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If we seriously want to tackle climate change, why are we not building compact electric vehicles in Australia?

Let’s combine two facts and see where that takes us:

Fact 1: Our car manufacturing factories are closing down. Their multi-national owners are falling over themselves to desert our shores. All our car manufacturing workers, engineers, vehicle designers, and component add-on personnel are scrambling about for any sort of new employment or manufacturing opportunity.

Fact 2: On 12 June 2014 Elon Musk, the CEO of the Tesla Motor Company in the US released a media statement. And this is what he had to say:

“Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

The combination of those two facts begs a very obvious question. How come we aren’t building little electric buzz-boxes in our soon to be defunct car factories, and exporting them by the millions to China, India, and to anybody else who wants them?

As an innovation nation (according to our politicians) how come we aren’t scaling down Musk’s technology from his expensive Model S Electric Sedan and fitting it into a much smaller and cheaper Hyundai sized two or four door electric hatch?

But what would happen if we did? Well, our politicians would certainly leap onboard like lemmings and sprout the wondrous job creation opportunities that such a re-tooling of our car manufacturing factories would represent. Unfortunately they’d be dead wrong, and they’d totally miss the point, because hardly any jobs would flow if we innovated ourselves down this path. It is not about jobs, it is about the creation of Sovereign Wealth.

The only way we could export small electric vehicles to Asia from our newly re-tooled factories would be if those factories were almost completely automated. In other words robots would have to build the cars. The vehicles would need to be stamped out like cheap green widgets in order to keep the costs down to about $15,000 per vehicle. A huge economy of scale would need to be the underlying principle.

But would we realistically be able to do any of this?

Well I for one believe that we have many intelligent and innovative people here in Australia. I believe that we have the engineering and manufacturing smarts to scale down Musk’s electric vehicle technology and bang out a small exhaust-less buzz box which would happily sail around Asia’s incredibly crowded and polluted streets by the millions. They could sail around our city streets as well.

Many people will say that if it does not create a huge number of jobs for our populace then it is probably not worth doing. I so disagree with such thinking because a manufacturing challenge like this is about creating sovereign wealth for our nation, it is not about making even more dollars for those who are already awash with the stuff.

I am suggesting that the Government step in, take over or buy the factories before they totally disappear, and manufacture these small electric vehicles under a nationally owned enterprise. I am suggesting that we break with the kind of tradition that saw us woefully blow the sovereign wealth generated by the last two mining booms.

And what are the benefits if we are quick enough to take Musk up on his offer?

  1. Sovereign wealth for our country. The current argument that we can all be re-trained up to rocket-scientist ‘future jobs’ level is just so much facile political hogwash. We will need this sovereign wealth because the nature of work is changing fast, automation and AI are going to put many more of us out of work, and we will soon need some variety of Universal Basic Income which will need to be sourced out of a healthy sovereign wealth fund.
  2. Saving our global environment. Compare the benefits of millions of small non-polluting electric vehicles whizzing about Asia’s mega-cities against the current air/climate killing effects of millions of internal combustion engined vehicles whizzing about the same streets. Instead of just talking hot air about the need to do something about climate change – we could actually do something. Australia could actually do something on a grand scale.

I see this Musk (Tesla) offered opportunity as beyond political. At best I would like to see our politicians from all sides pull solidly behind this idea, and at worst, I would like them to at least not get in the road of it. Perhaps South Australia would be a tad interested in the venture?

And … as we all know … opportunity only ever knocks once!

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  1. Shevill Mathers

    It is my understanding that Holden (Australia) did design and build an affordable family electric car some years ago, which is now being manufactured in Detroit USA.

  2. Keitha Granville

    This government is too busy divesting itself of any money making business, instead handing them over to private companies (ie their friends and backers) so they get to make all the money. And Climate Change ? Don’t be silly, that’s not real, pretty sure TA told us that, and Mal isn’t quite sure about it any more either. Now that they take votes from the loonies in the Senate we have to give them some leeway here, after all Malcolm Roberts definitely knows there’s no proof, no evidence.
    Maybe it’s because he has the same name as the PM? Maybe Malcolms stick together

  3. Klaus Petrat

    And where do you think this sovereign wealth ends up? Great for the environment, I agree. Certainly capable of spawning battery technology on the way. Other, supporting technologies would also contribute to jobs.

    But here is what actually will happen.

    1) Australia will need to source the robots from overseas. Massive upfront investment.
    2) Australia needs to compete on wages. Not sure this is possible in this high priced country without seriously hurting the few workers on the job.
    3) Australia would need to build electric charge stations around the country. Massive investments and jobs, but some investor has to front up the money.
    4) Australia has the shabby habit of privatizing everything, including this new investment. And that my friend, is the bottom line. The investors would share the spoil.

    There is no such thing as sovereign wealth, shared among the people. The Australian government is completely against anyone, other then the big end of town, sharing into anything.

    First, a massive attitude change, akin to frontal lobotomies for politicians and decision makers, needs to occur.

    Sorry friend, this country is currently on the path to annihilation, which can only be reversed through serious people action. And that, I can’t see on the horizon.

  4. Terry2

    It seems that the reason that we are not building any automobiles in Australia is because the Abbott government failed to show support for auto building in this country and used subsidies to support their opposition : lifters and leaners – even though they continue to provide much greater subsidies to private health insurance companies.

    This should have been above politics but as far as I can see it was all ideology based and in the process we lost our capacity to build cars.

    Under Labor government car plan $5.4 billion was to be extended in subsidies to the auto industry over 13 years from 2008 to 2020, totalling about $415 million a year. By comparison the subsidies provided to private health insurance companies were $6.5 billion in 2016 alone. So we give private health insurance companies more in one year than we had planned to give to the auto industry over 13 years.
    In return, the auto industry had guaranteed to provide jobs, apprenticeships and a technological footprint for Australia ; the health insurance companies by contrast provide a poor quality highly conditional product and offshore call centres.

    If we were prepared to co-invest in electric car manufacturing with the same enthusiasm that we throw public money at private health insurance companies we could have a thriving, state of the art, manufacturing industry in this country but our government has shown a Luddite tendency and that doesn’t appeal to entrepreneurs like Musk.

  5. bobrafto

    This notion of building electric cars here since the infrastructure is in place has been floating around for awhile on social media.

    I believe it can work with the cooperation of existing service stations where fully charged batteries can be exchanged for flat ones.

  6. Freethinker

    Thank you Keith for your article, I agree with you.
    With respects I disagree with you Klaus, it can be done, we have the raw materials, the man power and the brains to be able to achieve that.
    Further more I would start making electric buses using local manufactured components and once we have a good quantity of them start charging a lot more for car parking in the CBD of our cities providing good parking facilities on strategic locations.
    I would star manufacturing, using only local made components, win generators, auto-tracking solar panels, solar powered irrigation pumps and components for micro irrigation to conserving water and we can go on and on including energy efficient intelligent building systems.
    We do not need to borrow foreign currencies to do it, we do not need foreign capital, we need the will to do it.

  7. 1petermcc

    Klaus, you may have to ditch point 3. Tesla already has a number of recharge stations around the country plus owners have recharge stations at home. Those already owning one of these vehicles seem to be doing just fine when it comes to getting around.

    Owners are also assisted by the “intelligence” of the network that supports the vehicle for longer journeys where you plug in your destination and it factors in recharges and time frames.

    For example, a trip from Gippsland up to Wodonga involved a 20 minute recharge in Richmond, then another top up somewhere near Euroa. Owners use that time for grabbing a coffee. The driver who did this has the option to drive his Kluger but much prefers the Tesla for the driving experience.

    Having ridden in the vehicle, I can tell you the on screen display showing your position in the traffic that surrounds you is fabulous. When getting back into my own vehicle, a Territory, I really missed the visibility.

    Once they sort out teething issues like the faded yellow lines on the road works near Fountaingate, (the car preferred the more visible white lines), then I’ll be keen to own one. If that happens to be built in Oz then so much the better regardless of weather it’s robot or human assembled.

    On point 1) It’s the same for any hi tech business.
    On point 4) Complaining about investors earning rewards would seem to be at odds with our economic system. I thought the problem was our reluctance to invest in local infrastructure rather than worrying about someone turning a profit on their investment?

  8. helvityni

    Klaus Petrat,

    Last night’s Four Corners about Retirement Villages proves your point; so much is about greed, riches for few, poverty for peasants…

  9. Harquebus

    “That is when the second law of thermodynamics will come into play. Even with supercritical temperatures and pressures of steam to drive the generators, the conversion efficiency of heat into electricity is no higher than 42%. There will be further losses in converting AC into DC current and in overcoming the inertia of moving parts as electrical energy is turned into mechanical energy to drive the vehicle. All in all, therefore, at least three times as much fossil fuel energy will have to be consumed as the energy saved by switching from oil and gas to electric cars. Most of it will come from coal, which generates far more greenhouse gases per unit of usable energy than petrol, diesel or CNG.”
    “Unfortunately in chasing the gleaming chimera of the electric car transformation the global market economy is chasing yet another red herring while the technologies that could actually help avert catastrophic climate change are being ignored.”

    When governments dream of electric cars

    “Keep in mind that a 2 MW turbine uses 900 tons of material: 1300 tons concrete, 295 tons steel, 48 tons iron, 24 tons fiberglass, 4 tons copper, .4 tons neodymium, .065 tons dysprosium (Guezuraga, USGS).”
    “To store just one day of U.S. electricity generation (and at least 6 to 8 weeks would be needed to cope with the seasonal nature of wind and solar), you would need a 923 square mile, 450 million ton, $40.77 trillion dollar NaS battery that needs replacement every 15 years (DOE/EPRI 2013). Lead-acid: $8.3 trillion, 271.5 square miles, 15.8 million tons. Li-ion $11.9 trillion, 345 square miles, 74 million tons.”
    “The Achilles heel of civilization is our dependency on trucks that run on diesel”
    “But the average person believes in infinite human ingenuity that can overcome the laws of physics and doesn’t worry…”

    Big Fight: 21 top scientists show why Jacobson and Delucchi’s renewable scheme is a delusional fantasy

  10. Klaus Petrat

    Hi 1petermcc,

    The problem with investors in this country is the price gauging whenever they can. Nothing else wrong. But tell me, is this massive hike in Energy costs due to the free market doing its work or not? Can they get more overseas for their money than here? Free market rules will tell yes, they can and will take advantage.

    Toll roads, another great example. I don’t know where you live, but crossing Sydney or Melbourne seems a $20 exercise.

    Electricity is another. Germany has a healthy mix of private and public generating companies. Poles and Wires all belong to the public. We are a net importer of Energy as we have no resources, except for the large share of renewables.

    The MONTHLY electricity charge for a 3 room household is approximately $150 and this includes long, cold winters.

    Private investors and businesses have a strangle hold on everything and I am not convinced, this benefits the public. Sorry.

    Petrol prices is yet another example. There is a price cycle. Blime me if I knew where/what drives this cycle. What I do know, in the absence of spot price market fluctuations, the price cycle is high for 95% of the cycle time then low and back to high. What is this?? Aussies just take this for granted. Thank God, they say, it’s only the price cycle.

    I think the private industry has only one goal, maximizing profit. And I understand this. But why privatizing everything?

  11. 1petermcc

    Klaus, you will get no argument from me over price gouging. I was horrified to see that the Finkel Review prices energy at $7 to $10 per unit to produce while we Victorians get hit at $80 to $100 per unit. That has to be even worse than the Petrol gouging. Neither is fair to consumers.

    The term “Free Market” is misleading. When the rules are written in such a way that shortages can be manipulated, as they currently are, it’s still free market forces in play but with an unhealthy greed factor added into the mix. The corruption devil is in the detail.

    I personally prefer to see the Poles and Wires in Government hands but sadly there appears to be political gain in selling off the infrastructure for misleading “economic management” claims.

    When I talk about investors I’m including the Mum and Dad category where greed isn’t the main driver but sadly the big players have a strong grip on the politicians. Unfortunately we have Government that is reluctant to invest in infrastructure except for propping up clean coal style projects which are simply corrupt practices. That leaves investors as the only place to go to get the money.

    This can be fixed by intelligent regulations. But probably not by pollies who need to put aside personal enrichment in favour of the greater good. The only encouraging sign I see at present is the pressure being applied to CEO remuneration packages. People are rightly pissed off at the rewards and when they see the same bizarre levels even in Government departments, they are finally getting motivated.

    Why privatise everything? Why indeed? Maintenance levels drop for quick gains and the claimed “market forces will drive prices down” mantra is clearly bullshit. The only gain is a short term bottom line stuff that looks good on a spreadsheet if you only read the large print.

    Voters may have the chance to correct this but they have to call bullshit when they see it and demand better. The fact that Malcolm can still get up and claim economic management skills without being laughed off the stage would suggest we still have some way to go before we get enough leverage though.

    Michael’s The AIM Network gives me hope that eventually this is achievable and this is why I would encourage sharing links from this site to the Net. Especially FaceBook.

  12. Mary Mannison

    I’ve been waiting for years to buy a small electric runabout at a reasonable price. Perfect for all the elderlies! and a perfect second car for city dwellers with kids! C’mon you clever entrepreneurs…put one on the market.

  13. Ill fares the land

    Even before we get to wholesale reductions of the vehicles using internal combustion engines, we need to change some rusted-on attitudes amongst manufacturers and consumers. For a start, many hybrid cars already on the road are designed to allow the electric power to generate significant additional horsepower. Horsepower for what purpose exactly? Probably not much more than perpetuating middle-aged men wanking themselves over their cars.

    Then there is the rise and further rise of SUV’s and dual cab utes (the latter propelled in part by fringe benefits tax concessions) – and, lo and behold, they are still getting bigger and the marketing continues to rely on the “escape” and “power” aspects – this is a major part of the advertising thrust for dual cabs in particular. Ads showing a dual cab scaring even the junkyard dog, and the one with the wolf in the back are utterly moronic of course, but play to a market that still values size and might in their cars. These cars continue to use fossil fuels at a frightening rate.

    Manufacturers have for 30 years made really significant efficiency gains with the internal combustion engine (although the overall efficiency in terms of converting fuel into power is, generally, still not much better than 40% (diesels aside) – the rest is wasted on heat and noise, so it remains a highly inefficient engine), but have chosen to use those efficiency gains to chase more and more power and more power means more fuel gets use. Again, I ask the same question – for what purpose?

    Statistics indicate that in 40 years, the average fuel consumption of the Australian motor vehicle fleet has not changed. Since many vehicles are significantly more fuel efficient than a typical vehicle was back in 1970, this result suggests that there are also many cars that continue to be gas-guzzlers. Same as average beer consumption in Australia – I drink no beer, so someone is drinking my share.

    Until these attitudes to the motor vehicle get broken down (which can only happen by government legislation), we can make electric cars until the cows come home – the market will still not embrace them until they have no alternative. There is a trendoid aspect to the Tesla and a “look at me” mentality that generates sales, but that does not amount to such vehicles being embraced. They will have to be in time, despite the fact that when you look at their total resource use through production to use to disposal

  14. Freethinker

    Mary, the other day we saw one fully enclosed one seat, electric mobile scooter and cost $10000.
    They have to come down in price the scooters for the cars to be under $20000

  15. Johno

    Don’t forget the humble pushbike with this transition to a low carbon future, and pushies can be electric too.

  16. passum2013

    Its all about the Liberal National and cipher parties like one station the giggle parties governments Support to other industries Like Coal mining Oil etc
    Then there is this government is behind the times with Renewable,s the time is fast coming to have solar run cars of the future where all panels will develop energy to help re charge dc batteries that are also backed up with smaller more efficient fuel engines and dynamic charging with home charging. That can used for night running of households and being re charged when not receiving anything for energy produced. It could be attached to grid to help maintain it when over use of available energy.Paid for at peak energy rates buy the grid.

  17. Michael Stasse

    IF we are serious about fixing climate change, then we need to stop building things, cars especially…….. the emissions from building JUST THE BATTERIES for electric cars are equal to eight years’ worth of driving.

    The report shows that the battery manufacturing leads to high emissions. For every kilowatt hour of storage capacity in the battery generated emissions of 150 to 200 kilos of carbon dioxide already in the factory. The researchers did not study individual brand batteries, how these were produced, or the electricity mix they use. But if we understand the great importance of the battery here is an example: Two common electric cars on the market, the Nissan Leaf and the Tesla Model S, the batteries about 30 kWh and 100 kWh.

    Even before buying the car emissions occurred, corresponding to approximately 5.3 tons and 17.5 tons of Carbon Dioxide. The numbers can be difficult to relate to. As a comparison, a trip for one person round trip from Stockholm to New York by air causes the release of more than 600 kilograms of carbon dioxide, according to the UN organization ICAO calculation.

    Tesla car battery production releases as much CO2 as 8 years of gasoline driving

  18. havanaliedown

    Interesting stuff, Michael. Whatever you do, don’t calculate how many Co2 rainbows and unicorns are killed in the manufacture of wind-turbine generators.

    Here’s another neat site – calculate your carbon footprint. For no reason at all, I searched for a single return economy ticket to Denpasar, Bali – as if I was returning to the delightful Writer’s Festival in Ubud. Shock, horror – 1.27 metric tons!!! How many polar bears did I drown today? That’s a great title for a tortured travelogue, or better yet – a kid’s book!

    OK let’s try Canberra to Paris – Business class (naturel-mon) for a grandiose climate spankfest jaunt: 13.47 metric tons…Mon Dieu!!!

  19. Johno

    Has Malcolm Roberts been slipping you a bit of coin again.

  20. havanaliedown

    Sorry – here’s the site to make the proudest warmenista contemplate each exhalation of deadly Co2, let alone their use and enjoyment of every benefit from living in a modern industrialised society:

  21. Johno

    Mmmmmmmmm, Professor Havanaliedown, I would love to see your peer reviewed paper on ‘How plants are loving the extra 9.8 gigatonne of CO2 released annually.’ Take it away professor. (Please, no stunts, tin foil hats or conspiracies)

  22. Joseph Carli

    The “catch” with havanameltdown’s solution, is that “a plant lives not on CO2 alone”…ergo, if the plant gets a shot in the arm from co2 and gets that spurt of growth, then it is going to need more water to bring those little goodies from the soil to it’s branches…no water, no grow….just like that Chinese laundry; “No tickee, no washee”.

  23. Harquebus

    “An important frequent shortcoming in the discussion on availability of lithium is the lack of proper terminology and standardized concepts for assessing the available amounts of lithium. Published studies talk about “reserves”, “resources”, “recoverable resources”, “broad-based reserves”, “in-situ resources”, and “reserve base”.”

    “Facing an acute shortage of cobalt coupled with challenging bottlenecks in the existing supply chain, ‘blue metal’ mania has taken hold.”

    “The figures suggest clean-energy vehicles still aren’t attractive enough to compete without some form of subsidy.”

    Mike Stasse’s website.
    The green car myth

  24. Andreas Bimba

    Yes we can make battery powered vehicles and we should be doing this. The mining, finance and real estate speculation controlled conservative parties are dead against manufacturing as they want us to import more so that the dollar remains lower than it otherwise would be so that their backers can earn more profits.

    Some in Labor may like the idea of manufacturing electric vehicles but Labor has yet to commit to the underlying problems:

    (a) Ensuring the federal government has the needed resources to commit to worthy projects such as this and all the other essential government services, the urgent transition to clean energy and to increase spending on worthy infrastructure, social housing and similar, to ensure full employment and so on; by abandoning the lie of needing balanced federal budgets.

    (b) That free trade agreements with low wage and industrially capable nations such as Thailand and China be amended to provide moderate trade protection for important areas such as vehicle manufacturing; and that the across the board car import tariff be no less than 15%. Alternatively ongoing government assistance of an equivalent value, as Labor planned in the past, is necessary. If the Conservatives cut this when they get into power then the industry will fail. Note the needed levels of trade protection are the same as when the Keating government was in power and are hardly onorous.

    (c) That real areas of economic waste be reduced such as removing government incentives for real estate speculation, cutting the exorbitant superannuation sector management fees ($25 billion p.a.), the health insurance fund subsidy, the fuel tax exemption for mining, the superannuation contribution concessions, the government guarantee for the banks, the price gouging by utility monopolies and the chronic levels of tax evasion and so on.

    (d) That money and the undue influence of lobbyists be removed from politics.

    (e) That the poisonous influence of the neoliberal mass media over electorate opinion and on politicians be curbed.

    Unfortunately manufacturing in a country like Australia in general requires the right industrial policy settings to be in place and in the current poisonous neoliberal era this appears to be impossible. We passed this precipice when John Howard signed the Thailand Australia FTA and since then ALL GOVERNMENTS HAVE MADE THE SITUATION WORSE. As I mentioned all that is needed is to return to the industrial policy settings that were in place when the Keating government was in power. Trade protection at the high levels of the 40’s to the early 70’s would be counter productive.

    Both Holden and Toyota were planning on making plug-in hybrid vehicles as well as more energy efficient conventional vehicles in Australia prior to their closure announcements that was triggered by Tony Abbott’s and Joe Hockey’s decision to deny Holden’s funding request to upgrade their assembly plants and to introduce totally new models. No doubt EV’s would have been manufactured as well at some point depending on the government regulatory environment.

    For EV’s to take over from IC engine vehicles it is essential that the entire electricity generation sector be transitioned to clean energy ASAP which needs to be done anyway. Despite what the pessimists say about EROI for clean energy, it can be done but downsizing of our current profligate energy use must occur concurrently.

    We can make EV’s locally, we should do it but some political changes are needed first.

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