By September 16, 2016 3 Comments Read More →

Two scenarios where the Chevy Bolt could change America’s love affair with cars

Chevy Bolt

The Chevy Bolt, which will hit US markets in 2017 and sell for $37,500. Photo: General Motors.

Traditional diffusion path over 50 to 75 years vs. 10 years if “pooling economy” catches on

Just how important is Tuesday’s announcement that the Chevy Bolt will get 238 miles (400 kms) per charge? According to our experts, pretty darn important, for two reasons.

chevy bolt

Tesla Model 3, the competitor to the Chevy Bolt.

One, longer range and lower costs for electric vehicles means EVs are closer to becoming competitive with internal combustion engine (ICE) vehicles. In fact, for some drivers EVs may now make more economic sense than an ICE equivalent.

Two, the evolution of urban transportation systems favors EVs. Basically, if EVs can be help solve the congestion woes of big cities, the ones that cost consumers and businesses billions in lost time and productivity, then that is a major leap forward in value that justifies the the higher cost.

Fred Beach is the assistant director for the Energy Institute of the University of Texas at Arlington. He spent 25 years with the US Navy as a qualified submariner and surface warfare officer. And he describes himself as a gear head, the kind of guy whose first car was a 1968 Mustang GT that he rebuilt himself.

When shopping for a new car in 2014, his first choice was the Aston Martin V12. What gear head wouldn’t want one of those, right?

Instead, he bought a Chevy Volt, the Bolt’s hybrid electric big brother. Three years later, Beach prefers the Volt over the Aston Martin.

“The Chevy Volt is one of the most finely engineered pieces of gear I’ve ever driven,” he said in an interview.

“It’s just amazing how well the Chevy engineers did in coming up with that car and that concept and the way it seamlessly performs between the engine, the all-electric, the hybrid mode, and the plug in range it gives you.”

Beach uses his Volt to commute to work, about 10,000 miles a year. And he does it all in electric mode, maybe buying a tank of gasoline once a year just to flush the old gas from the car’s system before it gets stale. The Volt is cheap to operate, efficient, and a joy to drive, says Beach.

Which is why he’s optimistic about the future of the Bolt and its competitors in coming years.

“I’d say within the next 15 to 20 years we will see a much more rapid adoption of electric vehicles in the US. Not necessarily all electric but hybrid plugins and all electric,” he said.

“Right now the hybrid plugin is really the sweet spot because there is no range anxiety and yet for the vast majority of the driving people, it would be all electric.”

If it’s just a matter of EVs competing head to head with ICE vehicles, the 300 million-plus American automotive fleet won’t be replaced by EVs or hybrids for many decades.

But Levi Tillemann-Dick, managing partner at Valence Strategic, LLC in Washington, DC says the emerging “pooling economy” is where the real action is taking place.

“Increasingly we’re going to be transitioning away from a transportation system tied to individual vehicle ownership towards a system based on what we call “transportation network companies” led by Uber and Lyft,” he said in an interview.

“In theory, you can imagine a system where much of urban transportation is provided by private fleets that are incentivized to operate pools of electric vehicles. Then you’ll have some mass-transit trunk lines that are based on the current model of large trains and perhaps even some bus rapid transit systems that can move more people quickly down a set path from point A to point B. But in terms of flexibility and cost, the transportation network companies model makes a huge amount of sense.”

Automakers like General Motors, which recently invested $500 million in Lyft, are quietly maneuvering in the background to set themselves up for the transition to pooled transit using EVs and hybrids.

“Every carmaker is working in this space in one way or another, moving towards an autonomy-based system,” he said. “GM has already announced a partnership with Lyft where they’re going to be deploying autonomous Chevy Bolts.”

Tillemann-Dick predicts transportation network companies will take off in the next decade.

He may be right. But the pooling economy and EVs seem to be analogous to the cell phone and smartphone of a decade ago. Cell phones provided a cheap but limited service. Smartphones are really a mini-computer that just happen to allow users to make calls.

Smartphones provided an exponential leap forward in value to consumers. Within a few years, everybody had one.

If transportation network companies can provide a similar exponential leap forward in value, then Tillemann-Dick is probably right and we’ll see rapid adoption of EVs beginning in congested mega-cities like L.A. and New York, where time and convenience are highly valued by commuters.

If the pooling economy doesn’t catch on, then the more slow and traditional diffusion pattern predicted by Prof. Beach is more likely.

Either way, the Chevy Bolt (and the Tesla Model D) seem poised to start EVs moving more rapidly up the diffusion S-curve.

The speed of that ascent will have interesting implications for the American and Canadian oil industry as electricity displaces gasoline for transportation fuel.

chevy bolt

Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com

Posted in: Markham on Energy