businessplanet

Gordon: I am all in favor of electric vehicles

Gordon: I am all in favor of electric vehicles, and I do believe that their market is going to grow exponentially, especially with China and India putting in new electric-vehicle mandates and incentives, and driving down the costs dramatically as a result.

However, replacing the current vehicle fleet with an electric-vehicle fleet—even if fewer people are driving, as Tony notes—is in large part a matter of individual owner economics. The majority of Americans drive the cars they can afford, and “affordability” is about upfront cost, not cost over the period of ownership.

Americans are actually holding on to their cars longer since the 2008 recession; in fact, the share of cars 11 to 20 years old in the U.S. vehicle fleet increased by 33% between 2008 and 2012. Those with older cars often just let them run down, and then buy from a neighbor or friend.

The secondhand market will increasingly include hybrids and more-efficient cars, thanks to fuel-economy standards, and we’ll see the fleet slowly become more efficient and more electric. But this won’t be a sea change—especially in low-income rural areas, where people are most dependent on their vehicles today.