That will send global electricity prices up, especially if you live in Asia, where most of the Gulf’s LNG goes. But of course, even that won’t make EVs a bad deal for customers in Asia and Europe, since oil prices have risen even more than LNG prices.
And the U.S. is in a completely different situation. Natural gas markets are fragmented, since — unlike oil — it’s costly to transport natural gas in liquid form. That means that the U.S., with its abundant shale gas, isn’t very affected by overseas wars. Natural gas prices are up only a little bit in the U.S., and even that is mostly due to the AI boom and a cold winter .
In other words, if you’re an American who drives an EV, the Iran War is hurting you a lot less right now.
Yes, at some point the war will end — probably when Trump backs down and makes some sort of “deal”. Crude oil supplies will resume, and gasoline prices will slowly follow. But if you drive a gas-powered car, you have to realize that this is just going to keep happening .
The price of oil, and thus the price of gas, is extremely vulnerable to supply shocks. Oil demand is very inelastic in the short run. If there’s a small disruption to supply, it’s very hard for lots of people to stop driving to work, or moving things by truck and ship and plane. Oil is also an indispensable input into plastics, which are necessary for much of the modern economy. So when there’s some sort of supply disruption — for example, the Strait of Hormuz getting shut down by the Iran war — a few people can switch away from oil, but most people just desperately offer to pay more and more. So the price shoots up very quickly.
This is why even though only 20% of global oil flows through the Strait of Hormuz, disrupting much of that supply caused oil prices to almost double. As I wrote the other day , this isn’t apocalyptic, especially for America (which is a major oil producer). But it could send inflation creeping up and curb economic activity a bit. And for people who drive gasoline powered cars, it’s a major headache.
And it’s a headache that’s going to happen again, and again, and again. Here’s a comparison of oil and gasoline prices versus electricity prices in the U.S. since the turn of the century:
As you can see, oil and gasoline bounce around far more than electricity does. If you drive a gas-powered car, you are economically vulnerable to these periodic price shocks. If you drive an electric car, you are not vulnerable. It’s as simple as that.
In fact, the price shocks may get even worse over the coming decades. The Iranian closure of the Strait of Hormuz, and the Houthis’ closure of the Red Sea, show how modern drone warfare makes it much easier for land powers to shut down commerce through key maritime choke points. The fact that oil is a global market means that any war, anywhere in the world, can shut down those choke points and send the price of gasoline skyrocketing everywhere in the world — including in America.
And Trump’s flailing efforts in Iran show how U.S. power is no longer a bulwark against such conflicts — both because the U.S. is more of a force for chaos than a force for order now, and because changes in military technology make the U.S. much less capable of stopping the cheap fleets of drones that can threaten global shipping. In 1991, you could count on Uncle Sam to use its military might to keep oil prices low; today, you can’t. “Just go to war in the Mideast and make oil prices go down” simply doesn’t work anymore.
The Iran War provides a vivid demonstration that the energy transition isn’t a climate issue — it’s an issue of national security. If there’s a silver lining to Trump’s stupid war, it’s that it’ll speed the world’s transition to solar power, wind power, and electric vehicles. Countries around the world are realizing how vulnerable their dependence on fossil fuels makes them. From Shaiel Ben-Ephraim, here’s a rundown of emergency measures various nations are being forced to take in response to the Iran war:
The Philippines declared a national energy emergency…Sri Lanka instituted a weekly public holiday for public officials and schools. It has also revived a QR code-based fuel rationing system that limits private cars to 25 liters of petrol per week…Pakistan closed schools for two weeks and cut free fuel allocations for government vehicles by 50%. It also hiked high-octane fuel prices by 60%…Bangladesh…shut down universities and colleges and implemented five-hour rolling blackouts for households to prioritize the garment export sector…South Korea launched a nationwide energy-saving campaign and released a record 22.46 million barrels of strategic oil reserves. It also temporarily lifted limits on burning coal…Thailand ordered civil servants to work from home, set office air conditioning to 26–27°C, and halted petroleum exports to preserve domestic stock…Japan…announced its largest-ever release of strategic oil reserves, approximately 45 days' worth, to stabilize local markets…Egypt ordered early closures for malls, restaurants, and government offices while switching off illuminated billboards…Myanmar introduced an "odd-even" rationing system where private vehicles can only purchase fuel on alternating days based on their license plate numbers…India has invoked emergency powers to divert liquefied petroleum gas (LPG) away from industrial users to prioritize household cooking needs…Slovenia became the first EU member to implement fuel rationing, limiting private drivers to 50 liters of petrol per week and businesses to 200 liters.
Unlike in previous episodes of crisis and disruption in fossil fuel markets, countries now have another option — build more solar, wind, and batteries. Auston Vernon has some good back-of-the-envelope estimates of how much countries can compensate for lost oil supply by going electric. And Todd Woody has a rundown of various ways that people and countries are either going electric, or considering going electric, as a result of the war. Buying an EV, of course, is the most obvious way to go electric:
As gasoline prices climb — hitting $6.81 a gallon at a nearby station on Wednesday — a flurry of drivers are making appointments to check out Ever’s lightly used EVs, many priced under $30,000…Ever is just one dealership, but signs of a shift are playing out across the world. In Southeast Asia, buyers are flocking to Chinese EV giant BYD Co.’s stores…
High fuel prices in Europe are also sparking a new wave of interest in EVs. In the UK, car site Autotrader recorded a surge in EV inquiries since the first attacks at the end of February…In Denmark, used EV searches on Bilbasen , a major online car marketplace, have jumped by as much as 80,000 a week…
American online searches for electric cars rose 20% in the first week of the war and dealers have reported more inquiries from buyers.
As Woody notes, this would not be the first time an oil shock led to a sustained shift toward vehicles that used less oil — the oil crises of 1973 and 1979 inaugurated the era of cheap fuel-efficient Japanese cars.
That story ended with Detroit rebounding in the late 90s and 2000s after oil prices went back down, by shifting to high-margin gas-guzzling SUVs. This episode might eventually end the same way — as the Iran war ends and oil demand falls from the global shift to EVs, oil prices will eventually fall again, and Detroit will go back to its same old tired strategy. Woody notes that “US carmakers are sticking to their decisions to scale back on EVs even as demand grows in the rest of the world.”
But this time won’t be like the 90s. Batteries have fallen so much in price that EVs are simply better than gasoline-powered cars now. Even if Fortress America uses tariffs and toxic political nonsense to keep itself wedded to obsolete internal combustion technology, its car companies will be cut off from global markets. The rest of the world does not have the luxury of forcing itself to use outmoded legacy tech, and the appetite for Detroit’s ancient gas-guzzlers will be very low.
Meanwhile, America’s stubborn refusal to adopt EVs will have other negative long-term consequences. Since the same tech used to make EVs is also used to make drones, robots, and electronics , the U.S. lack of EVs will crimp demand for these fundamental technologies and limit the scale that American component manufacturers can achieve. That will hobble and weaken American manufacturing even as it delivers the industrial future to China on a silver platter.
And as for American drivers, they will continue to live forever with intermittent spikes in gasoline prices — sometimes lasting for months, sometimes lasting for years — while paying triple for each mile and standing around at a gas station once a week. Perhaps, as they anxiously scan the latest news from the Middle East, they will comfort themselves with decades-old nonsense about “range anxiety”. Meanwhile, the increasingly affluent and secure middle classes of more pragmatic nations wake up in the morning to their fully charged EVs, cheerfully unconcerned with developments in the Strait of Hormuz.
Choosing to disbelieve in technological innovation has real consequences.
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There's "cutting off one's nose to spite one's face".
This is "cutting off one's head to spite one's brain".
That’s like someone pushing ev’s to save the planet, but not tesla ev’s because,,elon.
Two different subjects. Boycottng a proud Nazi, and saving the planet
Given china’s record on human rights you must be completely against chinese ev’s too.
How do you feel about America's record on human rights?
Overall, it’s very good.
I suppose the Chinese would say the same
Good article Bob!
If you don't mind me asking, which make and model EV did you chose and what has been your experience thus far?
It's a Skoda Elroq - a sister to VW's ID.3.
We only take short trips around Calais - there's a very pleasant oceanfront walk where we go just about every day. We plug in about once a week for maybe six hours, to a standard (EU, 220V) 16 amp socket. This keeps the battery between 20% and 80%, for longevity.
Otherwise... it's... a car . I think that's what people want - cars that are like all the other cars they've known... but battery-powered.
Cool! That is a nice looking vehicle!
The Elroq replaced a Citroën, with their usual ultra-smooth ride, so that's not so great. Materials, fit, and finish are good. We like it.
I was looking at some others and returned here to look at pictures of the Elroq at your link. I still think it looks great but I couldn't help but notice that they have the steering wheel on the wrong side!
Mistakes happen.
Having had the opportunity to ride in EV cars where I am, I'm extremely impressed with how smooth and quiet the ride was. What really knocked me out was seeing that one of them did not have a gear shift, it had a big dial with 3 positions - forward, neutral and reverse. You hear a lot of bitching in America about the cost of living, but then why not do something do-able about it? Oh, I see, you've got to favour the industries that donate big to Trump.
Let them eat cake. Seriously, what this world needs is more Marie Antoinette.
The average car in the United States is almost 15 years old. People aren't driving 15 year old cars because they're too stubborn to buy a shiny new electric one. They're driving them because they can't afford a new one of any description.
If you can afford an electric car, $4 gasoline is a minor inconvenience. You probably had to be told that eggs weren't supposed to cost $7/dozen. You probably own a home and slapped solar panels on it back when Biden was paying 30% of the cost. I know I did.
But those folks struggling to cover $4 gas.... well... they deserve it for not being good liberals.
WOW. I didn't realize the USA had become Cuba since I was last there around 19 years ago.
The average age of a car in Cuba is 60-65 years old.
So that's almost exactly the same at 14.5.
Our Yuma car is a little 12 year old Buick Encore. Still a nice little car.
The trade-in for the Elroq was 16 years old.
I recall when everyone used to trade their car in every 3 tp 5 years. I guess cars have started to be built to last longer. Anyway, I was thinking more in general terms, I exaggerated to make a point about impoverishment due to increased cost of living..
How the hell do the motown three survive if they can't make people trade their cars more often?
That's very true. The durability of the average car is orders of magnitude better than it was when I was younger.
I think it's pretty well documented that the US economy, and specifically our educational system, have struggled for several decades now to help the middle class keep up with the rich . Unlike many of our European counterparts, we refuse to limit the top performers.
They moved huge amounts of the production overseas. It's far more efficient to source parts in China than pay union labor in the USA. That doesn't even mention the massive scale of auto production in Mexico. Mexican labor still costs about 10% of what US labor does.
The auto industry is the single biggest beneficiary of NAFTA.
It's interesting that you call them "the Motown Three", because Detroit is a complete wasteland now. There are over 100,000 vacant lots where homes once stood.
So why haven't you traded it in on an electric vehicle?
If we're admonishing people that "the should have bought an electric car", why do you still own an ICE (internal combustion engine) model?
The bad apples are those that preach to others about lowering their carbon footprint while they jet about between multiple homes on multiple continents.
Because it works fine. We're hardly putting any miles on now - far from what we'd need to amortize any car.
Of course I meant Ford, GM and Stellantis. In the movie The American President the three lawmakers who represent the car manufacturers were called "The motown three". As I'm sure you know I quote a lot from the movies.
That's some of them, yeah. There are others who find self righteousness in their privilege, and then love to divide everybody with their purity tests.
If you polled 1000 Americans on what they think about pollution, 999 would be against it. The last one would be unable to answer because she can't stop blathering about racism or the patriarchy or whatever else happens to be triggering her anxiety in the moment.
But rather than have any sort of intelligent conversation about how we lower pollution, we're going to allow the batshits to take over and pronounce idiotically unattainable targets with plans to force the rest of us to comply. "All electric cars by 2030" or some other stupidity. These dickheads are also really bad apples.
That's exactly why I don't own one yet. I've got an 8 year old Audi that sees about 4k miles/year.
But let's not forget people who actually struggle to pay bills. Acting like the "should have bought an electric car" is about the most stupid piece of privilege I've seen in years.
Oh yeah. I understood.
Are you sure that what you are remembering wasn't simply the end of a 3 or 5 year lease term? At which point they either went without a car or leased another, never really owning the vehicle? I actually think that a lease option, if offered, might be a better fit for electric cars as one could return the vehicle before the battery needed to be replaced, and re-lease another with a new battery.
Most folks who purchase a vehicle and finance it usually keep it for the full term of the loan and then try to stretch that ownership as far beyond the date of the final payment as they can to push off having a car payment as long as they can. I know that is what I and many of my friends have done historically. I have kept cars for 10 years or more for that reason. The sad thing is that all cars are so much more expensive now, so the loan term on a new vehicle is often 7 to 10 years in order to make the monthly payments manageable. That is the rut my kids are in.
I remember about car ownership from back in the mid-forties, and I can tell you that my father always owned his cars. I didn't start leasing mine until about the late 80s although I am aware that the concept of leasing did commence after WW2 but took a while to become popular.
Our Elroq cos just under € 30 000, including 20% VAT. Why can't you find anything similar in the US?
Dogma.
Stupid dogma.
We can. It's a VW ID.4. It runs about $47k US for the most basic model. $39k after VW rebate, plus 6.25% tax (in Texas), so about $41,500 all in.
So doing a little math here.... assuming an average American family with a 700 credit score (national average for middle class families) we're talking about a 9.98% interest rate (per CNBC) on a $35,500k loan (we'll assume they have $5k positive equity in their current car and put $1k down)..... that works out to a payment of $748.17 over 60 months.
It's only $9k/yr. I can't imagine why they're not lined up around the block as we speak.
VW also offers a similar model called the Taos, which starts at $26,500, or about $23k euros. With the promotional interest rate, you've got payments of $375/mo, which is probably still more you can afford if you're try to stretch $4k/mo.
Or math. Maybe it's math.
Because the families who really feel the pinch at the pump don't tend to have 700 credit scores, and often don't have $5k equity in the current car. 30% of people are upside down in their cars... i.e. they owe more than it's worth.
It's an ID3.
Which they don't sell in the USA.
And which isn't the same car at all.
The ID.3 is basically an electric Golf. The Elroq is an SUV. It's much closer to the ID.4.
My point, exactly.
Facepalm all you want. The specs don't lie.
What is that point, exactly? That there is some sinister "dogma" keeping one VW out of the USA while allowing a larger one in?
VW doesn't bring that tiny car to the USA because they can't sell the damn things. They can't even sell it to you. You bought a car almost exactly the same size as the ID.4. If you don't want it, why is somebody else supposed to?
I'm not sure why we're still trying to ignore that the people who suffer the most from $4 gas can't afford ANY of these cars anyway. The average car in the USA is almost 15 years old Binomial distribution over large numbers being what it is, that means that around but not exactly half of them are older than that.
My neighbor is raising 4 boys, ages 7-14. He drives a 2002 Chevy Tahoe he bought from me.
So I'll just run over and scold him for his "dogma" and tell him he should plonk down $700/mo for a tiny European car that won't hold his family.
Let them eat cake.
You don't know what you're talking about.
I await your evidence.
I dont know about that , i think he is looking at different aspects as it applies to the average US driver with average US finances .
i can afford an EV , but i wont get one , what IS offered is over priced and not suitable to my situation . thats not counting the initial costs to have it set up as well as the cost , all things that need to be considered for such an expenditure .
and that is why it is left to the individual to decide , once they get all the information for themselves , and things are still pretty much in flux as to how EVs will be charged to make up for the loss of those gas taxes that pay for the roads they expect to drive on .
You make false statements, and then complain about others...
VW group EVs use seclialized platforms, so a Golf (ICE) and an ID.3 are not siblings. A given platform can carry different bodies, so ID.3 and Elroq are siblings. There's also a Cupra (Spanish).
Yes! That's the point. The government is anti-EV, so the Big Three take advantage to offer only big, high-spec (expensive) cars. The consumer gets screwed.
The ID.4 is built on the same platform and is much, much closer in size than the 3 is.
Why, because they won't help you buy one anymore?
As long as the consumer still gets the final say , they are not getting screwed , now i would agree if EVs got mandated , and the consumer was left no choice , and all things being the same with whats offered , then i would agree they are getting screwed by the powers mandating it .
for me individually , i still get to say what i will spend my money on , no one else , and currently the issue isnt worth it to make that expenditure . and that IS my choice .
What part of "a given platform can carry different bodies" do you not understand?
Why do you not address the basic question: why does no manufacturer offer less expensive EVs?
That's pitiful, Jack.
The consumer cannot get the last word if the manufacturer doesn't even make the offer.
Oh but they do Bob , they just dont buy or lease whats offered . thats consumer preference and power at work . if the demand isnt there by the consumer it wont matter anyway , thats why some models were dropped recently lack of demand .
and for some additional clarification , the cost isnt the big factor with my not making a purchase , its the suitability of whats offered with the situation and conditions i have while driving . Purely personal things I require .
we all do have our own individual preferences , likes and dislikes , no car salesman is going to change that factor , no matter how close to the end of the month and needing to make quota they are .
I have stated where i stand on the issue , i wont be changing my mind anytime soon .
Yes. And the body closest to your Skoda is the ID.4 which costs $47k USD.
Because 40% of the cost of an EV is in the battery and lithium is expensive.
Why do you not address the basic question: how exactly are people who can't afford any new car supposed to afford an EV?
Then why? Do explain?
You do not know what you're talking about, and you clearly do not intend to learn anything. I'm done.
Really, really ironic statement considering I'm the only one bothering to look shit up and learn things. Or did you imagine I just magically knew the size of cars VW doesn't sell in the US? It's amazing what a little research can do.
So to summarize, you got the type of car wrong, you can't explain how "the government is anti-EV", it pisses you off that Americans don't buy tiny cars in spite of the fact you also didn't buy one when you had the chance, so you're going stand in judgement on people who can't afford a $20k car because they won't buy the $30k car you think they should have but didn't buy for yourself. That's brilliant.
You disappoint.
Well done Sir
Noah Smith's analysis relies on some conveniently subtle misdirection and completely ignores the Big Foot hiding in the corner.
At least Smith acknowledges that electricity prices have been increasing. But Smith fails to acknowledge the apple-to-oranges comparison between volatile spot pricing of gasoline and the buffered, contract-regulated pricing for electricity. When an oil shock happens the gasoline prices spike and then retreat as the shock passes. The shock doesn't hit electricity prices until the next contract cycle and rate review. While gasoline prices can be volatile, electricity prices are sticky and won't retreat after a shock.
Noah Smith's comparison of operating costs conveniently disregards the difference in tax structures for the two energy sources. Gasoline is subject to sizeable excise and sales taxes to help maintain infrastructure. Gasoline powered cars are, in reality, subsidizing the operation of EVs. What happens when the EV operating cost must include a 'road use' excise tax? Those EVs will begin losing their sparkle.
Finally Noah Smith, like many, ignore the Big Foot hiding in the corner -- the petrodollar. The global demand for US dollars in global energy transactions is why the fiat dollar has such a high value in global markets. The petrodollar does not have intrinsic value so its value depends upon competition to acquire US dollars for global transactions. If we 'de-oil' global energy markets then what will bolster the strength of the dollar in trade? If the petrodollar collapses the resulting inflation and devaluation of the US dollar will make all imports much more expensive. That would make Noah Smith's analysis moot.