The Government Shouldn't Power The Economy

Why Isn't Private Industry Building Charging Stations?

Why is the government building charging stations for electric cars? Why isn’t any respectable reporter asking that question when government officials talk about it?

With the tremendous rise in gas prices due to terribly misplaced government policy, a lot of people are looking at electric cars even though they are really expensive. They are quiet and have no emissions.

Electric cars do their own environmental damage, but you can’t see it. It’s sort of like not being able to see the slaughter of an animal at a meatpacking plant when you buy it at the grocery store.

There is no electric car free environmental lunch.

There are definite opportunity costs to electric cars and there are negative externalities with them, just like there are with gas/diesel-powered vehicles.

If everyone went electric today, it would overwhelm the power grid. As I have said in the past, unless you build nuclear power plants you aren’t serious about tackling global warming.

I think that electric cars are cool. I don’t hate on them. I am a car guy. But, you have to be objective when you analyze electric versus gasoline/diesel powered cars. Right now, electric is awesome for driving around a city/suburb.

Here is the point:

It’s not the government’s place to build charging stations. They build roads and bridges and often don’t do an efficient job of that. They don’t build gas stations.

Besides, private industry will always do something like this better. I realize that government bureaucrats want electric cars but it’s just because they can engage in the crony capitalism that surrounds government action at scale.

I read this article in the WSJ about a road trip between New Orleans and Chicago. The author did it in an electric car and had to do a lot of logistical work before doing the trip just so they could power their car. I have driven that drive but I did it in a diesel. Their trip was more circuitous through the South.

Their data.

• Miles driven: 2,013

• Number of charges: 14

• Total charging cost: $175

• Hours spent waiting to charge: 18

• Hours of sleep: 16

The author writes,

The government is spending $5 billion to build a nationwide network of fast chargers, which means thousands more should soon dot major highways. For now, though, fast chargers tend to be located in parking lots of suburban shopping malls, or tethered to gas stations or car dealerships

Why?

Shouldn’t the oil companies that already have service stations up and down interstates be doing electrical charging? If they aren’t why aren’t they? I realize that we now measure things in trillions so $5 billion doesn’t seem like a lot but I don’t think the government should be doing this in the first place.

The market for electric cars is small despite all the trends around them. Electric vehicles are 5.2% of the market. Sure, it’s growing but it isn’t big enough for the oil companies to build infrastructure for them. No doubt, this will grow as more electric cars are produced.

Analyst Benedict Evans wrote a piece back in 2017 that is a great analysis of the service station industry and the potential impacts of electronic cars replacing gas cars. It is well worth your time to click the link and read it. There are many second-order effects that will happen to supply chains and the economy from switching over to electric cars. These effects are neither “bad” nor “good” they just are.

With the government building charging stations, private industry will choose not to compete at scale. How do you compete with the government?

Driving cross country in an electric vehicle sounds like it kind of sucks. I wouldn’t want to tackle heavy snow in one and the WSJ writer said,

To save power, we turn off the car’s cooling system and the radio, unplug our phones and lower the windshield wipers to the lowest possible setting while still being able to see. Three miles away from the station, we have one mile of estimated range.

Imagine driving through hot and humid or dry hot desert areas of the country after reading that.