EU Bans ICE

Investment Analysis Clubs Macro Economic Trends and Risks
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The EU has approved ending the sale of ­vehicles with combustion engines by 2035 in Europe, the 27-member bloc announced on Wednesday, in a bid to reduce CO2 emissions to net zero.

The proposal was raised last July, and this decision will mean a de facto halt to sales of petrol and diesel vehicles and a complete shift to electric engines in the EU from 2035.

Environment ministers meeting in Luxembourg also approved a five-year extension of the exemption from CO2 ­obligations granted to “niche” manufacturers, or those producing fewer than 10,000 vehicles per year, until the end of 2035. The clause, referred to as the “Ferrari amendment”, will benefit luxury brands.

Practically this means private transportation will be for the affluent only. So what will happen when the general populace realise that there are insufficient cars for everyone?

ASX:INR is planning to list on the NAS with ADR’s code, IONR

Here is a blurb

ioneer Ltd is the 100% owner of the Rhyolite Ridge Lithium-Boron Project located in Nevada, USA, the only known lithium-boron deposit in North America and one of only two known such deposits in the world.

The Definitive Feasibility Study (DFS)1 completed in 2020 confirmed Rhyolite Ridge as a world-class lithium and boron project that is expected to become a globally significant, long-life, low-cost source of lithium and boron vital to a sustainable future. In September 2022, ioneer entered a 50/50 joint venture agreement with Sibanye Stillwater Ltd to advance the Rhyolite Ridge project. ioneer will be the operator of the Project, which is expected to come onstream in 2024. More information on Ioneer’s Rhyolite Ridge Lithium Boron Project can be found at therhyoliteridgeproject.com and ioneer.com.

This could be a bolter

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Practically this means private transportation will be for the affluent only.

Maybe. Maybe not. In any event, significant parts of the EU have public transportation systems that seem to actually work for people.

Here in the US, some factions decry public transit as a “big gummit plot to take your freedom away”.

There is zero public transportation in the Detroit suburb I live in.

Steve

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In any event, significant parts of the EU have public transportation systems that seem to actually work for people.

Public transportation in Porto is really good once you learn to use it. Clean affordable and it takes you pretty much everywhere. Lately I’m using it to tour the place. They are building two new extensions, one in Porto proper and the other in Vila Nova de Gaia on the south bank of the River Douro, where I live. There is a project for third line which includes a new bridge across the River Douro.

BTW, this kind of construction is quite labor intensive which is a great way to spread the wealth to people who need it, much better than UBI type of handouts. Win-win-win!

Free Wi-Fi on busses!

The Captain

Metro:

Future expansion[edit]
Line D: Connection to Vila D’Este. This expansion started to be built in March of 2021 planned to end in 2023.[8]

Line G: Casa da Música to São Bento.[9] The construction started in 2020 and is planned to take three years.[10][11]

Second line of Gaia : planned to start in 2023 and to end in 2026, with a new crossing of Douro river [12][13]

https://en.wikipedia.org/wiki/Porto_Metro#Future_expansion

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Practically this means private transportation will be for the affluent only.

What is the basis of this conclusion?

First, ICE cars will still be allowed on the roads and can be sold all the way up to 2034. There is nothing in the law saying that someone can’t drive a small affordable ICE vehicle for 20 years after 2035. So, your first conclusion that “there will be insufficient cars” is just flat out wrong.

Beyond that EV prices are falling and many here have posted that they will reach parity with ICE vehicles sometime in the next 3-5 years. By 2035, EVs are likely to be the cheaper option. If all automakers start building EVs at scale, prices will likely decrease further.

I do think this decision from the EU is extremely bold–with all the potentially good and bad things that come with a bold decision. 13 years is not a long time to build the infrastructure necessary for widespread use of EVs.

For commuting EVs are already a practical choice, but longer drives continue to pose significant issues. Availability of charging stations, standardization, charge times, and “real world” vehicle range will all need to be addressed very quickly. As you pointed out in your post, there will likely be some supply chain issues with the materials needed for the batteries and other components which are different in EVs compared to ICE vehicles.

One final thing–and it won’t surprise me if this happens–if things are really shaping up to be a mess because the infrastructure and technology are not keeping pace, the EU can simply push out the date or make exceptions as needed. They aren’t going to set up a situation where people don’t have cars.

sf, living in Luxembourg where public transportation is free.

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Public transportation in Porto is really good once you learn to use it.

I was in Seattle for a week in 94. Found public transit quite effective, and free downtown. Used city buses to get to the Boeing shareholder’s meeting and to the Museum of Flight. Used feet to get to Pioneer Square. Of course, according to some factions, Seattle is full of “Communists”.

BTW, this kind of construction is quite labor intensive which is a great way to spread the wealth to people who need it,

The narrative in Shinyland is that sort of thinking is “Communism”. We are assured the route to economic nirvana is to give all the loot to the “JCs”. Michigan currently has a large budget surplus. The Gov proposed investing in education and infrastructure. The opposition controlled legislature, pushed back, insisting all the loot be given to the “JCs”. The Gov seems to have won the argument, this time. One of the people running for Gov this time around is promising she will “not treat JCs like the enemy”. All the current Gov’s predecessor did over 8 years was throw money at the “JCs”, while increasing taxes on retirees and the working poor, and cutting funding to cities and counties.

Steve

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"Maybe. Maybe not. In any event, significant parts of the EU have public transportation systems that seem to actually work for people.

Here in the US, some factions decry public transit as a “big gummit plot to take your freedom away”.

There is zero public transportation in the Detroit suburb I live in."

There’s a bus line or two in Plano but it’s a 3 mile haul from my house to get to a bus stop. Few would ride it even if within a mile.

My dad walked 0.6 mile up and down hills to get to work. About half the time, he’d get a ride to the bus stop from a friend. Coming home he walked 0.6 miles from another bus stop opposite direction.

I’ve never lived where it was possible to get to work by ‘transit’. I probably could have if I didn’t have a car.

Note: I just got back from the Toyota dealer. Seems my 2007 Prius had it’s main hybrid battery fail. Dashboard lit up like a Xmas tree with warning lights All due to dying main HV hybrid battery. It’s a NiMH one that stores and delivers the hybrid energy. Car gets 44 mpg.
Service tech says they usually fail at 12-14 years. Mine made it 14 years almost to the month.
Now, it’s a $1800 battery, plus a lotta bucks to replace it. (not even in stock due to ‘supply chain issues’). Looking at two week to repair.

I hate to think what folks are going to think when their EV batteries die after 10-13 years and it’s half the cost of the car to replace it - $20,000 or $30,000 or $40,000 !!! Going to make EVs real popular after that time period. All that money you ‘saved’ on gas - well, just vaporized.

The Prius gets 44 mpg average spring and fall. Only 40 mpg real real cold and/or 100F type temps.

t

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I’ve never lived where it was possible to get to work by ‘transit’. I probably could have if I didn’t have a car.

When I lived in Columbus, I used the city bus to get to my dentist. I lived in the 'burb of Bexley, and the dentist was downtown. Livingston Ave bus stop was a stone’s throw from the apartment, but, when I got downtown, I hiked 2-3 blocks north from the bus to get there. I walked to class, only a mile, and sidewalks for part of that.

I hate to think what folks are going to think when their EV batteries die after 10-13 years and it’s half the cost of the car to replace it - $20,000 or $30,000 or $40,000 !!! Going to make EVs real popular after that time period. All that money you ‘saved’ on gas - well, just vaporized.

The MBAs will feed the data into their computer and find that the people who buy their cars new either lease for 3 years, or trade in 3-5 years, so they will not be impacted by the battery failing more than ten years out, therefore battery failure is not an issue to be concerned with. Automakers used to figure that way about rust.

Steve

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t: I hate to think what folks are going to think when their EV batteries die after 10-13 years and it’s half the cost of the car to replace it - $20,000 or $30,000 or $40,000 !!!

==========================================================

LOL! People already replace their ICE vehicles every 8-10 years. So what is your point?

Jaak

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I hate to think what folks are going to think when their EV batteries die after 10-13 years and it's half the cost of the car to replace it - $20,000 or $30,000 or $40,000 !!!! Going to make EVs real popular after that time period. All that money you 'saved' on gas - well, just vaporized.

The MBAs will feed the data into their computer and find that the people who buy their cars new either lease for 3 years, or trade in 3-5 years, so they will not be impacted by the battery failing more than ten years out, therefore battery failure is not an issue to be concerned with. Automakers used to figure that way about rust.

There was just a wee bit of hyperbole from the previous poster. For one, all manufacturers provide at least 8 year/100,000 mile warranties on their batteries, and some provide even longer warranties than that.

Coincidently, I have an approximately 10 year old EV. A 2013 Leaf that I bought used when it came off lease. When I bought it, a full charge was good for 82 miles, which was essentially 100%. Now a full charge is 78 miles. So virtually no battery degradation over ten years. At this rate, I expect the rest of the car to wear out before the battery does. If the battery were to degrade to the point it needs replacing, Google tells me the average price is $5500 including labor.

The vehicle’s role is a commuter/errands around town vehicle and it is excellent in that capacity. My wife can charge for free at work and since COVID restrictions ended we haven’t charged at home. And incredibly, today a used 2013 Leaf with the same trim costs about $2,000 more than I paid. This is the most economical vehicle I have owned or ever will own.

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I hate to think what folks are going to think when their EV batteries die after 10-13 years and it’s half the cost of the car to replace it - $20,000 or $30,000 or $40,000 !!!

I’ve seen stories of Teslas with over 1 million miles on them.

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Saunafool said

First, ICE cars will still be allowed on the roads and can be sold all the way up to 2034. There is nothing in the law saying that someone can’t drive a small affordable ICE vehicle for 20 years after 2035. So, your first conclusion that “there will be insufficient cars” is just flat out wrong.

You are correct ICE cars will still be available.

Rather I am guilty of imprecise language. I should have said “There will be insufficient EV cars for everyone who currently has a ICE car to have one”

By 2035, EVs are likely to be the cheaper option. If all automakers start building EVs at scale, prices will likely decrease further.

As I have posted previously, there are insufficient mines in the world to produce the quantity of raw materials necessary to produce sufficient EV cars to replace ICE cars.

If you go to this link here you will see a view of projected increase in raw materials needed to meet projected EV demand.

https://www.visualcapitalist.com/electric-vehicles-drive-up-…

As you can see there is a 10 fold increase needed in many raw materials needed. I can guarantee to you all there is not a 10 fold increase in copper of nickel mines planned at the moment. Nor will there be extra mines in operation to meet those quantities by 2030.

Don’t get hung up on the amount of raw material increase needed whether its 5, 10, or 14 fold there are a lot of numbers floating around but the direction is all the same. From all sources, mining companies and investment bank research.

So EV proponents must accept unless there is a material to decrease EV car material needed there will not be a 1:1 replacement.

Moreover if EV change is mandated you must accept the era of personal transport is over for the overwhelming majority of people.

This view is starting to seep into the public conciseness. in fact an excerpt from the front page of a national newspaper today.

Hopeful forecasts that show EV prices forever falling typically ignore the economic impact of the truly massive increase in demand for critical minerals – often concentrated in China, Russia and Africa, not the most stable locations – that EV batteries require. No number of laws, treaties or communiques will alter that fact.

An interesting fact, the Democratic Republic of Congo has the largest proven cobalt reserves and China owns 15 of the 19 mines.

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As I have posted previously, there are insufficient mines in the world to produce the quantity of raw materials necessary to produce sufficient EV cars to replace ICE cars.

This is definitely one of the logistical constraints that will have to be dealt with.

I believe the reality is something like “Peak Oil” which people have worried about many times in human history–basically ever since oil was discovered. Yet, if the demand is there, the resources eventually are found. There will likely be a pinch in supply by trying to mandate 2035 as the year EVs take over–which is the most likely reason I won’t be surprised if the date gets pushed back or the EU carves out “exceptions.”

Yes, the resources are largely in Russia, China, Africa. We deal with the same thing with oil–Russia, Middle East, Africa… The US has developed a lot of production capacity in the past decade, but Europe just doesn’t have much oil–so they are dependent on the same “unreliable” sources whichever way they turn. The advantage of EVs is that once you have the battery, Russia can’t just shut down a pipeline to put the screws to you.

An interesting fact, the Democratic Republic of Congo has the largest proven cobalt reserves and China owns 15 of the 19 mines.

China has definitely been playing the long game in locking up resources globally. It’s worrisome and a good argument for the U.S., Canada, Mexico to develop North American resources as much as possible–even if the price point is somewhat higher than in Africa.

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An interesting fact, the Democratic Republic of Congo has the largest proven cobalt reserves and China owns 15 of the 19 mines.

New battery chemistries require less or no cobalt.

The Captain
shift happens!

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As you can see there is a 10 fold increase needed in many raw materials needed. I can guarantee to you all there is not a 10 fold increase in copper of nickel mines planned at the moment.

One would only need a 10 fold increase in mines if the material in question was used only by EVs. EVs must use a tiny fraction of the copper and nickel. As for elements used in batteries, that technology seems to be evolving rapidly, so who knows what elements we will need in batteries in 2035 … and it will probably be a mix since one formulation will be best at being cheap, another at maximizing power for weight, another for rapid charging, etc.

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