Why Hasn't Europe Embraced Electric Automobiles More Despite Higher Gasoline Prices?

One might think that with much higher gasoline prices compared to the US, Europe would have embraced electric automobiles more. However, the main reason is a stark lack of batteries. Even for those who want an electric car, there are often months-long waiting lists, and manufacturers can't build them faster because they lack batteries.

The transition to electric vehicles (EVs) has been a long journey. It wasn't until the past decade that EVs began to become a reasonable alternative. It took a hundred years to develop the modern car industry, so adapting to new technologies takes time. It's estimated that it will take at least a decade or two before there are enough mines, battery factories, and electric cars to meet demand. Even then, it might take another decade or two before all the old gas cars are phased out completely.

The Role of Capital and Market Perception

A major factor is the capital required to transition to EVs. The consumerist notion of 'I want it and I want it now' is still unaffordable for most people in terms of cars. For example, in the UK, the monthly installment range for personal hiring plans (HP) that people are prepared to go for is ￡200. When you look at the cost of consumer white goods, the disparity in affordability is apparent. While some can afford it, most can't.

The next group to buy will be the aspirational market as the mass market grows. As more people embrace EVs, prices are set to decrease due to increased competition and manufacturers changing their short-term focus to long-term investment strategies. Additionally, the existing vehicle manufacturers are heavily unionized, and this revolution in car engineering could cost many jobs, presenting a significant challenge for them.

This scenario is reminiscent of the industrial revolution when the invention of cars led to countless blacksmiths losing their livelihoods due to the lack of demand. They weren’t unionized then, and the same could happen now, just on a larger scale. Industries such as tungsten light bulbs, calculating machines, and typewriter manufacturers also experienced similar changes. Many went to the wall as the market evolved towards newer and more efficient technologies.

Impact of Battery Technology and Economics

Beyond the capital cost, the purchase price of electric cars is still considerably higher than that of traditional gasoline cars. However, this issue is gradually being resolved as the cost of electricity is becoming more stable and predictable. Superchargers are being built throughout Europe and even extending into Asia, making long-distance travel more feasible.

The transition from diesel and turbo engines to battery-related technologies has been more challenging for European carmakers. Unlike in Japan and the US, the European automotive industry has focused more on harnessing the fuel economy benefits of diesel and turbo engines. Part of the reason for this is that diesel and turbo were already widely used in Europe, while the electronic chip required to regulate power inflows and outflows in a lithium-ion battery tended to be of American or Japanese design. It's interesting to note that Europe has never been a center for semiconductor design or production, and they chose a path that was less dependent on such technology for improved fuel economy.

In conclusion, the transition to electric automobiles in Europe is a complex process driven by multiple factors, including capital costs, market perceptions, and technological advancements. While there are challenges, the growing popularity of EVs and improvements in infrastructure suggest that the shift will continue, albeit gradually.