Electric vehicles are often praised as a green and sustainable alternative to conventional vehicles that run on fossil fuels.
However, electric vehicles may also have some hidden costs for the world economy and society that are not widely discussed or acknowledged.
In this article, we will expose some of the reasons why electric vehicles hurt the world economy and how they can affect different stakeholders.
How Electric Vehicles Hurt the World Economy?
#1. Electric Vehicles Increase the Cost of Transportation and Reduce the Purchasing Power of Consumers
One of the main drawbacks of electric vehicles is that they are much more expensive than conventional vehicles. According to the World Bank, electric vehicles can cost up to 70% more than conventional vehicles.
This makes electric vehicles unaffordable for many consumers, especially in developing countries where the average income is low and access to credit is limited.
Moreover, the savings from fuel and maintenance may not be enough to compensate for the higher purchase price, especially if the electricity prices are high or the driving distances are short.
Therefore, electric vehicles may not increase the demand for vehicles or the mobility of the people but rather create a financial burden for the consumers.
This may reduce the purchasing power and the disposable income of the consumers, which may have a negative impact on the consumption and the growth of the world economy.
#2. Electric Vehicles Do Not Reduce the Carbon Emissions or the Environmental Impact of the Transport Sector
Another drawback of electric vehicles is that they still rely on electricity, which may not be generated from renewable sources.
In many countries, the electricity grid is dominated by coal, natural gas, or nuclear power, which have their own environmental and social impacts.
For example, coal mining and burning can cause air pollution, water contamination, land degradation, and greenhouse gas emissions.
Natural gas extraction and transportation can cause methane leaks, water pollution, and seismic risks. Nuclear power plants can pose safety and security risks, as well as generate radioactive waste.
Therefore, electric vehicles may not reduce the overall carbon emissions or environmental impact of the transport sector, unless the electricity is generated from clean and renewable sources.
In fact, electric vehicles may even increase carbon emissions if the electricity is generated from coal or other fossil fuels.
This may worsen climate change and environmental degradation, which may have adverse effects on the health, productivity, and welfare of the people and the economy.
#4. Electric Vehicles Destroy Jobs and Industries in the Conventional Automotive Sector
A third drawback of electric vehicles is that they can destroy jobs and industries in the conventional automotive sector, such as engine manufacturing, fuel refining, and vehicle maintenance.
According to a study by the Council on Energy, Environment and Water (CEEW), a 30% electric vehicle scenario in India will support around 20 to 25% fewer jobs as compared to a business-as-usual scenario, depending on the level of indigenization.
The new EV jobs will require a skilled workforce, which does not exist in India today. Reskilling and vocational training will be essential to achieve the EV sales target.
Moreover, the transition to electric vehicles may also affect the tax revenues of the government, which rely heavily on the petroleum sector.
The CEEW study estimates that a 30% EV penetration in new vehicle sales in 2030 will result in the central and state governments losing 15% of potential petroleum tax revenues compared to a business-as-usual scenario.
This may have a negative impact on the fiscal balance and the public spending of the government, which may affect the provision and the quality of public goods and services, such as education, health, and infrastructure.
#5. Electric Vehicles Require Costly and Challenging Charging Infrastructure and Battery Recycling
A fourth drawback of electric vehicles is that they require a sufficient and reliable charging infrastructure and battery recycling system, which may not be available or affordable in many countries.
Electric vehicles need to be charged frequently and conveniently, which requires a network of charging stations that can provide fast and cheap electricity.
However, building and maintaining such a network can be costly and challenging, especially in rural and remote areas. Moreover, electric vehicles use batteries that contain toxic and scarce materials, such as lithium, cobalt, and nickel.
These batteries need to be replaced and recycled periodically, which requires a proper waste management and disposal system.
However, such a system may not exist or function properly in many countries, leading to environmental and health hazards. This may increase the cost and the risk of electric mobility, which may discourage the adoption and use of electric vehicles.
#6. Electric Vehicles Reduce the Consumer Choice and Innovation in the Automotive Sector
A fifth drawback of electric vehicles is that they may reduce consumer choice and innovation in the automotive sector.
Electric vehicles are relatively simpler and more standardized than conventional vehicles, which may limit the variety and customization of the vehicles.
Electric vehicles may also reduce competition and innovation in the automotive sector, as the market may be dominated by a few large players that control the battery and charging technology.
Electric vehicles may also discourage the development of other alternative and cleaner fuels, such as hydrogen, biofuels, or synthetic fuels, which may have more potential and benefits than electric vehicles.
This may reduce the diversity and the quality of the transport options and solutions, which may affect the satisfaction and the preferences of the consumers and society.
#7. Electric Vehicles Increase the Dependence on Foreign Suppliers and Geopolitical Risks
A sixth drawback of electric vehicles is that they may increase the dependence on foreign suppliers and geopolitical risks for the countries that import electric vehicle components and materials.
Electric vehicles require batteries that contain rare and strategic metals, such as lithium, cobalt, and nickel, which are mainly produced in a few countries, such as China, Congo, and Australia.
These countries may have political, economic, or environmental issues that can affect the supply and price of these metals.
Electric vehicles may also require electricity that is imported from neighboring countries, which may have different interests and agendas.
Electric vehicles may also create new conflicts and tensions over the access and control of the resources and markets related to electric vehicles.
This may increase the vulnerability and uncertainty of electric mobility, which may affect the stability and security of the economy and society.
#8. Electric Vehicles Reduce the Driving Pleasure and Performance
A seventh drawback of electric vehicles is that they may reduce the driving pleasure and performance of the drivers and passengers.
Electric vehicles are quieter and smoother than conventional vehicles, which may appeal to some people, but may also bore or annoy others.
Electric vehicles may also lack the power and speed of conventional vehicles, which may frustrate or disappoint some drivers.
Electric vehicles may also have a shorter range and a longer charging time than conventional vehicles, which may limit the travel options and convenience of the drivers and passengers.
Electric vehicles may also have a different design and appearance than conventional vehicles, which may not suit the tastes and preferences of some consumers.
This may reduce the enjoyment and satisfaction of electric mobility, which may affect the demand and the use of electric vehicles.
#9. Electric Vehicles Increase the Vulnerability to Cyberattacks and Hacking
An eighth drawback of electric cars is that they may increase the vulnerability to cyberattacks and hacking, as electric cars are more connected and digitalized than conventional cars.
Electric cars use software and sensors to control and monitor various functions and features of the vehicle, such as the battery, the charging, the navigation, and the entertainment.
These software and sensors may be hacked or manipulated by malicious actors, who can steal or alter the data, damage or disable the vehicle, or endanger the safety and security of the drivers and passengers.
Electric cars may also be affected by the reliability and quality of the internet and the electricity, which may be disrupted or compromised by natural disasters, technical glitches, or human errors.
#10. Increased Social Inequality and Exclusion
A ninth drawback of electric cars is that they may increase social inequality and exclusion, as electric cars may create a gap between the rich and the poor, the urban and the rural, and the young and the old.
Electric cars may be more accessible and affordable for the wealthy and urban dwellers, who can benefit from the subsidies, incentives, and infrastructure that support electric cars.
However, electric cars may be less accessible and affordable for the poor and rural dwellers, who may lack the income, credit, and infrastructure that enable electric cars.
Electric cars may also be more suitable and attractive for the young and the tech-savvy, who can adapt and enjoy the new and innovative features of electric cars.
However, electric cars may be less suitable and attractive for the old and the traditional, who may prefer and value the familiar and conventional features of conventional cars.
#11. Reduced Public Transport and Active Mobility
A tenth drawback of electric cars is that they may reduce public transport and active mobility, as electric cars may encourage more private car ownership and use, which may have negative consequences for the environment and society.
Electric cars may reduce the demand and supply of public transport, such as buses, trains, and taxis, which may be more efficient and equitable than private cars.
Electric cars may also reduce the demand and supply of active mobility, such as walking, cycling, and scooting, which may be more healthy and enjoyable than private cars.
Electric cars may also increase the congestion and pollution of the roads and cities, as electric cars may occupy more space and emit more emissions than public transport and active mobility.
Conclusion
Electric cars may have some positive effects on the environment and the energy security of the country, but they may also have some negative effects on the economy and society.
The transition to electric cars should be carefully planned and implemented, taking into account the various trade-offs and challenges involved.
The government should adopt a balanced and holistic approach, that supports the indigenization of the supply chain, the development of the EV ecosystem, the diversification of the tax base, and the reskilling of the workforce.
Electric cars are not a panacea, but a part of a larger solution that requires a systemic and coordinated effort from all stakeholders.
