Energy Sector

[JRM]

Even if every car in the world was replaced with hybrid\EV overnight the contribution to oil consumption would represent less than 10% of total demand.  I've read that it takes 100 barrels equivalent of energy to create the battery for one Tesla.  

 

The average age of passenger cars in the US is 12 years old.  No way that flips to 100% hybrid/EV by 2030.  Not possible.

[cubsfan]

^^ I don't see anyway the conversion happens quickly. I usually buy luxury cars (Lexus) ,

etc that are several years old with low mileage.

My latest, I paid $12,000 for a LS430 with 42,000 miles.

Yeah, the $5/gallon gas gets me upset..

 

But if all of a sudden everyone hates IC luxury cars - and the prices get destroyed -

I'm gonna love it.

 

No way I'm running out and buying a 90K Tesla, when I can get something equivalent

for 15% of the price.

Edited March 11, 2022 by cubsfan

[Gregmal]

The gas car argument is massively overrated for EVs. Theres probably logical reason for alternative energy somewhere, but its mostly a mind game. As I mentioned earlier, Ive got a 550 gallon double tank for heating oil. Going from $2 to $5 a gallon moves the needle. But for a standard car, if you use 15 gallons a week(assume 20 mpg thats 300 miles a week which is high) the difference between $2 gas and $5 gas is $45 a week. $10 gas is $90 a week. Big whoop. 

[LearningMachine]

1 hour ago, JRM said:

Even if every car in the world was replaced with hybrid\EV overnight the contribution to oil consumption would represent less than 10% of total demand.  

 

Hey @JRM, curious to learn more here.  Do you have a link?

[JRM]

I can't find the chart I'm thinking of which breaks down oil use by application.  The main takeaway is that gasoline use by passenger vehicles doesn't comprise a big piece of the pie.  I feel like I've posted a link somewhere here before, I'll keep looking.   I believe the chart was specific to the US.  It looks like globally it is estimated that about 25% of oil is used for gas in passenger vehicles.

 

https://afdc.energy.gov/data/10308

[SharperDingaan]

Assume your current car is using 15 gallons/week (67.5 litre).

Your current hybrid ('cause plug-in is not available everywhere) will use maybe 30% of that, 20 litres/week. Costco gas is currently CAD 1.69/liter, and there are 4.33 weeks/month (52/12). Just the gas saving on that hybrid is CAD 347.59/month (67.5-20)x1.69x4.33. Repair/insurance is also cheaper, and savings of CAD 100-150/month are fairly common. At savings of CAD 450-500/month you are going to switch to hybrid asap.  

https://www.gasbuddy.com/gasprices/ontario/toronto

 

The average family car may be 12 years old, but that ownership is over 2 or more owners. Most cars are leased, and most are for sales reps who have to be seen in fairly new cars. Most leases will be for 5-7 years, and they represent the company as well as the rep. If your company is selling "greening" tech, your reps need to 'walk the talk', and your fleet needs to be all hybrid asap. When the average lease is 7 years, the average fleet age is roughly 4 years (lease life/2).

 

Every major auto manufacturer makes EV's, exports, and a high cost spread over a 15 year life cycle is peanuts/yr.  A 2022 Toyota RAV4 Hybrid only costs roughly CAD 40,000, even in a constrained supply chain environment. Capex isn't a limiting factor.  

 

We just cannot imagine such radical change happening so quickly, even though it is staring us in the face. We do not see that gasoline powered auto's are not wearing out, they are becoming obsolete. Just as your fully functional ancient beer fridge was replaced with a new one, when you eventually decided that its 2-3x power consumption just wasn't worth the cost anymore. It became obsolete.

 

SD

Edited March 11, 2022 by SharperDingaan

[JRM]

So if there 280 million vehicles in the US and sales are at a rate of 15-20 million per year how does replacing the entire fleet happen quickly?  Like I said, my next vehicle will be a hybrid.  It makes sense for me.  For most people a 20 year old Camry will have a lower cost of ownership per mile.

 

I also wonder about residual value comparisons between a 10 year old EV and a 10 year old ICE.  A Tesla with bad battery is essentially worthless.

[LearningMachine]

36 minutes ago, JRM said:

I can't find the chart I'm thinking of which breaks down oil use by application.  The main takeaway is that gasoline use by passenger vehicles doesn't comprise a big piece of the pie.  I feel like I've posted a link somewhere here before, I'll keep looking.   I believe the chart was specific to the US.  It looks like globally it is estimated that about 25% of oil is used for gas in passenger vehicles.

 

https://afdc.energy.gov/data/10308

 

Thanks @JRM, this chart is for average use per vehicle, not total use for each vehicle category.  If you happen to find the link for total use for cars is below certain percentage, would love to learn more here. 

[LearningMachine]

36 minutes ago, SharperDingaan said:

Assume your current car is using 15 gallons/week (67.5 litre).

Your current hybrid ('cause plug-in is not available everywhere) will use maybe 30% of that, 20 litres/week. Costco gas is currently CAD 1.69/liter, and there are 4.33 weeks/months (52/12). Just the gas saving on that hybrid is CAD 347.59/month (67.5-20)x1.69x4.33. Repair/insurance is also cheaper, and savings of CAD 100-150/month are fairly common. At savings of CAD 450-500/month you are going to switch to hybrid asap.  https://www.gasbuddy.com/gasprices/ontario/toronto

 

The average family car may be 12 years old, but that ownership is over 2 or more owners. Most cars are leased, and most are for sales reps who have to be seen in fairly new cars. Most leases will be for 5-7 years, and they represent the company as well as the rep. If your company is selling "greening" tech, your reps need to 'walk the talk', and your fleet needs to be all hybrid asap. When the average lease is 7 years, the average fleet age is roughly 4 years (lease life/2).

 

Every major auto manufacturer makes EV's, exports, and a high cost spread over a 15 year life cycle is peanuts/yr.  A 2022 Toyota RAV4 Hybrid only costs roughly CAD 40,000, even in a constrained supply chain environment. Capex isn't a limiting factor.  

 

We just cannot imagine such radical change happening so quickly, even though it is staring you in the face.

 

SD

 

@SharperDingaan, I'm not denying that the change is happening. 

 

I'm saying let's do the math on what asap means here. 

 

When we are selling 0.3 million electric cars per year, and electric car sales/production is doubling about every 2-years last time I looked, and we have 280 million cars in the U.S., how many years will it take to replace those 280 million cars?

 

What does your math say?  Are you saying electric car sales per year are going to grow much faster than doubling ever two years that they have been doing so far?  Give us a growth rate and let's do the math on how long it would take to replace 280 million cars to calculate what "asap" means here. 

 

 

[JRM]

13 minutes ago, LearningMachine said:

Thanks @JRM, this chart is for average use per vehicle, not total use for each vehicle category.  If you happen to find the link for total use for cars is below certain percentage, would love to learn more here. 

That's a very polite way of saying I'm full of it.  All figures I'm seeing now are 25%.  The point still stands, though.  

[Gregmal]

The replacement works in a vacuum because you drop the gas cost big time. But to get the EV you need to buy the vehicle and thats the problem. So yes, when my 155k mile IS goes, I'll probably look to an EV. But a Lexus will run forever(knock on wood) and a new transmission or whatever big ticket item is may run $5-8k. So I plan on getting at least another 5 years out of it. I have no cost outside of maintenance and gas right now. With a new car you're looking at parting with a lump sum or having a monthly payment. 

[CorpRaider]

I think I want to get a PHEV.  I can plug in for commuting and when I take a road trip zero range anxiety or need to sit there like a schmuck while it charges (and I can also use all the existing  transportation refueling infrastructure).  Probably get a yota.  They've got a rav4 now, but hopefully they will have tacos and other options with the PHEV.   They've been building them well for a long time and all they need to add (basically) is a charging port.  The Koreans are coming with the PHEVs bigly too.

Edited March 11, 2022 by CorpRaider

[SharperDingaan]

1 hour ago, JRM said:

So if there 280 million vehicles in the US and sales are at a rate of 15-20 million per year how does replacing the entire fleet happen quickly?  Like I said, my next vehicle will be a hybrid.  It makes sense for me.  For most people a 20 year old Camry will have a lower cost of ownership per mile.

 

I also wonder about residual value comparisons between a 10 year old EV and a 10 year old ICE.  A Tesla with bad battery is essentially worthless.

 

280/20 = 14 years to replace entire fleet, 7 years to replace half the fleet.

You don't need to replace all of a fleet for it to go all EV. Do any M&A and you will quickly discover the tipping point is around 30-40%, depending on circumstance. At 5 years, 36% of the entire current fleet has turned over, and that will be enough to push the entire fleet into EV.

 

SD

[Spekulatius]

4 hours ago, SharperDingaan said:

Assume your current car is using 15 gallons/week (67.5 litre).

Your current hybrid ('cause plug-in is not available everywhere) will use maybe 30% of that, 20 litres/week. Costco gas is currently CAD 1.69/liter, and there are 4.33 weeks/month (52/12). Just the gas saving on that hybrid is CAD 347.59/month (67.5-20)x1.69x4.33. Repair/insurance is also cheaper, and savings of CAD 100-150/month are fairly common. At savings of CAD 450-500/month you are going to switch to hybrid asap.  

https://www.gasbuddy.com/gasprices/ontario/toronto

 

The average family car may be 12 years old, but that ownership is over 2 or more owners. Most cars are leased, and most are for sales reps who have to be seen in fairly new cars. Most leases will be for 5-7 years, and they represent the company as well as the rep. If your company is selling "greening" tech, your reps need to 'walk the talk', and your fleet needs to be all hybrid asap. When the average lease is 7 years, the average fleet age is roughly 4 years (lease life/2).

 

Every major auto manufacturer makes EV's, exports, and a high cost spread over a 15 year life cycle is peanuts/yr.  A 2022 Toyota RAV4 Hybrid only costs roughly CAD 40,000, even in a constrained supply chain environment. Capex isn't a limiting factor.  

 

We just cannot imagine such radical change happening so quickly, even though it is staring us in the face. We do not see that gasoline powered auto's are not wearing out, they are becoming obsolete. Just as your fully functional ancient beer fridge was replaced with a new one, when you eventually decided that its 2-3x power consumption just wasn't worth the cost anymore. It became obsolete.

 

SD

Your numbers are way off. A hybrid does not save 70% on gas, as you imply, it’s closer to 30%. A typical car will go perhaps from 30 miles/ gallon vs 40 miles/ gallon for a hybrid.

 

So, if you do 15k/ year, the savings will be 15k/30-15k/40= 125 gallon/ year. At currently $4/ gallon that’s ~$500/ year in fuel savings.

 

Now let’s look at Subaru Crosstreck (I like Subarus). MSRP for the Crosstrek is $35.8k. ICE model (Limited, which has more power than the hybrid) is $28.5k. So you pay 7k extra to save $500/ year on gas. Even more, if you step down a model (the hybrid has many extras I don’t care about) you can save 10k outlay and pay $500/ year more in gas cost, which I think you might not get back during the lifetime of the car.

Edited March 12, 2022 by Spekulatius

[TwoCitiesCapital]

3 hours ago, cubsfan said:

^^ I don't see anyway the conversion happens quickly. I usually buy luxury cars (Lexus) ,

etc that are several years old with low mileage.

My latest, I paid $12,000 for a LS430 with 42,000 miles.

Yeah, the $5/gallon gas gets me upset..

 

But if all of a sudden everyone hates IC luxury cars - and the prices get destroyed -

I'm gonna love it.

 

No way I'm running out and buying a 90K Tesla, when I can get something equivalent

for 15% of the price.

 

I have a similar view as a driver of a 2003 Porsche. 

 

Also, haven't done the numbers, but I wonder what my carbon footprint on incremental gas burn versus the carbon impact of building a brand new electric vehicle and then powering them with nat gas or coal? 

 

Almost seems to me I might be doing the environment a favor by continuing to utilize the sunk cost of carbon instead of incentivizing new emissions via new production

[LearningMachine]

29 minutes ago, SharperDingaan said:

 

280/20 = 14 years to replace entire fleet, 7 years to replace half the fleet.

 

@SharperDingaan, what year would we hit 20 million electric car sales & production per year when we are selling 15 million total cars per year, and less than 0.5 million of them electric?

 

Article below based on ING Research report is complaining even hitting 50% cars sold by 2030 is too drastic to expect: 

 

https://www.theguardian.com/us-news/2021/dec/03/us-electric-vehicle-car-sales-biden

 

 

Edited March 12, 2022 by LearningMachine

[StubbleJumper]

2 hours ago, SharperDingaan said:

Assume your current car is using 15 gallons/week (67.5 litre).

 

Sharper, if you are going to use Canadian gallons, you should be clear about it.  Better to use the US gallon if you want people to understand.

 

 

SJ

[Parsad]

8 hours ago, Spekulatius said:

Your numbers are way off. A hybrid does not save 70% on gas, as you imply, it’s closer to 30%. A typical car will go perhaps from 30 miles/ gallon vs 40 miles/ gallon for a hybrid.

 

So, if you do 15k/ year, the savings will be 15k/30-15k/40= 125 gallon/ year. At currently $4/ gallon that’s ~$500/ year in fuel savings.

 

Now let’s look at Subaru Crosstreck (I like Subarus). MSRP for the Crosstrek is $35.8k. ICE model (Limited, which has more power than the hybrid) is $28.5k. So you pay 7k extra to save $500/ year on gas. Even more, if you step down a model (the hybrid has many extras I don’t care about) you can save 10k outlay and pay $500/ year more in gas cost, which I think you might not get back during the lifetime of the car.

 

Correct.  The math was off on the hybrid mileage numbers.  A plug-in hybrid might get you down to 30% of fuel use, but most other hybrids are only about 20-30% more efficient than the non-hybrid. 

 

For example, regular 2022 Hyundai Tucson is like 28 mpg combined, while the 2022 Hybrid Tucson is:

 

https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=43753&id=43799

 

You save around $3-4K over 5 years, while the cost is about $7-10K higher. 

 

I don't know about the U.S., but they don't provide any sort of tax credits for hybrids anymore in Canada.  Plug-in hybrid and electric cars still get tax credits, but they are generally $12-20K more than equivalent gas version vehicle.  

 

In this type of market, buying slightly older gas vehicles from private sellers is probably the way to go.  As most dealers aren't giving significant discounts on financing or lease rates, and are marking up the vehicles above MSRP.  With inventory levels low, your selection is limited as well.  Cheers!

[Spekulatius]

3 hours ago, Parsad said:

 

Correct.  The math was off on the hybrid mileage numbers.  A plug-in hybrid might get you down to 30% of fuel use, but most other hybrids are only about 20-30% more efficient than the non-hybrid. 

 

For example, regular 2022 Hyundai Tucson is like 28 mpg combined, while the 2022 Hybrid Tucson is:

 

https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=43753&id=43799

 

You save around $3-4K over 5 years, while the cost is about $7-10K higher. 

 

I don't know about the U.S., but they don't provide any sort of tax credits for hybrids anymore in Canada.  Plug-in hybrid and electric cars still get tax credits, but they are generally $12-20K more than equivalent gas version vehicle.  

 

In this type of market, buying slightly older gas vehicles from private sellers is probably the way to go.  As most dealers aren't giving significant discounts on financing or lease rates, and are marking up the vehicles above MSRP.  With inventory levels low, your selection is limited as well.  Cheers!

Yes, plug in hybrids save more gas,  but you also need to account for the electricity cost to charge them. I am pro hybrid, but I think driving a relatively high mileage ICE car the way to go. I never could make the numbers work for a hybrid, much less and electric car. My next car is likely a Subaru as well, these cars drive like trains in the sometimes icy backroads here in MA where I live. My wife loves her Forester.

[JRM]

Some info on mineral resources needed for the green energy transition.  This is form another thread:

 

 

https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions

 

Some interesting executive summary highlights:

-Since 2010 the average amount of minerals needed for a new unit of power generation capacity has increased by 50% as the share of renewables in new investment has risen.

-40% to 50% reduction of silver and silicon used in solar panels since 2010

-Average of 16.5 years from discovery to first production of new mine

-Total lifecycle greenhouse gas emissions of EVs are around half those of internal combustion engine cars on average, with the potential for a further 25% reduction with low-carbon electricity.

[SharperDingaan]

I just pulled the numbers from our spousal car, a leased 2022 Toyota hybrid RAV4, and compared against a posters mileage example. This RAV4 is not a plug-in, is current state-of-the-art tech, & converted at 4.5 litre/gallon. Point is that between gas, upkeep, and insurance a driver has a large enough monthly cash saving to make the next car electric. Posters clearly agree, as everyone is claiming their next car will be electric!

 

Data came from Statista, as at 2020. Most people do not care about cap cost, they care only about the monthly cost (lease/loan) - we all know how to manipulate that as low as possible. It's also not just this boards posters going electric, it is everybody else doing it as well, en-mass and all at the same time. 

https://www.statista.com/statistics/183505/number-of-vehicles-in-the-united-states-since-1990/

 

EV uptake is reaction to higher costs; but as monthly driving costs rise - rising numbers are forced to public transit. Cant use public transit unless you are in a major city, and if you want less congestion around those cities - cars need to come off the road. Virtuous circle both retiring existing fleet 'early', and reducing overheated demand for EV.

 

Agreed, current state, there isn't enough commodity to meet anticipated EV demand.

Thing is, future state looks quite different, and many of todays bottle necks have already been solved; todays batteries are recyclable, weigh less, use far less rare material than they used to, and save way more charge for longer. Newer batteries aren't even batteries anymore, they are integrated fuel cells, using hydrogen vs plug-in. Future state also isn't a decade away, it is 3-4 years at most, and getting shorter as manufacturers scale up.

 

So what? The reality is that much of the money for upgraded electric grid, EV and hydrogen roll out, is going to come from o/g. O/G assets being run down, and cash from production going into these new areas. We don't see it, because we do not want to.

 

Invest today for where you want to be in X years, NOT next quarter.   

 

SD

 

 

 

Edited March 12, 2022 by SharperDingaan

[cubsfan]

10 minutes ago, SharperDingaan said:

 

 

Data came from Statistics, as at 2020. Most people do not care about cap cost, they care only about the monthly cost (lease/loan) - we all know how to manipulate that as low as possible. It's also not just this boards posters going electric, it is everybody else doing it as well, en-mass and all at the same time. 

https://www.statista.com/statistics/183505/number-of-vehicles-in-the-united-states-since-1990/

 

 

 

 

 

This is an interesting take, but seems totally stupid. I ALWAYS think of the cap cost, not the monthly,

otherwise you're just playing a shell game. Are Americans really that dumb? Perhaps.

 

But if I can get 250,000 - 300,000 miles on a great import IC car with less than 100,000 on it for $10,000 cap cost, I'll go that way every day. So if you are predicting everyone running out to buy EV cars,

then those used IC cars are going to get real cheap.  

 

I can't wait.

Edited March 12, 2022 by cubsfan

[SharperDingaan]

Americans aren't being stupid, they are being entirely rational.

Give me use of the auto TODAY, for the LOWEST possible monthly operating cost. Buy new and pay most of your cost in financing, or buy a clunker and pay most of your cost in repairs and higher gas/oil/fluids cost. Decision depends on the individual car & its history.

 

Fact is  .... used SUV gas guzzlers ARE going to get real cheap .... 'cause they will be scrap

Most lessee's are going to have a pay a terminal cost when they discover that MV is well under the guaranteed RV on their leases. The SUV bad mouthed because of its high operating cost ... bad mouthed again because of the terminal payment ... and bad mouthed a third time as the more expensive the model was the greater its 'loss of value' has been. Even if it were completely free, it would still cost more to run than similar functional alternatives. If you cant give it away, and it costs too much to drive, isn't that the definition of scrap?

 

Different POV.

 

SD

      

Edited March 12, 2022 by SharperDingaan

[Spekulatius]

3 hours ago, cubsfan said:

This is an interesting take, but seems totally stupid. I ALWAYS think of the cap cost, not the monthly,

otherwise you're just playing a shell game. Are Americans really that dumb? Perhaps.

 

I actually think that many Americans are really that dump. Just look at his car dealer sell you a monthly cost rather than the price of a car. I also got aware early on that many can’t conceptualize that interest cost matter much more so than the monthly cost of a loan. That’s why car deals stretch out the payback duration more.

 

Thats also the reason why credit cards in the US are a bigger and better business than literally anywhere else.

Edited March 12, 2022 by Spekulatius

[Sweet]

On 3/10/2022 at 2:21 AM, Parsad said:

 

Greg and everyone else...just friggin' use Biden and Warren...or the names of the politician you are targetting.  This shit gets tiresome and just provokes others.  If you can't avoid politics, then at least use the god-damn names so that I don't have to keep dealing with flame posts!  Cheers!

Years ago, when I just read this board and before I joined, I remember you posting regularly about Trump.  You did more than your fair share of flaming.

 

eg.

 

 

Edited March 13, 2022 by Sweet