The Electric Car Is Here, Are You Ready for It?

For decades, the electric car was the unicorn of the automotive world. It was here and then someone killed it. Some said it was real, others called it a mythical beast. Today we know it is real.
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For decades, the electric car was the unicorn of the automotive world. It was here and then someone killed it. Some said it was real, others called it a mythical beast. Today we know it is real.

On my street, I see plug-in cars parked in driveways. In traffic, I see them among the other cars. This week, at the fifth annual National Drive Electric Week, over 100,000 people will gather nationwide and beyond in some 185 cities, towns, malls, and farms to celebrate this technological turning point, test-drive the vehicles, and chat with long-time owners.

Plug-in cars are the future. They not only offer huge environmental benefits, but are a spectacularly disruptive technology. They don't appear all that different until you consider the billions of dollars of private and public investment and vast commitment of political will that brought them here. But make no mistake, the technological change and shift in spending patterns brought by the plug-in car will be on par with other major innovations like cell phones and the Internet.

Oil is the world's most widely traded commodity. The average American household spent over $2,500 on gasoline last year, according to the U.S. Energy Information Administration. The oil and gas industry makes up 7.3 percent of the U.S. economy--well over a trillion dollars a year, according to a PriceWaterhouseCoopers study. But since 2004, U.S. gasoline consumption has been slowly dropping, mostly due to improved fuel efficiency and fewer miles traveled. And that is before the plug-in cars start to really impact the market.

Plug-in cars now represent 3 percent of the California car market--up from zero just three years ago. That's twice the growth rate of plug-less hybrid technology. Starting this fall with the 2016 Chevy Volt, and rolling out over the next two years, a new generation of plug-in cars is coming to market with better performance and range. Watch for that 3 percent to grow quickly. Some of the other big changes expected as plug-in car adoption accelerates:

•Cleaner air: Despite tremendous improvements in vehicle emissions, air quality in many American cities still does not meet EPA standards. As our vehicle fleet becomes more electric, you'll notice it every time you breathe.

•Falling oil prices: Oil prices are highly sensitive to demand. As our fleet electrifies and demand for gasoline falls, prices will fall and our economy will be less captive to wild oil price gyrations.

•Fewer Middle Eastern wars: With lower prices and more available supply, oil will become a commodity like so many others (as it was before the 1973 oil embargo). ISIS and other terrorist groups will have less money to spend. When was the last time we fought a war over iron or cement, not to mention electricity?

•Changing gas stations: Gasoline accounts for a small fraction of most gas stations' profit. Most comes from drinks, snacks and other conveniences. People will still want these things, but gas stations will either disappear or morph into something new and unexpected to lure customers who no longer need the pump.

•Cheaper electricity: About half the cost of supplying electricity is in maintaining the grid, which is vastly underutilized at night, when power demand is lowest. But that is when most EVs will be charging. So the cost of maintaining the grid will be spread out over more kilowatt hours sold and prices may drop.

•Changing electric utilities: The wireless revolution sparked a massive change in the role of phone companies. The combination of plug-in cars, rooftop solar and battery storage will do the same for our utilities. Customers will become both buyers and sellers of power. They will be mobile (imagine charging your car at home when demand is low and electricity is cheap, then using it later, or even selling it back to the utility at a profit while at work, when demand is high) and no longer captive to a single company. Just as phone companies have done, utilities will need to scramble to figure out how to adapt.

•Cleaner power: Most new U.S. power is now generated by wind and solar. Look for that to continue as demand for electricity grows.

•New ways to use electricity: Plug-in cars with increasingly powerful batteries can be used as a remote source of electricity, anywhere it is needed. Look for entrepreneurs to come up with all kinds of innovative uses. Who ever thought that putting cell phones together with the Internet would put a video camera or interactive road map in your pocket?

•Less pressure on the global climate: Last but not least, petroleum is a big driver of global climate disruption. Electricity is not carbon-free, but it is much cleaner than petroleum and gets cleaner every year as our power mix improves.

As with other disruptive technologies, the impacts of plug-in vehicles will come over time as market penetration grows and people figure out new ways to use the technology. But make no mistake, the rollout is starting to make itself felt. Over 360,000 plug-in cars have now been sold in the U.S. If you have never been behind the wheel of one, try experiencing the quiet speed, cost-savings, and convenience they offer. Come join the revolution.

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