The EVs are coming! The EVs are coming! The EVs are coming!
Yes, three extremely bullish reports regarding EV (electric vehicle) sales just hit my inbox. In fact, I see these sorts of reports and projections all the time. They are commonplace, along with announcements from various car brands regarding an all-electric future lineup. Hyundai’s luxury Genesis brand is the latest, vowing that from 2025 every new vehicle will be “purely electric.”
What is at the root of this accelerating EV movement? The World Economic Forum notes that “green consciousness and environmental issues are now ranked as the clear number one influence on electric vehicle buyers.”
Moreover, car buyers all over the world say they are seriously considering an EV for their next purchase. A global study across 13 major international markets found that 41% of those who intend to buy a new car are thinking EV.
The world, at least a big part of it, now appears to be quite alert to the growing dangers of climate change caused by human activity. Many are expressing a desire to do the sorts of things that might help keep the planet from overheating.
Indeed, not a day goes by now without news of a new and potentially terrifying development on the climate change front. Such as:
- in part because of climate change, a third of the world’s tree species are at risk of extinction;
- extreme heat in part linked to climate change, could, by 2050, lead to 59,000 deaths annually AND result in annual costs as high as US$500 billion;
- deadly floods are 20% more likely due to climate change . Just look at the latest pictures from New York and New Orleans.
In light of these and so many other signs that our planet is becoming a dangerous hothouse, it’s no wonder we’re seeing a big shift in consumer behaviour. Morgan Stanley reports that ‘Global BEV [battery electric vehicle] sales (excluding hybrids and plug ins)’ are up 102% year-to-date.
Scotiabank reports that global EV purchases surged last year, despite the economic impact of the pandemic (sales up 43% to 3m units, even as all light vehicle sales dipped 16%).
The future? Bloomberg NEF projects that, globally, EV sales will represent two-thirds of all passenger vehicle sales in 2040 – adding that “sales of internal combustion engine (ICE) vehicles have already peaked.”
It’s quite easy to make the argument that climate change is the No. 1 existential threat we face on this planet. For more on the scientific details, browse through the 2021 Intergovernmental Panel on Climate Change report. It’s not light or uplifting reading.
“It has been clear for decades that the Earth’s climate is changing and the role of human influence on the climate system is undisputed,” says IPCC Working Group 1 co-chair Valerie Masson-Delmotte, a hugely-respected climate scientists who has published numerous peer-reviewed scholarly articles.
That the planet is warming at an alarming rate is beyond question. And everyone from the insurance industry to the Pentagon is warning that climate change is now a national security issue, and represents a potential economic and human catastrophe of staggering proportions.
Which brings us to EVs. The widespread adoption of EVs could be part of the solution to the question of what happens to personal transportation in a warming world. I mean, the U.S. EPA (Environmental Protection Agency) notes that transportation accounts for nearly a third (29%) of greenhouse gas emissions. There is an obvious need to dramatically reduce vehicle emissions.
But flooding the streets with EVs is hardly enough without other changes. EVs are not a solution if their batteries are charged with electricity from coal-fired power plants or other dirty sources of power generation. And yes, there are also important and confounding issues associated with sourcing the raw materials for batteries – such as copper, nickel, cobalt and so on. Mining is a dirty business, though it can be cleaned up with enough will and funding.
As well, we face various questions about the recyclability of battery-electric vehicles. Another question: Will consumers jump into EVs in the numbers projected by Scotiabank, Morgan Stanley, Bloomberg NEF and others? At current prices? Many think not.
Without a doubt, there are good reasons for skeptics to remain skeptical about all these rosy EV projections.
But when it comes to clean electricity, or green power generation, there are answers. Good ones. Reasonable ones. And real ones. We know how to generate renewable and carbon-free electricity. It’s an emerging business with enormous potential, one where the technology is advancing quickly and costs are dropping dramatically. In this area, scores and scores of smart players are hard at work right now.
Among the interesting and highly profitable Canadian companies already in the renewable business are Brookfield Renewable Partners and Brookfield Renewable Corporation; Boralex; Algonquin Power and Utilities; Northland Power; and even good, old Fortis, which though an old-school power company, has an extensive de-carbonizing plan going forward.
But renewable power sources such as wind and solar come with an energy storage problem: the wind doesn’t blow all the time and the sun doesn’t shine 24 hours a day. We need “batteries” of some sort to provide electricity when it’s dark and calm — to store the energy from wind, solar and the like.
You’ll find many interesting companies working in this space, too – from Tesla to VRB Energy Inc. This week VRB officially broke ground on a “world class” 100MW/500MWh storage system in Xiangyan, Hubei Province, China. This project is huge. According to the various players, total investment is nearly $2 billion – with about half of that being spent on building wind and photovoltaic power generation projects.
VRB Energy’s piece includes a 100MWh all-vanadium redox flow battery energy storage power station “along with 500 MW of distributed rooftop photovoltaic installation.” The size and scope of this project is immense.
A 100MWh battery is massive, absolutely massive. How so?
One, single megawatt hour describes 1,000 kilowatts of electricity used continuously for one hour. To put this in day-to-day terms, the Clean Energy Authority notes that one single megawatt hour is the amount of energy used by about 330 homes during one hour.
VRB, then, is building a battery that can power thousands of homes with electricity generated by wind and solar means. And this particular type of battery, a flow battery, is infinitely rechargeable, completely recyclable, totally scalable, safe, and does not suffer from the heat issues that plague lithium-ion storage systems.
VRB’s flow battery system stores energy in an electrolyte infused with vanadium. In other words, power for the grid is stored in a liquid solution with ionic forms of vanadium. Power can be drawn down and then recharged without heat issues and without loss of storage capability, regardless of how often the battery is charged and discharged, again, again and again.
The big downside to flow batteries is that they’re bulky. This makes them most suitable for grid energy storage, rather than in a mobile application like a car. The upside is that flow storage facilities can be used to provide clean power for all sorts of applications – from homes to, you guessed it, cars.
In fact, VRB’s under-construction power station is located in the Automobile Industrial Park of the larger Xiangyang High-tech Development Zone. It will be spread out over 8.0 hectares and is expected to become operational by the end of next year.
This is not just a one-off project, either. We are looking at only a very small piece of China’s sweeping “Carbon Neutral and Carbon Peak Strategy.” Yes, among those at the ground-breaking ceremonies were Communist Party and government officials.
If you doubt that China is serious about becoming a world-leader in clean energy and EVs, think again. This is China’s path to energy independence, and it’s part of a commitment to be a world leader in technological innovation.
Around the world and especially in China you will find many promising green energy projects underway – among them but not limited to VRB’s power station. Collectively, they have the potential to answer one of the most damning questions about EVs: where is the clean electricity to come from?
For the record, that’s why I became a VRB investor many years ago. I remain an investor today, though not on the scale of Canadian investor and mining entrepreneur Robert Friedland (Ivanhoe Resources, Voisey Bay, Galactic Resources and more). He has acquired most of this privately-held company, with Ivanhoe Electric the majority shareholder.
I don’t own shares in car companies for obvious reasons – I review vehicles of all shapes and types. In the interest of disclosure, however, let me be clear: I believe in the future of clean, green energy, and I’m putting money into these ventures.
Why? Because the latest and best science on climate change tells us that we are making the planet uninhabitable and that we must move away from spewing carbon into the atmosphere. We are carelessly burning fossil fuels, behaving as if there isn’t a price associated with our carbon footprint. That’s irrational.
Well, I invest in clean energy because it’s the way forward. We, as a society, will not stop using energy to fuel social and economic progress. That is an historical fact. Social and economic progress are inextricably linked to energy consumption. We cannot simply save, reduce and reuse our way out of the climate change tragedy unfolding. Therefore, we need to find and promote clean energy going forward.
And yes, I agree with Bloomberg NEF, that sales of internal combustion engine vehicles have peaked. The road ahead will be filled with EVs and other zero-emissions vehicles, which I believe will be powered by clean energy sources.
I am literally banking on it – the energy side of the equation.