Electric Cars Will Create Many “Losers”, But Consumers Win Big

3 months ago by Steven Loveday 29

Electric Cars

2018 Nissan LEAF charging

We could have told you already that Big Oil, the traditional dealership model, after-sales service, suppliers, lenders, and others will take a hit when electric cars dominate, but now it’s about to become a mainstream mentality.

It’s probably safe to say that there’s been no doubt that if electric cars become mainstream, it will mean dire consequences for the current automotive industry as we know it. In the EV world, we use the word “disrupt” often. While this may look like a negative disruption to many in the industry, it will be a positive disruption at the other end of the rainbow.

Electric Cars

Chevrolet Bolt charging up

Now that the if part of electric vehicle adoption will inevitably disappear, industry experts, investors, and even oil companies are taking notice and telling us what we already knew. Though there have been many tipping points as of late, which will eventually lead to EV market saturation, this year’s Frankfort Motor Show (IAA) seems to have sealed the deal for most.

JP Morgan believes that as electric cars begin to become the norm, there will be a lot of “losers”. After the firm’s recent note stating that we will see electric cars reaching price parity with ICE vehicles by 2025 and one billion EVs on the road by 2050, the researchers provided a new note. Some highlights from the note include (via CNBC):

“Concerns about scrap values of ICVs may drive consumers towards EVs even before the price differential between the two classes of vehicles closes.

EVs are relatively simpler to plan and build.

EVs have 20 moving parts compared to as many as 2,000 in an ICV, dramatically reducing service costs and increasing the longevity of the vehicle.

We see this as a meaningful risk for car dealers who rely on after-sales service for a large chunk of their profitability. This should over time reduce the number of vehicles sold as well, in addition to other potential trends, such as automated driving and greater car utilization rates.

A typical EV uses two to three times the dollar value of semiconductor constituents, compared to an ICV.”

JP Morgan also went so far as to say that operating an electric car could cost only 10 percent of that of an ICE car. Is there any good news here aside from the fact that we are moving toward a more green-friendly and sustainable product? The firm says that if you’re the customer, this is nothing but good news. Although there will be a wealth of losers (at least initially), consumers will be winners, taking advantage of cleaner vehicles, lower prices, less maintenance, longer ownership, etc. Isn’t this the way it SHOULD work?

Source: CNBC

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29 responses to "Electric Cars Will Create Many “Losers”, But Consumers Win Big"

  1. Get Real says:

    Correct, and the biggest losers in the short term are all the fools/shills/haters, etc shorting Tesla.

    Meanwhile EVs and Solar is disrupting some of the most entrenched (and regressive in some cases) industries in the world: Big Oil, Big Auto, Electrical Utilities.

    These rent seekers will have to troll elsewhere when people make the switch.

    1. Yb says:

      And oil producers such as Arab States whose only income is Oil and gas

  2. Will says:

    Millions of millions will lose their jobs then. Got it

    1. Dr. Miguelito Loveless says:

      Millions will have to adapt, or lose their jobs. I really don’t know what will happen to the folks who can’t adapt since, as a society, we have a visceral hatred of the unemployed and view them as parasites.

    2. paul smith says:

      Or even thousands of billions. All industries are automating, not just cars. It’s the new reality and will push governments to institute a Basic Guaranteed Income….except maybe the U.S.

      1. Scott says:

        To keep society from collapsing we will have to give everyone social security. It will be just enough to scrape by on. Every last bit will have to be spent, and thus keep the economy afloat.

  3. Kevin Z says:

    Not all consumers will win. Many good paying jobs will be lost. Think of all the jobs that the “2000 moving parts” supports. And if companies follow Chevy’s suit, even the jobs that are left like battery and electric motor building will go overseas. There is no reason why US companies can’t find ways to not only build a competitive product, but a superior one also.

    1. Dr. Miguelito Loveless says:

      The reason they “can’t” is they “won’t”. Far easier to outsource than lose precious profit building here.

  4. Get Real says:

    You mean just like the buggy whip makers from before?

    “Millions and millions” are a gross overestimation but by all means keep trolling.

    Instead of working for the utility, they will switch to solar jobs among other things or instead of working for your employer in the oil industry they will work for a wind turbine company for example.

    1. JeremyK says:

      Will is actually correct. Millions and millions of people ARE employed in support of the ICE-based auto industry. Obviously, not all of these are tied to engines and transmissions and for the ones that are, a handful of these suppliers will still be needed if/when EVs become the future.

      If the transition to EVs is allowed to migrate naturally then I think it will be manageable for the economy. If we were to impose mandates, like China, you’d see a lot of auto suppliers fold overnight and unemployment in the Midwest would go from 4% to double digits really quickly.

      I’m 100% behind EVs. Just pointing out that the transition will uncomfortable for some and downright painful for others.

      https://autoalliance.org/economy/

    2. Rad says:

      A lot of jobs will still be there. An EV will still need a frame, chasis, hood, doors, tires, wheels, shocks, dash seats … all parts of an ICE. Engine and drive train will be different, but much will carry over.

  5. Kosh says:

    My uncle just “retired” after 30 years as a dealer service manager… to take some time off and find a new career. Partly because he was just fed up with the job, but (and I finally got him to admit this after years of needling him)… he sees the writing on the wall…..

  6. Bacardi says:

    Once fully autonomous happens, the country will slowly turn to exclusively to ride sharing and will rarely care what kind of car they show up in to work in…

  7. Dr. Miguelito Loveless says:

    I keep seeing a varying number (8-20) for the number of “moving parts” in an EV drive train. So what is the number and what are the parts?

    1. Doggydogworld says:

      It depends on the design. In the motor itself there’s a rotor and a few bearings that move. There’s a reduction gear or two, a differential with gears and axles of some type. If the motor is liquid cooled you have a pump and some valves.

      The battery has high voltage contactors which move and may also be liquid cooled.

  8. mxs says:

    I wonder whether the websites, like this one, realize the meaning of the headline? Sure, you have a couple of decades to go, but at some point, writing about EV’s will be like talking about smartphones ….

  9. Bacardi says:

    Another entity that’s commonly mentioned in terms of electrification are heating…Right now electric heating isn’t the most efficient…If innovations and breakthroughs happen for electric heating for electric cars that could disrupt the entire heating oil companies…

    1. paul smith says:

      Those innovations are here. With a proper passive house design air to air heating and cooling negates fossil fuels.

    2. Scott says:

      The heat pump in my 2013 leaf seems to work pretty efficiently.

      1. JeremyK says:

        But does it work to -40F? I know GM designs and tests its vehicles to work at those temps. A lot of Asian manufacturers don’t test at the extremes for corrosion or temperature. They’ve gotten better, but do you remember when cars from Japan used to rust out in 2 years?

  10. Pushmi-Pullyu says:

    Every disruptive tech revolution creates “winners” and “losers” in the market. The EV revolution will create more than most, because both auto manufacturing and Big Oil are such a big part of the economies of the leading industrialized nations.

    I certainly won’t shed any tears at Big Oil losing business! But heck, the smart oil companies are already diversifying and investing in renewable energy, so there’s really no reason for even their investors to worry about their future.

    The oil drillers… well, as I said, every disruptive tech revolution has winners and losers. The EV revolution in concert with the clean energy revolution will eventually put most of the oil drillers out of a job, thank goodness!

    * * * * *

    The article quotes:

    EVs have 20 moving parts compared to as many as 2,000 in an ICV…

    I find it both surprising and disappointing that the writer of this InsideEVs article would repeat this very, very bad meme. It’s not the first time this absurd assertion has been quoted in an InsideEVs article. Heck, the power windows alone in an EV, taken together, probably have more than 20 moving parts!

    An ICEngine has around 200-300 moving parts. So it’s reasonable to believe that gasmobiles have a bit over 200-300 more moving parts than a pure electric car. The idea that a typical gasmobile has thousands of moving parts, or that the sort of EVs covered at this website have only 20… well, both of those assertions are pretty clueless.

    An EV with only 20 moving parts? Well, maybe a Segway. Heck, even an e-bike has more than 20 moving parts. The bicycle chain alone has well over a hundred!

    1. ModernMarvelFan says:

      “The idea that a typical gasmobile has thousands of moving parts, or that the sort of EVs covered at this website have only 20… well, both of those assertions are pretty clueless.”

      I agree that is a bit exaggeration. But what most people MISS is the transmission part.

      A typical 6speed or higher automatic transmission can easily have 900 parts or more with 3 to 4 sets of planetary gearset.
      Not to mention countless of clutches, valves and sensors. A typical single ratio EV gear box have about a dozen parts. That is almost 2 magnitude less in parts.

      That alone makes up a huge difference in simplicity.

      Hybrid power train is slightly more complex but still way simpler due to the fact that only a single planetary gear set is used. Prius Synergy or Voltec or Honda’s new system are extremely simple as well. The entire “rumor” that hybrid is somehow more complex than ICE cars are results of oil shrills to bash “green” cars when hybrid just came out.

      If anyone has opened up a typical automatic transmission, they will be shocked to see how many parts and how complex it is. That is why often it even takes more R&D funding to design a new transmission than a new Engine for many of the automakers.

      EVs are just simpler overall. (Although the high powered motor drivers/power electronic aren’t cheap).

      1. Pushmi-Pullyu says:

        Okay, fair cop, I did forget to count the transmission.

        And just now, MMF, reading online a bit about how complex an automatic transmission is… I understand your repeated insistence that a normal automobile transmission is more complex than a Voltec drivetrain.

        900 moving parts? That’s mind-boggling!

        I realize that most modern cars use automatic transmissions, but I learned to drive using a stick shift, and that’s what I’m most familiar with, so a “standard” transmission is what I think of when someone says “automobile transmission”.

        I guess I’m just a dinosaur. 🙂

        1. ModernMarvelFan says:

          “And just now, MMF, reading online a bit about how complex an automatic transmission is… I understand your repeated insistence that a normal automobile transmission is more complex than a Voltec drivetrain.”

          Thank you! Finally. We can move on now…

          This entire claim that somehow a “hybrid is more complex than a typical gas car” is entirely fabricated by gas heads to bash green technology.

          Prius synergy like hybrid configuration (similar to Voltec) is extremely simple and elegant in their own way.

          Even stick shift has about the same parts as a typical Voltec/synergy.

          The only transmission that are on the same scale of simplicity is CVT. It is also extremely cheap to make as well as small/light/compact. But it always will have some reliability concerns.

        2. ModernMarvelFan says:

          “900 moving parts? That’s mind-boggling!”

          Oh, 900 parts, not all moving parts. But I would say at least 500 to 600 of them are moving parts. Those new 9 speed and 10 speeds transmission aren’t any better.

  11. ModernMarvelFan says:

    It just means that all those “free work place” charging will become the next “rage” to fight over as EVs become more popular.

    Kiss those “freebies” good byes.

    I think that is a good thing.

  12. BillT says:

    I guess I don’t buy this statement at all: “EVs have 20 moving parts compared to as many as 2,000 in an ICV, dramatically reducing service costs and increasing the longevity of the vehicle”
    That is only true of the power train and at any rate most modern ICV power trains are pretty reliable for 200K plus miles. There are lots of other expensive “moving parts” on cars that are independent of the power train, likely to fail before a typical ICV power train:
    1) Suspensions, CV joints etc.
    2) Power seat and window motors.
    3) HVAC compressors
    I keep my cars at least 10 years and the last time I had powertrain related repairs was on our 92 Explorer which had far more than that in non-power train repairs.
    With the exception of oil change and transmission shops I think most repair shops (including those in dealerships) will fare just fine with EVs. Autonomous cars are a much bigger threat. I am sure Uber would maintain and repair its own fleet of autonomous cars.

  13. Breezy says:

    “I guess I don’t buy this statement at all: “EVs have 20 moving parts compared to as many as 2,000 in an ICV, dramatically reducing service costs and increasing the longevity of the vehicle””
    This is one of those things that nobody ever bothers to question. There aren’t really that many more moving parts in an ICEV powertrain compared to a EV.

  14. Rhaman68 says:

    I think of all of the business that made sails for ships that had to change when steam took over. So, steam engine business got created. Horses went out of style with cars. Transitions are difficult. How many shopping malls are closed and closing because of the Internet?

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