The New Vehicle Revolution

EV

January 14, 2019

There has been a lot of talk over the last few years about the upcoming boon in electric vehicles.  The theory is great: no more trips to the gas station, quick re-recharging capabilities at home and work, and a clean, cheap, and widely available source of fuel, electricity.  These are all lofty goals that should be worked towards, but the journey ahead will be like a good road for driving, both long and full of turns.

The most prevalent brand of electric vehicle of today is the Tesla.  Teslas come in a few distinct models, currently a sports car, sedan, and SUV, with more on the way.  The next iterations are expected to include a pick-up truck and a semi tractor.  While the current production models have been fairly successful in terms of sales, Tesla will need the next two to be even bigger.  This should be possible as well, as Tesla is one of the world’s leading companies in terms of self-driving capabilities.  This will prove most useful in the industrial shipping sector where one of the largest expenses is labor.  It will be a difficult task to fully automate the US trucking sector, but doing so can free up valuable human capital.  On the other hand, there are approximately 3.5 million truck drivers in the US who would be out of work until they can be retrained in a new industry.  Given that the average salary of these workers is $40,000 per year, the economy may have a tough time adjusting to this new reality.

The next biggest obstacle, and the one most ready for economic profit, is the infrastructure required for large scale adoption of electric vehicles.  Tesla and other companies have done a decent job of providing charging stations in urban centers, but the majority of US travel infrastructure is built around the gas powered internal combustion engine.  In order to be of practical, everyday use the charging network must be expanded exponentially.  This means not only adding charging ports to office building parking decks, home garages, and apartment parking lots, but also Pilot and Flying J Travel Centers on the nation’s highways that could make long distance travel in an EV a potential reality.  Currently this market is somewhat fragmented with commercial and residential properties electing to provide charging as a tenant service.  Though this serves as a benefit for those that do use EVs (yay free electricity!) it acts as an implied incentive for EVs and an implied deterrent for their gas based counterparts (you mean I’m paying for their electricity and my gas!?).  There are a few providers of pay-by-the-charge services, but until these become more commonplace the burden of charging will continue to be placed on landlords and individuals.

One final thought on the green side of the debate.  It is commonly assumed that electricity is more “green” than gasoline.  While this is true in the relative sense, it depends on where you live as to the true carbon impact of EVs.  The US electricity infrastructure is making strides in renewable energy, but it should not be forgotten that 77.6% of the electricity here is still generated by natural gas, oil, and coal.  EVs are definitely less pollutive than their counterparts, but after accounting for electricity and battery production they are in no way emission free.

The goal of transitioning the US to a majority EV based transportation system is a noble one. Even though there will be significant hurdles along the way it could prove to have a strong positive impact on the economy.  Workers will be freed up, maintenance costs will be brought down, and less overall pollution would be created.  It will be a long road, but the destination should be worth the drive.

Carey Blakley

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