by Anton Wahlman
January 05, 2018

from SeekingAlpha Website






A respected automotive analyst and journalist asks a pertinent question on the future of electric vehicles if global warming turns to cooling.


These are questions that have never been asked, but the time is ripe for discussion!



  • There are two tail risks to the electric vehicle (EV) market that could be more devastating than anything else.

  • To be sure, I believe these two tail risks are less than 50% likely. But they're also not zero. You have to take them into consideration for your valuation thesis.

  • The first risk is the electromagnetic radiation coming from EVs. These battery and electronic systems are far bigger than cell phones.

  • We do not know what future studies will conclude, after people have been exposed to high-power EVs for many years and decades.

  • The other risk is global cooling. If CO2 causes 'global warming,' wouldn't logic dictate that a new ice age means we must heavily tax or outright ban electric cars?

There are two things that could bring a "sudden death" to the future of electric cars.


These are the market-impact equivalents of an giant asteroid hitting hitting Earth, extinguishing all life.



In other words, Armageddon

The first of these two threats is any evidence of harmful electromagnetic radiation from sitting in an electric car.


Let's be clear:

I have no certain evidence that this is or will be a problem. I'm just saying that it's not clear that this issue has been investigated deeply enough, and not recently enough.

Sitting on top of a giant battery, ranging from 16 kWh to as high as 100 kWh or even 200 kWh, is at least enough to make someone suspicious.


Consider the magnitude of a cell phone, which one tries to keep at least a foot or two away from the vital organs of the body whenever possible.


The electric car has the potential to be many decimal points more potent.

I have tried to see if the studies conducted to date are any good. It's not obvious one way or the other. Maybe this will all turn out to be fine. I sure hope so! But the probability that it might not, is a non-zero probability.


How long until we discover the long-term effects of things that cause cancer?



Sometimes, that could be a decade or two out - Maybe longer

Imagine the scandal - Congressional hearings, and worse - if it turns out to be that,

  • sitting on top of EV batteries cause cancer

  • government policies caused people to buy EVs through subsidies, mandates and other incentives

That would really be something.

I have no idea how this will play out, but if you start seeing the government and other actors looking into this to any significant extent, look out below.


The risk is 100%...


If this happens, EVs will be viewed as radioactive by the population, and sales would go to zero, no matter how large the subsidies are.



Electric cars would be the new cigarettes

Here are three articles that could get you thinking, and ask for more knowledge:

The other issue is global cooling...


We are currently seeing some of the coldest weather in decades. I imagine this is temporary and that things will continue to fluctuate up and down, just like they have done since the beginning of time.


If so, probably no big deal.



However, what if it doesn't? - What if we're entering a "mini ice age?"

The argument by the global warming cultists has been that CO² causes the Earth to get warmer, and this is somehow bad (I don't see why that necessarily follows, but let's go with it).


Well, if climate change is bad, and the weather is now turning colder:

  • Wouldn't their logic dictate that we should maximize CO² output in order to reduce or eliminate the new ice age?

  • If so, why should the government subsidize electric cars?


  • In fact, why shouldn't the government just ban all electric cars?

Again, this is an unknown that in my view isn't even 50% likely.


The world's temperature is most likely going to stay approximately the same, as it has done for a long time already.


But just in case it gets colder, the logic that has driven government policy to this point, would have to reverse and perhaps tax EVs heavily or outright ban them.


Electric cars would be the new diesel.

To see an example of how the winds of fortune could change on this subject, consider the December 28, 2017, tweet by the president of the United States of America:


"In the East, it could be the COLDEST New Year's Eve on record.


Perhaps we could use a little bit of that good old Global Warming that our Country, but not other countries, was going to pay TRILLIONS OF DOLLARS to protect against. Bundle up!"

Investment impact - Tesla (TSLA)

If either of these two things happen, the risk is to those companies most exposed to electric cars.


There is no company more exposed than Tesla. With its high market cap and essentially total exposure to EVs, it stands to lose the most. It would be completely wiped out.

These tail risks are probably below 50% in terms of probability. But they are not zero.


You have to take them into consideration, thinking of these tail risks as a form of put option.