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California’s EV Fetish

Key Points:

  • California has led the modern crusade for vehicle electrification
  • Experience suggests that even with modern technology, electric cars are not capable of satisfying consumer desires
  • Subsidies given to promote electric car adoption are wasteful, regressive, and unethical
  • California regulators should let markets, not planners, determine the course of vehicle electrification

Environmentalists have long wished for the electrification of passenger vehicles. As Professor Vaclav Smil points out in Energy Myths and Realities, both Thomas Edison, and Henry Ford labored mightily to make that happen:1

Few people believed more strongly in the eventual dominance of electric cars than Thomas Edison, the inventor of the modern electric system. This conviction brought about one of the most consequential pairings in the history of technology. Henry Ford was hired as the chief engineer at Detroit Edison Illuminating Company…

Edison would, in fact, spend more than 10 years trying to develop a battery that could compete with a gasoline engine. Alas, he didn’t find one. That did not dampen enthusiasm for electric cars, however.
As Robert Bryce points out in Power Hungry “All-electric cars are The Next Big Thing. And they always will be.”2 Bryce goes on to chronicle the 100+ year search for the all-electric car that can compete, on a level playing field, with internal-combustion engines, and finds a long history of failure. A few examples of the false starts that litters the history of electric cars is illustrative:

1911: The New York Times declares that the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter and “much more economical.”

1915: The Washington Post writes that “prices on electric cars will continue to drop until they are within reach of the average family.”

1979: The Washington Post reports that General Motors has found “a breakthrough in batteries” that “now makes electric cars commercially practical.” The new zinc-nickel oxide batteries will provide the “100-mile range that General Motors executives believe is necessary to successfully sell electric vehicles to the public.”

But the long history of failure involving electric cars has never dimmed the enthusiasm of environmental regulators, particularly in California, which mandated the adoption of all-electric cars in California back in 1990, under the guise of a “Zero-Emission Vehicle (ZEV) mandate.3 While ostensibly a performance standard based on vehicle emissions, there were no vehicles other than all-electric cars that could satisfy the ZEV mandate at the time: it was a de facto electric car standard from the beginning.

ZEV Mandate
The Zero-Emission Vehicle mandate, enacted in 1990, required that by 1998, 2% of the vehicles sold in the state by large automakers had to be zero-emission (aka electric) vehicles.4 That mandate was set to increase to 5% of vehicle sales by 2001, and 10% by 2003.

But it was quite obvious that the technology to satisfy the ZEV mandate was not forthcoming from manufacturers, and by 1996 the mandate was modified to allow automakers to sell more conventional (but super-low-emitting) vehicles in order to get credit for meeting their ZEV mandate targets. In 2001, the mandate was further modified, to allow large automakers to satisfy their obligations if they sold just 2% “pure” zero-emission vehicles, 2% “advanced technology partial zero emission vehicles PZEVs (aka, natural gas or hybrid-electric vehicles), and 6% conventional PZEVs, which are internal combustion vehicles (such as a Honda Accord) that meet a “super ultra low emission vehicle standard.”5

Most recently, the ZEV mandate was modified again, and now mandates that “at least 15.4 percent of all cars sold by any major automaker doing business in California will have to be either fully electric, a plug-in hybrid or be powered by a hydrogen fuel cell by 2025.”6

The limitations of electric vehicle technology
But electric-vehicle technology is still unable to satisfy the demands of consumers. Consider the Chevy Volt. When it was first announced, the price estimate from General Motors (GM) was speculated to be $30,000. That soon jumped to $35,000. The actual sales price for the Volt, at this writing, is just under $40,000.7 The all-electric Nissan Leaf, with a limited range of about 73 miles per charge sells for about $35,000.8

Hybrids are also more expensive to insure. Online insurance broker shows that it costs $1,308 to insure a Honda Civic but $1,486 to insure a Honda Civic Hybrid.9 Similarly, it costs $1,270 to insure a Toyota Camry10 but $1,517 to insure a Toyota Camry Hybrid; $1,619 to insure a Chevrolet Volt but only $1,267 for the same-size gas-powered Chevrolet Cruze; and $1,512 for the Nissan Leaf but only $1,240 for the comparable Nissan Versa.11

What explains the higher rates? According to the Mitchell Industry Trends Report, hybrids cost more to insure because their parts are more expensive and repairing them requires specialized labor, thus boosting the after-accident payout.12 Even conventional small cars are more expensive to insure than larger vehicles, because the former are involved in more accidents that produce extensive injuries. According to a recent article in The Wall Street Journal, the same driver would pay $412 more to insure a Honda Civic compact that gets 36 mpg on the highway than he would to insure a Honda CR-V (Honda’s mini-SUV) that gets 27 mpg.13

And sales are lackluster, to say the least. The figure below shows the volume of sales of the GM Volt and Nissan Leaf in perspective.14