Good Battery-Nomics – Something for Tesla to Boast About

Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

Colombia Automobiles / Thematic (Sector/Industry)

<p>“Electric cars aren’t green” is one of the most popular arguments these days. EVs supposedly have higher manufacturing emissions than regular vehicles; they also run on electricity which has its own footprint. These factors combined are said to offset the environmental impact of avoiding gasoline use. In this note, we look at the mathematics behind this argument.</p><ul class=""><li>Greenhouse Gas (GHG) savings from an EV are only 5% compared to a regular gasoline vehicle. Operating emissions of an EV are 50% lower than a gasoline vehicle but their manufacturing footprint doubles that of a gasoline vehicle.</li><li>Hybrids and PHEVs offer a GHG saving of over 30% compared to gasoline vehicles and BEVs</li><li>Lower than expected GHG savings make EV incentives counter-intuitive. The US government spends over USD 350 per one metric ton of CO2 emissions saved under the federal income tax credit incentive for EVs, while the value of one metric ton of CO2 savings in the market is around USD 17.</li></ul>

“Electric cars aren’t green” is one of the most popular arguments these days. EVs supposedly have higher manufacturing emissions than regular vehicles; they also run on electricity which has its own footprint. These factors combined are said to offset the environmental impact of avoiding gasoline use. In this note, we look at the mathematics behind this argument.Greenhouse Gas (GHG) savings from an EV are only 5% compared to a regular gasoline vehicle. Operating emissions of an EV are 50% lower than a gasoline vehicle but their manufacturing footprint doubles that of a gasoline vehicle.Hybrids and PHEVs offer a GHG saving of over 30% compared to gasoline vehicles and BEVsLower than expected GHG savings make EV incentives counter-intuitive. The US government spends over USD 350 per one metric ton of CO2 emissions saved under the federal income tax credit incentive for EVs, while the value of one metric ton of CO2 savings in the market is around USD 17.

Mathematics of EV Emissions