The electric revolution

Electric cars have been in the news headlines in the last couple weeks.  The story that Sir Clive Sinclair – the inventor of the ZX Spectrum computer and the C5 electric vehicle (pictured) – had died probably got more coverage in the UK than elsewhere.  However, it is worth noting that it is only 35 years since this lead-acid battery, pedal-assisted, tricycle was launched as a ground-breaking urban mobility vehicle, which in car terms is only around four or five model cycles.  It took a bit less than 25 years to get to the launch of pioneering BEVs as we would recognise them today – the Tesla Roadster, Mitsubishi i-MIEV, Nissan Leaf, but little over a decade to the position now where we are looking at an all-electric future, with almost every brand now offering pure BEVs.

The responses to that prospect range from horrified (diehard petrolheads) through pragmatic (most traditional OEMs) to frothy excitement (some investors).  Other headlines this week reflect that range.  The Ford F-Series pick-up truck – reputedly the most profitable vehicle line in history – is to get an electric makeover with a US$7 billion investment by Ford, despite the fact that BEV sales in the US lag far behind China and Europe at only 2% of total registrations in 2020 (most of which were Teslas sold in California).  Daimler announced a partnership with Stellantis and Total to build battery-producing gigafactories with a total planned investment of a similar scale to that announced by Ford of €7 billion.

Meanwhile, Nikola – a US start-up that almost failed when its founder was caught out faking product videos and has been charged with misleading investors – revealed its first electric truck with the message “It’s real, I promise”.  Despite the chequered history, the company still has a market capitalisation of US$4.8bn, roughly a tenth that of Ford that has over a century of history and sold over 4 million vehicles globally last year.  Also at the frothy end of the scale sits Polestar – an otherwise solid newcomer to the market, spun out of Volvo – but which announced yesterday that it will go public at a valuation of US$20 billion.  This uses the same ‘SPAC’ approach that was adopted by used car start-up Cazoo in their US$7 billion listing a month ago.  The Polestar listing is despite their own CEO, Thomas Ingenlath, saying in April that “It frankly amazes me that there are companies out there that are worth billions of dollars and have never made a car.  I would like to today state clearly that the electric mobility revolution needs to be grounded in reality, not dreams.”

Ingelnath may find, like Andy Palmer at Aston Martin, that having an inflated valuation at IPO becomes a millstone round his neck rather than a measure of success, but he is right to focus on the need for a more realistic perspective.  A successful transition to electric propulsion will be made by major investments like those of Daimler and Ford, more development of battery technologies and hydrogen fuel cells and a measured approach by governments to tapering out incentives and transitioning vehicle taxation to reflect a non-fossil fuel future.  There are many smaller companies with leading edge expertise in particular areas, and many will not secure the investment they need and deserve.

This goldrush mentality to looking for quick wins, whilst overlooking more soundly-based opportunities, and the erratic approach of governments to steering the developments in a supportive way, is perhaps just the inevitable consequence of a change that brings developers, speculators and regulators together, each with very different agendas, and answerable to equally different backers.  However, as we approach the COP26 summit in a few weeks’ time with indications that it will fail to win the backing needed for real action on climate change, it would be good to see a more science-led approach to ensuring that as a society we can continue to deliver the personal mobility that has enriched our lives in some way over the last century.  Sticking our heads in the sand or searching for short term trading profits should not be acceptable options.