Why is a sensible person like you driving a car like that?

 

No-one has asked me that question yet, but I thought I should have a speech ready just in case it happens.

The car is a BYD Atto 3. It is an electric vehicle, made in China.

A sensible person? Why would anyone say I was a “sensible person”? Some people might think I would be sensible enough not to choose a car which takes more than half an hour to power up at a charging station, when I could have a car which could be filled with petrol in less than 5 minutes.

My wife and I don’t anticipate spending much time at charging stations. We have decided that at our age the time has come to stop driving on long trips. We expect to be able to charge our new car at home nearly all the time.

Our choice of car has more to do with saving money than saving the planet. I am not going to attempt to justify the government incentives that made this a good decision for us. I will just try to explain why our decision makes sense from our perspective.

The main reason why our decision makes sense can be illustrated from this graph which shows our production and consumption of solar power one day a few weeks ago. The horizontal axis shows the time of day and the vertical access shows power production and consumption in kWh.

 

• The orange area shows what we purchase from the grid at a cost of 42 cents per kWh. 
• The green area shows what we export to the grid. Before we bought the car, we received about 10 cents per kWh for about half of that and only 4 cents per kWh for the rest.
• The blue area shows the amount of our solar energy that we consume ourselves. You can see the point at which I plugged in the car around noon and the point at which I unplugged the car at about 5 pm.

It costs us about 64 cents in foregone revenue to have the car plugged into the power for 10 hours. In that time, we would have added 112 km to the distance we could drive. The cost of petrol to drive that distance in our previous car (Subaru forester) would have been about $20.

Before we bought the new car, we usually spent about $100 per month on petrol. I assumed that home charging might cost us $20 per month, allowing for some charging on cloudy days. So, I estimated that we could have a potential saving in total power bills (difference between saving in cost of petrol and additional cost of electricity) of about $80 per month or $960 per annum. There are also savings in the cost of servicing which have been estimated at around $350 per annum.

So, that means a total saving of about $1,300 per annum.

However, at this point, I needed to take account of the additional cost of EVs (electric vehicles) by comparison with ICE (internal combustion engine) vehicles. I used a KIA Seltos GT-Line FWD as the basis for comparison. At the time I was doing my calculations that was priced at around $47,000. That was about $3,900 less than the BYD Atto 3.

Since we are saving about $1,300 a year in running costs, the additional purchase price of the BYD Atto 3 would be recovered in about three years. That is much less than the expected life of the BYD's battery, which comprises a high percentage of the cost of the car. BYD offer an 8-year warranty on the car's battery.

We also looked at other electric cars. The comparable Tesla, VW and KIA cars were a lot more expensive at that time. The MG was cheaper, but we chose the Atto 3 because we liked its shape, color, and battery technology. Unlike the batteries in some other electric vehicles, the lithium iron phosphate battery in the Atto 3 can be fully charged frequently without degradation.

The Atto 3 has everything we were looking for. It has a range of over 400 km on a full battery. It fits our garage; has adequate boot capacity; it can be configured in a way that makes it fun to drive; and it has comfortable seats. It also has lots of safety features which can be switched on and off as required.

The car is naturally silent, but it can be made to emit sound so that blind people are able to hear that it is in their vicinity. I understand that for a few hundred dollars I might be able to make the car sound like an Aston Martin. However, my wife doesn’t think it is worth paying that price.

One thing that concerns me a little about buying a Chinese car is that it might be difficult to get spare parts if Australia goes to war with China. In that event, however, getting spare parts for the car might be the least of our worries.

Summing up

We have bought an electric vehicle because it suits our circumstances. We no longer drive long distances, and we have been exporting a lot of solar power to the grid.

The main point I would like to leave with you is that buying an electric vehicle can sometimes be a sensible choice, irrespective of any feel-good considerations about reducing CO2 emissions. At the same time, I admit that it does feel good to own a solar-powered car.

Addendum 1

This post was prepared for a speech delivered a couple of weeks ago at Charlestown Toastmasters. 

My wife and I purchased the car about 7 weeks ago. We have not yet visited a charging station.

I noted in my speech that I would not attempt to justify the government incentives that influenced our car purchase. I will now outline briefly the main impacts of government policies on the prices we faced.

It is possible that policies of the Chinese government provide an implicit subsidy to foreign consumers of Chinese-made electric vehicles. If so, I am grateful to the people of China for their assistance.

The cost of installing solar panels is subsidized by the Australian government. I expect we would still have installed solar panels if the Australian government had adopted a more rational approach to reducing greenhouse gas emissions, with a modest carbon tax rather than the mishmash of policies that currently apply. Even so, it may well be that a free market in energy without any carbon tax or other interventions would produce better outcomes for the people who live in this country, since our government's interventions have a negligible impact on the global climate.

The existence of fuel excise, which comprises a substantial proportion of the retail price of petrol, favours EVs relative to ICE vehicles. This excise is sometimes viewed as a road user charge. If that is appropriate, the absence of a similar charge on users of EVs is a price distortion favouring EVs relative to ICE vehicles.

However, in my view the fuel excise lacks the desirable characteristics of a road user charge – it doesn’t accurately reflect marginal costs of road usage, which are associated with congestion costs and road damage. It seems to me that there may be a stronger case for the fuel excise to be viewed as a carbon tax than as a road user charge. Purchase of fuel for use in ICEs is directly related to carbon emissions.  

That brings us back to the question of whether there is a case for Australia to have a carbon tax, given that Australian interventions have negligible impact on the global climate. If fuel excise cannot be justified as a carbon tax, it seems to me that a strong case can be made to eliminate this discriminatory tax, accompanied, if necessary, by an increase in a more broadly based tax such as the GST.

That leaves me doubting whether it would be possible to justify the government interventions that affect the prices on which our purchase decision was made. 

Nevertheless, from the perspective of individual consumers, distorted prices are a feature of the real world that they must accept. There is no prospect that relevant price distortions will be removed in the near future.

I will end on a personal note about the process I went through in contemplating purchase of an electric vehicle. There was an initial psychological barrier associated with the fact that I didn’t see myself as the kind of person who would own an electric vehicle, and particularly not one made in China. I had to acknowledge (to myself) that it didn’t make sense to see car choice as making an ideological statement - except insofar as basing the choice on utilitarian considerations could be said to be making an ideological statement.

I also needed to consider how I might feel if other people assumed that our choice of car involved some kind of virtue signaling about saving the planet from CO2 emissions. I decided that I would probably feel bemused rather than offended if that happened.

Addendum 2

In response to one of the comments below, I estimated the additional cost of electricity for a person in my circumstances who did not have solar panels. Assuming an off-peak rate of 22 cents per kWh, I estimated that the additional cost of electricity from ownerships of a BEV would be about $15 per month. That is still lower than the $20 per month I allowed in my calculation.

Addendum 3

John Freebairn has sent me the following comment relating to the suitability of the fuel excise as a road user charge.

"I offer some contrary arguments to your statement that the fuel excise is not a useful road user fee. Primarily, the fuel excise applies only to fuel purchased for use by on-road vehicles. The excise is exempt for all off-road vehicle uses, including mining, agriculture and shipping. The exemption does not make sense as a CO-2 pollution tax.

While one can agree that the correlation between  fuel consumption by on-road vehicles and social costs of road construction and maintenance, and of congestion, are not equal to unity, I'm sure they are positive. And fuel excise is a relatively simple and low cost tax or vehicle user fee. Modern technology may support more highly correlated and direct road user fees.

To exempt EVs from any form of road user fee means a subsidy and too much investment in and consumption of government supplied road services.

Another issue is that the fuel excise is not a hypothecated road user fee. In fact, the revenue is collected by the Commonwealth, and most road construction and maintenance is paid by the states and local governments. Yet, the Commonwealth in making its revenue grants to the states with advice from the Commonwealth Grants Commission includes consideration of relative costs across the states to provide comparable levels of road services per capita.

Reform of fuel excise as part of a pollution tax, and the introduction of a road user charge for all vehicles to reflect the social costs of investment and maintenance of roads and other transport infrastructure, policing, ambulances and other operating costs, should be on the tax reform agenda."

What are the ingredients of good leadership?

As I contemplate leadership failures in some major organisations, in Australia and elsewhere, it strikes me that the people responsible for those failures have not been meeting the norms of behaviour expected of responsible adults. For example, it doesn’t seem like responsible adult behaviour to persist in charging customers for services that they haven’t received.

That has me wondering whether the prevailing emphasis on inspiring organisational leadership rather than efficient administration could be responsible for a decline in the quality of senior executives. It seems to have become possible for some people to rise to the top by learning how to present a vision and flatter stakeholders, without acquiring management skills and business ethics along the way. Perhaps we are seeing a shallow leadership culture displacing the long-standing management culture that encouraged business leaders to take pride in being trustworthy.

Should the gurus who began promoting an emphasis on organisational leadership about 30 years ago be held responsible for the shallowness of leadership in some modern organisations today?  As that question arose in my mind I decided to revisit a book that I had read about 30 years ago - On Becoming a Leader by Warren Bennis, a famous leadership guru. I had a vague recollection that Bennis argued that organisations need leaders, not managers. 

My recollection was correct. The book contains a heading: “Leaders, Not Managers”. Under that heading there is a list of differences between leaders and managers. For example: “The manager administers; the leader innovates” and “The manager has his eye always on the bottom line; the leader has his eye on the horizon”. I don’t see recognition that organisations need leaders who have both high-level management and leadership capabilities.

However, the concept of leadership that Bennis advanced is far from shallow. He can’t be held responsible for readers who think leadership just involves mastering jargon about visions and stakeholders.

Bennis presents the view that “leaders are people who are able to express themselves fully”. He explains:

“The key to full self-expression is understanding one’s self and the world, and the key to understanding is learning – from one’s own life and experience”.

Bennis lists the ingredients of leadership as: a guiding vision; the passion to pursue that vision; integrity (encompassing self-knowledge, candour and maturity); trustworthiness; and curiosity and daring.

Those seem to be characteristics that would be displayed by any flourishing adult. As noted in an earlier post, human flourishing also requires alertness to the new opportunities emerging in changing circumstances.

That makes me to wonder whether there is any difference between the characteristics of a good leader and those displayed by any flourishing adult human. Toastmasters International, an organisation dedicated to assisting members to acquire leadership skills, as well as to improve communication skills, suggests one possible difference: “Great leaders inspire others to follow them”.

That difference is probably not important. Flourishing adults tend to display attributes required to attract followers, even when they don’t seek to be followed. They can’t avoid setting an example of behaviour that some others might choose to follow. As implied in the mission of Toastmasters clubs, the development of communication and leadership skills results in “greater self-confidence and personal growth”.

Perhaps I should try to sum up. It does seem possible that recent leadership problems in some major organisations are attributable to a shallow leadership culture. Some of these problems might have been avoided with a more conventional management culture - less emphasis on public relations and more emphasis on maintaining efficient and ethical management practices. Leadership gurus, such as Warren Bennis, might have contributed to such problems by downplaying the importance management skills. Nevertheless, the ingredients of leadership identified by Bennis are characteristics of flourishing adults - people who act with integrity. Organisations need leaders who have both high-level management and leadership capabilities.

 One question which I have not addressed is whether it is possible to identify intermediate stages in acquiring leadership capabilities. Do you have to learn to think for yourself before you can be a leader? Does Robert Kegan’s concept of self-authoring represent an intermediate stage in development of leadership capabilities?

What is to be gained by listening to opposing viewpoints?

It is comforting to listen to people espouse views like our own. Perhaps it makes us feel that our views are being validated.

Listening to an opposing viewpoint can feel challenging. There are several reasons for that. There may be times when we are not in the mood for the intellectual stimulation involved in considering the merits and demerits of an opposing viewpoint.

A more deep-seated reason for feeling challenged arises when we identify strongly with views that are being attacked. We may even feel offended. That has traditionally been seen to be likely when views on politics, religion and sex are being criticized. Ethnicity and culture should be added to that list. People also tend to be highly offended if anyone casts aspersions on the sporting teams they support.

However, taking offence is optional. Many Collingwood supporters, and many people of Irish and Scottish descent even seem to be able to see the humour in some of the jokes made at their expense.

From my childhood memories, in the farming community in which our family lived in the 1950s, there seemed to be greater willingness to listen to opposing political viewpoints than exists anywhere today. There seemed to be widespread acceptance that you need to listen to opposing political viewpoints if you want to argue against them effectively. People steered clear of discussion of religious differences and if anyone had views about sex and marriage that were at variance with conventional morality they didn’t discuss them openly.

The civility of the participants is obviously an important determinant of the amount of heat generated when contentious political issues are discussed. From my own experience, and limited discussions with others, I have the impression that in the 1950s people were generally more intent than they are now on maintaining civility when participating in political discussions. It seemed common for discussions to end in a meeting of minds on some points and respectful disagreement on others. Occasionally, when one of the main participants was intent on giving offence, discussions would end in an exchange of insults, or worse.

Have people become more open to listening to opposing views on other contentious issues since the 1950s?  A few years ago, I would have argued that the shibboleths had diminished as the major religions had become more tolerant of each other and a revolution in attitudes had caused many people to moderate their views of sexual morality.

It now seems that the old shibboleths have been replaced as new issues have become politicised. When issues become politicised it now seems to be much more common for people to parrot the views of the leaders of their political tribe and to refuse to consider opposing viewpoints. The art of listening seems to be disappearing from the public realm.

Steven Pinker has an interesting discussion of the politicization of issues in his recent book, Enlightenment Now: The case for reason, science, humanism and progress. He refers to research by the Dan Kahan, a legal scholar, who argues that bitter public disputes over science are now “the exception rather than the rule”. The exception arises when certain beliefs become symbols of cultural allegiance. To help make this point Kahan refers to recent U.S. history regarding vaccines for Hepatitis B and the HPV virus (a major cause of cervical cancer). Both vaccines prevent sexually transmitted diseases. Hep B vaccination has apparently been accepted without much opposition, but HPV vaccination has become a political firestorm because of fears that it would encourage teenage promiscuity. Kahan suggests that the difference stems from the way the two vaccines were introduced.  Hep B vaccination was treated as a routine public health matter, but the manufacturers of the HPV vaccine lobbied state legislatures to make vaccination of adolescent girls mandatory. Kahan’s view is supported by Australian experience of a voluntary HPV vaccination program being introduced successfully without the issue becoming politicised.

Issues often become politicized when they are taken up by political leaders. For example, it seems likely that by politicising the global warming debate, Al Gore’s documentary An Inconvenient Truth made it more difficult for conservatives to acknowledge the merits of any proposed policy action on climate change.

The media also plays a role in politicising issues by converting disagreement on public policy into a spectator sport.  In my view Australia’s public broadcaster, the ABC, is a major offender. The ABC’s charter requires it to inform and entertain, but unfortunately does not require it to encourage the reasoned debate and respectful disagreement necessary for liberal democracy to function effectively. In particular, the Q&A program seems to me to be designed to politicize policy debate. It entertains viewers by providing a forum for activist and conservative tribes to clash on totemic issues. Although some panellists and audience participants do their best to engage in reasoned debate, it would be difficult for any viewers to obtain a better understanding of alternative viewpoints from this program.

How can we have a useful exchange of views on issues that have become politicised? In a recent article on this blog I suggested that people who approach issues from different ideological perspectives would be able to have more useful policy discussions if they could turn their attention to what they can learn from the actual experiences of people in different institutional and policy settings. That is rarely straight forward, of course, because interpretation of experience is not immune to ideological bias. But it is still good advice!

It can also be useful to ask people to explain views you disagree with, rather than asserting that they are talking nonsense. Steven Pinker notes that when people are asked to explain an opinion they often realize that they don’t know what they are talking about and become more open to counter-arguments. That is more likely to occur when they are aware that someone is listening intently to the answer they are giving.

This view is consistent with Leah Goldrick’s conclusion in a recent article about the know-it-all syndrome. On her blog, Common Sense Ethics, Leah writes:

“Thinking is fundamentally driven by questions, not answers. This is why doubt, not certainty, is so important. Doubt is the starting place that leads us to question the assumptions that have lead us to a particular conclusion, and doubt is what drives us to learn more if we will humble ourselves enough to consider that we may be wrong. Constant learning, from a place of humble confidence, rather than a place of arrogance, is the antidote to know-it-all syndrome”.

You are more likely to have useful exchanges of view if you “assume that the person you are listening to might know something you don’t”. That is one of the rules that Jordan Peterson lists in his recent book, 12 Rules for Life (recently reviewed on this blog). Peterson suggests that we remain threatened by disease, self-deception, unhappiness and many other causes of suffering because we are too ignorant to protect ourselves. There is always potential for us to improve our own lives if we respect the personal experience of our conversational partners.

Some of my readers may be wondering whether there is any organisation they could joint to help cultivate a listening culture and improved communication in the community in which they live. A few weeks ago, the realisation dawned on me that for the past 16 years I have been a member of an organisation whose founder believed that “in bringing improvement in the way of better thinking, better listening, better speaking to individuals we are contributing to the improvement of the society which is made up of these individuals”. The quote is from an article by Ralph Smedley, founder of Toastmasters International, which appeared in the February 1958 issue of The Toastmaster. (The article, entitled, ‘The Toastmasters Club … Its Meaning and Values’, has been reproduced in Personally Speaking: Selections from the Writings of Dr Ralph C Smedley.)

The mission of Toastmasters is to develop communication and leadership skills of individual members so that they can achieve greater self-confidence and personal growth. The benefits that can bring to the lives of individual members are obvious but, as Ralph Smedley maintained, members of Toastmasters - now numbering more than 352,00 – also have an opportunity to contribute to “the building of a better society made up of individuals who must act in groups”.