‘Can California Cars Save the Climate?’ ‘There’s not a single automaker that makes money on an electric car’
Co-published by Fast Company
Eric Noble works in the automobile industry, but that doesn’t mean he doesn’t worry about climate change. When he and his two sons, 11 and 15 years old, travel south to surf on Baja’s Pacific Coast a few times a year, they can detect the impact greenhouse gases are having on the earth. “We can see the sea level rising,” he says. “Little coastal roads we used to be able to drive on are inundated now. This is happening.” He understands that transportation is responsible for more than a quarter of the greenhouse gases that linger in our atmosphere, and light-duty vehicles—passenger cars, mostly—emit close to two-thirds of that pollution.
And so Noble, who is president of the Orange County, California-based automotive consulting firm CarLab, also worries whether California’s strict zero-emissions vehicle strategy, which forces automakers to market exhaust-free hydrogen-fueled and battery-powered vehicles in the state, is really the most consumer-friendly, egalitarian way to go. Not just in California and the nine states that have followed its lead on emissions standards, but throughout the nation.
California is moving rapidly toward low-carbon electricity generation. But even with a cleaner grid, or solar charging stations in home garages, it’s not enough for car makers to sell a handful of clean cars to do-gooder early adopters. People have to buy them in sufficient numbers to make a difference. Even with substantial perks for drivers—a $7,500 federal tax credit for a pure electric vehicle, carpool lane privileges, the quiet power of an electric motor—manufacturers still lease their cars cheap, and at a loss.
“There’s not a single automaker that makes money on an electric car,” Noble says. Tesla, with its rising stock shares and fame, turned a slim profit in the third quarter of 2016, but likely because of $139 million in ZEV credits it sold to less-green manufacturers. General Motors expects to lose money on every unit it sells of its new Chevrolet Bolt, the all-electric car pitched as an answer to “range anxiety,” because, if you’re careful not to drive it too hard, it can last for 238 miles on a charge.