The Coming Electric Vehicle Revolution

Originally published September 30. 2017 on Medium

Perhaps a little optimistic at the time, but still believe in the thesis.

By 2040, almost all new vehicles will be electric and sourced from clean energy.

Humans naturally avoid devastating risk, and they choose the easiest path. The easiest path is determined by the total cost of an action, relative to benefits, assuming an increasing cost for each additional unit of energy; there are actions that return 5x that of alternatives but require 5x the effort so most people will avoid them-for instance, medical school. Medical school also carries a risk of ruin if you don’t graduate.

Electric vehicles will not conquer the market because they reduce emissions and pollution. Nor will the coolness of the technology. The real benefit to EVs will be in their ease of use, and their ability to avoid ruin.

A domestic energy supply has long been seen as the solution to the Middle East problem. Dictators, ISIS, and Saudi Arabia are able to sow chaos by generating huge capital flows from their natural oil reserves. We now have the ability to source all of our energy domestically, while avoiding

Wind and solar are now at a competitive level (sans-subsidies )with every generation source but natural gas for electrical production. And the cost of production of these renewable sources is falling as much as 30% year over year. The asymptote of solar’s price is not far off from its labor cost as technology and efficiency per square inch improve. While advances in renewables tech haven’t reached the absurd level of productivity growth necessary for Moore’s Law, they aren’t far off.

Most power purchase agreements for solar are in the 20–25 year range, but the systems will produce at a predictable, de-rated level for 50 or more years. As more solar and wind is installed, the marginal cost of energy will approach zero, and occasionally go negative, as we already are seeing in California’s market on sunny afternoons.

We have established that the marginal cost of energy will approach zero in the next twenty years. Critics are quick to point out that the intermittent nature of solar and wind are likely to affect grid stability resilience until a better storage solution is identified. That argument has some merits. The antidote, large scale lithium-ion batteries, are approaching the same point on the cost curve as solar was at in 2005, and the price is expected to fall by 10x or more in the next several years. If EVs are properly introduced, the storage issue will be resolve, regardless of how quickly solid state batteries and other promising alternative storage systems- that don’t require rare-earth metals -are brought to market. There is enough lithium available to meet the needs for 40,000,000 electric vehicles by 2040*

Let’s imagine for a second that there are 40,000,000 EVs on the grid by 2030, and necessary charging and docking stations have been built at homes, workplaces and service stations. These charging/docking stations will have built in smart systems that regulate when the vehicle charges based on grid-demand. Most households will have a distributed generation solar array on their home by 2030 as it becomes more and more economically feasible, and businesses will have charging stations in their parking lots.

In 2030, you will have millions of batteries plugged in to smart charging stations, with distributed, resilient grid resources available. With large scale coordination (a friend of mine informs me that network packet switching technology has applicability to grid routing), you could completely flatten the demand curves on the grid, i.e. the system would have the same load 24-hours a day. Cars would charge during the day, when production from solar is high. Overnight, batteries in homes, large scale storage, and wind (which produces better at night) would supply required energy. These storage systems also could off take excess energy during the day from solar, and charge vehicles off of it at night. If grid demand threatens to rise high enough to require a natural gas peaker plant to fire up, your smart system could send out real time pricing, and EV chargers would be incentivized to stop charging for the hour or two necessary.

Hackers ability to penetrate this network would be dangerous, and require a lot of forethought and redundancies. That’s why distributed generation on homes and businesses will be important even if utility-scale installations are more economically viable. If you have a 40 kwH powerpack on your wall, and a solar array on the roof, any attempted hacks could be disrupted by switching to local networks and inverters until the incident is contained. This would also prevent rolling blackouts, and increase resiliency against natural disasters that can devastate power supply, like Puerto Rico is experiencing right now.

In addition to the avoidance of risk, the system would also meet the “easier” requirement that technologies need to realize for wide-scale adaptation. Gas station trips would largely be removed, as your car would charge at home, at work, or at street level electrical chargers. The cost/kwH of electricity will be close to zero. And grid and transmission services will be greatly reduced as intermittency and demand-response issues are relieved. You will have an unlimited, virtually-free (if amortized over a long enough schedule) power source, increased grid reliability, systems that avoid the risk of ruin, and adaptors’ lives will be easier as they remove gas station trips and gas costs.

EVs require minimal maintenance by removing the failure points and moving parts found in the traditional internal combustion engine.

The biggest challenges to widespread adaptation are the development of a charging infrastructure, and battery costs. Disposal and recycling for lithium-ion batteries is a market I suspect will expand rapidly and profitably, and new challengers will arise to Lithium-ion in time. It is important to remember that lithium comprises a relatively small percentage of a lithium ion battery, and reserves don’t threaten to run low for a very long time.

I predict that municipalities’ diesel buses will be the first to adapt widespread EV tech; current buses get 3–4 mpg, contribute to pollution, and are loud. Concurrently electric bikes are set to explode in popularity, and already are growing rapidly in popularity. Charging infrastructure will first appear as a way for the wealthy to charge their toys, then reach a tipping point where it is is widely implemented. Solar and wind will continue their rise, supplemented by relatively clean burning natural gas. And the people and companies who bet heavily on electric vehicles when it didn’t seem prudent will be laughing all the way to their bitcoin wallet.

*Have no clue but judging by the rate we find oil when we need to, we will find a lot more lithium as demand rises