GPI President and CEO Rolf Nordstrom wrote “What Business Owners Should Know to Prepare for the Shift to Electric Vehicles” for the Forbes Business Council website where it was originally published. Nordstrom recently became a council member.

Transportation electrification will likely permanently change how we move people and goods, so having a nuanced understanding of electric vehicles (EVs) and their implications is now a business imperative. Even though Tesla is a household name, there’s a lot of mythology and outdated information out there about EVs.

In addition to being an EV owner myself, the organization that I lead has deep expertise and nearly 25 years of experience in the EV space, and expertise on next-generation transportation technologies broadly. Here’s a chance to test your own EV literacy and prepare your company for what’s coming.

First, a quick recap of key trends shaping the transportation sector:

  • Automakers are going electric, even while EVs still represent a fraction of new sales. BloombergNEF expects electric models to be nearly 60% of all new passenger car sales worldwide by 2040. In the U.S., General Motors just announced that it will increase its investment in EVs and autonomous vehicles to $27 billion, bringing more than 20 new EV models to market in North America by 2025.
  • Transportation is now the largest source of greenhouse gas emissions. According to the Environmental Protection Agency, from 1990 to 2018, transportation emissions rose 21%.
  • Bans on selling conventional vehicles are growing.So far, 17 governments worldwide, including the state of California, have announced phase-outs of the sale of internal combustion engine vehicles. Even if such bans don’t take hold broadly in the U.S., they are already sending a powerful market signal.

Now, let’s dig into nine things that business owners should know about EVs:

  1. The total cost of ownership for light-duty EVs is often lower than comparable conventional vehicles, which makes them a great choice for fleets. Today’s EVs can have a higher upfront cost without incentives, but a recent study by Consumer Reports notes a lifetime ownership cost savings of between $6,000 and $10,000 for some of the most popular EV models. That lower cost means fleets are an early opportunity. While automakers appear to have a huge number of electric models in the pipeline (McKinsey & Company predicts some 400 by 2023), today’s models can meet the needs of some fleets. Based on our own experience working mostly with cities, here are key factors to identify which fleet vehicles to electrify:
  • Vehicles that take many short trips.
  • Vehicles that idle a lot.
  • Vehicles that are driven a lot each day (more miles driven equals more cost savings).
  1. EVs generally cost less to maintain. Consumer Reports notes that pure electric vehicles have fewer parts than conventional vehicles, which means less maintenance is required. By the time EVs are five years old, they cost about $900 a year to repair and maintain compared to about $1,200 for gasoline-powered cars.
  2. EVs are clean and getting cleaner.Many U.S. utilities are making deep decarbonization commitments, which include less reliance on coal in favor of greater energy efficiency, more renewable energy and some natural gas.That cleaner EV fuel makes an already low-carbon option even cleaner over time. This could yield significant public health benefits, as noted by the American Lung Association.
  3. Managing when we charge EVs could save billions of dollars. Our modeling and analysis for the central U.S. suggest a savings of $27 billion between now and 2050 for “managed EV charging.” That means either relying on the telematics in your EV and/or arranging with your utility to automatically charge your vehicle when it’s cheapest for you and for the grid, while still making sure you’re fully charged when you want to be.
  4. Synchronizing solar and EV charging could provide enough power even in northern states. An ongoing pilot that we’ve run at our Minneapolis headquarters suggests that synchronizing solar and EV charging can deliver sufficient charge for EV drivers who park at their workplace and charge during the day.
  5. Electric vehicles work in cold climates. Nordic countries have one of the highest percentages of EV drivers in the world. The most bitterly cold days might reduce the charge by up to 40%, but extreme cold is blessedly rare in most parts of the U.S. and impacts the efficiency of all automobiles. And as the driving range increases with every new EV model, that cold weather “hit” will likely become less important.
  6. EVs include those running on hydrogen fuel cells. Instead of plugging into the grid, you refuel with hydrogen and on-board fuel cells transform that hydrogen into electricity.
  7. Charging infrastructure is expanding, and 95% of the EV owners surveyed have never run out of charge while driving. While the U.S. has installed about 12% of the necessary “Level 2” chargers and nearly 50% of the fast-charge stations needed to meet the estimated 2030 charging demand, there’s been a 26% increase in public charging stations since 2019. Even new EVs with the smallest range available can go more than 100 miles on a full charge.
  8. Most consumers who have tried an EV don’t want to go back. According to a AAA survey of EV owners, 96% said they’d buy or lease another one. And 77% of those who initially had concerns about insufficient driving range and there not being enough charging stations said they no longer had the same concerns after making their purchase.

This is admittedly a lot to take in. And we haven’t even touched on what’s happening in the medium- and heavy-duty vehicle space. Nevertheless, think of the shift to EVs as similar in scale to the transition from horses to the automobile. It may be worth your time to think ahead about how your company, employees and communities might benefit from your leaning into this transition. Start by analyzing your fleet, if you have one, and getting up to speed on providing charging for customers and employees at your business. After all, an EV charging station looks to be the hitching post of the 21st century.

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