OilPrice.com sent me a link to this.
Is This The Beginning Of The End For Gasoline In Asia’s Largest Markets?
As the rise of electric cars looms ever larger on the horizon for India and China, far-reaching implications for the global oil market are impending.
China released a "road map" this month stating their plan to replace at least one-fifth of new car sales with alternative fuel vehicles by 2025. India proposed to take more extreme actions, creating strategies to electrify all vehicles in the country by 2032, as reported to Reuters.
China’s Guangzhou Automobile Group (GAC) has already begun construction on a huge new manufacturing facility dedicated solely to the production of electric cars in the southern Guangdong province. With a projected construction budget of nearly $700 million, the plant will have a manufacturing capacity of 200,000 cars annually once completed by the end of next year. GAC anticipates that the new factory will cast China as a strong leader of the global green car movement.
Fascinating.
EVs in India and China are a big deal, but not yet that big. To answer the question in the link above,
No, it isn't, and you shouldn't talk such nonsense.
This is not the beginning of the end for gasoline. But, as Churchill described Rommell's defeat at El Alamein during WW II, it may be the end of the beginning. That is to say that it shows us the way to Peak Gasoline and, as we slide down the other side, to Peak Oil.
We have to get to the point where growth in the automobile market, measured by gasoline consumption rather than dollars or units, is all covered by new EV and hybrid sales, with a little boost from more fuel-efficient gas sippers. Global oil consumption is growing by only about 1% a year, comparable to renewable energy growth, but still ahead of EV growth. So, not yet, but we can make out the outlines from here.
OilPrice.com is given to breathless headlines, sometimes about complete frauds. Let's look into that a bit, and then examine the real story about Asian EVs.
Back when I was a high-tech market analyst, I got paid for answers stated with great assurance more than for questions. (I asked them anyway.) Here I can show you a little bit of how the process really works. As Samuel Johnson explained, it isn't just what you know yourself, but what you know how and where to find.
Lies, Damned Lies, & Stock Tips
I got the e-mail below today as a subscriber to the OilPrice newsletter. They offer
- real news on oil price fluctuations and companies in the business
- a lot of speculative fiction masquerading as expert opinion
- and now this, a bogus claim about a "superfuel"
It is not about fuel of any kind. It is about sources of lithium for the batteries that we all know about. There is no mystery here, except whatever can be ginned up in the minds of the marks for this con.
Say “Goodbye” to Oil, Gas, & Solar
Please take a few minutes to check out the below email from our friends over at Money Map Press.
[A] mysterious new superfuel has been discovered. This fuel is so powerful that it is now threatening to destroy OPEC's global energy monopoly.
Money Map Press has its own history of bogosity, as in its Better Business Bureau complaints listing.
Then we have the unnamed advisor ploy, and the junk science ploy with bogus quotations, and the spurious precision ploy, and so on.
From the desk of a U.S. State Department Energy Advisor:
This Breakthrough "Superfuel" is 1,693X More Powerful Than Gasoline
Unearthed in the Andes Mountains, these mysterious crystals contain
what MIT researchers call energy’s “Holy Grail.”
And they could ignite a $7.2 trillion economic revolution!
I do not have the patience to go into how many lies are contained in this bo-o-o-o-ogus pitch. I refer you instead to the Urban Legends pages at Snopes.com, which lays it out in detail.
Fact Check > Science
Have Researchers Discovered a New 'Superfuel' 1,693 Times More Powerful Than Gasoline?
A viral marketing campaign called a resource used in lithium batteries a secret superfuel — all with the intent of selling investment tips in an expensive e-book.
False
The perpetrators want you to buy a $99 book to get the name of a lithium mining company that is making these and other bogus claims. Lithium mining companies are publicly listed. And then, at the bottom of the e-mail, OilPrice added this.
The materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice.
Nothing contained on the Web site shall be considered a recommendation, solicitation, or offer to buy or sell a security to any person in any jurisdiction.
Some of that is standard legalese, designed to excuse any sorts of lies and misrepresentations in the documents concerned. Nevertheless:
Feh.
Snopes is, BTW, a treasure that everybody in the evidence-based community should know well. Also, I recommend The Golden Horseshoe, by Dashiell Hammett.
I was trying to count the lies contained in those nine words, and had reached four…
Just the Facts, Ma'am
India
Firstly, the India story linked above is about a report from a think tank, not a worked-out plan or a policy or a program. It is an excellent report, worthy of better than this hype. For example,
India could save as much as $60 billion in energy costs by 2030 and one gigatonne of carbon emissions between 2017 and 2030 by adopting more electric and shared vehicles, according to a report released on Friday by the country's leading think-tank.
The report on transformative mobility solutions by Niti Aayog, India's policy commission chaired by Prime Minister Narendra Modi, provides a 15-year roadmap for electrification of vehicles in the country and is likely to form the basis for a new green car policy, sources had told Reuters.
Maybe. Never believe pundits who claim to know in advance what politicians are going to do. As Rachel Maddow says about Trump & Co. LLCBBQ, forget what they say and look only at what they do.
For example, going to renewables could electrify the whole country, including a million or so villages, which Indian politicians have been promising for decades to no evident effect. Look into Community Microgrid Solar technology if you have an interest in helping. But don't give money to just anybody making promises.
In Rural India, Solar-Powered Microgrids Show Mixed Success
As India looks to bring electricity to the quarter of its population still without it, nonprofit groups are increasingly turning to solar microgrids to provide power to the nation’s villages. But the initiatives so far have faced major challenges.
We can certainly hope that Modi and the Indian Parliament will take such excellent advice on EVs. We can do more, of course. Those of us in the global environmental movement or in India itself can urge India to follow up, in the same way we got India to commit to serious movement on renewables at COPS21 against intense resistance from Modi himself.
We know that India has committed to stopping further coal-fired plant construction after those already started are completed, and that it has twice as much renewable capacity under construction as coal. Australian coal interests are in a bit of a panic at the prospect of losing such a huge market, but are pretending hard that they are not.
India Solar Prices Hit New Low, Undercutting Fossil Fuels
Well, if so on EVs, then what? Indian EV exports to the rest of the world, perhaps. I know of a lot of commentators who pooh-poohed Korean car exports, and before that Japanese car exports. We have indeed had the disastrous examples of the Yugoslav Yugo (because it didn't) and the Russian, um, I can't even remember. Let me look.
Automotive industry in Russia
Oh, yes, the Lada brand from AutoVAZ. 30,000 sold in the UK one year, but none in the US. Well, that explains my problem.
As for India, I personally don't know enough to say either way for sure, but I know that it is not impossible.
India surpasses China in passenger car exports
That is probably temporary, as they have traded places before. Also, it includes foreign manufacturers in India such as VW exporting to elsewhere in Asia.
China
Now, what do those links at OilPrice actually say about GAC? No, pardon me, first there is this, from Wired, about the Shanghai Auto Show back in April.
In the Age of Trump, China Eyes Electric Car Dominance
Now, firstly,
HAHAHAHAHAHAHA
to Trump, with thanks to Bubbanomics.
OK, now I have that out of my system.
Audi revealed the E-Tron Sportback concept, a potential Tesla Model X competitor. Volkswagen unveiled the Crozz [sic, apparently meaning the Cross plug-in hybrid concept] part of its post-Dieselgate, all-electric [sic] apology tour. Chevrolet, Buick, Renault, Citroen, and Jaguar showed off battery-powered cars. So did the local Chinese players, like Denza, Chery, Lynk & Co, and Nio.
So, not GAC? But that turns out not to be the case. OilPrice's first link goes to CleanTechnica, which reprinted a story from Gas2.org. The second link goes directly to this same Gas2 story.
GAC Group Starts Building New Electric Car Manufacturing Facility In China
GAC’s first electric car, the GE3, was introduced at the 2017 North America International Auto Show in January. Its new plug-in hybrid sedan, the GA3S, and plug-in hybrid SUV called the GS4 at Shanghai auto show [missing verb, apparently, right here] in April. “In the coming five years, we will push out at least seven new electric vehicle models and cover three product series including pure electric, range-extending and hybrid,” said Yu. “Our goal is for GAC to take the lead in the EV business and achieve sales of 200,000 electric vehicles by 2020.”
Those are fairly modest goals, especially when compared to the more than one million electric cars Tesla says it will be building by 2020. The Chinese new car market is the largest in the world, with more than 20 million vehicles sold every year. That number is growing steadily and the Chinese government is actively promoting policies that will make more of them electrics. As China goes, so will go the world new car market. There is even a possibility that some of those GAC models could find their way to America in years to come, assuming The Donald doesn’t sign an executive order banning all imported cars from the US.
This is where we came in, at the top of this Diary.
But fear not, there really is more. Here is one of the cars in question.
Motor Trend: 2018 GAC Trumpchi GS7, GE3, EnSpirit Concept First Look: Fine China
GAC may well be the first indigenous Chinese brand to launch cars in the U.S., though today’s announcement at the Detroit auto show was not a definite pronouncement of export plans (the target remains 2018-2019), but rather that an R&D operation would be sited somewhere in the U.S. during the first half of 2017…
Oh, and as for the nomenclature: GAC is the parent company (like GM), Trumpchi (the P is silent) is the brand name—and it was launched well before our most recent election cycle began, so don’t go wondering if there’s political pandering in it…
The GE3 goes on sale in China this June. It is a pure EV powered by a 47-kWh lithium-ion battery pack that is said to provide almost 200 miles of range on the easy-does-it Euro NEDC cycle. Its permanent magnet synchronous electric motor is rated at 67 hp and 81 lb-ft continuous, with peak output of 161 hp and 214 lb-ft. The vehicle is roughly B-segment SUV size, measuring within an inch or so of a Chevy Trax. The design is pretty generic outside, but a bit more engaging inside. At least to look at. Most of what you can touch is hard grained plastic, and the door slam sound on the production car present on the stand rivaled that of an original Kia Sephia (anybody remember those?). Not too nice. If the NEDC range translates down to the low 100-mile range, we’d counsel GAC’s Trumpchi planners to keep this one at home.
So, depending on engineering, legalities, marketing, and other factors, we get a definite maybe for possibly as early as 2018 in the US.
It will likely turn out to be later, but nobody better bet against eventual Chinese success in the US market.
Fine, So Then What?
We are talking about substantial amounts of cars from countries not so well known in the US for car manufacturing, but that have huge domestic markets.
Automotive industry in India
The automotive industry in India is one of the largest in the world with an annual production of 23.96 million vehicles in FY (fiscal year) 2015–16, following a growth of 2.57 per cent over the last year. The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP).
Automotive industry in China
In 2014, total vehicles production in China reached 23.720 million, accounting for 26% of global automotive production.[9]
The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009, and is expected to exceed 200 million by 2020.
Their path forward is well understood. Just as Detroit laughed at small Japanese cars, and had its lunch eaten, so all car makers are looking to EV niches that Detroit doesn't want to know about, and are eying each other's plans around the world. You may have noticed that Detroit mostly wants to know about hybrid and electric SUVs, pickups, and other large vehicles.
All of this means ever more choice for EV buyers, with ever longer driving ranges at ever lower initial cost and major savings in maintenance compared with any ICE car. We are at the tipping point, where nothing seems to have happened for decades, but it is all just about to, seemingly all at once.
Hence the danger to the oil industry, which the realists among them know about.
Even Exxon-Mobil admits that EVs are coming, but they are still whistling past the graveyard about when.
There will be 1.8 billion cars, trucks, and SUVs in the world in 2040, up from 1 billion now. However, energy demand will rise at a slower pace because new vehicles will be more efficient and get more miles per gallon.
In 2040, 15 percent of all cars globally will be hybrids. 10 percent of new car sales in the U.S. will be electric vehicles.
Emphasis theirs.
HAHAHAH…
Oh, wait, I said that.
These are the standard market growth curves, the bell curve from Gauss for random factors influencing adoption, and the population growth curve, aka the logistic curve, from Verhulst. At each point this adds up all earlier sales. (In math we call that an integral. So simple. Just the area under a curve. The complications come in when we have to do the calculations.) This combined and annotated graph is from Everett Rodgers, The Diffusion of Innovation.
So you know that half-trillion dollar oil deal that Exxon-Mobil CEO and Trump SoS Rex Tillerson wants to shake loose from the sanctions on Russia? It is nearly time to short it. Selling coal stocks short is a big deal, with all of the coal company bankruptcies we have been seeing, and shorting fracked oil and gas is on the table from time to time. Big oil is next, and batteries for energy storage are going to bring down natural gas at some point.
Everybody should read The Big Short: Inside the Doomsday Machine, by national treasure Michael Lewis. The movie is OK, too, but it necessarily left out a lot. Get expert advice before you think about getting into short selling. Only put in money you can afford to lose. You can lose more than your shirt if you don't understand what you are doing.
But the fossil fuel magnates now stand to lose something over $10 trillion when their assets are stranded and become worthless. Even if you can't short them, tell your pension fund to get out now.