⚡ Watts Up! with EV prices?

An EV could save you money in the long run, but during the "Cozzie lives" forking out for a car with a higher sticker price than the equivalent petrol version, which you may have no means to charge at home, is a hard pill to swallow.

Many factors exist, but I can't discuss economics without straying into politics. This is a divisive topic so I will highlight the issues as I see them, and people can correct me 😂.

The cost of fuel/energy for you as a consumer is not directly linked to the cost of producing and delivering it. There is multi-country price fixing (Opec+), massive subsidies paid out to fossil fuel and renewable energy companies, and a lot of lobbying.

Last year, the big five oil and gas companies spent in excess of $300M lobbying just in the USA & EU. That is two and a half times Greggs's annual net income (other bakers are available 🥐). Imagine how much money a company stands to make if the operational cost for acquiring favourable legislative conditions is in the 10s-100s of millions!

Some forms of energy do have tight margins. For example, in the UK, at the petrol forecourt, the fuel provider typically takes single-digit percentages of the price you pay at the pump ⛽. Most of the rest comes from taxes and the cut the individual petrol station takes. Natural gas is another one. It is vital for keeping the lights on and potentially falsely considered one of the cleaner fossil fuels (that's another story), but the margins are not that high. This is part of the reason that the energy companies raised their prices so high in response to the conflict in Ukraine. They struggled on the natural gas front but made record profits in other divisions of the business. They operate a “heads they win, tails you lose” business model, so even if the market dips, they know the consumer/taxpayer will bail them out.

For me, the true cost is in the loss of life and the destruction of the environment 🌍. These externalised costs are not typically paid by the energy provider but by society.

According to the World Health Organization 🌐, air pollution leads to 6.7 million premature deaths annually. To put that into perspective, that is just shy of the total number of global deaths from COVID-19. And that is not climate change; that’s just air pollution. Climate refugees are already a reality, but immigration is still considered a significant economic factor by a fair percentage of the population.

It is well known that batteries are not squeaky clean and are linked to horrific practices like child slave labour. However, the battery industry is seeing significantly tighter regulations coming into force, meaning they are becoming more ethical and sustainable ♻. Even if they are far from perfect, the science is clear that they result in fewer overall lifetime emissions than an internal combustion engine.

So I ask you this: What is the actual cost of a battery or a tank of petrol? And who should shoulder these costs?