Guest Post: "The All-in Sustaining Costs of Electric Vehicles", by metallionaire

I'm going to be unavailable for most of the morning so I thought it would be a great time to share with you this fantastic "guest post" from one of your valued site members.

Many of you may recognize this comment/post from the Dave Collum thread two weeks ago. However and as we all know, sometimes great posts can get washed down the page and missed. As such, here's a second chance to check it out.

I'll try to stop by this thread's comments section from time to time this morning to add thoughts on the intraday PM action as well as other news. In the meantime, please enjoy something a little different from the same old, same old PM commentary.

Thanks to metallionaire for this great work!



"The All-in Sustaining Costs of Electric Vehicles", by metallionaire

Governments tell us, relentlessly, that EVs are beneficial and their widespread use will be a major factor in alleviating the pending climate crisis (assuming there is one). This initiative is so vital, we are told, that governments have mandated ever-increasing production levels in the years ahead - the stated goal being to replace all internal combustion engine (ICE) vehicle production within the next decade or so. While it may seem, at first glance, to be a good idea, there are many issues and secondary-level considerations that are being conveniently omitted from the discussion.

If EVs are so superior to ICE vehicles, I ask myself, why do governments feel it necessary to mandate their increasing production and adoption? Governments only seem to mandate things which people would otherwise avoid (think vaccines?). No one mandated the adoption of the internet, smart phones, or flat-screen TV’s. The advantages they offered were so obvious that people lined up voluntarily to buy them and they quickly gained widespread adoption. If EVs are such a great invention, then, surely, the public would enthusiastically adopt them without massive government subsidies and coercive policies?

Let us begin our investigation by examining the broader lithium market, which is an essential linchpin of EV production. As it turns out, more than half of the current lithium reserves used in the batteries of EVs comes from the salt flats of Bolivia, Chile and Argentina. Most of these reserves are located in the salt brine ponds of the Atacama Desert and similar geological locations in South America. As luck would have it, the Atacama Desert is the location where several indigenous tribes have lived for countless generations and also happens to be one of the driest places on Earth. Ironically, lithium is mined by a process of pumping salty lithium-containing water into ponds and using evaporation to extract the lithium. As a result, the local water resources, as scarce as they already were, are being repurposed and contaminated to extract the lithium we use for EV’s in the name of saving the planet. How ironic! I read recently, but can no longer find the link to the article, that suggested they are attempting to get an exemption to mine Lithium in a world-recognized biodiversity zone of Chile. Apparently, we have to kill the planet to save it.

The estimated known reserves of lithium vary from one analyst to another but it is generally believed to be in the order of 17 to 22 million tonnes. A Tesla Model 3 uses about 65 kilograms of lithium so, if all known reserves are allocated exclusively toward building such vehicles, there is enough mineral to make about 250-320 million cars. The International Energy Agency states that to meet a net zero scenario by 2050, at least 300 million vehicles will be needed by 2030! In other words, if the entire known lithium reserves are mined and utilized, we barely have enough to get to 2030 production expectations. To continue manufacturing beyond that date, we will need to find and extract massive new reserves that are still unknown, assuming they even exist. It is noteworthy that EV batteries also consume large quantities of cobalt and nickel and massive reserves will need to be located for those elements as well. All in all, it requires an incredible 500,000 lbs of the Earth’s crust to be dug out and processed to make the battery pack for just one EV.

If we cast a wider net, lithium-ion batteries are also used in a wide array of consumer products including portable tools, lawn care equipment and other appliances and some reserves must be allocated to these, as well. Further, it is estimated that 98% of the batteries used in these devices end up in landfills, posing a huge safety and environmental risk. When exposed to the elements over time, these batteries can leak dangerous contaminants, including chemicals we have not mentioned, and pose a significant risk of underground fires that burn with intense heat that cannot be extinguished by normal methods. Often these burn in underground cavities in landfills for weeks or months, causing dangerous hollows in the landfill while leaching untold carcinogens and toxic chemicals into the atmosphere and underground aquifers. German officials have reported that 90% of the fires that occurred at their landfill sites in 2020 were the result of defective lithium-ion batteries.

Even before lithium-based batteries reach the landfill or recycling plant, they pose significant environmental risks. If they are damaged, they can release microscopically-fine particles that contain arsenic, cadmium, cobalt and other contaminants – all of which pose serious health issues such as heart and lung disease, heightened cancer risk and hormonal imbalances. Used Lithium batteries can also emit hydrofluoric acid (HF) that is dangerous if it comes into contact with skin or inhaled as it will penetrate deep into body tissues causing severe toxic effects. According to the sources I found, a single EV battery can emit from 20mg to 200mg of HF per wattage capacity of the battery pack. This level easily exceeds the limits imposed by the US National Institute of Occupational Safety and Health.

Batteries also have a finite lifespan and lose about 5% of their capacity each year. A five year old battery may require 25-30% more time to charge than a new battery and batteries typically have to be replaced in about ten years or 200,000 miles. I just read of a case where a man bought a used EV with a battery warranty that expired at 160,00km but, soon after, when his vehicle hit 172,000 km the battery failed. He was quoted $50,000 to replace it and opted, instead, to scrap the car. Used batteries are available for a fraction of that price but one has to wonder about their efficiency and safety? It is worth noting that EV batteries are not one contained package as they are for gas powered vehicles. EV’s have many batteries that are packed into cavities of the vehicle and then linked electronically to act as one power source. Quarter panels, seat cavities, dashboards and almost every other hollow space in the vehicle may contain battery packs and just like Christmas lights, if one fails, the entire string fails! I have joked with friends that there will never be a classic car club for EVs. The cost and complexity to keep them maintained and operational will be so prohibitive that none will be saved beyond a couple of decades at the outside.

Delving further, we find that manufacturers stipulate that charging a battery to 100% regularly can degrade the battery and they recommend that batteries normally be charged only to 80% capacity. They further recommend that it is unwise to let a battery drop below 20% of its charging capacity. In other words, manufacturers suggest that the actual charge available for travel is 60% of the battery potential. They call it the 80-20 battery rule. If that is not enough, manufacturers advise when temperatures reach the high 80s (F), that driving range and battery damage become an issue. Range decreases an average of 5% at 90 degrees and 31% at 100 degrees. Imagine getting stuck in an Arizona desert when its 100 degrees outside! On the other end of the scale, recent arctic air revealed that many EV’s will not uptake any charge when temperatures are too low. There were accounts of people trying for 48 hours to charge their vehicles to no avail. One newspaper recounted the story of a fellow who had to rent a car to get to work as his EV would not charge. As a last comment, manufactures suggest it may be dangerous to charge a vehicle outdoors during a thunderstorm!

Utilizing climate control is a major factor in determining range. Air conditioning will reduce range by an average of 17%. Translated differently, operating the AC will reduce range by about 7 miles per hour of usage and about 5 miles per hour to operate the heater. So, driving across that Arizona desert, you are not only losing range due to outside temperatures but making it worse by having the indecency of trying to stay cool.

While we’re on the subject of batteries, let’s consider their manufacture. According to Rebel News, the Northvolt electric battery plant, a facility the size of 318 football fields in Quebec, is currently under review by the Dept of Fisheries and Oceans due to its “potential for the destruction of wetlands and fish habitat". This risk likely extends to all similar facilities around the world.

If your vehicle fails and you get towed or pushed, there is a further risk. If one set of tires remains on the road and spins while being moved, they continuously generate power that is transmitted to the battery. If that power is not used it can damage the motor and the battery and, in excessive cases, may pose a fire risk. Most EVs are also not designed to tow a trailer of any type unless they are specifically manufactured with this in mind. Stories abound of EV truck owners who have attempted to pull relatively heavy loads and found their range collapses prohibitively. Some accounts suggest range dropped to double digits, measured in km and then required many hours to recharge.

One of the factors that I do not see being discussed anywhere is the lost opportunity cost. In any business, employers are always aware of lost opportunity cost. When an employee is off sick or a machine fails or an order fails to arrive, there is a net cost to productivity and that translates to the bottom line. When individuals re-organize their lives around the charging routines of their vehicles, it means they are not interacting with the community or buying things or going for lunch on a spontaneous whim. This has a net negative impact on the economy as people are denied the spontaneity of going where they want, when they want.

EV’s are heavier than regular vehicles. For example a gas-powered Hummer weighs 6000lbs. The comparable EV Hummer weighs 9000lbs, with a battery pack that weighs a hefty 2900lbs according to the Kelley Blue Book. This has all sorts of secondary implications. The National Bureau for Auto Safety, for example, concluded that “baseline fatality” from being hit in a crash increases 47% for each additional 1000lbs of vehicle weight. Structurally speaking, highways, bridges and parking garages have all been engineered for the average weight of ICE vehicles. A parking garage in New York City collapsed recently due to the excess weight of EVs being parked there. City officials are now pondering the idea of closing off a significant percentage of the parking spaces to ensure safety. Where are all those extra vehicles going to park? Bridges and roadways are also deteriorating faster than predicted due to the greater weight and the higher torque generated by EVs. Higher torque translates into vehicles skidding while accelerating. This is detrimental to the life of the tire but also to the life of the pavement. Road crews will be called upon to resurface roadways more often.

Insurance will become a major cost factor as repair costs for EVs can be exponentially greater than for a comparable combustion engine vehicle. Since the battery packs fill most cavities within the walls of the vehicle, a simple fender-bender can damage one of the battery packs and this can lead to catastrophic outcomes. Some vehicle owners have been confronted with $40,000 repair bills to fix a simple, dented fender. Many times the damage is not even visible but if a battery pack is impacted it can alter the current flow, leading to heat gain and potential fire or explosive outcomes. Lithium fires are terrible and cannot be extinguished with water. These are combustible chemical fires and burn much hotter than regular fires and emit all sorts of lethal chemicals. Many times fire departments simply contain the fire and let it burn out, often leading to major road repairs. As adoption levels increase, there are more and more stories about homes and apartment buildings going up in flames due to spontaneous combustion of EVs or E-bikes being stored in garages or underground parking areas. All of this has to be accounted for when determining the true cost of owning and operating EVs. In New York City last year, E-bikes alone caused 267 fires resulting in 18 deaths and 150 injuries, plus untold property damage. How many fires and deaths is that nationally?

When EVs die they become a major public safety issue. The batteries emit toxic chemicals as they age and, as stated, they pose increasing fire risks. They cannot be allowed to rot in someone’s drive or empty farmer’s field. They have to be disposed of by specialized companies that have highly trained staff and sophisticated equipment. The old days of crushing a vehicle are over as EVs have to be meticulously dismantled and recycled one piece at a time. This will become a major cost attached to ownership of an EV and will surely be regulated and mandated before long.

Another important variable to consider is the time and cost to charge a typical battery. There are several types of chargers, depending upon the energy source available to you. According to the US Dept of Transportation, Level 1 chargers are relatively inexpensive and will plug into a normal 110v outlet but may require 40 to 50 hours, or more, to charge a battery to 80% capacity. A Level 2 charger which draws 240v, has a projected lifespan of 5 to 10 years and will cost $3,000 to $10,000 and also may require an upgrade or replacement to the home electrical panel. A Level 2 charger will typically take 4 to 10 hours to charge a battery to 80% capacity. Finally, commercial chargers tap directly into the grid and draw 600v. These may cost anywhere from $75,000 to $200,000 but will charge a battery to 80% capacity in 40 to 60 minutes. To increase the charge from 80% to 100% using any of these systems, double all of the times noted.

Luke Gromen recently offered a very interesting statistic. The large transformers that deliver electricity to our cities are designed to run hot during the daytime and then cool during the night when usage drops. When a proper balance of heating and cooling is maintained, the lifespan of these large and very costly transformers is about 30 years but, with EV owners now tapping into the grid overnight to charge their vehicles, these large transformers never get to cool down properly. He states this could reduce lifespan to as little as THREE YEARS!

Lastly, I worry about those occasions when mass evacuation orders are given due to incoming hurricanes and other weather events. I can visualize a million EVs exiting Florida and all of them stuck in Jacksonville awaiting a charge. Who will rescue them from their own fate? If that is not scary enough, consider that EVs left knee-deep in water quickly become health hazards and can spontaneously ignite. Recycling and replacing a million vehicles, rendered unusable by hurricane damage, would become a national catastrophe.

And, finally, I found a website that offered ideas for apartment dwellers who want to buy a EV and wonder about charging, The article offered 5 ideas…charge your car while at work, use public chargers near you, plug into a wall outlet, ask your landlord to cover the cost of installing a charger and, lastly, move to another apartment that will accommodate you – not very encouraging, I would say!

All in all, I think EVs are an ill-fated venture and another example of the magical thinking that has infected our governments of late. Their fantasies of a better world trump their better judgement.

I yearn to return to 1963 when cars were flashy, fast, reliable, stylish and easy to repair. They could travel all day on the interstate. They could pull a house trailer. They could carry a family in comfort. They had most of the modern amenities and can easily be retrofitted for modern stereos, GPS systems and so forth - and the parts remain available to this day to replace and repair almost any aspect of those cars and keep them roadworthy.

About the Author

tfmetalsreport [at] gmail [dot] com ()

Subscribe or login to read all comments.

Support TFMR

Donate Buy Silver

Access Subscriber Benefits

Listen to TFMR on the go in your favorite podcast app, and join our member-only forum discussions!

Key Economic Events Week of 2/26

2/26 10:00 ET New home sales
2/27 8:30 ET Durable Goods
2/27 9:00 ET Case-Shiller home prices
2/27 10:00 ET Consumer Confidence
2/28 8:30 ET Q4 GDP 2nd guess
2/28 12:00 ET Goon Bostic
2/29 8:30 ET PCE and Core PCE
2/29 9:45 ET Chicago PMI
2/29 10:00 ET Pending home sales
2/29 10:50 ET Goon Bostic again
2/29 11:00 ET Goon Ghoulsbee
2/29 1:15 ET Goon Mester
3/1 9:45 ET S&P Manu PMI
3/1 10:00 ET ISM Manu PMI
3/1 10:00 ET Construction spending
3/1 10:15 ET Goon Logan
3/1 10:15 Goon Waller
3/1 12:15 ET Goon Bostic AGAIN
3/1 1:30 ET Goon Daly

Forum Discussion