Electric shock – Tesla cars in Hong Kong more polluting than petrol models

Hi Mark,

Yes, I saw that.  It was front page in the local South China Morning Post, a couple of weeks back.

Today, there's a counter-argument in a letter to the editor:

Cheers

P/Forse

Electric cars still the greener option by far

I refer to the article, "Electric shock – Tesla cars in Hong Kong more polluting than petrol models" (April 13). The Bernstein report quoted in the article presents a distorted picture, skewing the data to fit the author's investment portfolio. Not surprising, given the report's author's oil and gas background and investments.

The most outrageous distortion is the choice of HK Electric in the estimation of carbon intensity, while completely excluding CLP, whose carbon dioxide emissions are 30 per cent lower. CLP generates three-quarters of the electricity, and powers 70 per cent of the electric vehicles, in Hong Kong. Correct that one distortion, and the report result is reversed.

Bernstein uses artificial fuel economy figures; production emissions are exaggerated, and the amount of carbon dioxide produced in the extraction, refinement and transportation of oil is understated.

All environmental protection agencies and governments globally recognise the benefits of electric vehicles, and support and promote their adoption. One distorted report from an oil company investor does not change that. The truth is that electric vehicles, even when powered by dirty coal, are still cleaner than comparable petrol vehicles today. In most cases, comparable petrol vehicles pollute at least 50 per cent more.

Hong Kong has already seen a 90 per cent reduction in emissions harmful to air quality from power generation over the past 20 years. Commitments for the coming 10 years will further reduce carbon dioxide emissions by at least 50 per cent. An electric vehicle purchased today will get cleaner in the coming years, as power generation continues to improve, while a petrol car will get dirtier, as the engine deteriorates.

The only valid point in the whole biased Bernstein report is that Hong Kong needs a cleaner fuel mix for electricity generation. Such a migration to cleaner and more renewable energy is inevitable, and in progress. We as a community should support that, because it is not just electric vehicles that are powered by our electricity grid.

Mark Webb-Johnson, chairman, Charged Hong Kong

On 17 Apr, 2016, at 5:16 am, Mark Hodgkin <MHodgkin@burystreetcapital.com> wrote:

Hi Peter,

I hope the sailing went well, I am still waiting for my Open 40 experience...

This may amuse – from the FT

On Hong Kong island, electric cars are not the clean option

Never mind that Elon Musk, founder and chief executive of the electric carmaker, has described the city as "a beacon" for electric vehicles. This may be so — Hong Kong has one of the highest penetration rates of electric vehicles as a percentage of new car sales anywhere. But this may not be helping Hong Kong's carbon footprint or air quality. According to research from Bernstein, electricity generation for Hong Kong island is so dirty that a Tesla car charged there will be responsible for one-fifth more CO2 over its average life than an equivalent petrol guzzler. Based on its assumptions, the research house says Hong Kong would have to reduce its carbon intensity by 30 per cent before its citizens can justify buying electric vehicles for lower emissions.

This is not Tesla's fault, nor is it likely to deter buyers. Nor, judging from the response to the Model 3 launch, do delivery delays, for which the company has become infamous.

Perhaps they should. Early adopters of a technology normally accept that their gadget will become obsolete fairly rapidly. They may not expect this for cars. Delays were so long for the first buyers of Model S cars in Hong Kong that deliveries arrived only two months before upgraded hardware came out. Ambitious technology goals have caused teething problems in most models. The very popularity of Tesla in Hong Kong can lead to delays in fixing any problems.

No matter, Tesla offers a way out. As in some other countries, it has a trade-in option for the Model S, buying old cars at 75 per cent of the base price (and 65 per cent of add-ons) if returned within a window of 36 to 37 months of ownership. That deal does not hold, though, if you want to upgrade earlier.

Tesla cars have long run potential. But until it can learn to deliver, rational investors will steer clear.

Mark