Nick’s Note: The world’s cars are going electric. By some estimates, 125 million electric vehicles will be on the road by 2030. And the government is going all in to convince Americans to make the switch. The usual reason given: to protect the environment.
But that’s not the whole truth. Today, tech expert and PBRG friend Jeff Brown reveals the real reason the government and corporations want you to go electric…
By Jeff Brown, editor, Exponential Tech Investor
By now, most consumers are aware of the growing trend of electric vehicles (EVs).
According to the Paris-based International Energy Agency (IEA), 125 million electric vehicles will be on the road by 2030. That’s up from an estimated 3.1 million in 2017.
And according to a 2018 survey from the American Automobile Association (AAA), roughly 20% of Americans are considering going electric for their next car purchase.
The adoption of this technology has been aggressively pushed for by governments. In the U.S. alone, government subsidies for electric vehicles have been estimated to be as high as $20 billion.
But the push to migrate from internal combustion engine (ICE) vehicles to EVs isn’t what most people think.
There’s a deeper story there…
The most popular motivation used by both consumers and governments is a simple one: EVs are better for the environment. They produce less—or no—pollution.
Sadly, this is a logical fallacy.
Taken out of context, yes, EVs produce less pollution than ICE vehicles. Or do they?
The answer lies in a simple question that’s rarely ever asked… Where does the electricity come from?
Take a state like California…
According to the California Energy Commission, 61.6% of energy used in the state comes from coal (a fossil fuel), large hydro projects (which damage natural habitats of freshwater rivers and lakes), natural gas (a fossil fuel and California’s largest individual power source), and nuclear energy (which produces radioactive waste). Only 29% comes from renewable sources, two-thirds of that being solar and wind.
That means nearly 62% of the electricity used to power EVs in California comes from fossil fuels and energy sources that are highly destructive to the natural environment.
Surprising, isn’t it?
And California is one of the best states in the country for generating renewable energy due to its sunny—and in some places, windy—climate.
Look at a state on the other coast, like New York. The New York Times reports that 94% of its energy comes from natural gas (37%), nuclear energy (33%), and large hydro projects (23%).
That’s right, 70% of the electricity fueling EVs in the state of New York is “burning” carbon or is a form of nuclear power.
My point is that EVs are only as clean as the energy used to fuel them.
So if saving the environment isn’t the real motivation for the adoption of EVs, then what is?
One of the main advantages is that EVs are less complex vehicles.
Consider this: The average ICE car has 2,000 moving parts. The EV equivalent has only 20. That’s just 1% of the average ICE. Incredible, right?
As a result, EVs break down less often and are much cheaper to maintain. This makes them attractive to both automobile manufacturers and to consumers.
EVs also represent an attractive opportunity for automotive manufacturers because the market for ICE vehicles is so flooded.
More specifically, carmakers hoping to sell new automobiles have to compete with used cars. After all, a well-maintained used car can still accomplish the principal task of getting you where you need to go. But it comes at a significant discount.
In the case of EVs—which is a fairly new market for cars—there just aren’t that many used options on the market. So the market for EVs is pretty much a greenfield opportunity.
It’s the opportunity for profit, not concern for the environment, that motivates automakers to pursue EVs.
But what about government motivations for EVs? What has the incentive been to stimulate this industry?
Governments typically tell the public that EV subsidies are for environmental reasons. It’s a simple explanation, but that’s not the whole truth…
Many governments have offered economic incentives like discounted prices or tax rebates to encourage consumers to buy these new EVs.
There’s certainly a hope that these kinds of incentives will become catalysts for domestic corporations to invest in the technology… create new jobs… and hopefully manufacture these new EVs locally—and thus, stimulate the economy.
There’s plenty of truth to that, especially in markets with existing automobile manufacturing plants.
But what if we step back further, and think about an even bigger picture?
Consider that the next evolution of EVs will be self-driving cars. EVs tend to be designed much more like upgradeable computers than traditional ICE vehicles.
Tesla is a perfect example… Software updates are pushed out to Teslas around the world several times a year to “upgrade” the cars.
Oftentimes, these software updates include new performance features for the car, like self-driving functionality.
So why would a government push for the mass adoption of remotely connected, self-driving cars? Well, there are some very Orwellian possibilities that many aren’t considering…
Self-driving cars must always be connected to a network. Tesla’s EVs connect to its network over 4G wireless networks today, which will become 5G wireless networks beginning this year.
The government will know the location of every self-driving car at all times. And with the right authority, a self-driving car could be rerouted to a government’s choice of location at any time.
For example, what if someone suspected of a crime was trying to “drive” out of state? The local government could simply reroute the car to the nearest police station.
And there’s something else…
Consider Waymo, the self-driving division of Alphabet (Google’s parent company).
I always get a kick out of articles that claim Waymo’s motivation is to become a manufacturer of self-driving cars…
Google’s motivation is simple: It wants to collect as much data as possible about consumers and sell that data to whoever will pay for it.
Think about it… According to the U.S. Department of Transportation, the average American driver spends about an hour a day in a car.
In a world where cars and taxis drive themselves, that frees up an hour of time to look at a screen, surf the internet, watch videos… and—you guessed it—look at ads that are served to you.
Google is spending so much time and money on research and development on autonomous driving technology so that it can license that technology to car manufacturers in exchange for being able to retain and sell the data that it collects.
It’s plain and simple.
Force for Good
Now, I don’t want to give you the impression that I’m negative on new technological developments—far from it.
As many of you know, I’ve devoted my entire adult life to studying, working in, and investing in bleeding-edge technology.
And as I’ve told my readers time and time again, our lives are about to improve exponentially in the coming years thanks to new technology.
Self-driving EVs are a tool. And like any tool, they can be used for good… or bad.
Understanding the less obvious motivations in the world of technology is a critical part of my research process. It helps me inform my readers with better investment recommendations.
By looking beyond the “official reasons,” I’m able to better understand the direction of important technology trends.
And now, so can you…
Editor, Exponential Tech Investor
P.S. Digging deep to uncover the true drivers of new technology is tough work. But I’m happy to say that it’s paid off handsomely. By looking behind the scenes, I was able to pinpoint the best-performing S&P 500 stock in 2018.
And I’m happy to report that my readers were able to get in months before most investors had even heard of the company. Now, there’s something else on my radar…
It’s not an exaggeration to say that it’ll be the biggest technology trend of the next decade. But the time to establish a position is now—right now. And I can show you how right here.
Readers continue to show sympathy for Teeka Tiwari, who told us on Monday about his experience getting hacked…
From Adam M.: Teeka, really sorry to hear about the hack. I know it turns your world upside down. I think your suggestions of buying a burner phone and using a “secret” email are both really good. I’ll be doing the same. Good luck!
From William N.: Big T, isn’t your phone company liable for the hack since it allowed someone else to change your information? Anyway, sorry to hear about what happened.
And one reader is thrilled about Walmart’s new online delivery service…
From Anonymous: Hi, Nick. Thanks for your story on online grocery shopping at Walmart. It’s a great idea for seniors who can’t get out to stores.
Do you have any questions or comments for our editors? You can send them to us right here…
This isn’t something you’ll hear about from the mainstream media…
But a radical new technology is about to take down the world leader of electric vehicles—and flood a tiny, $2 stock with a massive windfall. Get all the details right here.