Bob Dykes speaks in the gritty language you’d expect from a Wyoming man who owns an oil and gas company. He is 69 years old, calls himself politically independent and agnostic towards global warming. He is also in the process of buying his first fully electric vehicle. None from Elon Musk. “Tesla is a yuppie vehicle to me,” he says.
The 1,000-horsepower beast he pre-ordered from General Motors is the new electric Hummer. It will be the third Hummer owned by Mr. Dykes, whose family business operates in 14 states, and is the most expensive at $ 112,595. He says what sold him were the ads. GM bought a seat with basketball superstar LeBron James in this year’s Super Bowl.
Hundreds of thousands of consumers have pre-ordered either the Hummer EV, the electric pickup from US startup Rivian, or Tesla’s Cybertruck. Others have expressed interest in electric SUVs like the Toyota bZ4X and the Mercedes-Benz EQB, as well as electric versions of pickups like the Ford F-150 and the Chevy Silverado, a close relative of the Hummer.
These vehicles are advertised with the promise of long battery life, a high trailer load, all the extras typical of mid-range luxury vehicles – and hardly any mention of their environmentally friendly trust. If previous electric cars were marketed to people who are concerned about climate change, these are aimed at people who are more concerned about surviving its consequences. Ads for these vehicles, showing the outdoors and the gritty city centers alike, suggest that even when the oceans rise and forests burn, you will only drive to your bugout cabin with sunlight and complacency.
These aren’t your California cousin’s electric vehicles. In fact, more and more economists, sociologists, and psychologists are saying they could turn even people who grew up on 1960s muscle cars into something they may not have identified as before: environmentalists.
Large vehicles are already the most lucrative segment of the domestic automotive market. SUVs and crossovers accounted for half of all vehicles sold in the US for the first time in 2020, and pickups made up an additional 20% of the US auto market.
By offering relatively affluent consumers “green” vehicles and other goods that by their own standards are better than their “brown” equivalents, America’s entrepreneurs and multinational corporations are creating a new class of “casual environmentalists,” says Matthew Kahn. Professor of Economics at the University of Southern California.
Magali Delmas, a professor of management at the University of California at Los Angeles, says most people buy things based on five criteria: quality, cost, health benefits, status improvement, and emotional connection. It uses a related term: “comfortable environmentalists” for people who only make the green choice when it doesn’t require sacrifice.
Climate activists are critical of economists who believe that existing markets will solve a community tragedy such as greenhouse gas emissions. One reason is the fear that people believe the climate crisis will resolve itself. Economists and social scientists counter that research shows that activist shame does not move most consumers. Support for laws that would force people to make more climate-friendly choices has been weak in recent years, and America has not yet passed significant federal emissions regulations.
As Bill Gates argues in his new book, Avoiding Climate Disaster, markets do their thing when people spend money on low-carbon products like electric vehicles, and investors invest money in advancing the technologies that will ultimately lead us to a net-zero economy. Greenhouse gas emissions.
If this argument is valid, there are several reasons to believe that the larger the EV, the better.
You could describe Sagar Rambhia, a 26-year-old ophthalmologist doing his residency in Los Angeles, a comfortable environmentalist. He is “indifferent” to the emissions of his private vehicle, but supports the switch to renewable energy sources. He bought a Tesla Model S, which he charges at home and in the hospital he works in because it is low-maintenance, gives him access to the carpool lane on LA’s notoriously growling I-405, and “by far the fastest car, That I am”. I’ve ever owned it. “
While Teslas is generally considered to be more environmentally friendly than gas-powered cars, the question remains whether an electric Hummer will provide the same benefits. This may depend on whether the Hummer EV is replacing a Hummer with a combustion engine, or whether its electron-guzzling power and crab-walking ability have attracted someone who would otherwise commute on the light rail. (According to some analysis, it may also depend on how the electricity is generated that powers a particular Hummer EV. EVs that run on coal are unlikely to be any better for the environment.)
While the production and use of electric vehicles is not much more environmentally friendly, their popularity could lead to other environmentally friendly outcomes.
Dr. Kahn’s research shows that one green choice is likely to lead to another, whether it’s lobbying for faster charging stations along the country’s highways or installing solar panels. Dr. However, Delmas warns that this could lead to unintended consequences: if the price of electric vehicles drops enough, more people may choose to drive rather than public transit, the far more energy-efficient option.
After Rodney Swan worked as CFO at a health insurance company, he made a dramatic move 15 years ago. He lives in Los Angeles but now runs a cotton and alfalfa farm elsewhere in Southern California. As a lifelong PC guy, he bought an iPhone one day and ended up switching over to Apple products entirely. Similarly, he says he bought a Tesla a few years ago and is now into renewable electricity.
He has a number of solar panels in his farm’s workshop and a Tesla Powerwall at home that covers him for the periodic power outages in LA. For his next eco-friendly purchase, Mr. Swan says he will aim to replace the 10 gasoline-powered pickups on his farm with the electric equivalent when they hit the market. Ford’s F-150 Electric is due in 2022.
The more electric vehicles are bought, the cheaper their batteries become, says Dr. Kahn, because manufacturers will learn how to make them cheaper and in abundance. In the past 20 years, the price of batteries has fallen rapidly. Not only are large vehicles more popular in the US, they also require a lot more batteries, so their impact on the battery market will be oversized.
Once the batteries are cheap enough that the total cost of ownership of an electric vehicle is lower than that of a comparable gasoline-powered vehicle, some people are just switching to save money. Some analysts believe the US has already passed that threshold, but for now it appears to be dependent on federal tax credits.
According to Dr. Kahn is critical of bringing America’s hundreds of millions of suburbs to renewable energy and electric vehicles – whether through low-energy hatchbacks or giant electric SUVs – to change clean energy policies in the US.
SHARE YOUR THOUGHTS
What would it take to convince you to switch to an electric vehicle? Join the following conversation.
Environmentalists have been campaigning for a carbon tax for years to get people to choose renewable energy – but it’s a political non-starter. Proponents of such a tax, he says, would be better off if they first encouraged people to buy electric vehicles and install solar panels. A change in political mindset could follow: once they have reduced their own carbon footprint, people would be more likely to be more willing to tax others who haven’t made the switch.
While the Biden administration is pushing for the US to cut its greenhouse gas emissions in half by 2030, a target recommended by more than 300 executives at some of America’s largest companies will depend heavily on consumer preferences. Americans tell pollsters they are interested in electric vehicles but have so far shown no similar interest in dealerships. (Teslas is a different story, but they’re also still a tiny fraction of U.S. auto sales.)
By providing batteries for the largest vehicles, in both luxury and affordable lines, automakers could find a way to attract people who otherwise wouldn’t give a plug-in car a second look.
The pandemic is increasing the demand for SUVs and EVs, and for the same reason, says Andreas Nienhaus, partner at Oliver Wyman, who specializes in the global automotive industry. People are switching from local transport to private vehicles, especially large ones, because they convey a sense of security.
Similarly, consumer renewed interest in the environment appears to be linked to health and safety concerns, he adds. In spring 2020, 34% of respondents to an Oliver Wyman survey said they were willing to buy an electric vehicle. in March 2021 it was 51%. Similar increases have been seen around the world, with EV interest roughly doubling in China, France, Germany and the UK
For his part, Mr. Dykes, the Wyoming oilman, plans to attach a snowplow to his electric Hummer and drive it up and down the mountain road that leads to one of his homes outside Denver. Despite nearly four decades in the fossil fuel industry, a penchant for internal combustion engines and a skepticism about all electric vehicles offered so far, he is confident about the future of both renewable energies and electrically powered transport.
“We all know electric cars are coming,” says Dykes. “My grandchildren – I told them to get out of the oil business by 2050.”
– For more analysis, ratings, advice and headlines on WSJ technology, subscribe to our weekly newsletter.
Write to Christopher Mims at christopher.mims@wsj.com
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
