My e-bike’s already broken but I’m still an e-believer

My e-bike broke.

That’s an opening line I neither wanted nor expected to write just two weeks after getting my hands on the thing. But there you go.

It was only my fourth time riding it and all.

The particulars of what happened aren’t especially dramatic, but go as follows: after braking quite hard ahead of some looming traffic lights, the front wheel suddenly careered off.

Up until then, I had admittedly been enjoying the bike’s so-called Turbo boost, which had shot me straight to around 30 km/h without much need for serious pedalling. So I had to brake quite hard, but still. I wasn’t expecting to suddenly be without a front wheel. After all, they’re quite important to make the bike move where you want it to go.

Luckily, as I was nearly stationary when it fell off, I wasn’t hurt, though I can’t say the same for the bike. The disc brake is now bent out of shape, meaning the front wheel no longer rotates properly, so the bike is out of action for the time being.

These things happen, I suppose.

What happened certainly wasn’t anything to do with the fact that it’s an e-bike.

The manufacturer seems to think I hadn’t tightened the front wheel’s quick release enough, though I’m sure I had. Either way, they’re sending me a new part. Though this time I’m going to get a bike shop pro to fit it and give the whole bike a once over when it arrives.

I certainly won’t be put off riding the bike.

Right up until the accident, I’d loved riding it. Especially being able to accelerate away from all the other non-electric bikes on the road and getting as much as ten pedal strokes more for my money.

It was proving quite simply a brilliant mode of transport (though admittedly it wasn’t quite so impressive when operating on one wheel).

Similarly, the electric car I drive certainly out-competes any traditional internal combustion engine (ICE) vehicle I’ve driven before. It drives much more smoothly and accelerates more quickly. I shell out much less to keep it running, and, perhaps most importantly, it reduces urban noise and air pollution.

I’m still an e-believer, make no mistake.

Saying that, not everyone is. Although sometimes you have to question their motives. ExxonMobil CEO Darren Woods is a recent case in point.

Last month, at an industry event, Woods revealed either bad faith or ignorance of the energy industry when he pointedly suggested there was no point having “electric vehicles that will end up being charged by power generated from coal” – a familiar stick used to beat against electric vehicles (EVs) by naysayers.

Indeed, you might have heard similar suggestions before. The thing is, Woods’ statement and those like it are all total nonsense.

Even if every car on the planet was taken off oil and run on coal-fired electricity, they would still deliver more carbon savings by an order of magnitude.

Oil, after all, is an incredibly inefficient transport fuel, with EVs already over three times as efficient as internal combustion engine cars. What’s more, centralising heat loss in a power plant is far better than decentralising heat loss in millions of separate engines.

But this is mostly beside the point.

That’s because in the areas where EV adoption is occurring at the fastest rates – China, California and the EU – the deployment of clean electricity is far outpacing the marginal demand from new on-road EVs.

What that means is that EV uptake is being entirely met at the margin through new generation from wind and solar – and certainly not from coal. Global coal consumption peaked in 2013 and is in heavy decline in many domains.

As journalist Gregor Macdonald, author of a new book called Oil Fall, points out:

China put 1.26 million new EV on the road last year. Very, very generously, this represents 4.41 TWh of new electricity demand. But how much new electricity did China create last year, from wind and solar alone? 130.7 TWh.

As Macdonald states, for the sake of ExxonMobil shareholders, you’d hope Woods learns some power sector mathematics.

He should certainly know that EVs represent the greatest threat to oil’s monopoly of the internal combustion engine.

Electricity, in short, is on a fast track to massively reduce its carbon emissions – and, unlike ExxonMobil, is richly rewarding investors in the process.

If you don’t believe me, just take a look at the following chart.

Source: Financial Times

As you can see, the iShares Global Clean Energy exchange-traded fund is streaking far ahead of the oil-dominated Vanguard Energy ETF, with the former rising by 32% so far this year compared to only a 1% rise in the latter.

In fact, in August, the renewables fund bettered the fossil fuel ETF by the biggest margin in five years.

Be clear, solar and wind stocks are outperforming oil and gas shares by a widening margin.

I’ve written about the reason for the outperformance before: the sharp reduction in the cost of wind and solar in recent years, which has made them cheaper than coal and natural gas at certain times in many markets.

The cost of solar has fallen 85% since 2010, while wind power has dropped about 50%, according to Bloomberg New Energy Finance.

According to Deirdre Cooper, who runs the Investec Global Environment Fund, low global interest rates are also making it easier to fund solar and wind projects that have high upfront costs but low operating costs.

“Decarbonisation is the largest investment the world has ever had to make in peacetime and the yield curve is giving us an extremely attractive environment in which to make that investment,” Cooper told the Financial Times.

The green energy boom is just beginning. With a few bumps along the way…

But it’s far from the only tech boom out there. My friend Eoin Treacy has identified three tech trends he calls Millionaire Makers. For good reason.

All the best,

James Allen
Editor, Southbank Investment Research

Category: Technology

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