“On Wednesday, the Epa plans to announce hard new tailpipe emission standards designed to successfully require the automobile industry to phase out the sale of gas-powered cars,” reports The Verge, with the intriguing headline “Completion Is Nigh for Gas-Powered Cars.”
Environmental, social, and corporate governance (ESG) is the most recent faith, and we all know who the practitioners are. Electric lorry (EV) owners sing “Hallelujah” when they take out of their garages. The investor-class ESG evangelists think the new belief is in its beginnings. Whatever the Biden EPA does, financier Harris Kupperman believes it’s most likely just the Church of What’s Happening Now.
Kupperman, described as Kuppy by Real Vision‘s Maggie Lake, informed her, “Well, I believe we’re nearing peak ESG, which is most likely a good thing, truthfully.” He explained,
And it resembles religious beliefs sort of come, they peak, they die out. Nobody practices Roman faiths anymore. I can name 3 of the gods and I’m a Roman history significant.
These things, they peak, they crest, and this little religious beliefs of ESG, it’s been around for a while. It peaked. And now there’ll be some die hard adherence, but I think the large majority of investors want to earn money. And it’s excellent if they’re doing something that has a social great, but the majority of them simply wish to conserve for their retirement.
As to all those elegant Teslas quietly cutting you off in traffic, their chauffeurs bursting with superiority, believing they are saving the world, Kuppy sees them going the method of T. rex. “No. I think EV is going to be something you’re going to go to a museum with my kids and be like, wow, that was an evolutionary dead end and we constantly [waste] trillions of dollars on this. No, I think that there’s no future to EV.”
“Really, why?” an aghast Lake questioned.
Next, Kuppy includes the tough truths amateur environmentalists and federal government enforcers don’t consider.
Since it [the EV] damages energy. You have this principle called EROI, which is the return on energy you put in. An EV, you put more energy in than you go out. Therefore as a result, it’s just like a thermodynamic rule– it will not work unless you subsidize it.
What’s the reason for EVs? It’s due to the fact that it apparently produces less carbon. But through the complete life cycle of owning an EV, because a lot carbon has to go into the silly thing, it doesn’t utilize less carbon. You’re better off having a gas drinker.
Yikes. Perhaps EV owners are not as brave as they think.
Kupperman states that without federal government aids, consumers will stay with internal combustion engine (ICE) vehicles. In fact, even with aids, the majority of people, like Kupperman, will buy ICE vehicles. But there will always be snobs.
[If] you sort of wish to be a snob and say you have actually got an EV, then be a snob. It’s a nice thing to have if you want to display that you have a thing. For me, I have a truck. Does not trouble me at all and I’m proud of my truck.
Nevertheless, “if carbon is the thing you’re caring about, you’re appreciating the total cost of using the automobile or the energy in versus energy out. Nearly any part you take a look at, you’re much better off simply having an internal combustion engine. And those engines have actually gotten extremely efficient over the last number of years.”
Kupperman explains that as these EVs age, owners will see
what happens to battery degradation with lithium ion batteries, and the reality that the lithium ion battery is such a large element of the overall expense of a car, and when you’re at year 5 or 6 [and] need to change 30% to 40% of your vehicle’s preliminary cost, individuals are going to recognize the life time cost of owning an EV is astronomically high.
Thus, in Kuppy’s view adoption will decrease and EV owners will have doubts and understand their EVs are terrible automobiles.
As far as ESG goes, it is simply a tax on mankind, according to Kupperman. “And that’s a real hinderance to 6 billion people that desire a much better standard of living if they can’t pay for the important things to pull them up out of hardship, successfully.”
Kupperman thinks ongoing demand for energy is unstoppable and the federal government will only make matters worse.
They’ll try all sorts of foolish things. Federal governments historically do truly dumb things that make issues even worse. That’s the history of governments. I assume they’ll try all sorts of things that’ll stop working. And all that it will do will be to damage the supply reaction since of the government’s interfering in your ability to do your company.
When Lake asked about possible federal government interference, Kupperman replied,
Yeah, they’re most likely going to attempt excess earnings taxes. They’re most likely going to attempt export restrictions, and price caps, and all sorts of other things. And the net result is that guys will take their dividends and go to the beach. They’re not going to drill for oil. No, I think it’s nearly inescapable that the government will take a problem and turn it into a crisis.
Yes, an energy crisis is on the method, thanks to Uncle Sam.