Jeff Lenard:
John is with the Fuels Institute and also puts on a NACS hat on a regular basis. Thanks for joining us today, John. We want to talk about this new Fuels Institute report called the Lifecycle Analysis Comparison. Let’s start with telling us a little bit about the research that the Fuels Institute does, what was the topic of this report and why was it important to research this?

John Eichberger:
The Fuels Institute was founded by NACS back in 2013. We have established ourselves as an organization to be objective. We really don’t care what the outcome is. We just want people to have knowledge of facts and objective analyses. My team, we do probably 40 to 50 presentations a year and most of them are on the future of the transportation. Questions we get all the time are why are people pushing electric vehicles? They’re not cleaner, because you have to burn coal to get electricity. Electric vehicles are terrible in cold weather. Electric vehicles are so much more carbon intense than the manufacturing of combustion engine vehicles. And we hear this all the time. So what we really wanted to do was create a publication that took an objective look at the life-cycle carbon emissions of electric, combustion and hybrid electric vehicles.

John Eichberger:
From the point of sourcing the materials, mining the lithium, drilling the oil, getting the aluminum, building the vehicle, running a hundred thousand miles and then getting rid of the vehicle, we wanted to understand the contribution of emissions from the energy, the fuel, the electricity used in the vehicles to provide a comprehensive overview of where are we. And then from there, stop this he said she said stuff and start looking at how do we reduce emissions? How do we reduce emissions from combustion and from electric vehicles in a meaningful and efficient way? The paper was put together to do just that and I think it did a pretty good job of doing so.

Jeff Lenard:
When you talk about life cycle, I think when most people think of EVs as there’s nothing coming out of the tailpipe because there is no tailpipe. Meanwhile, whether it’s a hybrid or whether it’s a traditional petroleum-powered vehicle, something comes out of the tailpipe. Is an EV is better for the environment? And everyone should have one and within five years and if you don’t have one you’re missing something. Clearly that’s the impetus behind this research to look at are all the elements from? What is the different structure required if it is, to how long the vehicles last because that’s a big factor right now. We know that the traditional vehicle is what, about 12 years that a traditional vehicle is used? Take us through some of the top line findings and maybe we can dive in to some of the specifics.

John Eichberger:
First of all we use the nomenclature ‘zero-emission vehicle’ and that’s used to describe the electric and hydrogen vehicles. It’s kind of a misnomer. It should be a zero-tailpipe emission vehicle because there’re already emissions. And before I get into the overview, 73% of the life cycle emissions from a combustion engine vehicle occur during motion when you’re burning the liquid fuel to move the vehicle down the road. 73% of all the emissions come from that phase of the life cycle. By contrast, 72% of all the emissions associated with the electric vehicle come from electricity general. And why is that important? Because now if we want to reduce emissions, now we know where to focus. You focus on the big chunks. You focus on bringing a low carbon fuel to the market for the combustion engine vehicle and improving the efficiency of the combustion engine.

John Eichberger:
You focus on more renewable resources to generate electricity. That’s kind of quick takeaway. Now when we think about the national average—and it gets dangerous when you talk about national averages because there’s nothing average, there’s such variation—but if you assume the U.S. electricity grid on average—you’ve got a lot of renewals in the Pacific Northwest, a lot of coal in West Virginia and the Midwest—but on average, and you assume a vehicle runs 200,000 miles, the battery electric vehicle does emit 41% less carbon than a combustion engine vehicle. It’s a significant savings on a national average. A hybrid vehicle, which doesn’t require any infrastructure, emits 29% less carbon than a combustion engine vehicle. So we’re seeing opportunities here and when we start breaking it into regionality and you look at a market—say you assume West Virginia, Southwest Virginia, where a lot of coal power plants are operating—an electric vehicle over 200,000 miles emits 16% more carbon than a combustion engine vehicle. But in the Pacific Northwest where it’s real clean, it emits 73% less carbon.

John Eichberger:
Diving into it this way helps us understand that we know where focus our attention to reduce the emissions. And now we need to start thinking about strategic deployment. Maybe electric vehicles make a lot of sense for the environment in Seattle. Maybe they don’t make a lot of sense in other markets and we need to be much more prescriptive about how we deploy our strategies. Overall. Maybe some of these markets hybrid vehicles make the best sense or maybe even just an efficient combustion engine vehicle makes the most sense. So it really is looking at the data and realizing one size fits all strategies can’t work. We have to be much more strategic about our decisions and our deployment strategies. And that requires using data that requires much more analytical perspective, which doesn’t play well in a soundbite and doesn’t play well in a headline. ‘EVs are clean.’ That’s real easy to remember. But we need to be a lot more detailed in how we are addressing our emissions profile.

Chris Blasinsky:
John, who’s the audience for this information? Who benefits the most from what you’re saying?

John Eichberger:
I think the government needs to really pay attention to this. The government, state level and federal level. President Biden said, we want to convert 50% of sales to be zero emission vehicles by 2030. We need to build half a million chargers. You’ve got California saying we’re not going to sell combustion engine vehicles after 2035. You’ve got several other states doing the same thing. That doesn’t always make sense. It may not be the right path forward. There may be opportunities. And you have to look at cost. We have to raise the profile and the importance of consumer and economic value with protecting the environment. So if it makes more sense to deploy a hybrid electric vehicle to a market to reduce the emissions and that doesn’t require a billion dollars in infrastructure, is that better for the market? Or is expanding the infrastructure to take advantage of a clean grid to push more EVs, is that better for the market?

John Eichberger:
We have to look at this comprehensively and this idea that we need to address emissions at all costs is not true. Any approach that’s going to impose a burden on consumers, whether it be through a tax basis or through direct cost to consumer, is going to fail. And so we need to really be thinking about what solutions make the most sense in a given scenario, in a given circumstance, for the environment and for consumers. It comes down to, as the administration of Congress are considering and state legislators are considering how we address car emissions, look at the facts. Look at the details and be a little more prescriptive about what you’re trying to do rather than just giving a soundbite approach to policies.

Jeff Lenard:
It is super timely because that is the big conversation. Should we have half a million chargers and I guess the presumption—and I love your line that you said there is no average—the presumption is the East Coast has lots of people. Therefore they would have lots of EVs, therefore they should have the chargers. Looking at where the power comes from and what that power is, I think is hugely important. Now, before we talk a little bit more about that, I wanna go back. You mentioned 73% of emissions of a traditional vehicle are related to moving. What’s the other 27%? Because like with both they’re roughly three quarters is involved with the motion or the power to do the motion. What is the other one quarter? Is it the emissions related to building and disposing of the vehicle?

John Eichberger:
It’s material sourcing, it’s manufacture, it’s well to tank. So it’s the sourcing of the steel materials, the manufacturing, the electricity used in manufacturing, the energy use in manufacturing, it’s the production of the gasoline or diesels going into the engine. So the harvesting of the oil, processing it, refining it, distributing it—all of that is incorporated in that other 27%. Now, when you go over to the electric vehicle market and you look at the material sourcing manufacturer for an internal combustion engine, it’s a very small percentage. It’s five metric tons of greenhouse gas out of 66. For the electric vehicle, it’s two times more carbon intense to produce the vehicle and to produce the batteries and all that stuff. There’s opportunities there to improve that profile.

John Eichberger:
But I really think where we are going to get the most bang for our buck is focusing on those big 72%, 73% chunks, which is the fuel and the electricity. If we can address those and have significant improvement, then we can start turning our attention to manufacturing and material sourcing. It’s a small component of the big picture. I think we really need to be focused, and this is another reason I point out this slide so much in our documents we put on our website, is let’s put our resources where we’re going to have the biggest impact, the best return on investment and stop nitpicking at the things that aren’t going to have a huge impact on the overall emissions. Focus on the big chunks because that’s where you’re going to get the best benefit for the environment.

Jeff Lenard:
The Super Bowl earlier this year, that was dominated once again by EV commercials. But what struck me about the EV commercials this year is they were much different than last year. Last year’s commercials were you should consider buying an EV because this is what it does. And it seems like it’s evolved, just like as we’ve gone to car shows and seen how you move to the next steps. It seems like now car companies are not just saying here’s what an EV is but look why mine is more cool than theirs. And it’s evolving quite a bit. I think these conversations, as the manufacturers are treating EVs like they’re treating the regular cars, here’s the features that go beyond the EV, beyond the power train, that make my car interesting. It becomes really important to look at all the other elements. If the presumed benefit of an EV is environmental, where does that benefit the most people? I don’t think anybody’s done that sort of research besides this.

John Eichberger:
If I’m an auto manufacturer and I’ve made commitments to produce electric vehicles, I’ve invested billions of upon billions of dollars in battery and manufacturing capabilities. I want to sell cars, I need to sell cars. I have to have a return. If I don’t sell cars, guess what? I have to go back to combustion engine vehicles. And you know, that’s not going to play too well in public statements, you know backtracking. So they are evolving because they realize that you have the first movers who are the ones who own EVs now. To get to mass adoption, you have to commoditize the product. You have to get away from pushing the EV tech for environmental purposes because the vast majority of consumers don’t care. They buy vehicles based upon what kind of vehicle do I need, what’s my monthly payment. And then within that, what are my options?

John Eichberger:
It is not which one’s best for the environment. For the vast majority of consumers that is so far down on a list of interest that you have to diversify and distinguish your car based upon what it does for the consumer. So you have to talk about power. You have to talk about performance. You have to talk about capabilities. You have to talk about how it fits the consumer’s lifestyle because it is a different type of experience. It’s a car you’re driving from point A to point B. But we know from our experience in the convenience industry that time is of critical importance to consumers. And that’s why there’s such an emphasis on infrastructure because a family of five with three sporting events on the weekend, they don’t have time to spend 30 minutes charging a car.

John Eichberger:
They just do not have the 30 minutes. More than half of Americans have access to off-street parking or garage so they can charge at home a lot. But they want to know that they can charge anywhere anytime quickly so that they don’t have to sacrifice time. The automakers have a challenge. They have to convince consumers there’s enough range to get them where they want to go. They have to convince them that the vehicle is the type of vehicle they want buy. Whether it’s a pick-up truck or sport utility vehicle, whatever they have to convince them, there’s enough charging infrastructure. They have to convince them it’s an economic win for total cost of ownership. They have to get the price down to a monthly payment that consumers can afford. There’s a lot of hurdles that need to be addressed here.

John Eichberger:
I think what you’re seeing from the marketing side is trying to tap into that visceral reaction of consumers to what they’re seeing. Buying a vehicle, at least in the United States, is a very emotional thing. There’s a connection for most people. I think that’s starting to mitigate a little bit as people just look them as a tool, a utilitarian option. But there’s still this ‘my car says something about who I am.’ That’s still part of it. Tesla is unique. Tesla has their niche. Tesla has their product, they didn’t have to do that. GM, Ford, Volkswagen—they have to sell a brand value and start competing. And so I think it’s going to be interesting to see the evolution of the marketing campaigns, because they’re going to get much more closely aligned to pick-up trucks going through snow. They’re going to be much more football-based commercials for trucks rather than look at how great and clean this vehicle is because the consumers just don’t care. They really just don’t care.

Chris Blasinsky:
You touched one hurdle, range of anxiety, which has been around since pretty much day one of electric vehicles and this rise that we’ve seen in probably the last five or six years. I feel like that’s a narrative that’s gotten away from the automakers in terms of how to mitigate that because it is different. Now you can get 300-plus miles. That’s a huge challenge to overcome because the average consumer who really doesn’t know much about EVs, other than seeing the commercials that we’re talking about, immediately goes to that. What if I run out of charge? What if I’m stuck on the side of the road? That seems like it’s still a big hurdle to overcome.

John Eichberger:
It is a hurdle. I think one of the things that mitigates that a little bit is we have another paper coming out pretty soon that’s looking at how many chargers do we need when, where and what kind. But within that, we’re also looking at the vehicles and who’s buying them. For the most part, for people buying electric vehicles that is an addition to their garage. It’s a new car, an additional car. It’s not replacing a combust engine car. So it is a vehicle they may drive for local errands, a vehicle they’ll drive within 150 miles of home so they can get out. And back on that 300 mile range. A vehicle that is not their long distance driving car. We are seeing a shift. We’re seeing more consumers buy the EV as their primary vehicle, but you have to think about who are those consumers, where do they live.

John Eichberger:
Do they live in an urban environment or do they drive 50 to 60 miles a day? And they have a garage so it’s not a problem for them. They don’t go on long trips. And that’s why I really think it comes down to this market segmentation strategy. Not everybody is going to want to buy an EV. And that’s why I think these ideas that we’re going all EV, I don’t think they’re real. I think there’s going to be a saturation point. I don’t know what that point is. There’s going to be a point where EV are going to hit a market share and they’re probably going to stall and kind of lock in that market share because they’re going to attract the customers who they’re going to attract. There’s going to difficulty converting any new customers to an EV.

John Eichberger:
There are certain scenarios where an EV is just not going to fit someone’s lifestyle. And you know, these new pick-up trucks coming out have great capabilities. I grew up in Southern California and people would go to the desert on the weekends and run ATVs and mini motorcycles and stuff on the desert. You’re not going to drive 200 miles in an electric pick-up truck towing all your ATVs, camp for the weekend, and then drive back. You’re going to want a gas car or a diesel vehicle. That customer I don’t see ever buying an electric vehicle. Now, evolution, who knows 50 years from now, who knows. But as of right now, I see a ceiling on the electric vehicle market. Which takes us to the next question, what’s beyond electric vehicles? What’s next the next big thing?

Chris Blasinsky:
The Jetsons.

John Eichberger:
The Jetsons [laughter]. There’s going to be new technology. There’s going to be new things coming on. Batteries right now, they use some pretty nasty stuff, that’s going to evolve. We’re going to have much better batteries, much cleaner, more environmentally sensitive batteries in the next five to 10 years. I’m not really concerned about that. I just think it’s all about consumer behavior, consumer choice, lifestyle match and I think there’s a wall. But EVs are going to be a big part of the market, and they should be. They have some tremendous attributes. The acceleration electric vehicle is beyond compare. Now I do raise the question, and Jeff you and I’ve chatted about this on a previous podcast, is I’ve heard that the Dodge Challenger is are going to come out with an electric vehicle. Does a muscle car enthusiast really want to buy a silent electric vehicle? Or are we going to be investing a lot more money in the sound system to replicate the sound of a muscle car? It will be an nteresting dynamic to see how that plays out.

Chris Blasinsky:
So speaking of sounds, John you’re a pretty good music connoisseur. Every time you come out with a Fuels Institute blog, you usually tie your headline to a song title. So Jeff has some trivia questions that he’s going to ask you.

Jeff Lenard:
One of the regular things we do with Convenience Matters is we have trivia related to the industry. So we have two questions for you, John. First question: What award-winning 1992 music video featured the graphic on the screen ‘right now a convenience store is open’?

John Eichberger:
Is that the one I to you, the Dead Kennedys?

Jeff Lenard:
No.

Chris Blasinsky:
Back to your MTV days.

Jeff Lenard:
Let me read the graphic again: ‘Right now, a convenience store is open.’

John Eichberger:
Oh, Van Halen.

Jeff Lenard:
Yes. That is correct.

Chris Blasinsky:
Softball.

John Eichberger:
Or I should say Van Hagar.

Jeff Lenard:
Speaking of Van Hagar, we have a follow up. Sammy Hagar’s song, ‘I Can’t Drive 55,’ railed against a federal speed limit in 1984. What is the current highest speed limit in the country right now?

John Eichberger:
I believe is it’s 80.

Jeff Lenard:
85 miles an hour on Texas State Highway 130.

John Eichberger:
I knew it was Texas. I didn’t know it was 85.

Jeff Lenard:
And for what it’s worth, Sammy was doing 62 when he got pulled over, told the cop I can’t drive 55 and he said at the same time he was filling out the ticket, he was writing is next single.

Chris Blasinsky:
There, you have it.

Jeff Lenard:
There, you have it.

John Eichberger:
All right.

Chris Blasinsky:
You won something, but I don’t know what it is.

Jeff Lenard:
It’s something Bitcoin and we’ll figure out how to send that to you.

Chris Blasinsky:
Make sure you see that bouncing QR code.

John Eichberger:
Yeah. [Laughter]

Jeff Lenard:
So before we finish, one final question and how do we get more information. What’s the reaction from your stakeholders? You have this diverse group of stakeholders involved in the Fuels Institute and also your EV Council. What’s their reaction to this latest report and how do they intend to share out the information?

John Eichberger:
Most of the reaction has been thanks for doing this, there’s objectivity here. We didn’t just create a life cycle analysis in a black box. We used an exhaustive literature review to come up with the parameters of the study. We used Argon’s model, which is the most respected model in north America for emissions profiling. So it’s repeatable, it’s transparent. I think there’s a lot of confidence in the fact that the data we’re presenting is objective and fairly accurate. Now there has been some pushback when you do average, I mentioned before there’s no average, but in my response is you have to have to have benchmark. So you do a benchmark and then you do the flex case scenarios to understand how external factors affect that.

John Eichberger:
It’s been pretty positive response in terms of thanks for just providing the content. And that’s what we are here for. We don’t advocate, we don’t push an agenda. We just want people to be more informed so we can have more informed discussions about what our options are. We have several more papers coming out focused on EV infrastructure, medium and heavy duty decarbonization strategies, the role of biofuels in reducing the carbon intensity of the fuel market, the future of internal combustion engine design and research—a whole bunch of stuff coming out that ties into this whole mindset of if the goal is to decarbonize and we don’t get involved in influencing to what the goal should be, but that seems to be the goal, we want to help figure out how we do it in a way that’s effective and most importantly efficient. If it’s not efficient, it’s going to hurt consumers and then it’s going to fail.

John Eichberger:
We want to help guide the discussion so that we are being very thoughtful and we are anticipating potential unintended consequences and implementing mitigation strategies before it becomes too late. Because if we don’t do this right, it’s going to be dangerous for the market. As we see when gas prices go up, the market changes and people react. We’ve seen vehicle monthly payments go up more than $100 in the past year, according to NADA and a presentation they did at our conference last year. So you’ve got some significant challenges and headwinds. And I think the key for people observing the market is headlines are eye grabbing. They’re attention-getting intentionally. But the details that actually affect the market are much more complex than a headline’s going to give you an indication of.

Chris Blasinsky:
John, thank you for being our guest today. And thanks everyone for listening to this episode of Convenience Matters. If you want to download the report that John’s been talking about, you can go to fuelsinstitute.org and find it there along with all the other great research that they’ve done over the years. Also, we invited Elon Musk to be on this podcast, but he was busy with stuff in space. So we’ll try again. If you want to download or subscribe to our podcast, check us out on your favorite podcast player. Convenience matters.

Outro:
Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.

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