As the world grows ever more eco-conscious, and technological innovations provide us with new and exciting ways to reduce our carbon footprint, businesses are caught between providing the latest and greatest in the ‘green’ economy and furnishing products consumers will actually use. Electric cars have been heralded as the next big thing in the push for more environmentally-friendly consumer vehicles for several years now, so why aren’t more drivers switching over from their gas-guzzling counterparts?
In my opinion, there are some significant barriers that prevent widespread adoption of electric vehicles (EVs).
Carmakers have recognized that in order to go mainstream they have to offer the consumer the same performance as what they have come to expect from conventional cars. Technology is key and constantly evolving. In January, General Motors (GM) announced plans for the Chevy Bolt, which promises 200 miles on a single charge and will compete directly with Tesla’s forthcoming mass-market competitor, the Model 3. This is a promising advancement for continued development of long-range EVs at prices accessible to many consumers.
However, there are still many decisions to be made when it comes to building out the charging infrastructure, which could impact drivers for many years to come.
In order to bring EVs into the mainstream, there will need to be advancements in the technology that makes these cars practical in addition to being environmentally friendly, so that these vehicles are as convenient and easy to maintain as cars powered by gas.
Just as likely a culprit in preventing mass adoption is the abundance of misinformation among the general public about the benefits of owning an EV, and especially the incentives that are available to lower the cost of the vehicle.
As important as scientific advancements will be as we move away from traditional vehicles, enhanced efforts to raise awareness of available incentives and the benefits of EVs will be just as important. As with many new technologies, government must use public policy as a continuous driver to foster innovation. At first, at least, it would make sense to give consumers incentives, such as tax breaks on the purchase price of EVs, reserved parking in crowded cities, and credits for building in-home charging infrastructure to support early adoption and increase demand.
At some point, however, market competition should decide if this is a viable technology. One EV competitor that comes to mind when talking about alternative means of transportation is the hydrogen car.
With its recent announcement about the forthcoming mass-market hydrogen car, the Mirai, Toyota has shown it believes in the concept, joining several other carmakers currently in the development process. While replete with its own unique set of challenges, hydro cars offer the same no emission alternative as battery-powered vehicles without the impediment of having to store the energy used to power the car but rather having a fuel cell that they can rely on. Critics will now say that the source of power for the fuel cell, hydrogen, is also currently produced out of natural gas and therefore also a fossil fuel. This is correct as of right now, but future plans are to produce hydrogen out of renewable biogas and solar.
We currently see a similar approach in energy production with wind, solar and other alternative sources slowly taking their place as viable sources of power alongside our regular energy mix, with each of them having their niche. For example, the solar market in the US grew by about 40% in the last couple of years due to the stimulus program, and prices continue to drop as the industry continues to innovate. Incentives may drop off, but reduced price and increased efficiency can make solar power a viable, cost-efficient addition, especially in sunny suited U.S. Climates, but will in no way be able to substitute of large base power capacity in the near future as other forms of electricity are currently more competitive.
There are a slew of options as we look to alternatives to traditional power sources. Government regulation and incentives are at times needed to expand new markets, but in the end it is the efficiency of the technology that will dictate its success with consumers.
As car makers rush to dominate market share in the new green economy, mainstream success will come from a traditional source: consumer satisfaction. Let the race begin.
Dominik Knoll is CEO of the World Trade Center New Orleans, part of the World Trade Centers Association of business leaders.