Response to Plumer et al.
Plumer, Popovitch, and Migliozzi’s NYT article of March 10th, Electric Cars are Coming. How Long Until They Rule the Road, makes an interesting point, that simply selling electric cars won’t get us to carbon-neutral quickly enough. People will keep driving gas-powered cars for a long time, because they can. However, the article has two flaws. First, the authors bury the lead until the very end, a journalistic offense. Economics, and by its application, human behavior are the tools by which gas-powered cars can be removed from the motor pool. Secondly, the authors are looking at the current landscape and making typical recommendations, but are suffering from a lack of vision that this large problem requires. A too quick or incomplete read of the article puts it on the brink of defeatism.
Our love affair with car ownership shows real cracks, especially with those under 40. More young people are living in cities, using public transportation or foot or bicycle, eschewing car ownership altogether. Car sharing has become an increasing part of the transportation mix. Why own a car when you can rent it by the hour, or buy a trip through Lyft and Uber. Leasing has creeped up from around 20% in 1999 to over 30% last year. The idea of buying a car new and driving it into the ground is likely to be entombed with the Boomer generation. People may need a car from time to time, but they may no longer have the kind of emotional attachments to it that some had when listening to the Beach Boys or Elvis on AM through the crappy 9-inch speaker in the dash.
Yes, cars are being built better to last longer, but people drive older cars out of economic necessity, not love or moral certitude. People drive older cars because they have no other choice. $40,000, the average price of a new car, is a major investment. The 12-year current lifespan of cars, e.g., 200,000 miles is not immutable. Fifty years ago, it was 100,000 miles and in the 1930’s, 50,000+ miles. Cars have been engineered to last longer. Refrigerators and other major appliances have been engineered to expire more quickly. Perhaps companies will respond to the nature of future demand and produce cheaper vehicles more like a Yugo and less like a Mercedes-Benz.
Leasing trends show a correlation between recessions and depressed car leasing – economics are inexorably linked with car ownership. For better or worse, buying a car is a somewhat rational economic decision. As the authors cite at the very end of their article, economic actions, through market or policy, can make gas-powered car ownership too costly to maintain in relationship to electric cars. Gas prices and carbon fees can be economic levers to use, perhaps in conjunction with something like the formerly ill-fated cash-for-clunkers program. The economic tools available to push people toward EV’s are almost endless. The goal is simple, make ownership or use of gas-powered cars too expensive to sustain.
If the policies are successful, the last owners of gas-powered cars, such as those that bought new in 2034, will be left holding the bag. As far as what to do with the musical chairs issue of gas-powered cars facing retirement before expiration date, companies may respond by producing cheaper and more disposable vehicles. Ultimately, the trick will be to incrementally depress resale value, such as through an excise tax on new and used cars. The buy-back clunkers program implemented by itself was unsuccessful. A buy-back program, coupled with other policies that keep the cost of “ownership” high, can systematically and relentlessly removed gas-powered cars from the pool.
Electric conversions are not new. Home mechanics have been experimenting with this since the 70’s, and at the top end, I can buy a 1960’s electrified Jaguar if I have $350,000 laying around. Seriously, later model SUV’s would be good candidates for a company that could retrofit them with electric motors and batteries. Recycle or melt down the rest. Lord knows, if we can be somewhat successful in promoting electric cars, the supply of suitable gas-powered cars for conversions should be ample. Will people care? I doubt it, as long as their transportation needs are met. As far as those on the bottom of the economic ladder, their getting adequate transportation goes far beyond the issue of the nation getting carbon-neutral. But keeping them in old gas-guzzlers won’t solve these larger problems of income inequality.
Great post (as usual), Ira– my kids (26 and 21) have no love affair with cars, and only use them when they have to. Neither of them ever anticipate being able to buy a new car given the current and foreseeable economy. I, however, being the Boomer that I am, continue to maintain my love affair with my 1969 VW Bus and plan to drive it till it won’t drive no more. And, I have my eyes on a 1973 Plymouth Scamp that is just too good of a deal to pass up…