Is it time to scrap electric cars? With Rory Sutherland | SpectatorTV

Summary

In this discussion, Rory Sutherland and Freddy Gray delve into the electric vehicle (EV) market's challenges. They explore government incentives' impact, the market's resistance, and the need for charging infrastructure. Sutherland argues for a natural progression towards electrification, citing electric motors' advantages and the potential of plug-in hybrids as a transitional solution. They also address the risk of Chinese EV overproduction and its global market implications, suggesting a cautious approach to mandated timelines for technology adoption.

Takeaways

• 🚗 The electric vehicle (EV) market is facing challenges despite government incentives and mandates pushing for electrification.
• 🌿 Ross Clark's article discusses the 'great EV bust', suggesting that electric cars are not being adopted as expected despite efforts to promote them.
• 🔌 Rory Sutherland argues that the natural progression for vehicles is towards electrification due to the advantages of electric motors.
• 🏡 Sutherland points out that electric cars can be miniaturized and are more versatile in terms of energy source compared to internal combustion engines.
• 🚦 There is a debate on government mandates for EV adoption, with concerns that they might be premature and not aligned with market readiness.
• 🔌 Plug-in hybrid cars are presented as a compromise between traditional and electric vehicles, suitable for those with range anxiety.
• 📉 The market for early adopters of EVs is limited, and there are concerns about the sustainability of the current EV market model.
• 📉 There is a worry about the overproduction of EVs by China, which could lead to a flood of cheap EVs in Western markets, affecting local industries.
• 🔄 The discussion highlights the need for innovation and the potential for game-changing technologies to emerge in the EV space.
• 🔌 Battery technology is a critical issue for EVs, with concerns about China's dominance in the market and the need for more competitive alternatives.

Q & A

What is the main topic of discussion in the transcript?

The main topic of discussion is the current state and future of electric vehicles (EVs), including government incentives, market adoption, and the challenges faced by the industry.

What does Ross Clark argue in his piece about electric cars?

Ross Clark argues that despite government incentives and mandates, the electric car market is not functioning as required and is experiencing a breakdown.

What is Rory's opinion on the natural progression of vehicles towards electrification?

Rory believes that the natural path of vehicle development is towards electrification, citing the advantages of electric motors in miniaturizing cars and the versatility of electricity production.

What is Rory's view on government mandates for electric vehicle adoption?

Rory thinks that government attempts to mandate the pace of change towards electric vehicles may be misguided and that the market should be allowed to naturally progress.

What is the 'crossing the chasm' concept mentioned in the transcript?

The 'crossing the chasm' concept refers to the difficulty of moving a product from early adopters to the mainstream market, which is complicated by the fact that not everyone buys new cars.

Why does Rory think plug-in hybrid cars could be a good compromise?

Rory sees plug-in hybrid cars as a good compromise because they can run mostly on electricity for short distances while still having an internal combustion engine for longer trips.

What issue does Rory raise about the market saturation of early adopters for electric cars?

Rory points out that the market quickly runs out of early adopters who are willing to buy new cars, which is a small segment of the population, potentially limiting the growth of electric car sales.

What is Rory's perspective on the affordability of electric cars?

Rory suggests that as secondhand prices of electric cars fall, affordability issues may be resolved, but there are concerns about the impact of an oversupply of Chinese EVs on the market.

What does Rory suggest as a potential solution to the challenges faced by the electric vehicle market?

Rory suggests that the government should encourage, but not mandate, the adoption of electric vehicles and allow the market to naturally evolve with innovations like self-driving cars or micro cars.

What is the 'mayor' concept that Rory refers to in the context of electric vehicles?

The 'mayor' concept refers to producing something that is notably better than what preceded it but not so different that it is unrecognizable or alarming, which Rory suggests is a good approach for electric vehicles to be accepted by the mainstream market.

Why does Rory compare the current situation of electric vehicles to the荧光灯 bulbs incident?

Rory compares electric vehicles to the荧光灯 bulbs incident because, like荧光灯 bulbs, EVs might be prematurely mandated without allowing for market innovation and the development of better technologies like LED lighting.

Outlines

00:00

🚗 The Electric Vehicle Market's Struggles

The paragraph discusses the electric vehicle (EV) market's challenges despite government incentives and mandates. Ross Clark's article is highlighted, which uses the proverb 'you can lead a horse to water' to illustrate the EV market's struggle to meet expectations despite significant support. Rory Southern, a supporter of EVs, argues that the natural progression of vehicle technology is towards electrification, citing benefits such as miniaturization and the versatility of electricity production. However, he acknowledges the market's current limitations, including the rapid depletion of early adopters and the potential overproduction by China, which could flood Western markets with EVs.

05:01

🌿 Environmental Policies and Market Realities

This section delves into the government's dual role of guiding the automotive industry towards electrification and protecting domestic markets from foreign competition, particularly Chinese EVs. Rory suggests that mandated timelines for technology adoption, like those seen with fluorescent bulbs, can be premature and lead to suboptimal outcomes. He advocates for a more voluntary approach, encouraging those capable and willing to adopt EVs, while also recognizing the benefits of plug-in hybrids as a transitional technology. The conversation also touches on the psychological resistance to new electrical goods and the potential for game-changing innovations in EV technology.

10:02

🚦 The Future of Personal Transportation

The discussion turns to the potential for innovation in personal transportation, such as self-driving cars or micro cars, which could disrupt the EV market. Rory emphasizes the importance of allowing market forces to drive innovation rather than imposing theoretical ideals. He also points out the psychological barrier to adopting new electrical goods and the tendency for consumers to wait for technology to mature. The conversation highlights the need for a balanced approach that encourages innovation while being mindful of market realities and consumer behavior.

15:03

🏡 Heat Pumps and the Adjacent Possible

In the final paragraph, the conversation shifts to heat pumps and the concept of 'maximally advanced yet acceptable' (Mayor) in design. Rory uses the example of air conditioning units that can double as heat pumps to argue for incremental technological adoption that doesn't require a complete overhaul of existing systems. He criticizes the lack of subsidies for such incremental improvements, suggesting that they could be a more accessible and practical solution for many consumers. The discussion concludes with the idea that technology should evolve within the 'adjacent possible,' a concept from evolutionary biology that encourages gradual and recognizable advancements.

Keywords

💡Electric Vehicle (EV)

An electric vehicle (EV) is a type of motor vehicle that uses one or more electric motors or traction motors for propulsion. In the script, EVs are discussed as a focal point of the conversation, with the participants discussing the current state and future of EVs in the automotive market. The script mentions the push towards EVs by Western governments due to green ideology.

💡Electrification

Electrification in this context refers to the process of converting vehicles from internal combustion engines to electric powertrains. The script discusses the natural progression towards electrification for vehicles, comparing it to other devices that have transitioned from non-electric to electric operation.

💡Green Ideology

Green ideology is a set of principles that emphasize the importance of environmental conservation and sustainability. The script mentions how green ideology has influenced government policies to push for electric vehicles as a means to reduce carbon emissions and combat climate change.

💡Plug-in Hybrid

A plug-in hybrid is a type of hybrid vehicle that can be charged from an external source of electricity, allowing it to run on electric power for a certain range before switching to the internal combustion engine. The script discusses plug-in hybrids as a compromise between fully electric vehicles and traditional cars, providing an example of a vehicle that can operate on both electric power and gasoline.

💡Charging Infrastructure

Charging infrastructure refers to the network of charging stations and related equipment required to recharge electric vehicles. The script touches on the importance of charging infrastructure as a prerequisite for the widespread adoption of electric vehicles, noting that its development is crucial for their success.

💡Early Adopters

Early adopters are consumers who are among the first to purchase and use new products or technologies. The script discusses the challenge of transitioning from early adopters of electric vehicles to the mainstream market, highlighting the concept of 'crossing the chasm' in marketing.

💡Market Bust

A market bust refers to a period of decline or collapse in a particular market sector. The script discusses the potential for an 'electric vehicle bust,' suggesting that the market may be facing challenges due to overproduction and other factors.

💡Chinese EV Overproduction

Chinese EV overproduction refers to the situation where China has produced a surplus of electric vehicles, potentially leading to a market glut. The script mentions concerns about Chinese EVs being 'dumped' on other markets, which could impact local automotive industries.

💡Net-Zero Targets

Net-zero targets are goals set by governments and organizations to reduce greenhouse gas emissions to a level where they are balanced by removals from the atmosphere, effectively achieving a 'net-zero' impact. The script discusses how governments are trying to balance the encouragement of electric vehicle use to meet net-zero targets with other economic and environmental objectives.

💡Affordability

Affordability in the context of the script refers to the cost of electric vehicles and how it affects their adoption by consumers. The script suggests that a fall in secondhand prices of electric cars could make them more affordable and accessible to a broader market.

💡Heat Pumps

Heat pumps are devices that transfer heat from one location to another for the purpose of space heating or cooling. The script uses heat pumps as an analogy to discuss the concept of 'maximally advanced yet acceptable' technology, suggesting that people are more likely to adopt new technologies if they can integrate them with existing systems rather than replacing them entirely.

Highlights

The electric vehicle market is facing challenges despite government incentives and mandates.

Ross Clark's article discusses the potential 'great electric vehicle bust'.

Rory Sutherland is a fan of electric vehicles and has written extensively on the subject.

Governments worldwide are pushing towards electric vehicles due to green ideology.

The natural progression of vehicles is towards electrification, according to Rory.

Electric motors allow for the miniaturization of vehicles, unlike internal combustion engines.

Electricity can be produced from various sources, unlike the reliance on crude oil for electric cars.

The market for electric cars may be reaching a saturation point with early adopters.

Plug-in hybrid cars could be a good compromise for those hesitant about fully electric vehicles.

The average age of new car buyers is higher, which may affect the adoption rate of electric vehicles.

The fall in demand for electric cars could lead to more affordable second-hand options.

China's overproduction of electric vehicles could lead to them being 'dumped' on other markets.

Rory suggests that government mandates for electric vehicle adoption may be premature.

The idea that electric cars are better than those with internal combustion engines is discussed.

Rory argues that buying a new car is a form of wealth redistribution.

The conversation touches on the potential for self-driving cars to disrupt the electric vehicle market.

Rory discusses the psychological barrier to adopting new electric technologies.

The importance of a gradual transition to electric vehicles is emphasized.

The discussion concludes with the idea that the market should be allowed to innovate naturally.

Transcripts

now before rishy sunak decided to throw

the spectators weekly Rhythm out of sync

uh we were running with our cover this

week which was electric shock uh which

is a fascinating piece by Ross Clark um

about the great electric vehicle bust um

it's a very important subject and Ross

has explored it very well uh I'm

delighted to be joined by Rory

southernland the wiki man our spectator

Wiki man uh who's also written a lot

about uh electric vehicles over the

years quite a fan Rory is of electric

vehicles and if I can just

find Ross's article uh Rory I thought

I'd start by asking by putting to you a

a a bit from Ross's

piece um where Ross says uh if there

ever was a real world demonstration of

the old proverb you can lead a horse to

water it is electric cars and what he's

referring to there is the fact that

governments the world over particularly

Western governments have because of

green uh ideology to a certain extent uh

pushed their public and push the car

industry towards electric vehicles with

huge incentives and mandates and so on

um and yet uh the electric car market is

not really functioning as required it's

having a bit of a breakdown on the side

of the road what do you think about

Ross's thesis do you agree with it I

think that it if you look at my opinion

in the on this I think the natural path

of migration of cars as with more or

less every other device which makes

something rotate in this case a drive

shaft I think the natural path of travel

is towards

electrification and I I think there are

reasons to be hopeful about

electrification not least in that

electric motors allow you to miniaturize

cars and other vehicles in a way that

the internal combustion engine doesn't

there are other advant for example you

can produce electricity with more or

less any fuel um or any source of energy

including nuclear whereas electric cars

run on crude oil effectively there you

know electric cars are

omnivorous so there are lots of reasons

I think to believe that that's the

direction of travel and there are

Arguments for accelerating that

direction of travel because obviously

it's dependent on things like charging

infrastructure however I think

government attempts to mandate the pace

of change

are very possibly wrong-headed uh just

to give one example I don't really see

what the objection is to plug in hybrid

cars if people are too nervous to have

an electric car or if most of the time

they only drive very short distances and

merely use the internal combustion

engine for the rare occasions when they

drive further out of town for example

for a Londoner the plug-in hybrid seems

a pretty good compromise or at least a

kind of gateway drug to

electrification but there is a problem

here which actually I should have

anticipated and the market should have

anticipated which is you do run out of

early adopters in a market quite quickly

there is always a kind of it's sometimes

called in marketing crossing the chasm

in other words it's reasonably easy to

produce a new product which gets adopted

by the 10% of the population who are to

put it very casually kind of relatively

wealthy novelty

Seekers but for that product to actually

then migrate to the mainstream or to

what's called sort of you know early

adopters the Early majority the late

majority and then you know the mass

Market isn't always that easy that's

Complicated by the fact by the way that

not many people actually buy cars from

new uh in the okay the electric car I

think has done very well with in the

fleet market and the corporate leasing

Market not least because there were very

generous uh tax concessions

um actually the average age for example

of someone who buys a Volkswagen Golf

from new is somewhere between like 58 58

and 64 okay most people in their 20s 30s

40s don't actually buy new cars unless

they're on some sort of company leas ski

and so what you're looking for with the

electric car is actually quite a small

Market which is the people who are

novelty Seekers who also buy a new car

now you could argue that the fallof in

demand is going to be the solution to

its own problem and that if secondhand

prices of electric cars fall fairly

dramatically as seems to be the case

well you are at least solving the

problem of

affordability but there are some worries

there I think Ross is right to worry

about the Chinese who made this mistake

massively overproduced electric cars and

are now effectively going to be dumping

them on you know either the European or

the American Market yes that's kind of

an unfair threat to the indigenous car

industry I think um and it is in some

ways for consumers you might argue it's

a bit of a bonanza at least to those

consumers who are adventurous enough uh

to actually go electric but this

probably isn't ideal I have to say and I

I I I blame myself a little bit because

as an evangelist for electric cars

regardless of any environmental message

by the way I will argue that they are

better cars my previous car was a 5 L

Jaguar V8 XJ and I switched to a Ford

Mustang macki a cheaper car certainly

from new and it's better okay it's

marketly better all kinds of reasons one

pedal driving regenerative breaking you

know quietness and actually a bizarre

kind of combination of being a limousine

when you wanted to be a limousine and a

go-kart when you want it to be a go-kart

in lots and lots of respects we're now a

two-car electric household once you have

home charging the whole issue with

charging is actually to be honest a

distraction you know unless you're one

of these people in the comments on my

last spectator piece is someone who said

I you know I need to drive to Glasgow

and back from Northwest London in a day

well personally I think that person is

mad I think that's what trains and

airplanes are for but nonetheless if you

are that person you probably shouldn't

buy an electric car you should buy a

diesel is is the problem Rory that uh

governments trying to do different

things at once they're trying to uh

plate uh the the car industry and show

the car industry A Way Forward which the

car IND have hopped on board with at the

same time as they're trying to encourage

electric car use by everyone for Net

Zero targets and so on at the same time

as they want to block out Chinese cars

because the Americans are doing it

because they want to protect their

domestic car Industries related to that

question what what do you think Rishi

sunak should do about uh this abundance

of Chinese EVS that are going to be

dumped a bit like fenyl or steel is

being dumped all around the world when

China has an over

Supply my personal view is that

um the extent to which in some cases I

me broadly speaking as I say I support

electrification as a direction of travel

I support renewable energy in terms of a

direction of travel but I think we have

a kind of precedent in the case of

mandated fluorescent bulbs the way in

which we got rid of the incandescent

bulb and we got rid of it about two

years years too early because um we

mandated that everybody bought these

piece of crap bulbs that took 10 minutes

to reach full brightness okay and then

two years later LED lighting came along

which rendered the whole thing

completely

Moot and I think I'm very uncomfortable

with mandated time scales that are

universally applied I think as far as

possible you know I would encourage

people whose motoring requirements are

um you know within normal range and who

have their own driveway I would

encourage those people to at least

consider an electric car because I think

they're very very good I mean you know

looked at from the point of view of an

alien the internal combustion engine is

an insanely complicated mechanism for

simply rotating a shaft okay all those

parts the air filter the oil filter the

tapet the big end the cylinders the

gearbox okay all of those things are

eliminating an electric car it's

electricity in rotation out okay okay so

there are you know very there's a very

good reason why your toothbrush I assume

you have an electric toothbrush doesn't

run on an internal combustion engine

there's a very good reason why radio

controlled helicopters in my childhood

they ran on tiny little sort of one

stroke or two-stroke engines okay they

don't anymore okay the movement of

travel should be electric and the

government should at least the very

least kind of encourage that and I might

also add that people go it's disgusting

that my taxes went to subsidizing you

having a new electric El car can I make

the point that anybody who buys a car

from new is practicing a massive form of

wealth redistribution through voluntary

means if you go and buy a new Jag Freddy

what it means is that four years later

someone will be able to buy a really

really good car for half the price you

paid if only the property Market worked

like that you know I've got I've got

this three-bedroom house in Mayfair but

I've used it for three years so you can

have it for half price okay you are you

are you are a massive massively generous

social person because it means that

someone half as wealthy as you can have

a car that's nearly as good as yours

Rory let me interrupt isn't isn't the

key word voluntary there yes absolutely

I I don't think it's I don't think it's

wrong in the early days of a technology

for a government to at least make sure

that the tech I mean you know I was very

much in favor of a light's touch on

vaping because I think you you know in

the early days of a technology the

natural reaction is kind of fear and

hostility it's worth noting by the way

I'm old enough to remember in 1989 I

used a mobile phone on Oxford Street and

two people shouted abuse at me from

passing cars okay right most

Technologies encounter quite a lot of

hostility in their early days sometimes

deservedly sometimes not you touch on a

what could be the key Point here which

is that Innovation uh always always

comes up with something unexpected that

that government action hasn't provided

for and that markets can provide for uh

and that might be in the case of cars

self-driving cars which might come along

just at the moment as the EV Market is

ready to go and in fact we'll replace it

entirely or actually mini cars somewhere

between the electric cargo bike and the

car there is the opportunity for an

electric car which people use for short

range Journeys it's kind of absurd I

take a four-seater car to my local

station three miles away with a bloody

gra battery weighing a ton okay to be

honest for that Journey what I need is

is is some sort of micro vehicle yes

okay the Citron Amy isn't a totally

insane idea it's probably a bit ahead of

its time but I can see the micro car

being quite a major solution here

because they don't need very big

batteries they don't need huge range in

fact in the case of the Citron Amy you

just plug it into a three pin socket you

don't even need a

charger but I agree with you that I

think that the attempt to take a kind of

theoretical ideal set a timeline for it

and impose it on the market without

allowing the market to do its ingenious

best and we have you know exactly the

case of those you know fluorescent light

bulbs which were ghastly you know um

there's also a problem by the way which

is a psychological one I mentioned the

fact that not many people buy new cars

okay it's a it's a narrow slice of the

market that buys cars from new and they

tend to be much much older and therefore

potentially more conservative ative who

knows okay less experimental there's

also the problem that 25 years of

experience if you are over 50 actually

50 years of experience has taught you

that with electrical Goods it always

pays to wait okay the people who bought

the flat first flat screen televisions

paid an insane premium for a not

particularly good plasma screen LCD came

along changes the game I think there's

potential for a similar game-changing

invention in um in electric Locomotion

uh to be honest but but you're right in

the sense that a lot of people have this

instinctive feeling if it's got if it's

got a plug of some kind okay and it's

relatively new the trick is to wait five

years until until the problems have been

ironed out or human Ingenuity has had

the opportunity to do its best well and

a problem that a lot of people want to

get ironed out is batteries which as

Ross says towards the end of his piece

uh have um they're all

China seems to have cornered the market

to a large extent uh British attempts to

develop our own battery Market have been

pretty unsuccessful uh for electric cars

and uh until this gets ironed out or

becomes a more competitive uh Market by

itself um EV the EV Market is going to

struggle the bigger EV Market is going

to struggle yes I mean again um I'm one

of the things I think that's often true

in terms of migrating people there's a

concept in design called mayor which is

Maxim advanced yet acceptable and it

comes from Raymond Loy the designer who

said that it's your job to produce

something that's notably better than

what preceded it but not so weirdly

different that people find it

unrecognizable or alarming or simply

can't make sense of it I don't

understand the antipathy to plug-in

hybrids which seemed to me a pretty good

compromise okay most of your Journeys if

you if you do plug them in are going to

be electric with all the benefit that

brings you know one one thing with my

electric car I very rarely use the

brakes at all okay I took my car in for

a service and they said the brakes are

fine and the tires are fine I said what

about all the other stuff they said

there isn't any other stuff okay you

know there are huge advantages to this

but actually the plug-in the plug-in

hybrid seems to me actually a pretty

healthy compromise if someone reduces

not 100% of their carbon emissions and I

don't think this is all about carbon by

the way anyway

okay um but if someone reduces a very

large part of their carbon emissions but

still has um a um an electric you know

an internal combustion engine for longer

range Journeys and therefore has a

lighter smaller battery that that

doesn't strike me that doesn't TR me

there's anything insane about this it's

very similar to the argument about heat

pumps where to get a grant for a heat

pump you have to rip out your whole

boiler and your central heating system

okay well you know I'd like to keep them

in reserve if you don't mind you know

I'm quite happy getting a he heat pump

which maybe reduces my use of gas by 80%

I'm not going to get rid of my boiler

just yet if you don't mind that's kind

of a leap in the dark and interestingly

if you want to know a very interesting

thing about heat pumps an air

conditioning unit which you can install

one room at a time for about 1,500 which

is a very very long-established

technology made by recognizable

companies like you know mitubishi and so

forth that's a heat pump you can install

an air iing unit and run it in reverse

it's has basically the same level of

efficiency it's an air-to-air heat pump

and you can keep your boiler for really

really cold spells why don't you get a

grant for that and I asked my brother

he's doing this whole air conditioning

thing he's an astrophysicist so he knows

all the bloody mathematics and the

physics involved okay and he said it's

very simple they don't want people

installing air conditioning units

because you might use them for air

conditioning okay which would then

increase energy consumption to which my

answer is wait this is the UK okay

that's a reasonable exam reasonable I

think objection to air conditioning

units if you're in Algeria or if you're

in southern Italy or if you're in Greece

in the UK a lot of happy people would

enjoy air conditioning for the two weeks

of the year when it's painfully hot and

they'd have a heat pump for the rest of

the year they could still keep their

boiler which they'd use if it were just

egregiously cold for a couple of weeks I

think that's a happy compromise many

people could adopt which is Mayor

maximally advanced yet acceptable it's

what an evolutionary biologist as I said

in this week's article would call the

adjacent possible you can get people to

do that the number of people who have

spend 40,000 in one go ripping out their

boiler and their radiators digging out

their lawn to install piping the number

of people who will do that rather than

say having a holiday in the MDES with

the available money is very very small

and they're probably enormously Rich to

begin with so why the hell are we

subsidizing them well quite Rory I'm

afraid I'm going to have to unplug you

there because we're running out of time

but uh thank you very much indeed uh

it's always fascinating to talk to you

about any subject uh and particularly

one as curious as this thank you Rory

it's a joy Freddy thanks very much

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