About electric cars

Image: Mike Bird


The world needs more and more energy, including for electric cars, and there are no solutions today for a radical change in the energy matrix with low environmental impact


This text seeks to bring elements to an important discussion on environmental issues: the use of electric cars to replace conventional cars, powered by gasoline. Understanding this issue better requires the presentation of some numbers. This makes the text more dry, but it is essential to focus the debate. It is important to realize the gigantic size of the issue. The numbers, and consequently the impacts, are also very large.

The electric car is today presented as a kind of panacea to solve part of the problems of air pollution, reducing the use of fossil fuels and global warming. There is an expectation that the entire fleet of cars that use gasoline will be replaced by cars powered by electricity. This is a huge challenge. Two initial numbers: there are currently around 1,45 billion cars running on gasoline and around 40 million running on electricity.

But, regardless of its environmental impacts, in the world of financial capital it is very well positioned. This may explain to some extent the way he has been presented to the world. Volkswagen is the company with the highest sales volume of companies listed on US stock exchanges. In the last four quarters, Volks sold US$348,13 billion. Toyota, second, sold US$307,48 billion. Tesla, the queen of electric cars, sold US$94,74 billion. The second, BYD, sold US$84,70 billion. They are respectively in positions 11 and 13 in the sales ranking. The two together sell about half of what Volkswagen or Toyota sell. The top ten companies are all conventional car manufacturers.

In numbers of vehicles produced in 2023, Toyota produced around 10,5 million and Volks 8,8 million. Tesla produced 1,8 million and BYD 1,5 million. The two combined produced 17% of what Toyota and Volkswagen produced. The ten largest manufacturers, all of conventional cars, together produced around 57 million units.

However, Tesla is the largest automobile company with a market value of US$562,57 billion. Toyota is second with a value of US$292,80 billion, about half of Tesla. BYD is third with a value of US$87,52 billion. Volks is only seventh with a value of US$72,71 billion. Tesla is worth more than Toyota, BYD, Porsche and Mercedes-Benz combined. Elon Musk thanks you. With a small part of this money he bought Twitter and opened the app's doors to the dirty work of the far right.

Capitalism in this current phase already profits from initiatives proposed to reduce environmental impact. Financial gains are pursued wherever there is the possibility of extracting value. But the question about the real impact of the electric car goes beyond this aspect of the value of automobile companies. Further investigation is needed into the general impact on the environment and the viability of the car as part of the solution to the environmental issue, in the size that has been proposed.


The first issue is the production of electrical energy. Is it sustainable to replace a significant part of the fleet, or all of it, with electric cars? The answer to this question is essential.

The consumption of a conventional car is measured in km/l, that is, how many kilometers a car travels for each liter of fuel. In the case of trams, it is measured in KWh/Km. KWh is the unit of measurement for energy. This measure reflects the car's energy consumption for each kilometer driven. An average electric car consumes 0,22KWh/Km. Considering that an average car travels 30Km per day, an accepted estimate, a car consumes around 6,6KWh per day. Or 2.409KWh per year. There are currently around 40 million electric cars on the road in the world, resulting in an annual consumption of approximately 96,3TWh. The total energy generation in the world is around 29.479,05TWh. Today the fleet of electric cars consumes around 0,32% of the energy produced.

If we extrapolate this result to the replacement of all 1,45 billion conventional cars with electric cars, consumption would be 3.500TWh, a significant 12% increase in global demand for electrical energy. The growth in global electricity consumption over the last ten years has averaged around 2,5% per year. Car sales have grown over the last ten years, on average, around 1,1% per year. Maintaining these values, we can have an idea of ​​the impact of changing the car fleet from conventional to electric on global electricity consumption.

The underlying issue behind this increase in energy needs is the generation matrix. The two graphs below illustrate the evolution from 1985 to 2023 by type of source for generation:

Generation using fossil fuels represents 60% of the total and generation using non-fossil fuels, including nuclear energy, is 40%. Among non-fossils, the largest contribution is from water sources, with 36,3%. And in fossils it is coal, with 58,55%, as can be seen in the table below.

All these numbers show us the size of the challenge. It is necessary to equalize the growth of the electric car fleet with the growth of electrical energy generation. And more than that, a much faster change in the generation matrix. If there is no planning, the energy demand of electric cars may not be able to be met by generation. There may be an energy demand greater than the generation capacity, completely unbalancing the system and causing a lack of energy for all activities.

On the other hand, increasing generation capacity, maintaining the current matrix, will increase the impact on the environment caused by more fossil fuels being burned. The charge profile of car batteries still needs to be considered. There are increasingly faster chargers that demand more energy from the system in shorter times. It is another variable that needs to be considered.

In the debate about the environmental impacts of the generation and use of electrical energy, there is nothing simple, a straight path or magical, definitive solutions. There is no way of producing energy that is free from environmental impact. The burning of fossil fuels generates gases that generate climate change, in addition to the impacts generated by the extraction and refining of coal, oil and gas.

Wind generation generates impacts that are now being better studied with the enormous growth of wind farms, including in Brazil. Solar generation covers extensive areas that compromise life on the ground and the movement of larger animals. Hydraulics have the impact of large flooded areas. We live in a dilemma: the world needs more and more energy, including for electric cars, and there are no solutions today for a radical change in the energy matrix with low environmental impact.

Technology will not, as some bet, solve the problems. Promises and non-obligatory commitments are even less so. We need mandatory actions and commitments that at least point to real and significant reductions in greenhouse gas emissions. The financial market is the only economic agent that is winning in this situation.

The appreciation of companies, such as electric car manufacturers, in this sector is high, which makes it very attractive for short-term gains for investors. And for capital in general, and finance in particular, as Lord Keynes said, “in the long run we will all be dead”.

*Luis Sergio Canario is a master's student in political economy at UFABC.

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