Electric vehicles sales surge in Asia: Gerschenkron and EV production in China

A BYD dealership in Phuket, Thailand.

According to Bloomberg "BYD Showrooms Are Bustling Across Asia After Iran Oil Shock," people are reacting to gas price increases resulting from the war with Iran by looking at buying electric cars.

Maybe the US too ("What to Know About Electric Cars When Gas Prices Are Surging," New York Times).  From the article:

In the United States, prices for new electric vehicles have fallen but still average $6,500 more than vehicles that run on fossil fuels, according to Cox Automotive. From a purely financial point of view, an electric vehicle makes sense for people who will save that much on fuel and maintenance during the time they own it.

The New York Times offers a tool to help people make that calculation based on local electricity prices and driving habits. But there is more to the decision than dollars and cents. Some benefits of electric vehicles are hard to put a price on, like the peace of mind that comes from not being at the mercy of geopolitics.

Alexander Gerschenkron was an economist who studied development economics.  

In "Economic Backwardness in Historical Perspective," he makes the point that later developing countries have an advantage when it comes to adopting new technologies, because unlike legacy advanced economies, they don't have billions invested in older technologies.

Vintage Marathon Oil gasoline station in Miami, Oklahoma.

China (in many technologies) is a great example.  One is with motor vehicles.  While their development of the automobile industry started with gasoline cars, many built through joint ventures with then advanced car makers like GM and Toyota, the companies were able to adopt and adapt the technologies for the development of their own domestic auto industry.

But China, seeing fossil fuel as a legacy fuel and making them dependent on the world oil economy, moved to the development of electric vehicles (and solar power, although the country still burns a lot of coal and is adding coal plants, since they have large supplies of coal domestically sourced) ("Chinese BYD cars emerge as threat to automakers," Detroit Free Press).

BYD started making electric batteries before moving to cars.  More recently they've developed a fast charging system that allows cars to go up to 600 miles between charges--except to provide this at scale would require serious electricity transmission upgrades.

Now China is years ahead of the American auto industry, which is losing billions of dollars trying to compete in the electric vehicle market ("Carmakers Took a $50 Billion Loss on EVs," Autoweek). And they are an increasing force in global markets ("How America’s EV retreat is increasing China’s control of global markets," CNBC).

During the first Trump Administration, I remember the Economist writing about this ("America’s domination of oil and gas will not cow China"), and Trump's preference for coal ("Trump orders coal revival, but market favors natural gas," NPR) and oil, stating that in energy, China is the future, and the US is the past.  China is an electro-state and the US is a Petro-state ("The Petro States of America," Bloomberg). 

Foreign Policy Magazine develops this thesis further, ""How the Iran War Could Consolidate China’s Energy Dominance: Amid global oil and gas disruptions, China stands prepared for the electrostate era."

Petro states as a sub-national phenomenon.

Wind turbines operate at a wind farm near Whitewater, California. Renewables tend to be lower risk than oil projects, but they also tend to deliver lower returns. / Getty Images

I apply the concept of petro states at the sub-national scale as well--many states in the US are pro fossil fuels, and have hampered the development of alternative technologies ("Making oil is more profitable than saving the planet. These numbers tell the story," NPR).  

In large part, it's because excise taxes on oil and natural gas are a huge revenue source for states ("Congress gave a break to coal producers. Wyoming worries it’ll carry the loss," Wyoming Public Radio).  From the article:

Over the last 50 years, the state of Wyoming made bank from coal – billions of dollars to fund the government, schools, roads and parks. The state now has its own sovereign wealth fund thanks to coal.

Here’s how it works: When coal is mined on federal land, the mining company pays royalty fees. Half of those royalties go to the federal government and the other half goes to the state, and only Congress has the power to change that ratio.

President Trump’s GOP spending bill lowers those royalty fees for mining companies from 12.5% to 7% through 2034.

Or they continue to provide tax incentives for increased production ("Tax credit for huge oil producer raises questions about Utah board’s transparency," Salt Lake City Weekly) and other ways to promote production ("Supreme Court backs Utah oil railroad expansion, endorsing limited version of key environmental law," Colorado Public Radio).

For example, Oklahoma, with oil and natural gas interests (fracking especially) is fully committed to fossil fuels, but is toying with solar and wind ("As demand grows, Oklahoma considers its energy path forward," Daily Oklahoman).  Tulsa and Oklahoma City are home to many regional headquarters and a few national firms.

North Dakota ("Studies underscore oil and gas industry’s significant impact on North Dakota’s economy, communities").  Kentucky ("Heavy reliance on coal has eroded a KY economic advantage. Can Trump reverse the trend?," Kentucky Lantern). While New Mexico, which has a good producing section of the Permian Basin, and Pennsylvania--home to the nation's first oil well, but a center for fracking, are less committed.

It's the rare state, like California, pushing a sustainable fuel future despite historically having been a large producer.  Maybe the switch is due to significant drops in production ("As oil industry in California wanes, what will become of shuttered refineries?," Daily Breeze).

An oil pump jack stands near a field of wind turbines in Nolan, Texas. Oil companies are under pressure to pivot more swiftly toward renewable energy. Here's one reason why that's not happening so quickly: It's still incredibly lucrative to sell oil. / Getty Images

Texas is the mother lode of oil production in the US.  It is also a major wind power producer.  

Like the Trump Administration ("Trump Officials Weigh New $1 Billion Deal to Stop Offshore Wind Farms," New York Times), some pro-oil interests are working to deemphasize wind in the state's mix of energy sources ("The War on Wind Rages in Texas," Earth Day).

Originally the Humble Oil Building, named before Humble Oil and Refining Company was fully integrated in Esso (which later became Exxon, then ExxonMobil).  Now it's the ExxonMobil Building.

Texas is the big winner nationally as Houston is the center of the oil and gas industry.  For example, Chevron is moving there from California.  The company in various forms has been headquartered in the SF Bay region since 1879.  

Production and supporting services companies often relocate from regional centers ("The economic impact of Expand Energy moving headquarters from Oklahoma to Houston," News9 OKC), as the oil industry business cluster there continues to intensify.

Not a suprise: Senator son of former car company president disfavors bicycle lanes, tax credits for electric bikes

 Over the past few years I have been thinking a lot about the concept of the petro state ("The Petro States of America," Bloomberg) at the sub-national scale, and how the points scholars make about how resource extraction based economies make a lot of bad decisions when it comes to the environment, priorities, tax policy etc. are relevant to states too, not just nations/the national scale.

-- "Gasoline Dependent Sprawl" 
-- "Oil dependence | The US as a Petro-state and gasoholic | and war"

Tesoro oil refinery, Long Beach, California.

In short, US states like Texas, Oklahoma, North Dakota, Wyoming and Utah are petro states for the most part making short term decisions about energy policy that favor extraction and the primacy of an automobile centric mobility paradigm.

(Note that California is an exception.  It is a major oil producer, but because of air quality and other environmental concerns, it is committed to moving away from dependence on oil.  OTOH, it is still very much a poster child for the sprawl development paradigm.)

Utah is sprawl centric, has some oil and coal production, and is home to many refineries dedicated to refining oil produced in Wyoming and nearby states.  

Because of the mountains, gasoline use in cars, and oil refining (and other extractive industries like copper and magnesium and their environmental effects) the air quality in the Salt Lake Valley can be very bad (in fact, I've developed a persistent cough as a result).

But for the most part, machinations in how air quality is measured and reported to the EPA means the state can get away without dealing with it in substantive ways.

Although these days the state is getting lots of media attention because of the decline of the Great Salt Lake, which is seriously affected by the loss of water supply because of drought and agriculture ("As the Great Salt Lake Dries Up, Utah Faces an ‘Environmental Nuclear Bomb'." New York Times, "‘Last nail in the coffin’: Utah’s Great Salt Lake on verge of collapse," Guardian, "The countdown to save Utah's Great Salt Lake," El Pais).

Mitt Romney is a US Senator from Utah. 

He grew up in Michigan where his father was George Romney, once the top official at the automobile manufacturer that became American Motors.  

Although George went on to become Governor of Michigan and later considered running for president.  He served in the Nixon Administration.  

But at the same time, George came out of the then honorable moderate Republican school of politics which was very strong in Michigan.  He favored civil rights, etc.

I always say Mitt is no George.

And ironically, George Romney was the first American automobile executive to promote small cars over big in a systematic way ("When George Romney and Rambler took aim at the “dinosaurs”," Hagerty Media). 

George Romney with AMC cars.

So who knows, maybe George Romney would have been okay with electric bikes as an alternative to automobile dependency?  (Probably not, but we can "counterfactual.")

Mitt gets props on impeachment, but on virtually every other issue--including voter suppression--he is a solid vote for conservatives.

Recently, Mitt got some attention for coming out against tax credits for electric bikes ("Mitt Romney Trashes E-Bikes, Says Adding Bike Lanes Is the 'Height of Stupidity'," Bicycling).  From the article:

Business Insider reports Romney saying, “I’m not going to spend money on buying e-bikes for people like me who have bought them—they’re expensive. Removing automobile lanes to put in bike lanes is, in my opinion, the height of stupidity, it means more cars backing up, creating more emissions.”

Mitt Romney is committed to the car.  Photo: Bryan Mitchell, Getty Images.

For one, the E-BIKE Act specifically makes e-bikes far less expensive, and, for many trips, removes the need to drive cars at all. Also, the Act isn’t targeting folks like Romney—it’s intended largely for low-income Americans. The proposed E-BIKE Act would give Americans who earn up to $150,000, or up to $300,000 for joint tax filers, a refundable tax credit of 30% off the purchase of an e-bike, up to $1,500.

Mitt doesn't get that every trip not made by car cuts emissions even more!

Switching from a car to a bicycle has significant environmental benefits ("EVs are expensive. These city commuters ditched cars altogether — for e-bikes," NPR), while switching from a gasoline powered car to an electric car has some environmental benefits but doesn't challenge the sprawl land use paradigm nor does it promote sustainable mobility.

It's what I call "Next Generation Asphalt Nation."

At the same time, the Republican agenda is very much committed to fossil fuel production and use.  So this isn't a surprise.

But also it comes out of the idea that bicycles are toys, for recreation, and aren't viable methods for "real transportation."

Earth Day, Saturday April 23rd

 Some communities create an Earth Week or Earth Month, not just an Earth Day.

In the DC area, one of my favorite activities is the GreenFest sponsored by Montgomery County, Maryland and this year held at Brookside Gardens.  It's a model for something I want to try to create here in Salt Lake, hopefully as soon as next year, in conjunction with my participation as a board member of Sugar House Park.

Oil dependence and transit.  WRT Earth Day issues, given the rise in oil prices as a result of uncertainty in the market created by Russia's invasion of Ukraine, there have been various articles with suggestions on what to do.  Interestingly, the International Energy Agency suggests consuming less (A 10-Point Plan to Cut Oil Use).

By contrast the Washington Post editorialized for more production ("Another energy crisis is here. The U.S. must be realistic about what’s next."), albeit for other steps as well.

-- "Oil dependence | The US as a Petro-state and gasoholic | and war," 2022

And while some states and legislators are calling for a gas tax holiday ("As states consider gas tax holidays, don't expect big savings," CNBC), Germany is making public transit practically free, charging €9/month, when a pass for transit in the core of Hamburg is normally €72/month , although they are also reducing gas taxes ("Germany unveils measures to tackle high energy prices," Die Welt).

The reality is that with the sprawl land use paradigm, it's difficult to substitute transit for driving, because it many instances, transit service doesn't measure up--it doesn't go where you need to go at all, or it takes an incredibly long time to get there, plus the distance to the final destination may be considerable.

As blog commenter charlie once said "transit's killer app is saving time and money" (paraphrased).  If it doesn't save time, and in fact costs a lot more time, people won't use it.

Transit also has great opportunity from electrification, as coastal states could generate the bulk of their electricity from off shore wind turbines and tide-based energy generation, and this energy could be used to fuel buses and trains.

2.  Cities aren't necessarily green but they are environmentally superior to suburban sprawl.  Cities use less energy than suburbs, for transport and household fueling, compared to the suburbs, even though they import goods and services, especially food.

This is discussed in the Green Metropolis argument by David Owen, first in an article in the New Yorker, and later in book form.

-- Green Metropolis: Why Living Smaller, Living Closer, And Driving Less Are The Keys To Sustainability

3.  Other environmental issues to think about:

Big Oil obfuscates about climate change.  Not that we should be surprised, but PBS Frontline has a three-part documentary on the subject ("The Guardian: ‘What we now know … they lied’: how big oil companies betrayed us all," Guardian). The first episode ran Tuesday.

Lithium recycling.  "Lithium costs a lot of money—so why aren’t we recycling lithium batteries?," Ars Technica

Household Energy Poverty. "People are struggling to pay their energy bills – here’s a simple idea that could help," Guardian.  Makes an interesting point that you could index the price of household fuels, providing a basic amount for free, and charging more, indexing price, with a rise in consumption.

"Green" Hydrogen as an alternative to gasoline and diesel fuel.  "Forget passenger cars, here’s where hydrogen make sense in transport," Ars Technica.  There's a lot of talk about green hydrogen.  It doesn't make sense for cars, but could for long distance trucking and maybe transit.

Ethanol.  To cut prices, the US has authorized a greater percentage of ethanol in the gasoline mix ("The Biden administration gives a green light to a fuel that could be even dirtier than regular gas," The Verge).  It's also not particularly good for the environment.

In the US, ethanol is made from corn, so it's not particularly energy efficient, and it raises food prices.  But corn and ethanol producers like it and it has led to an increase in incomes for corn farmers.  If the US made ethanol from waste feedstocks like in Brazil, it would be a different story from an efficiency standpoint.  There sugar cane waste is the primary feedstock.

Ethanol production in the US should be ended, but it's ensconced in the political system of the Midwest so it's pretty untouchable ("Stop the ethanol madness," Atlantic).

Parley's Creek in Sugar House Park, Salt Lake City.  Most of Salt Lake's water supply comes from snowmelt runoff from the Wasatch Mountains.

Drought. Moving from DC--tons of rain--to Salt Lake/Utah has really made me see the impact of drought, resulting from less snowfall and rain, which likely is the result of climate change.  

Some communities have stopped issuing building permits because they couldn't guarantee water supply.  Places with high rainfall and water supplies likely will have greater advantages in terms of economic and population growth going forward.

Drought and agriculture.  Over time, just because there is no other choice, water conservation will have to be a significant priority.  Eventually, it will have to include making choices about agriculture in terms of water use.  For example, Utah's greatest consumer of water is agriculture, and their primary crop is alfalfa--feed for animals--that is sold to China.  It doesn't make sense to dedicate most of the state's scarce water resources to China.

Electric cars.  Are about the environment, sort of, but not about "living smaller, living closer, and driving less."  It's a form of what I call "Next Generation Asphalt Nation" (there is a book titled Asphalt Nation by Jane Holtz).

Photo from "Shell to acquire UK’s biggest electric car charging network," The Driven.

Charging points in rowhouse neighborhoods.  But I have to say one issue I haven't thought enough about is that of providing access to high quality, safe charging infrastructure in rowhouse neighborhoods, many of which don't have on-site parking.  

I know London has been installing charging stations on light poles ("Powering ahead: six new ways to charge an electric car," Guardian), but you have to figure a way to move the cars once they are charged, so that others can use them.

The Guardian article also covers hubs in urban parking structures, installing charging infrastructure at the curbside in curbs and in street furniture (Connected Kerb), and in "street cabinets" used by cable television companies.

Hmm, while most communities are eliminating individual parking meters in favor of parking meter pay stations and numbering slots, parking meter infrastructure could be a way to deliver charging points.

Geothermal opportunities in abandoned fossil fuel wells.  Old oil and natural gas wells can be entry points for geothermal energy generation ("Clean energy is buried at the bottom of abandoned oil wells," Vox).

Automobility dependence and how the Colonial Pipeline gasoline transportation failure affects gasoline supplies on the Atlantic Coast

Superstorm Sandy.  As a result of Superstorm Sandy, gasoline supplies were restricted and many states declared states of emergency, not just because of disaster damage from the storm, but because of reduced access to gasoline ("After Sandy, New York will hold strategic gasoline reserves," Washington Post, "After Sandy, gas lines stretch for miles," CNN).

New Jersey residents waited in line at a Getty gas station in Sayreville on Oct. 31, 2012 to try and keep their generators running - their only source of power in the wake of Superstorm Sandy..  CNN photo.

This was important not just for transportation, but also for energy to run standby generators, due to electric and/or natural gas power outages for businesses and residences. 

Graphic by Scott Reinhard for the New York Times.

Colonial Pipeline.  The same thing is happening now, as a cyber attack on the Colonial Pipeline (really their financial systems, so they shut down their industrial systems too) has led to the closure of the pipeline, the major source of gasoline supplies in many Southeastern states, but as far north as the Greater New York ("Gasoline Prices Hit $3 as Shortages Grow on Pipeline Outage," Bloomberg, "Are There Gas Shortages in DC, Maryland, Virginia? What to Know After Colonial Pipeline Shutdown," AP/NBC Washington).

The closure of oil refineries over the past 20 years along the East Coast has made the region more dependent on the pipeline for gasoline.

Photo: Andrew Cabellero-Reynolds, Agence France Press.

When you're dependent on the automobile for transportation, breaks in supply are catastrophic as people are stranded without gasoline to power their cars.

1973 Oil Crisis.  When Middle Eastern nations led by Saudi Arabia, declared an oil embargo on Western nations supporting Israel, but also taking control of their oil resources from Western oil companies and raising prices simultaneously, a similar transportation and mobility crisis was sparked ("Long lines, high prices and fisticuffs: The 1970s gas shortages fueled bedlam in America," Washington Post).  

From the article:

“The notion that Americans were going run out of gas was both new and completely terrifying. It came on so suddenly,” said Jacobs, author of “Panic at the Pump: The Energy Crisis and The Transformation of American Politics in the 1970s.” “At the same time, our cars were the size of living rooms.” 

 Both literally and figuratively. Not only were cars large, but they played on outsize role in Americans’ self-conception, she said. 

 “Everybody was completely dependent and in love with their cars as a symbol of American triumph and freedom,” Jacobs said.

The US response didn't attempt to change the land use and mobility planning paradigm that made most of the nation dependent on the automobile.  There were three basic responses: (1) short term reductions in speed limits to reduce demand; (2) longer term gasoline efficiency requirements on cars sold in the United States, to reduce the demand for gasoline but not our dependence on it; and (3) the creation of the Strategic Petroleum Reserve, a storage plan for oil, accessible in times of restricted supplies.  

How the Netherlands and Denmark responded to the "Oil Crisis."  The response in the Netherlands ("America, The Netherlands, and the Oil Crisis: 50 Years Later," Institute for Trasnportation and Development Policy) and Denmark ("1 energy crisis, 2 futures: How Denmark and Texas answered a challenge," Texas Tribune) was much different.  They realized that as neither country was an oil producer, they would always be reliant on foreign suppliers for oil, and that there could be breaks in supply at any time, and that costs could continue to rise at any time.

Amsterdam.

They recognized that their post-war shift to an automobile-centric mobility paradigm put their countries at risk.  

In response, they re-committed to transit, sustainable mobility, in particular biking, and to compact development/pro-center city development paradigms, all aimed at reducing dependence on oil.

Photo: Building the Cycling City: The Dutch Blueprint for Urban Vitality, published by Island Press.

And they changed other policies to be congruent with their policy decision to de-emphasize the automobile.  

• they changed planning practices in land use and transportation to prioritize sustainable mobility and compact development in a variety of ways
• they invested in transit
• they invested in biking infrastructure
• they invested in sustainable energy sources (e.g., wind power) and energy efficiency
• they raised the excise tax on gasoline, so that gasoline today is about $7/gallon
• they raised the excise tax on new automobiles to be about equivalent to the cost of the car
• they require urban car purchasers to prove they have parking before they can buy a car
• etc.

Transportation engineers do what they are told to do.  This is why I get "frustrated" talking with biking advocates who say "why can't we just ask Dutch engineers why they aren't resistant to doing good bike infrastructure?"

Photo: Trent Nelson | The Salt Lake Tribune. Traffic on State Street in South Salt Lake, Wednesday June 5, 2019.

I say, "you miss the point.  In the US, in terms of transportation planning we say, sometimes, transit and biking and walking are good.  But all our planning systems incentivize automobility. US transportation engineers are told to prioritize the car and that's what they do.

In Denmark and the Netherlands, their planning systems prioritize sustainable mobility and compact development, so that's why their systems produce high quality outcomes for transit, biking, walking, and compact development."

Why it's difficult for the US to do something similar.  Not only does the US have a thriving automobile industry, although granted it is going through a paradigm shift today with the rise in demand for electric cars, it is one of the world's leading oil producers.  

Major centers of oil and natural gas production in the United States.  Source: "The United States of oil and gas," Washington Post.

So US economic policy supports sprawl land use development and automobility, because it supports two of the nation's leading industries.

This wasn't an issue in the Netherlands and Denmark, although even Norway, a leading oil producer with discoveries in the North Sea in the 1970s, has prioritized sustainable mobility practices (although this is in part because it is a major producer of hydroelectricity).

Interestingly, Germany shows that you can be super committed to automobiles, as it's home to globally significant manufacturers Mercedes, VW, and BMW, and sustainable mobility too,  

Most of Germany's major cities have extensive transit and bikeway networks, and the country has high gasoline excise taxes, makes it difficult and expensive to get a driver's license, has high registration fees for automobiles, etc.  But a great freeway system, etc.

Thinking differently about the future of energy

A few years ago, my brother mentioned to me his thinking that the reason there was so much push for electric cars was to reshape the demand for oil as an element of foreign policy.  

High volume producers like Russia and Saudi Arabia are dependent on oil (and natural gas) as a significant generator of national government budgets, but also use energy supplies and provision as a way to project national power.

Businessweek pointed out a few years ago that the US is also a major oil producer, equally a Petro State like Russia or Saudi Arabia ("The Petro States of America").  

And I've written about how Houston's development success attributed to its lack of zoning is more than anything the result of  its role as the headquarters of the US oil and petrochemical industries ("I get tired of the articles that ascribe Houston's economic success to its lack of zoning").

Coincident with the start of the pandemic, Saudi Arabia dropped oil prices as a way to pressure both Russia and the US shale oil industry.  

The timing was bad, but the pandemic-fueled recession dropped oil demand and pricing, thereby crushing the US shale oil and natural gas industry ("The oil crash doesn't look good economically for states like Texas (Oklahoma, North Dakota, etc.)"), which was what SA and Russia wanted all along.  

US shale-focused firms are entering bankruptcy at a fast clip. BP is reducing its reliance on oil production.  And as the production of electricity becomes more prominent, independently of the energy source which produces it, "utility companies" like Iberdrola, E.ON, and RWE become as significant as oil companies.

1.  Economist Magazine has a story on the future of "Electrostates" suggesting that China, just in terms of its place in the manufacturing of solar panels and other clean energy technologies and the deployment of these technologies at such a large scale, will supersede the place of petrostates like Saudi Arabia ("America’s domination of oil and gas will not cow China").

2,  But Foreign Policy Magazine disagrees ("Everything You Think About the Geopolitics of Climate Change Is Wrong"), making the point that what will matter going forward, at least during the long period of transmission, is the cost of energy production--Saudi Arabia is the cheapest producer of oil, and Russia of natural gas--vis a vis low and high cost (like shale) producers, as well as the overall environmental efficiency of production--for example, compared to the US oil producers, there's very little flaring of natural gas ("The US Oil and Gas Industry’s Methane Problem Is Catching up With It," Resilence).

Relatedly, the Wall Street Journal excerpts ("The New Geopolitics of Energy") a new book by Daniel Yergin, The New Map: Energy, Climate and the Clash of Nations (review).

3.  Separately, a study finds countries that commit to nuclear power over and/or equal to renewable energy sources have less overall carbon emissions reductions ("Study: Renewables, not nuclear power, can provide truly low carbon energy," UPI).

4.  This is relevant to Utah and Idaho because there is a long term push to build an "efficient" experimental nuclear energy facility, to be funded by local municipalities through long term energy contracts ("How nuclear power may become a reality for Utah and Idaho" and "Critics of planned nuclear power project urge Utah cities to pull out before it’s too late," Salt Lake Deseret News).

I thought it was "crazy" merely because over the last 40 years, virtually every new nuclear energy construction project in the US has ended up in disaster with billions of dollars of overruns.  

It just doesn't make sense from the standpoint of construction, overall safe management of the facilities (although certain US utility firms have developed best practice expertise in running such plants), and dealing with safe handling and storage of nuclear waste.

5.  California joins various European cities in setting a deadline to stop the sales of fossil fuel motor vehicles ("California Plans to Ban Sales of New Gas-Powered Cars in 15 Years," New York Times), granted not til 2035.

6.  Electric cars and Tesla.  I've been critical of Elon Musk because he's a blowhard, but the reality is that he is reshaping the US car industry towards electric vehicle production. What's interesting is that with these kinds of scalar shifts in the nature of an industry, traditional producers stuck not just with legacy costs but legacy systems, can be wrong footed in terms of marketing, branding, and image.  That's what's happening with Tesla vs. Ford and GM.

Ford and GM can manufacture vehicles much better than Tesla, but in terms of brand image, people won't seek out electric vehicles from the traditional companies, because those firms aren't cool. 

Although Tesla is superior in battery technology and the use of IT, especially in digital versus analog upgrade processes, and in developing external fast charging networks "in the field" making it harder for Big 3 vehicles to compete ("EV Comparison: Tesla Model 3 Vs. Chevy Bolt," InsideEVs).

It's a different element of disruptive innovation that hasn't been discussed in the context of the original theory.

7.  And because electric cars are so much cheaper to maintain compared to internal combustion engines, the higher initial price is offset by lower maintenance costs over time ("Tesla Model 3 crushes Dodge Charger in 1-year review of cost of operation as police car," Elektrek).

The oil crash doesn't look good economically for states like Texas (Oklahoma, North Dakota, etc.)

All the Trump Administration's promotion of the oil industry and expanded exploration and production, especially through the sales of mineral leases on public lands ("Trump ‘turns back the clock’ by luring drilling companies to pristine lands," Guardian) looks to go to nought because of the current pandemic-related drop in oil demand, heightened by competition between producing nations who need high prices to fund their national economies ("Russia Is Losing the Oil War Against Saudi Arabia—and the Middle East," Foreign Policy).

Cheap oil ("Texas economists react to historic drop in oil prices," CBS Austin) means bankrupted companies, shut down of various service industries, lots of layoffs ("Houston-based service companies take more hits as oil industry weakens," Houston Chronicle), and significantly reduced demand for commercial real estate and retail.

Fracking-produced oil needs to sell for at $40/barrel for producers to break even.

Which means dusting off a 2014 blog entry, "I get tired of the articles that ascribe Houston's economic success to its lack of zoning," where I made the point that all the talk in the planning profession by conservative thinkers ascribing the economic success of the City of Houston to its lack of zoning misses the point that the primary driving force of the city's economy is its position as the headquarters city of the global oil industry.

(Another benefit of "planning" for Houston vis a vis legacy center cities is liberal annexation policies. For the most part, it has been able to grow outward, absorbing outlying communities that in other places would be standalone suburbs.)

Grain storage facility next to a house in the Old Town Harrisburg neighborhood  ("The weirdest images to come from Houston's lack of zoning laws," San Francisco Chronicle; note that the "weird images" aren't all that weird, but common in edge condition situations--edge being defined as the line between areas with different zoning, such as industrial vs. residential).

If Houston had zoning, the city would still thrive economically, although development would take more time and cost more, so long as the oil industry remains healthy.

And there would be more separation between residential and commercial/industrial areas ("Houston doesn’t have zoning, but there are workarounds," Kinder Institute, Rice University).

But lack of zoning won't increase demand in the face of a sputtering economy.

In general, it happens that the relative success of the US economy is largely dependent on oil ("The Petro States of America," Bloomberg).

Rex Babin, Sacramento Bee.

This is true not just in terms of driving the housing industry, manufacturing, and finance because of the automobile-dependent mobility paradigm, but for economic activity and investment more generally ("Oil and Gas Sector Increasingly Influences U.S. Business Fixed Investment," Dallas Federal Reserve).