INVESTING ON ELECTRIC VEHICLE IS IT THE RIGHT CHOICE?
In the year 2024 electric vehicle (EV) revolution is knocking on the doors of the auto industry but the real question is zero carbon emission by 2030 at what environmental and economic cost? EV is being portrait as a cleaner, greener alternative to the fuel combustion engines. In most of the countries governments to combat the climate change are pushing car manufacturers into manufacturing EV vehicles. Automakers are focusing their energies in the manufacturing of EVs not because of environmental costs but to make more profits.
The actual question is are the electric vehicles truly the sustainable solution we have been led to believe? There is a famous precaution taught in the Investment management is not to invest on technology as it is always evolving. There is a huge segment of car owners who are certain that EV is a scam marketed by a few to fool the new generation.
The most important component of any EV is its battery in most cases it is lithium-ion battery, known for high energy density and long span. The manufacturing of such battery has a significant environmental costs such are lithium, cobalt and nickel that has a devastating effects on local ecosystems and communities. Unfortunately cobalt mined in Democratic Republic of Congo miners are exposed to inhumane working conditions, hazardous environmental effects and in the greed to make money in some conditions child labor is also involved.
There is a study that suggests that the production of a single EV has CO2 emissions more than the conventional car manufacturing. So one thing is certain the car manufacturers are not educating the end users nor they discuss the inefficiencies in manufacturing of EVs. Another aspect which is over looked is that all the EVs have a significant amount of more rubber and plastic products to ensure vehicle has a reduced weight both of these materials have a larger carbon foot print.
Meanwhile in Pakistan no one is discussing that even if 10% of the vehicles shift to EV the load on national grid is going to increase leading towards electricity generation from the furnace oil and coal powered power plants. Furthermore the technology is limited to few countries and hence reliance of imported parts is going to increase the import bill resulting in inflation and increase in taxes.
There is a huge challenge that the EV manufacturers are not highlighting towards disposal and recycling of battery, There is going to be a huge dumping cost and third world countries such as Pakistan are ideal for countries in the west to become final landing place of such batteries. This shall further put pressure on the health services as greater number of population shall be exposed to the environmental hazards.
The transition to EVs is dependent on a steady supply of rare earth raw materials, particularly lithium, cobalt, and nickel. However, these materials are limited and their extraction is a highly energy-intensive process. There are growing concerns about whether the world’s supply of these minerals can keep up with the ever-increasing demand for EV batteries.
One thing that EV users must know that because of the newer technology only the car dealerships are going to be the only point of service. The cost of service, repairs and maintenance shall be a lot and in most of the cases there is going to be manufacturers and dealership monopoly. Countries such as Pakistan where vehicles used to be sold on premium shall eventually become a playground for investors to make profits as in reality the high value replacement products and services shall be available with very few.
Vehicle is form of an investment for middle class and lower middle class of Pakistan. Just imagine battery malfunction or EV catching fire because of weather conditions with no insurance claim!
One of the basic problems we are not seeking an answer is EV going to solve our traffic problems and the answer is NO! more the EVs on road means greater number of smart traffic jams. I specifically used the term ‘smart traffic jams’ is that in future to come once the vehicle run out of power it shall cause traffic congestion at a far larger scale and just like a domino effect more vehicles shall run out of power eventually the whole traffic management system shall see a collapse.
Electric vehicles are often presented as the solution to our transportation and climate challenges, they are not a perfect fix. There is a need to explore improving efficiency of transport systems. A simple question we all need to ask ourselves is ‘Pakistan Auto Industry has failed to adopt a 15-20 year old Hybrid technology, so how would they adapt to EV technology overnight?