Mildly Interesting: Demand Destruction from Electric Scooters, of All Things

(edited)

This isn't a big deal for oil markets, but it does illustrate how specific oil demands will see rapid EV adoption rates.  I leave it here for your amusement.  

Scooters & small motorcycles are going electric. Quickly.  Electrek did an interview with Kymco, who stated that:

1)  Kymco already has an EV version of every new model.
2)  Once an electric version is available, they expect 50+% of sales to be electric.

In other words, they're electrifying their lineup as quickly as they update models, and adoption will be immediate. Furthermore, scooters survive at most 5-10 years of regular use.  Supposing all scooter manufacturers electrify - and it appears they will - 50-100% of scooters could be electric in 10-15 years. Compared to the several decades we expect for automobiles, that's frighteningly fast. 

Why scooters though?  They're an excellent EV use case: 
1) Low mass/speed/driving distances -> fewer batteries required.  A Tesla requires 60-100kWh; a scooter requires <1. That means you don't have to build a fleet of Gigafactories to produce these, and the up-front cost is already competitive with gas scooters.
2) Low maintenance requirements. Between the belt & the engine, a scooter is a headache to maintain. That maintenance is also surprisingly expensive: you have to change the oil every 1-3k miles, the belt every 8-12k, etc.  e-scooters eliminate all that.
3) Longer life. Your car is designed to last 250k miles, you'd be lucky to get 30k out of a 50cc engine.  Mind you, that's for the high-end models; the cheap ones go <10k. The drive train on an e-scooter will last far longer. 
4) Low pollution. A 3.5 horsepower scooter produces as much pollution as a 200 horsepower car.  This is a problem for cities. 

Economically and environmentally, e-scooters are a huge improvement over gas scooters; there's no reason not to adopt them.  This shows that the economic case for an EV depends heavily on what you're using it for.

But... do scooters, specifically, matter to oil markets?  Barely.  Back-of-envelope calculations indicate that, despite there being >200 million in the world, they only consume about 0.5MMbpd.  Still, 0.5MMbpd is 0.5MMbpd - and it isn't just scooters immediately ditching oil. We're already seeing rapid electrification/hybridization of:

- Trash trucks (China, for now)
- Buses (Somewhat in the US/Canada; very much elsewhere)
- Ferries, tugs, and other short-range boats
- Class 8 terminal tractors
- Urban delivery vehicles
- Mining vehicles
- Distributed generation (Islands, remote towns, mines)
- Off-road equipment (Hybridization. Cuts fuel use up to 50%)
- Taxis
- Etc.

When demand destruction is discussed, I see the variety of use cases bundled into a single category with a single adoption rate.  That may be an inappropriately coarse model of reality.  That said, could global demand destruction exceed expectations?  Does anyone know of a more detailed analysis? 

Edited by mthebold
Typo.
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(edited)

Hey there!  

I love your posts.  You are always very logical and you think like me.  I've read your discussions with Tom Kirkman on automation a month or so back, and I'm in complete agreement with you.  I'm unsure if you saw my arguments for automation, but that's besides the point.  

I also love that you are completely embracing electrification without being anti- oil and gas.  I see electrification as the future for most modes of transportation, and even when it can't fully replace oil and gas, hybridization will always be an option.  That being said, oil and gas will always play a significant roll in our energy mix, especially amongst the world's energy grid.

 

Going on to your main question:  

 

Could global demand destruction exceed expectations?  

 

Yes!  

 

We've seen how fast diesel sales crashed since VW's emissions scandal and we've seen how fast EVs are being adapted globally.  

I personally have a lot of faith in Elon Musk and Tesla.  There is an enormous amount of demand for the Model 3, the short-sellers have been wrong at just about every turn, and the Tesla Model 3 is now outselling many of the German luxury sedans.  

 

Even so, with EVs rapidly increasing in market-share, we have to realize that the demand for vehicles globally is still increasing at a faster rate than EVs are replacing ICE vehicles globally.  

Yes, EVs are replacing ICE vehicles on paper, as they are traded in, but those ICE vehicles are then re-sold to another buyer, often of lower income status, so EVs are actually more part of the growth in global vehicle demand than actually replacing ICE vehicles.  

EVs being part of vehicle demand growth is still better than all vehicle demand growth being ICE vehicles, so in that sense, yes, EVs are cutting into oil demand.  

 

I personally believe that, if oil is conserved or replaced in one scenario, then oil will be used in another scenario.  Think about global airline growth, for example, especially in Asia.  The quantity of new airports being built and the quantity of new flight paths available globally will completely over-ride the decrease in oil being used in personal vehicles.  

Then again, if fuel efficiency and EVs never came to be, oil prices would be much higher, and because of that, economic growth would be less, and less airports would be built, meaning less flight paths would be developed.  

 

With global oil demand increasing exponentially, it is our duty to use it more efficiently and to find as many alternatives as possible, so that it can be used where there are no alternatives.  

*Important reminder to all the anti-fossil-fuel leftists - There are many non-fuel related applications for so-called fossil-fuels:  Oil and/or natural gas are required to produce petrochemicals, Oil and/or coal are necessary to produce asphalt, and coal is necessary to produce steel and concrete.  Because of that, we are not going to "keep it in the ground".  

*The global demand for petrochemicals, asphalt, steel, and concrete will continue to increase even if all of our energy is produced from alternatives.

Edited by GeoSciGuy
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28 minutes ago, GeoSciGuy said:

With global oil demand increasing exponentially, it is our duty to use it more efficiently and to find as many alternatives as possible, so that it can be used where there are no alternatives.  

*Important reminder to all the anti-fossil-fuel leftists - There are many non-fuel related applications for so-called fossil-fuels:  Oil and/or natural gas are required to produce petrochemicals, Oil and/or coal are necessary to produce asphalt, and coal is necessary to produce steel and concrete.  Because of that, we are not going to "keep it in the ground".  

*The global demand for petrochemicals, asphalt, steel, and concrete will continue to increase even if all of our energy is produced from alternatives.

Great comments, and I enjoyed the last bits the best.

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I forgot to mention my point on electric bicycles/motorcycles. 

I think that e-bicycles and e-motorcycles will replace the majority of two-wheeled transportation within cities and play a very important role in the economic growth of developing countries.  

 

In cities, people are very pollution conscious, and are willing to transition to e-bicycles and  e-motorcycles very rapidly.  

E-assisted bicycles will play a significant role because they are sort of half-way between a traditional bicycle and an electric motorcycle.  The benefit of the e-bicycle is that there is no driver's license required and no paid parking, as well as being cheaper than a motorcycle.  

 

When the battery on an e-bike doesn't cut it and where there is a more treacherous terrain or longer distances are required, an electric motorcycle is very desirable.  

 

Much of the developing world does not have paved roads yet.  Electric mountain bikes (aka e-bicycles) and electric dirt bikes (aka e-motorcycles) can play a significant role in giving adequate transportation to everyone where paved roads don't exist.  There are plenty of healthy people that aren't fit enough to cycle over extremely steep hills.  Also, E-bicycles allow people to commute without becoming sweaty, which is important for many jobs.  

 

As battery prices continue to decrease year over year, the entire world will benefit, whether those batteries are in their car, motorcycle, bicycle, laptop, or smartphone.

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6 hours ago, GeoSciGuy said:

Hey there!  

I love your posts.  You are always very logical and you think like me.  I've read your discussions with Tom Kirkman on automation a month or so back, and I'm in complete agreement with you.  I'm unsure if you saw my arguments for automation, but that's besides the point.  

I also love that you are completely embracing electrification without being anti- oil and gas.  I see electrification as the future for most modes of transportation, and even when it can't fully replace oil and gas, hybridization will always be an option.  That being said, oil and gas will always play a significant roll in our energy mix, especially amongst the world's energy grid.

Thank you.  I merely attempt to look at things dispassionately - but of course, that's easier said than done.  It's been years of practice to get to this point, so I appreciate the positive feedback.  

I'll see if I can find your points on automation.  

6 hours ago, GeoSciGuy said:

Even so, with EVs rapidly increasing in market-share, we have to realize that the demand for vehicles globally is still increasing at a faster rate than EVs are replacing ICE vehicles globally.  

Yes, EVs are replacing ICE vehicles on paper, as they are traded in, but those ICE vehicles are then re-sold to another buyer, often of lower income status, so EVs are actually more part of the growth in global vehicle demand than actually replacing ICE vehicles.  

EVs being part of vehicle demand growth is still better than all vehicle demand growth being ICE vehicles, so in that sense, yes, EVs are cutting into oil demand.  

EV production is still slow, but I don't think current production is as important as people think it is.  I see a tendency among people to look at a single data point plucked from the present time and try to extrapolate from there.  That view is... concerning.  The next thing people look at - if they're particularly attentive - is S-curves for previous technologies.  That's better, but it's still only guessing.  I prefer to skip the guessing and dig into the nuts and bolts of how technology is commercialized.  

There's a vehicle development pipeline, and we can monitor it. OEMs work with three tiers of suppliers to invent, refine, commercialize, and ramp up new technologies.  This process takes years at minimum, sometimes stretching into decades.  Figure several years for Tier 1 suppliers to introduce a new technology, several more years to prove it in the field at small scale, and several more years for OEMs to design it into new vehicles.  We can gather a decent idea of what will be by looking at where the industry is in this process and how much money they're throwing at it*.

That said, Tesla's Roadster & Model S were the small-scale, "proving out" of EV technology, and the industry is now going all-out to electrify.  Hundreds of billions of dollars are being thrown at R&D, mining, battery production, etc.  This isn't a run-of-the-mill, incremental-improvement, technology either.  Some locations want EVs to reduce pollution, many countries want them to avoid oil imports, and commercial users stand to save a ton of money.  A ton of financial & political weight is being thrown behind then. It's happening.  The question is, "When will EV production exceed vehicle demand growth?" 

Would love to year your thoughts on that.  

*There's also the second-order effect of improving the R&D process to reduce development times - an important factor I've yet to hear anyone discuss.  

 

6 hours ago, GeoSciGuy said:

I personally believe that, if oil is conserved or replaced in one scenario, then oil will be used in another scenario.  Think about global airline growth, for example, especially in Asia.  The quantity of new airports being built and the quantity of new flight paths available globally will completely over-ride the decrease in oil being used in personal vehicles.  

Then again, if fuel efficiency and EVs never came to be, oil prices would be much higher, and because of that, economic growth would be less, and less airports would be built, meaning less flight paths would be developed.  

 

With global oil demand increasing exponentially, it is our duty to use it more efficiently and to find as many alternatives as possible, so that it can be used where there are no alternatives.  

Agreed that prices affect what, exactly, we spend our oil on.  "Duty" is an interesting word though.  My understanding is that an industry will always look for the best and highest use of their product, it being their fiduciary responsibility to do so.  How does our "duty to use it more efficiently" play into that?  

 

5 hours ago, GeoSciGuy said:

I forgot to mention my point on electric bicycles/motorcycles. 

I think that e-bicycles and e-motorcycles will replace the majority of two-wheeled transportation within cities and play a very important role in the economic growth of developing countries.  

 

In cities, people are very pollution conscious, and are willing to transition to e-bicycles and  e-motorcycles very rapidly.  

E-assisted bicycles will play a significant role because they are sort of half-way between a traditional bicycle and an electric motorcycle.  The benefit of the e-bicycle is that there is no driver's license required and no paid parking, as well as being cheaper than a motorcycle.  

 

When the battery on an e-bike doesn't cut it and where there is a more treacherous terrain or longer distances are required, an electric motorcycle is very desirable.  

 

Much of the developing world does not have paved roads yet.  Electric mountain bikes (aka e-bicycles) and electric dirt bikes (aka e-motorcycles) can play a significant role in giving adequate transportation to everyone where paved roads don't exist.  There are plenty of healthy people that aren't fit enough to cycle over extremely steep hills.  Also, E-bicycles allow people to commute without becoming sweaty, which is important for many jobs.  

 

As battery prices continue to decrease year over year, the entire world will benefit, whether those batteries are in their car, motorcycle, bicycle, laptop, or smartphone.

eBikes are a good point - esp. for the use cases you mentioned.  Another use case is universities: tens of thousands of young, often poor students packed into a tight space with little/no parking.  With a car, first they drive, then they park, then they walk.  After their first class, they walk again.  And again.  And again.  eBike dramatically speeds that process at minimal cost.  So they're not just cheaper; they can be faster than cars.  To wit: for my current commute, my eBike is faster. 

eBikes are also incredibly cheap compared to cars.  I have a spreadsheet where, before purchasing a vehicle, I calculate two values: 

1) Total Cost of Ownership for the vehicle.  I know, before purchasing the vehicle, approximately how long it will last me and approximately how much money I will spend over its life.  
2) Marginal cost of driving.  I.e. the cost to drive one mile, independent of fixed costs.  

If you go through this exercise, you'll make some enlightening observations: 

1)  The marginal costs of bicycle, eBike, 50cc scooter, and electric car are comparable.  How?  For all of these, most of the cost is in regular maintenance: brakes, tires, oil changes, filters, etc.  Maintenance items for the 2-wheeled vehicles are much cheaper - but they don't last as long.  Hence, an EV is almost as cheap to drive a mile as a scooter. 
2) The cheapest conventional car you can drive is about 2X the marginal cost of driving these other options. 
3) Marginal costs are but a fraction of the Total Cost of Ownership.  Initial purchase price, taxes, licensing, registration, insurance, paying mechanics to do the things you can't do - these are the things that eat your wallet.  

When you combine all this, the TCO comparison looks like this: 

bike/eBike << Scooter << EV/ICE

Now, to your point about eBikes: they do, in fact, bridge the gap between bicycles and scooters - and they do so at significantly lower cost.  I think you're right; we'll see them take off around the world.  

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5 hours ago, mthebold said:

EV production is still slow, but I don't think current production is as important as people think it is. 

You're right.  At this point in time ICE and EV demand are both growing. 

In the future, we'll see a higher percentage of of ICE vehicles being decommissioned than being added to the global fleet, so by then, EVs (and possibly fuel-cell vehicles) will make up 100% of the growth.  

It will be interesting to see how fast that change happens.  

5 hours ago, mthebold said:

Agreed that prices affect what, exactly, we spend our oil on.  "Duty" is an interesting word though.  My understanding is that an industry will always look for the best and highest use of their product, it being their fiduciary responsibility to do so.  How does our "duty to use it more efficiently" play into that?  

Maybe duty is the wrong word, as it has too strong a meaning.  

By all means, I believe everyone has the right to buy inefficient ICE vehicles and the right to drive wherever they want, whenever they want, for whatever reason.  

I was thinking more along the lines of the engineering and scientific communities having the duty to increase efficiency and find alternatives, and for material scientists to discover better applications for oil where not alternatives are available.

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11 minutes ago, GeoSciGuy said:

I was thinking more along the lines of the engineering and scientific communities having the duty to increase efficiency and find alternatives, and for material scientists to discover better applications for oil where not alternatives are available.

You're still using "duty", which implies a moral or legal obligation.  As a professional, I can say nothing will drive me out of a field faster than a public belief that it's my "duty" to solve their problems.  Will I help where I can?  Of course.  Will I do a thankless job for fair pay?  Sure.  Will I submit to a "duty" impressed upon me by ignorant, entitled masses?  Noooooooope.  Not touching that with a 10ft pole.  The risk to me and mine is incalculable.  

And therein lies the reason why all socialist programs fail: good men smart enough to do the job are also smart enough to realize that, should they fail, the fickle masses will have their heads - or at least their reputations, which can be as bad.  Once the good men leave, what's left is irredeemably ignorant idealists led by sociopaths.  Corruption ensues.  

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17 minutes ago, petronal@gmail.com said:

hay otras alternativas  por medio de bitumenes naturales 

No hablo Espanol.  Lo Siento.

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(edited)

e-bikes and e-scooters or e-rickshaws are efficient ways to travel in the cities. And a growing number of the world population live in a urban community.

Compared to cars they use less space in the traffic and for parking and they consume less energy.

Car occupancy rates (the average number of persons traveling in the car) are rather low. It's 1.7 in the US, 1.5 in the EU and sometimes even less (in Switzerland where I live its 1.1). Traveling alone in a 2 tons SUV for short distances when you don't  have to carry things is a waste of energy and using an e-bike or an e-scooter instead would be a more rational choice.

Another factor favoring e-bikes and e-scooters is the increasing cost of parking in the overpopulated cities with rising number of cars. In some Asian cities owning a place to park the car is more  expensive than the price of the car. In Hong Kong, the parking spot's price per sq ft, is at about US$3,500, outpaced the typical per sq ft price of prime residential flats in major cities like Tokyo, London and New York, according to data from property consultancy Savills. The only city that could top that is Hong Kong, at US$4,000 per sq ft.

https://www.straitstimes.com/business/property/as-flat-prices-soar-in-hk-investors-park-cash-in-parking-spots

Edited by Guillaume Albasini
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1 hour ago, GeoSciGuy said:

By all means, I believe everyone has the right to buy inefficient ICE vehicles and the right to drive wherever they want, whenever they want, for whatever reason.  

I don't see this as moral at all, the ICE produces pollutants that kill, that's a fact. If I walked around a city spraying toxic fumes into babies faces I would be rightfully arrested, it's no different when alternatives are available.

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1 hour ago, DA? said:

I don't see this as moral at all, the ICE produces pollutants that kill, that's a fact. If I walked around a city spraying toxic fumes into babies faces I would be rightfully arrested, it's no different when alternatives are available.

That's a fair point: pollution above some concentration is harmful, and those who pollute shouldn't be allowed to run roughshod over those who do not.  However, I think we need to balance harm from pollution against the harm poor people would incur if we forced expensive alternatives upon them.  

CA is a case study in this: the techies and successful entrepreneurs make enough money that COL increases are irrelevant.  The poor, on the other hand, have suffered from excessive regulation.  Many have become the "working homeless".  

Society has taken a step in the right direction by creating regulatory agencies and insisting on pollution controls, but it's important to discern where those controls are needed, how they should be applied, and who may suffer from them.  There may come a time when banning all fossil fuels makes sense, but we're not there yet.    

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1 hour ago, Technical_Fundamentalist said:

I love the idea of e-bikes and e-scooters. The concept works great in cities, but I'm just wondering how well they would do in suburbs. I feel like urban planners need to start keeping this tech in mind 

They do better in suburbs than you'd think.  If you have a 10-15 mile commute to work, they're not terribly practical.  For shorter commutes, however, suburbs are about perfect.  Newer communities often have wider roads, bicycle lanes, lighter traffic, and a generally more pleasant vibe.  I enjoyed cycling in suburbs far more than I did in any downtown.  I've also noticed that even the main arteries of suburbs with 45-45mph speed limits have plenty of space on the shoulders for bicycles, if not dedicated bicycle lanes.  Then there are the bicycle trails popping up in smaller towns.  My hometown had a trail that started about 3 miles from home.  I left for college, came back a few years later, and discovered it had been extended to within 1 mile of my house.  It also stretched the length of the city by that point; you could go anywhere. 

An eBike or scooter can't do everything, but there's plenty of opportunity for them.  Even Detroit is seeing bicycle lanes appear in gentrified neighborhoods.  

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10 hours ago, mthebold said:

That's a fair point: pollution above some concentration is harmful, and those who pollute shouldn't be allowed to run roughshod over those who do not.  However, I think we need to balance harm from pollution against the harm poor people would incur if we forced expensive alternatives upon them.  

CA is a case study in this: the techies and successful entrepreneurs make enough money that COL increases are irrelevant.  The poor, on the other hand, have suffered from excessive regulation.  Many have become the "working homeless".  

Society has taken a step in the right direction by creating regulatory agencies and insisting on pollution controls, but it's important to discern where those controls are needed, how they should be applied, and who may suffer from them.  There may come a time when banning all fossil fuels makes sense, but we're not there yet.    

Any pollution is harmful, it's just the acceptable risk that seems to be OK. The problem is humans on the whole are horrendously at taking responsibility for their actions especially when they don't see the results. We need strong regulations to control the actions of companies that have repeatedly in the past shown that they and those that run them can't be trusted.

The poor tend to be the ones that suffer worst of all from pollution, living closer to roads and industry, then not being able to afford the health care when the damage is done. Trying to put the blame on pollution regulation for homelessness is really ignoring so many other factors in the equation that are the prime movers.

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6 hours ago, Technical_Fundamentalist said:

I love the idea of e-bikes and e-scooters. The concept works great in cities, but I'm just wondering how well they would do in suburbs. I feel like urban planners need to start keeping this tech in mind 

My brother is the sustainable transport manager for a city and his job is a nightmare. With conservative councils around the city they have ended up with bike routes that suddenly end as they exit the city area. The surrounding areas seem to want to hinder any plan that's not just for cars. Contact your local politicians and tell them you want a village/town/city that's people friendly not car friendly.  

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