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Addressing a need

WSJ: Nawar, do you think electric vehicles will ever replace those with internal-combustion engines?

Alsaadi: For something to replace something else, it needs to address an existing deficiency, solve a problem or at least offer the same service at a lower cost. Electric vehicles fail on all these measures. In a free-market dynamic, electric vehicles as they are have no realistic chance of replacing internal-combustion cars anytime soon.

A common argument by the electric-vehicle camp is that the price of electric vehicles, especially the cost of the battery, will decline enough in 10 to 15 years to make them competitive with internal-combustion cars. The cost of the battery is 50% mechanical, hence the decline in the price of the battery including assembly will not fall as quickly as for the cells themselves. As electric-vehicle sales increase, subsidies for electric vehicles will be phased out. This will cancel out if not eliminate totally the reduction in battery prices over the next 10 to 15 years. Electric vehicles are unlikely to be cost-competitive with internal-combustion cars in the near to medium term.