Changing the Equation for Electric Transportation

I’ll be at the 26th International Electric Vehicle Symposium (“EVS26”) in Los Angeles in May. If anyone wants to meet me for a cup of coffee, please hit “Contact” and let me know.

The migration to electric transportation is going through a period that some of us anticipated: a bit of nervousness brought on by the fact that the value proposition for the consumer is simply not there yet. EV start-ups are having a hard time getting there, which has given the established auto industry a great deal of time to breathe, take its time, hedge its bets, and, perhaps most to its liking, milk the internal combustion engine cow a few more years.

Take the Ford Focus Electric, as an example of what I mean by consumer value proposition. I’m sure they’d explain it differently, but, at a high level, Ford has taken an extremely unexciting, garden variety passenger car, the Focus, ripped out the componentry associated with gasoline — the engine, fuel delivery system, transmission, and exhaust system—and replaced them with an all-electric drive train. Looking at this from the consumer’s perspective, now you have an identically unexciting car, but one that doesn’t use gas, and is charged by the driver at his convenience (or lack thereof). Given the current average prices for gasoline and electricity, the owner saves over 80% in fuel costs, but…he comes out of pocket with a wicked $20,000 extra (almost exactly double!) in terms of sticker price.

Are there other ingredients in the equation? Sure. There are tax incentives that reduce that premium in half.  And there is the thrill of knowing that you’re doing a truly good thing in helping our country break its addiction to oil, which is harming every single one of us – in several different ways.

But you’re also forcing yourself to overcome a fear that may lie in the pit of your stomach: what’s the long-term prognosis for electric transportation? It failed in a big way in the 1990s when GM and Toyota famously (imfamously?) decommitted to their EV programs, gathered the cars back together, and crushed them. The oil companies absolutely adore creating FUD (fear, uncertainty, and doubt) and sowing it into the minds of car-buyers: what if I’m investing in the automotive equivalent of the Betamax (a perfectly good technology that, for some reason, simply failed in the marketplace, leaving its customers with useless electronics)?

Personally, I think the handwriting for EVs is on the wall — that this will succeed in a huge way in the near future. With the breakthroughs in battery cost and energy density as suggested by companies like Envia and Eos, the sales proposition to the consumer will soon change dramatically. Electric drivetrains based on batteries at $125 per kilowatt-hour will soon be cheaper than their internal combustion counterparts. At that point, the game is over, and we’ll phase out gasoline over a fairly short period of time.

Of course, the onus will be on all of us to replace coal as the source of almost half of our electricity in the U.S. The challenge will be to continue to drive down the cost of each of the flavors of clean energy, and develop affordable ways to store energy from intermittent sources.

But that’s a challenge we have to face anyway.

Let the games begin.

Hope to see you at EVS26.