For consumers, discussion of electric cars tends to focus on how long the vehicle travels before needing a recharge and what it will cost to buy. But a new report backed by several large corporations takes a broader view of what the electric car will mean to our overall finances.
And the news is good.
Fueling our cars with electricity instead of gasoline – this one change – could avert a lot of economic pain, according to the “Economic Impact of the Electrification Roadmap” report by the Electrification Council.
The council, which includes NRG Energy, CISCO, PG&E, Nissan Motor, Fedex and other major companies, wants to see us drive electric cars by 2040 for 75 percent of the miles we travel.
In pursing this target, we could reduce our federal debt by $336 million, increase cumulative household income $4.6 trillion, improve our trade balance by $127 billion and add 1.9 million jobs by 2030, says the report.
How can an electric car do all of this? Our use of oil would fall dramatically, and we’d be spared the sharp financial blows we now experience when oil prices spike.
“Probably the single most important conclusion of the study is that by substantially reducing America’s oil dependence, the economy will be much better prepared to withstand a future oil shock such as those that contributed to recessions in 1973–74, 1980–81, 1991, 2000–01 and 2007–09. That is, the policy package can be thought of as a self-financing insurance policy that will make the economy more robust in good times and more resilient when subjected to energy shocks,” says a letter introducing the report by Robert Wescott, president of Keybridge Research and Jeffrey Werling of the University of Maryland’s Department of Economics.
The report envisions electric vehicle use reducing U.S. foreign oil imports by 11.9 billion between 2010 and 2030. To put this number in perspective, the nation’s total proved reserves are slightly less than 30 billion barrels.
World demand for oil would fall, leading to lower oil prices, putting more money in our pockets. It’s also a lot cheaper to run a car on electricity than gasoline, about 2.5 cents per mile for an electric vehicle compared with 10 cents per mile for a combustion engine, says the report.
David Crane, NRG Energy president and CEO, says the electric vehicle represents the “next great tectonic shift in our economy, one that will transform the way we use energy both in our homes and on the road.”
The report doesn’t bring up the bad news. Bad news, that is, if the goal is to reduce carbon dioxide emissions. The United States now gets about 50 percent of its electricity from coal, and the U.S. Energy Information Administration does not forecast much change in coal’s dominant position over the next two decades, even with today’s rapid injection of renewable energy into the system.
Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.