Throughout the bailout bonanza, we were told that the car industry means million of jobs. True enough, before the money was doled out, we learned that auto-related industries employ 3.1 million people around the country. Now, the government is paying big bucks for electric car development. From Tesla all the way to Nissan, the industry is getting $ 25 billions of DOE loans, conditional on the development of advanced vehicle technologies. Which usually means electric cars. What’s wrong with that picture? If successful, it could cost a big chunk of those 3.1 million jobs.
According to The Nikkei [sub] electric vehicles require around one-third of the parts used in conventional automobiles. Let’s take bearings. “If electric vehicles become popular, our business would face head winds,” says Naoki Mitsue, Chief of Japanese bearing maker NSK. An ICE powered car uses between 120 and 150 bearings. An electric car is happy with half of that.
That tricky 7 speed DSG twin clutch transmission could be replaced with something of washer/dryer complexity. Compare an electric motor with a car engine and its myriad of moving high precision parts, driven by thousands of controlled explosions per minute, and you’ll agree that an electric car is a model of simplicity. It’s also a job eater.
Fewer parts, less work. As the car gets simpler, there is less to repair and replace: Mr: Goodwrench could face the fate of the Maytag Man.
If that battery wouldn’t be so obscenely expensive (and with the help of the DOE, they are supposedly working on that), the electric car would cost much less than a conventional one. Once it does, less jobs in banking. Repo men will line up for unemployment benefits. You think it’s a joke?
Japanese parts manufacturers “face the grim prospect that some of their products will become obsolete in the era of electric vehicles,” writes the Nikkei, and reports that “autoparts makers have begun searching for new business models to make up for the inevitable sales declines.” Of course, they plan to make electric parts. But at the end of the day, there is no denying that one third of the parts means one third (or less) of the work.
We will make up the difference in quanity. Instead of 3 cars my wife and I will have 4.
Same old arguments that buggy whip manufacturers were making 110 years ago.
See? They were right. There just weren’t enough BDSM aficionados to keep them alive …
“Who killed the electric car” made the exact same point years ago. Lots of enthusiasts scoffed when that film theorized that one reason GM killed the EV1 was to protect their parts and repair businesses. Glad to see the enthusiast blogosphere, at least, catching up with that view.
Gee, you forgot to mention the potential job losses in the oil drilling, pumping, distributing and oil soaked marsh land scrubbing industries.
I was tempted, but then decided it would be in bad taste …
John,
Oil isn’t going away. I think the strongest argument for replacing petro-fuels is that petroleum is too valuable a chemical feedstock to burn it as fuel. So even if we switch to alternative fueling for transportation, we’re still going to drill for and pump oil.
Contrarian that I am, I have to point out that including all the drilling platform and oil tanker spills, leaks and disasters, the primary source of oil in the oceans remains natural seepage. Tar balls washed up on beaches long before petroleum started being pumped and refined.
So even if we stopped pumping oil from the sea bed, there’d still be a need for some level of remediation due to oil contamination.
The “natural” world is not benign. Arsenic and cyanide compounds are perfectly natural and even without genetic splicing strains of celery can be grown that are more toxic than poison ivy. Oceans, lakes and rivers are contaminated by all sorts of naturally occurring substances. Analysis of fish bones found in 1500 year old fire pits in Michigan show the presence of mercury – so at least some of the mercury found in the Great Lakes is not anthropogenic.
Estimates of 3.1 million gallons of oil are lost each day at the BP oil spill. If each of those 3.1 million people that may soon lose their jobs head down to the Gulf with a one gallon milk jug, we could have this oil spill cleaned up in no time!
When has that ever stopped you??? (LOL)
Electric Cars will not be successful on any sort of large scale for the foreseeable future. No matter how much of my and your money our government throws at it. Most of these ‘auto related jobs’ aren’t going anywhere for quite some time.
Since we seem hellbent on repeating the 1970s, we are one good clusterfsck in the middle east from turning that on its head.
If it takes fewer man-hours to build an automobile that will free up that capital for new uses. Businesses and entire industries stagnate and collapse when they continue on with outdated or inefficient ways of doing things. While painful in the short term, improving productivity creates net benefits long term.
+1. Change is necessary for survival.
+1
I think this article was kind of written tongue-in-cheek, but if not, the phasing out of obsolete jobs and technology for something more productive is always a net gain for the economy as a whole, even if a few suffer in the short term. This was exactly the point with the original Luddites, who were textile workers destroying industrial equipment for fear of their jobs. Instead, the Industrial Revolution kicked off, and I think you’ll agree the average global standard of living is a bit higher today than in 1850.
Autos that are cheaper and easier to build, and break down less often, are a net gain for the world’s collective wealth. Period.
The article failed to mention the numerous spinoff jobs in oil spill remediation and fighting for oil that also result from ICE dependence.
Should we maintain dirty outdated technologies just because some jobs depend on it? Should we encourage smoking because that would create more jobs in manufacturing, cleaning and health care?
Anyone who doesn’t think that in 15 years an electric car will not be a viable option is pretty much completely out of the loop.
And better to save whatever US jobs you can rather than have the Japanese and Germans make those cars and lose them all eventually.
TTAC, seriously, the amateur fearmongering politics are really not impressive and really degrade the quality of the site. Isn’t it time to get back to reviewing cars?
I like these kind of articles on TTAC. Since TTAC also does great car reviews, we get a broad range of articles to choose from. That’s good, not bad.
Would you complain to an all-you-can-eat buffet that it should not have seafood because you prefer to eat prime rib? Pretty selfish, I think.
NSK’s primary business is bearings, but in addition to that, they are one of the first, and now among the biggest manufacturers of electric steering systems in the world … on one side they have benefited for years on that side of the business … if the bearing business consolidates, then they better position to grab more of the remaining share, merge, or consolidate their operations …
Economic Darwinism or not, it is no different than The Lord Giveth and The Lord Taketh-Away…
History suggests that there is less than a 50/50 chance that existing gasoline-powered vehicle manufacturers will be the ones to succeed with electric cars.
For the most part, the old mainframe computer manufacturers aren’t selling us PCs, Microsoft and Dell are having trouble with the handheld device transition, and Kodak is slipping into oblivion as film goes away.
On the other hand, Nikon and Canon are leaders in digital cameras, and Apple is doing just fine.
Little wonder that people with stakes in the current industry are nervous.
That’s usually the way to bet, but Nissan is doing a really great job on the Leaf. They are the first electric automaker to sell something more viable than a Golf cart or an unaffordable Tesla Roadster.
Apple went from computers to handheld devices and tablets seemingly without a hitch. So it can be done, it just takes superior management that is not complacent.
Carlos Goshen definitely deserves a lot of credit as a visionary if the Leaf succeeds long-term.
D
As long as our leaders keep reminding us it’s for ‘the common good’ I’m sure we won’t mind losing a few million jobs and lowering our standard of living… Now that’s progress!
No one’s stopping EXXON from OWNING the Battery, Solar, Wind or Electric Auto Component Industries, Except Exxon.
If Exxon Chooses to NOT invest 50% of Profit into the Future, Then Let them Die the Death they Deserve.
BP made 14 Billion in Profit Last Year. What could 7 Billion do in Wind Farms?
Who are BP’s Dumb A** Shareholders? GS, JPMorgan, the Wall Street Banks. All about Extracting Current Wealth to their pockets with NO Investment in the Future.
That’s NO Investment in the USA.
That’s NO JOBS in the USA.
That’s your problem. Wall Street CROOKS Running this Country into the Ground.
Always nice to combine economic illiteracy and anger into one post. Energy independence would/will be great when it happens, but Lou Dobbs style ranting won’t get us any closer to that ideal.
Seriously, any company (or individual) can invest in “green” technologies today, right now. Of course, if you study history you learn that most technology pioneers fail and the invested capital evaporates. For every Ford or GM hundreds of automakers went broke; for every Apple there are thousands of shuttered computer and software makers. If you invested in wind farms three years ago you are a lot poorer now (ask T. Boone Pickens how that deal is working out for him).
Stockholders (and that includes your retirement and mutual funds) get very cranky when 50% of the company profits are “invested” in unproven technologies. Investors are a lot happier if the companies they invested in stick to enterprises they understand: that is usually why stockholders invested in that company in the first place.
Mike999, if you can predict the technologies (and companies that produce them) that will successfully replace the oil companies you could become a very, very rich man. Give us your specific investment predictions and we can see how they pan out.
Toad, Wind Generators have a 5 year payback.
Who told you someone was losing money on Wind? Rush[ Dumb A**] Limbaugh, Glen [ CrackPot ] Beck, or Fox[ Saudi Oil ] News?
Secondly, Look at that multi-state “Negative Externality” in the Gulf? Is oil really cheaper the Wind? Only in your [ oil industry ] imagination.
Wind is making money for everyone who invests in it Today, how is that “unproven”?
Toad, maybe you should take an Economic Refresher.
Innovative Investors INVEST, and reap the Benefits from Investment.
Since the Oil Industry is NOT Investing, they are Not Innovators.
That’s an “Incompetent” Tax on AMERICA.
That’s not a Rant, that’s just the TRUTH.
If wind is so profitable, why does it require so much in the way of public subsidies?
Are you seriously saying that if wind has a five year payback people wouldn’t be investing their own money instead of relying on the government (meaning our) money?
Wind power does not have a 5 year payback; if it did every utility in world would be building wind turbines and money would be pouring into the business. This reality is why T.Boone Pickens wind farm plan (and others) is dying on the vine, even with government subsidies: http://www.dallasnews.com/sharedcontent/dws/bus/stories/011310dnbuspickens.6ebd955b.html
Before you accuse people who disagree with you of being stooges for media personalities you don’t like, at least Google the subject matter. I’m not even going to try to figure out what an “Incompetent tax on AMERICA” is, but it isn’t in any economics textbook I have read. Could not even find it on Google.
My business buys over $500k of fuel yearly, and nothing would make me happier than a viable alternative. Natural gas, diesel, hybrids, even electric may all possibilities in different applications. Even cooler stuff like in wheel electric motors could be fuel, production, and maintenance game changers (http://www.greencar.com/articles/could-wheel-motors-next-big-thing.php).
But anarchist/populist rants without facts are just another dead end. Even using the Caps Lock key won’t change that.
I’m sorry Toad,
Let me be more specific:
Coastal Installation of 2.5 GW Wind Turbines hear towns with established electrical supply, have a 5 year payback. Is that better?
The cost of installation does not scale with the size of the turbine.
Secondly, the 30% tax rebate influences No One to build a turbine. It’s simply not enough.
The American Investor has LOST the ability to control the oil industry, thru the 401K investment program in mutual funds. We’ve lost our review of the prospectus and handed direction of the oil industry to Wall Street, which makes NO LONG TERM Investments, allowing the Oil Industry to invest less then 1% of Profit in Energy sources with No Negative Externalities.
Here’s a solution to the BP Disaster affecting the 4 southern states.
– Make BP invest 7 Billion dollars a year for 10 years, in these 4 southern states. That should have a Multiplier effect of 3X if we make sure they hire American labor, and buy American Wind turbines. That should have a beneficial effect on the Southern Economy.
Secondly, It’s Not a Penalty. They will make money on these turbines for the next 20 to 50 years.
Sorry, 2.5MW wind turbines:
http://www.gepower.com/prod_serv/products/wind_turbines/en/downloads/wind_plant_perf2.pdf
Interesting take Bertel. I am even more sure than ever that there will be no electric cars in our future. There were lots of electric cars at the beginning of the 20th century. My great-grandmother owned one. Even though they had this kind of head start in manufacturing complexity, they still lost out to liquid hydrocarbon ICE.
Electric cars have had little change in the past century. ICE vehicles have progressed much more. What makes anyone think that the competition will turn out any differently this time.
“There were lots of electric cars at the beginning of the 20th century.” True, and their salesmen were telling prospects that they just had to get the batteries competitive before they took over the automobile market. This is the same thing that electric car pushers are telling us now; the main difference is that a lot of the pushers are not salesmen per se but people who are trying to “invest” as much taxpayer money as possible to push along this century-old boondoggle.
I think the ICE has a long life ahead of it. Complexity and quantity of parts are only part of the equation for total cost. When it comes to complexity, a better analogy would be the comparing an EV car’s battery to an ICE car’s gas tank.
There’s a huge built in base of support, knowledge and expertise for keeping the ICE going.
Similar arguments could have been made for the horse circa 1900. In fact, those argument were made at the time!
The horse vs. car debate was still very much going on in 1910 when the New York Times published this piece:
http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=940CEFD71239E433A2575AC0A9669D946196D6CF
The horse analogy is not valid. The automobile and other forms of mechanical transportation won that contest. The ICE v BEV contest was played shortly after that, and ICE won fair and square.
Since then ICE has has advanced in efficiency and reliability far more than have batteries. Lithium batteries are the hot topic (Pun intended) now. But all they have demonstrated is that if you use a higher energy chemistry with less abundant elements, you can pack more energy into a given size cell. And it is more flammable.
Technology will advance and change. People will adapt. Industry will adapt. Companies will adapt or fail. This is the free market at work, after all.
With governments around the world already subsidizing the hell out of electric cars, they may as well chip in to solve this problem as well. It’s not difficult: They can hire half the newly-unemployed auto workers to dig ditches, and the other half to fill them in again. It’s shovel-ready!
The adoption rate for these EV will be slow and probably gradual that the unemployment problems isn’t going to be bad. It’s just a shifting in the industry like any other disruptive technologies (such as the internet). It’ll just shift people’s field and stuff and create more jobs anyway. The synergy with EV and batteries advancement would help in other area such as smart phone lasting longer than a day or two and would enable more jobs. The benefits will out weigh the con. It’s silly to stay with old technologies and not advance or try new things.
EV is going to be the future it just depend on when. Oil is a limited resource. We can’t just buy cheap crap made in China while expecting them to not rise in oil consumption.
It’s like passing Medicare Plan D, having two wars, while passing the largest tax cut ever. Best plan ever.