The transition to EVs is already in motion—not just because technology makes EVs feasible to create but also because society is moving toward greater climate and environmental protection.
Transportation supports just about every business that operates today
Even some digital, service-based organizations have workers who need to commute to the office, and virtually all product-based companies need cars and trucks to get supplies or deliver orders.
But like many other things in the business space, vehicles are changing. If you’re a savvy leader, then you should be asking yourself what the future of transportation will be so you can create a realistic, affordable, and fearless plan to stay on the road.
ELECTRIC VEHICLES ARE ABOUT TO SHINE
Inventors were experimenting with electric vehicles (EVs) as early as the beginning of the 1800s. In fact, the first electric car in the U.S., created by William Morrison, debuted in 1890. When Henry Ford came onto the scene, however, the lower price of the mass-produced Model T, along with the low cost of crude oil from Texas, simply allowed gasoline engines to win out.
So, electric cars aren’t a new concept at all. But there’s never been a bigger push for companies to take care of the planet and be aware of the worsening climate crisis than there is today. Big corporations like Amazon, Unilever, and Walmart are responding to that push and making commitments to drop their greenhouse gas emissions and carbon footprint to neutral. Many people want clean, environmentally responsible transportation, and because technology has improved so significantly, companies also now have the ability to deliver an EV future in a more practical way.
WHERE WE CURRENTLY STAND
Different areas of the world are at different points in the gas-to-electric transition. Take a look at Norway, for instance. In August 2021, just over 70% of the vehicles registered were EVs. The U.S. lags behind with the aim of 50% of vehicles being EVs by 2030. But some regions, such as California and New York, are already issuing some mandates that go further with fossil fuel limits and will require all new cars and passenger trucks to be zero-emission.
The stage is primed for EVs to overtake internal combustion engine (ICE) vehicles. Traditional original equipment manufacturers (OEMs) like Ford and General Motors already see the writing on the wall and are heavily investing in EVs. Businesses like Tesla have already become well-known and respected in the space. Many smaller startups are getting in the game, too—Lordstown, Rivian, and Canoo, just to name a few. At the moment, much of their production is focused on vehicles for last-mile delivery (think your Amazon delivery van). But individuals are buying EVs, too; 2020 saw about 1.8 million EVs registered in the U.S.—more than three times the amount registered in 2016.
THE LAST HURDLES TO JUMP As EVs become cheaper and more widely available, they still have some barriers to overcome before they can truly become people’s first choice. Probably the biggest wall in front of EVs is infrastructure. America doesn’t yet have electric charging stations everywhere they need to be seen. Most are concentrated in larger cities. People still have ‘range anxiety’ and worry about whether they’ll be able to plug in and get where they need to go. Other countries have been able to erase that anxiety, although the U.S. admittedly has a larger geographical footprint to deal with.
Second, even though EVs are becoming more affordable, ICE vehicles still often have lower initial acquisition costs. People see the price of an EV and get sticker shock. But EVs can cost 40% less to operate over time because you don’t have expenses like oil changes or as many mechanical failures to worry about. You can typically get your total cost of ownership and return on investment—that is, recoup that extra money you pay upfront—in less time than you could with an ICE vehicle.