Morgan Stanley Is Wrong About Tesla’s Electric Cars

, Senior vehicles engineer | August 21, 2017, 3:35 pm EDT
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Last week, investment bank Morgan Stanley was quoted as claiming electric vehicles are responsible for more global warming emissions than gasoline cars. The firm’s report says Tesla isn’t a ‘green’ company because of this (incorrect) conclusion. There are likely plenty of reasons to invest in the electric car and solar panel maker, and certainly many reasons not to bet on Tesla, but the false claim of dirty cars isn’t one of them.

Why did Morgan Stanley get the wrong answer? It’s hard to say because no underlying data is shown to back up Morgan Stanley’s assertions, so I can’t check their calculations. However, you are welcome to inspect ours; we wrote a report in 2015 comparing the emissions of electric cars and gasoline vehicles, and recently updated it with new electricity generation data.

What are the global warming emissions from electric cars?

The emissions that result from using an electric vehicle (EV) depend on part on where the vehicle is recharged, as electricity generation varies significantly across the United States. Based on where EVs have been sold so far, the average electric car generates global warming emissions equal to a 73 MPG gasoline car. Overall, over two-thirds (70 percent) of Americans live where driving an electric car would result in lower global warming emissions than even a 50 MPG gasoline car.


Manufacturing emissions are small compared to savings during use


Even when considering the emissions from the manufacture of the EV’s battery, EVs over their lifespan result in significant global warming emissions savings. Over the lifetime of a car the size of the Tesla Model S, the emissions savings are about 53 percent, when compared to a similar gasoline car.

Electricity is getting cleaner, making EVs better over time

Very few details are given in the article about Morgan Stanley’s analysis, however one of the few statistics given (regarding the fraction of electricity from fossil fuel in the U.S.) is wrong.

Nationally, we currently derive about 65 percent of electricity from fossil fuel and only about 31 percent from coal, down from 50 percent in 2006.

Both fossil-fueled electricity and coal generation have declined substantially over the last decade, making driving EVs cleaner. And as we increase the amount of renewable electricity in the U.S., driving on electricity can be even cleaner.


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  • csftn

    Not a Twitter expert, but I tweeted this to Morgan Stanley

  • Bruce Miller

    As Science advances at supercomputer pace and as Technology unravels at Super Artificial Intelligence rates, we find ourselves in a new “fuel Era” befor the last one was fully developed. Save this article, even burn it to disc before “Big Oil” buries it forever!
    Aluminum Storage Breakthrough Hydrogen Economy now possible
    The accidental discovery of a novel aluminum alloy that reacts with water in a highly unusual way may be the first step to reviving the struggling hydrogen economy. It could offer a convenient and portable source of hydrogen for fuel cells and other applications, potentially transforming the energy market and providing an alternative to batteries and liquid fuels.

    • Carl Raymond S

      Is the Al consumed, or recoverable? Oxidation reactions got us in the mess we are in.

  • solodoctor

    Thanks from me as well! Things can only get better if/when some of the regions noted shift towards less fossil fuel use when it comes to generating electricity. Efforts need to continue in that vein so that EV’s become even MORE efficient!

  • Thank you, David, for rebutting Morgan Stanleys false statements.

  • Gear

    I’ve heard Elon Musk is against the idea of robots taking over our lives, that’s something I finally agree with him on, so he should REMOVE the autopilot in his Teslas so he doesn’t make himself look like a hypocrite.

    • neroden

      He’s just doing it because all the other car companies are doing it and he has to keep up with the competition. 🙁