Electric Vehicles: Friend or Foe of the Future Green Economy
Earlier this week, beloved comedy actor and car enthusiast Rowan Atkinson wrote a piece in the Guardian raising his suspicions with electric vehicles (EVs). It’s a timely letter, because as we approach a green economy with ongoing policy shifts, we are at a crossroads in deciding whether to fully embrace electric cars or not.
What is The Future Green Economy?
The future green economy represents a transformative vision of economic growth driven by sustainable practices. It promotes a low carbon, resource-efficient, and socially inclusive economic structure. The aim is to realize sustainable development without degrading the environment… Or economy.
Key sectors of this economy include renewable energy, waste management, sustainable agriculture, and green transportation, the last of which electric vehicles (EVs) have a significant role.
The Promise of Electric Vehicles
Electric Vehicles stand as a beacon of promise in the green economy. They are vehicles that use one or more electric motors for propulsion, relying on electric power rather than traditional fuels like petrol or diesel. The appeal of EVs lies largely in their potential to reduce carbon emissions, a key objective of the green economy.
EVs produce zero exhaust pipe emissions, offering a cleaner alternative to internal combustion engine (ICE) vehicles when driving around town. Moreover, their higher energy efficiency translates to less energy consumed per mile driven, leading to lower overall greenhouse gas emissions, especially when charged with renewable energy. In theory, you can drive indefinitely with a solar-powered EV charger and car without producing new emissions.
Recent Criticisms of Electric Vehicles
As pointed out in Atkinson’s piece, the above is a somewhat narrow view of emissions. We first have to consider the production of the car itself, of which Atkinson claims requires 70% more emissions than a non-electric car to manufacture. Then there’s the issue that they need to be manufactured more frequently, because the batteries inside them last only a decade currently.
Furthermore, it’s important to point out how the electricity is generated – far from all of it is renewable generated, meaning that some emissions need to be factored into the powering of the cars.
Finally, many environmentalists are advocating that cars in and of themselves are the problem. The vast land they take over through not just driving, but parking, means far less greenery in urban areas. A fully functioning public transport system, like a metro and high-speed cross-country rail network, would be far more green.
In fact, this plays into the vision of a sharing economy, where EVs may be dotted around the city for hire. In places like Lithuania, it’s already possible to hop in an EV an pay for just a 20 minute drive – you don’t even need to return the car. This system incorporates EVs into society, but not in a one-per-household private ownership kind of way.
The Impact on Investors
Of course, the direction we take when it comes to EVs will heavily impact investors. Those trading Plus500 Futures might be already leaning towards the commodities that are required for battery production, seeing as these are currently fundamental to EV production. Risks are already high with Futures trading, and big changes in society’s dependence on certain commodities and raw materials further increase this risk. This is perpetuated by Atkinson’s proposal to consider alternatives, such as hydrogen, which can power cars.
The industry is heavily reliant on government subsidies and regulations, too, making it investors vulnerable to policy changes.
The Role Policy Will Play
Policy will play a pivotal role in determining whether electric vehicles will ultimately be a friend or foe of the future green economy. Governments around the world have a critical part in shaping the trajectory of the EV industry. Already, the UK are proposing a ban on selling new petrol or diesel cars from 2030 onwards.
Policies like subsidies for EV buyers, emissions standards for ICE vehicles, and investments in charging infrastructure can stimulate demand for EVs and support their wider adoption. However, they must also mitigate the potential negative impacts. For instance, regulations could enforce ethical and sustainable extraction of battery materials and promote renewable sources for electricity generation.
The UK, for example, is currently undergoing HS2, a huge railway project to tie London to the north of England. The idea is to cut commute times, spread wealth around, and cut car emissions. But, it has so far been a disaster. If it ever does get completed, it will be long after 2030, meanwhile the US has showed no intention of a cross-country rail network.
So far, it seems that governments around the world are going all-in on electric vehicles without considering alternatives – alternatives in how we could power cars or alternatives to our dependence on the private ownership of cars. Thus, it’s understandable why many investors are also speculating on this path forwards, but time will tell on the true amount of emissions that it will help reduce.