Cleantech Worst Case Scenarios For 2024: Investment Collapse

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For my last article of 2023, I’m going to write a third article about important challenges the cleantech industry might face in 2024. I’ve already covered political violence and civil war, and the rising chances of a damaging solar storm. Neither of these two outcomes are likely, but they’re worth thinking about, trying to prevent, and preparing for. The idea here isn’t to feed anybody’s doomscrolling addiction as much as to try to get important conversations started and try to find good ways to avoid them.

The Problem

As I pointed out in another recent article, investment in EV charging is starting to dry up. Now, I’m no investment expert. I don’t play one on TV. I don’t pretend to be one anywhere. If anything, take this all with a huge grain of salt because I live in a trailer in New Mexico and drive a Bolt. But, I’m seeing a disturbing trend that we need to make sure doesn’t turn into a full-blown crisis.

One thing that may be keeping investment from going into EV charging is the amount of government money going in. EV charging stations already have low utilization, which makes them presently unprofitable. Forward-leaning companies like Tesla invested anyway because it was clear that EVs weren’t happening without a good charging network, and that investment is paying off. But, current stations that are already underutilized will soon be competing with a bunch of other government-funded stations, leading to a further delay in utilization.

At the same time, though, this is a bit of a self-fulfilling prophecy. If too few people want to build charging stations because nobody’s using them, then nobody will use them because there aren’t charging stations to charge an EV at, which implies that they won’t buy an EV. Or, they’ll buy one only for around-town use.

A further sad truth is that the NEVI (Infrastructure Law), Dieselgate, and Tesla stations will still fall pretty far short of needs to support serious sales growth. If things stop there, many back roads will remain unserved. Many main roads will be underserved. Charging stations will have long lines that discourage EV buying. Reliability could still prove to be a question if utilization gets too high but not high enough to attract more station-building.

So, the truth is that private investment is needed. But, nobody wants to do it. Property owners want someone else to show up and build stations, and then pay them rent while they enjoy the increased business. Charging companies often want the property owner to pay for the station, and low utilization among other risks keeps that from happening in many cases. This leaves only government-funded stations, Tesla stations, and stations built by automakers to fill in the gaps.

It Happens Outside Of EV Charging

There’s another problem: lack of investment in anything not mainstream enough. Investor interest in micromobility companies like Bird and Lime is not what it once was. Interest in truly offbeat but revolutionary vehicles like Aptera, Solo, Arcimoto, Lightyear and Sion is limited enough that many in that space have already sunk, and with open hostility and shorting of the rest.

Those among us who think sinking companies like Aptera is a good thing don’t see that this cynicism can metastasize and plague the wider industry. There’s no shortage of FUD and astroturfing, political opposition, and more trying to stop mainstream EVs, including Tesla. Hating on the new entrants gives those people ammo to use against us later.

Between the challenges faced by private investment in EV charging and private investment in anything different on the vehicle side, it’s not hard to imagine the worst case scenario of a complete investment collapse that takes the whole thing down. Add in the risks of a bad 2024-2025 for EVs and cleantech in the political world (I cover the worst case for that here), and it’s not that unrealistic at all.

Heading This Off: Becoming Explorers Again

Something that comes up a few times in the various Star Trek series and films is a desire to get back to exploring. Warfare, politics, dumb diplomatic challenges with houseplant-eating guests, and other soul-crushing things often lead to the characters wondering what they’re even doing. Several times, a question like, “Does anyone remember when we used to be explorers?” comes up.

The film Interstellar brings up a similar sentiment after the man finds out his kids are being taught that the moon landing was fake:

Sometimes it seems like the industry, EV drivers, and the fan base have gotten so busy dealing with minutiae and success of certain players (especially Tesla) that we’ve forgotten what it was like when things were new and exciting. We’re a bit like a typical episode of VH1’s Behind The Music, where a young and talented musician hits it big, becomes wildly successful, and then goes into a bad phase of addiction and suffering. But, the best musicians on those shows come out of that phase of suffering in theoretical success and fix their lives.

Instead of getting so busy celebrating success that we get drunk and high and wake up ten years older, we could instead stay engaged in being excited about and working toward new and innovative things that push the world forward.

We need to continue challenging assumptions, like I discuss in this article. We need to wise up and stop worshipping the Thomas Edisons of the world and start lifting up the Nikola Teslas. As I said before:

The world absolutely needs Edisons, because you can’t change the world if you’re wasting away in a hotel room somebody else paid for pining for the unrequited psychic love of one of the pigeons outside. But, being good at putting deals together and making technology work in the real world against terrible odds isn’t the same as truly innovating and pioneering radical new ideas that depart in significant ways from the status quo.

I get that investors want to not depart too far from the status quo, largely because it’s the pioneers who often came home in a box with arrows stuck in their backs. But, sometimes we have to go against the grain and not get so busy seeking cover that we don’t fight the war.

Featured Image: The dried up shoreline of the Great Salt Lake at Antelope Island. What was once a fun beach people visited has long since dried up as demand for water today led to people not thinking about tomorrow. Image by Jennifer Sensiba.