We've just spent a week trying out an electric car. This was the last confirmation I needed. It is clear that the petrol / diesel powered car is on the way out. Let me explain my thinking:
- A basic electric car is mechanically simple; A battery and an electric motor. There's no large metal box full of mechanical parts in which fuel explodes. There's no complex ignition, exhaust, or cooling systems. These cars are easy and cheap to service.
- The complexity comes in charging and taking charge out of the battery, and in getting efficiency from an electric motor. We're doing a lot of society-wide work on battery technology (like, in smartphones/tablets/everything). I'm expecting significant improvements over the next few years.
- The fuel cost per mile or kilometre is say between 1/5th and 1/10th of that of petrol or diesel.
- Battery charge density and therefore range is improving fast, as is charging speed.
Better organised and complete charging infrastructure will emerge. Electric car range will increase. Doubling of the currently ~100 mile range to 200 miles will make most journeys feasible. I'm confident people will get very interested when the fuel and maintenance costs of electric cars start to become clear.
That's seems to be at most five years away. At that point, a petrol/diesel car might start to seem an expensive luxury. Petrol/diesel resale values may fall sharply. Fuel use will start to decline. About 60% of the total energy used for transport is personal vehicles. This would hurt fossil fuel providers, so maybe holding those fossil fuel shares is not a good long term bet.
So, right now, here are my tips for surviving the change:
- Don't buy a new petrol car. Look out for a bad resale price in 5 years, especially for an ordinary car. Are you buying your last petrol car ever?
- Don't buy a new electric car just yet. Lease an all electric or plug-in hybrid for a few years. There will be annoying and adventurous times as long distance charging networks stabilise. Allow the basic electric range to double (to say 200-250 miles) then consider a purchase.
We've just arranged a lease on a Nissan Leaf. It should arrive next week. I'll update how we get on.
Disclosure: I hold shares in Tesla Motors. I'll benefit if you buy or lease one of them.
Leaf image from wikipedia.