On October 4, 2012 the Journal of Industrial Ecology published a "Comparative Environmental Life Cycle Assessment of Conventional and Electric Vehicles" which found that:
"EVs powered by the present European electricity mix offer a 10% to 24% decrease in global warming potential (GWP) relative to conventional diesel or gasoline vehicles assuming lifetimes of 150,000 km. However, EVs exhibit the potential for significant increases in human toxicity, freshwater eco-toxicity, freshwater eutrophication, and metal depletion impacts, largely emanating from the vehicle supply chain."
Since mushy terms like 'significant' leave plenty of wiggle room for rationalization, I spent some time digging through the supporting information to get a better understanding of the environmental impacts. I learned that when the authors compared the comprehensive cycle life impacts of a Leaf from Nissan Motors (NSANF.PK) against the comprehensive cycle life impacts of a gasoline fueled A Class from Mercedes Benz (DDAIF.PK):
- CO2 emissions decreased 23% from 258.3 grams per kilometer to an average of 201.3 grams for the two battery chemistries evaluated;
- Human toxicity increased 256% from 74.1 grams of 1.4-dichloryl benzene equivalent per kilometer to an average of 273.1 grams for the two battery chemistries evaluated;
- Freshwater eco-toxicity increased 171% from 1.5 grams of 1.4-dichloryl benzene equivalent per kilometer to an average of 4.2 grams for the two battery chemistries evaluated;
- Freshwater eutrophication increased 269% from 0.05 grams of phosphorous equivalent per kilometer to an average of 0.22 grams for the two battery chemistries evaluated; and
- Metal depletion increased 194% from 30.2 grams of iron equivalent per kilometer to an average of 87 grams for the two battery chemistries evaluated.
I have a hard time understanding how trading modest CO2 reductions for massive human toxicity and metal depletion impacts is a good deal, but I'll leave that particular cost-benefit equation for readers to puzzle their way through.
The wonderful thing about comprehensive life-cycle assessments is they not only identify what the impacts are, but they identify when the impacts are. This particular study was organized in a way that made it simple to distinguish between front-end manufacturing impacts and long-term impacts from vehicle use and end of life disposal.
That's where the differences get really shocking because except for CO2 emissions impacts, the bulk of the nasty environmental impacts arise from the manufacturing of vehicles rather than the use of vehicles. For all intents and purposes, the real filth is front-end loaded.
I created the following graph by taking the normalized data from Section I of the Supporting Information for the Journal of Industrial Ecology study and segregating it into two classes; manufacturing, and use and disposal. My Excel spreadsheet with the detailed calculations is available here. The manufacturing impacts are highlighted in red while the use and disposal impacts are highlighted in blue. The five columns on the left represent the impacts of a Nissan Leaf while the five columns on the right represent the impacts of a Mercedes A Class.
For every class of environmental damage, the front-end impact from manufacturing EVs was at least twice as high as the impact from manufacturing a comparable gasoline powered vehicle.
As a final step in my analysis I took the environmental impact data for a Nissan Leaf and adjusted the battery related environmental impacts to get a feel for how the Model S from Tesla Motors (TSLA) would fare if it was subjected to a comparable life cycle environmental impact analysis. Once again, the manufacturing impacts are highlighted in blue while the use and disposal impacts are highlighted in red. The five columns on the left represent the impacts of a Tesla Model S, the five columns in the middle represent the impacts of a Nissan Leaf and the five columns on the right represent the impacts of a Mercedes A Class.
The point of this last graph is to show the catastrophic environmental impact of larger batteries. The only data points I changed were the ones that were directly related to battery size. That one simple upgrade which is touted as a primary advantage of the Model S:
- Reduced the life-cycle CO2 advantage to 5%:
- Increased the life-cycle human toxicity impacts by 46%;
- Increased the life-cycle freshwater eco-toxicity by 36%;
- Increased freshwater eutrophication by 35%; and
- Increased metal depletion by 44%
You don't even want to see environmental impact graphs for a Model S equipped with an optional 65 kWh or 85 kWh battery pack.
With the last week's successful completion of a $196 million follow-on offering, Tesla is no longer teetering on the edge of insolvency. It is, however, trading at a dizzying 13 times book value based solely on green hype that isn't supported by the underlying facts.
Benjamin Graham famously cautioned investors, "In the short run, the market acts like a voting machine, but in the long run it acts like a weighing machine." As environmentalists come to the realization that battery electric vehicles are massively increasing current industrial pollution in the name of moderately reducing future global warming impacts, I expect the backlash to be stunning.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.