To me, the energy transition looks like a western film
On the car, the games are now done, the EU scheme is law, the date 2035 is official. The car dossier is closed, it's wrong to argue. Of course, one can think about the “transition” process. The Cameo of Riccardo Ruggeri, former top manager of the Fiat group
A premise for my lifetime readers. In all these years I have never commented on the electric car, because I considered it a waste of time. I knew the puppeteers behind it well, so the ending was clear to me: a political choice, set within the framework of a predefined strategic scenario.
On the Auto the games are now done, the EU scheme is law, the date 2035 is official. The car dossier is closed, it's wrong to argue. Of course, one can think about the “transition” process.
I am convinced that the transition to a decarbonised world, and in particular the electrification of the car, will be a culturally fascinating passage. It reminds me of the most beloved movie of my adolescence, Red Shadows , by John Ford. It told of a journey by a group of passengers from Arizona to New Mexico on a stagecoach, passing through Geronimo's Apache territory, in revolt. After passing the ford of Lee's Ferry, when they thought they had made it, they are attacked. The legendary chase ends when, out of ammunition, salvation stands out on the horizon: it is the legendary "Sesto Cavalleria", the "Ours".
I spoke to a famous former CEO of the sector. One of the few who have a clear positioning of the "car" object in a future society governed in the manner of "medieval seigniorage" (another way to say CEO capitalism ), where the individual freedom of movement of citizens no longer seems to be a priority . Henry Ford paid his workers much more than the market, and in 1926 he gave them the "short week" ( sic! ), so that they could buy the legendary model T (only black, because the black paint dried before?), which they themselves they built, and thus be free to move around on weekends. In the 20th century, auto workers had good welfare and owned both their own car and their own house, and moreover, they could send their children to study. Will it still be possible?
The EU has established that from 2035 all cars manufactured or imported there must be exclusively full electric . For the first time in the history of the business, a supranational entity has imposed a "Regulation" on emissions (zero emissions) and a date (2035), despite knowing that no other "Technology", apart from electric, at that date would have been available. In the last century, first California, then the EU, followed a much more articulated, shared process (every "X" years the various "Euros" were approved, the progressive number indicated gradually more stringent constraints, tending to reach the zero emissions), through joint “regulatory-manufacturers” objectives, to safeguard business and jobs at the same time. A gentle form of self-transition.
In fact, some thought, and still think (the same super-European Romano Prodi expressed himself in this way), that it was possible with other "Technologies", especially with other "Fuels" (biofuels, synthetics, hydrogen), to still achieve zero emissions, such as for electric. Sure, not by 2035, but that would have been a near-zero cost transition. Then it would have been the Market that chose which "Technologies" to make it with. It was not so. The decision was political, with a sexy component, typical of those who seem to want to divide the world into two separate Zoos: the ZTL for the wealthy, the Indian-like Reserves for the Plebs.
When at the turn of the 19th-20th century mobility had to be replaced from "carriage with horse" to "motorized carriage", the elites of the time were able to choose between the three "Technologies" available at that time: steam engines (at the time the most advanced), electric motors with lead batteries, use of the recently invented endothermic engine, in two versions: petrol Otto cycle and diesel diesel cycle.
It would have been the market, as it was, after a decade of ruthless competition, to choose the endothermic engine, petrol and diesel versions. At the beginning of the twentieth century, Detroit Electric Car was born, its founder, William Anderson, despite the collaboration of the legendary Thomas Edison, who created for him the first nickel-iron storage battery (price $600, sic! ), which brought the travel without recharging from 130 to 340 km, with a speed in the city of 32 km/hour (exactly the limit that today the Mayors with the "woke" license plate impose on ZTL style cities) unfortunately failed. The Market made a different choice.
A personal note. I was twenty when, having been a worker for a couple of years at the Mirafiori Workshop 5, I was transferred to Engine Design. There were about ten of us, all very young, we met Dante Giacosa, a legend, he was the father of the Topolino and of all Fiat cars up until 1970. In the welcome pistolotto he said a phrase that I wrote down "The car is designed to make the freest possible the customer, it is a flatbed with four wheels, an engine, a tank”. He underlined the strategic aspect of the "reservoir", the strategic terminal of a simple supply chain: crude oil-refining-distributor.
I am convinced that there will be many business opportunities, as has always happened, when the Politics and the High Bureaucracy of the States want to replace the Market. Simply because, being culturally ignorant (in the sense that they are ignorant), they withdraw into the most sinister and comfortable dirigisme, while the market would always find, with progressive approximations, the optimal cost-time-benefit balance.
Let's see the "numbers". If we take the EU, and assume those prevailing among the manufacturers as hypotheses, we have these (raw) data. In 2022 there were 250 million cars on the road in the EU, less than 5 million of which were electric. Let's assume that the market remains constant, and electric grows in the significant way expected. In 2030 there could be 60 million electric and 190 million conventional. If only more electrics were sold from 2030, in 2035, with the same market, there will be 110 million electric and 140 million conventional. Moving forward at the same pace, by 2050 we will be carbon neutral for the entire park, then the transition would be complete. With what (monstrous) costs we will know by living.
This hypothesis assumes that we have the capacity to supply energy, both electric cars with only renewables, and conventional ones with hydrocarbons. Then, we know little about Gen Z, and even less about Gen Alpha (those born in 2010), who would seem much less interested in the car object, and therefore could move the date forward. The further the end of the transition moves forward, the more the costs for the state become relentless.
It is easy to predict that the so-called "transition from endothermic to electric" will turn into a colossal business for some companies, given the large amount of money made available (infinite games are possible with "incentives-disincentives" on highly sensitive issues, such as layoffs, non-repayable investments, reduced taxation, etc.) while the so-called European lobbies will feast. The "transitions" driven by politics by the bureaucracy, and not by the market, have always been the ground for all kinds of schemers.
At the same time the Auto Corporations will modify their strategic positioning, their areas of optimal focus on products/markets, and, consequently, their organization. They will probably be divided into several product/market divisions, trying to pass on to the States the enormous restructuring costs and the gigantic social implications they will have to face.
There will be obvious social tensions from workers and customers who will either lose their jobs or be unable to afford the cost of switching to electric mobility, or both. It is probable that the opposition parties will ride the discontent, dissociating themselves from the choices made. An example for all, the famous gilets jaunes a few years ago almost reached a popular uprising, because Emmanuel Macron had increased the price of diesel by 6 cents ( sic! ), allocating the proceeds (sic!) to subsidize the buyers of electric cars in the 16th Arrondissement.
The "defeated" will be the "states" and the "weak classes" (customers and workers in the sector and related industries), it being known that for CEO capitalism , the term "Transition" means the transfer of resources or loss of rights (in this case losing free personal mobility, as it is today) from the weaker classes to those in power.
A side note. A recent issue of the Financial Times reports a graph where the distances of the various countries from renewable electricity production to total needs are indicated, and how much the United States will spend to make up the gap. What does it mean? That the cars will be all electric, but the energy to make them work will not be all renewable (sic! ), and for a long time. If this were the case, it would be politically unacceptable to have only electric cars at very high economic and social costs, but then not have enough energy from renewables, and have to make use of the ignoble energy, deriving from hydrocarbons or coal.
But that's not enough, let's pretend that the other predicted "losers" of our transition to electric power, the "ugly and bad oil tankers", bite the bullet without reacting. At the very least, they will do a Super Opec, and thus compensate for lower revenues with higher hydrocarbon prices, to keep profits intact. Meanwhile, for many years we will have to maintain an expensive double grid, conventional fuel stations and electric charging stations.
For the next thirty years, even if the games are over, there will be a great confusion in the sky between conflicting political-economic-cultural interests. Thus the incentive policies will be different, depending on whether the country has, not only the shareholding structure, but also the operational management of its own automotive industry.
I ask myself again: “We already know that the “winners” will be the current proprietary leaderships who will lead the transition, that the “losers” will be the usual weaker classes. But how will they react? And what will the opposition parties do? If we run out of ammunition will the Sixth Cavalry save us?”
We will find out by living. Prosit!
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/transizione-energetica-film-western/ on Sun, 26 Feb 2023 06:02:00 +0000.