Volvo Trucks in Pulaski County this week showed one of its new electric models, which you might soon see on Interstate 81. The Wytheville-based Camrett Logistics is starting to electrify its fleet of trucks, citing rising fuel costs and concern for the environment as reasons for switching from traditional fossil fuel-powered vehicles.
Today, a single transportation company converting to electric vehicles is worthy of the full panoply of attention – the news media invited to witness the first vehicle rolling out, TV cameras recording the action, the company president ceremoniously driving the vehicle. But the day may soon come when this kind of thing is no longer news.
A few days ago, CNBC broadcast a prediction that by 2040, every passenger vehicle sold in the world will be electric.
So who said that? Some crazy futurist hawking a new book or some tree-hugging environmentalist out to save the world? Neither, actually – it was David Woods, the CEO of ExxonMobil. If the world’s largest refiner and marketing of petroleum products says we’re all about to go electric, maybe we should pay attention?
Right now, only about 4% of vehicles sold in the United States are electric, according to the market research firm Canalys. And that’s just the new cars. When you look at the total fleet, only about 1.5% of Americans owned an electric car in 2019, according to the website EV Adoption. Far more Americans believe in Bigfoot than own electric cars, which is to say most of us probably find Woods’ prediction to be fantastical. Even in California, trendy with-it California, only 5.16%. of the vehicles on the road are electric. So are we really going to see Americans stomp on the go-green accelerator and get to 100% by 2040? Seems unlikely, right?
Now consider this: 2040 is 18 years away, which is not so long a stretch of time when you think in historical terms. Think back 18 years to 2004 and consider how much the world has changed, technologically. At this point in 2004, Facebook was just a few months old and limited to college students. Twitter didn’t exist. Neither did YouTube. And definitely not Instagram, Snapchat or TikTok. There were flip phones in 2004 but no iPhones. Now we take all those things for granted. Whole industries have grown up around them – there were no such things as “social media influencers” in 2004. If you could go back in time to 2004 – surely Elon Musk is working on a time machine, right? – and told someone that 18 years from then they’d be walking around looking at a handheld computer that, in a pinch, could make a phone call, they probably would’ve had you locked up. Now we argue over whether a certain former president should be allowed on one of those platforms. Or sometimes we just argue. The point is: Sometimes technological change can come very fast.
If the head of ExxonMobil sees an end to gas-powered vehicles, and talks about how his company will adjust to that future (by selling the chemicals necessary for making electric cars), maybe the rest of us should give some thought to that, too. Here’s the thing: You may not be shopping for an electric vehicle yet, but a lot of big companies are betting big money that you will. In fact, if they’re right, you may not have any choice in the matter. That may be all that’s unavailable, unless you can find some old-fashioned gas guzzler down at Honest Eddie’s Used Car Lot. (And then you’d better hope there’s a gas station where you can fill it up; will you still be able to count on the neighborhood Exxon station then?)
While climate change activists and climate change deniers exhaust their breath arguing with each other, the free market is moving on. Every major car company – and even some that might not be – are investing heavily in electric vehicles and the batteries that make them go. Ford announced last year it’s building three new plants – two in Kentucky and one in Tennessee – related to electric vehicles. In all, they’ll employ 10,800 people. Toyota announced it’s building an electric vehicle battery plant in North Carolina – 1,750 jobs – and expanding production at existing plants in North Carolina and West Virginia. General Motors – which has already announced it will phase out gas vehicles by 2035, five years before Exxon’s target date – announced it would build a battery plant in Michigan and upgrade an existing factory near Detroit to start producing electric trucks; that’s 4,000 jobs in all. In December, Rivian, a California-based electric car marker, said it will build a plant in Georgia, creating 7,500 jobs. Then in May, Hyundai announced it will build an electric battery plant in Georgia, creating 8,100 jobs. And that’s just a partial list.
Maybe the Exxon CEO is wrong; maybe we won’t be at 100% electric vehicles by 2040. But it sure seems likely we’ll have a much bigger percentage than we have now. In Norway, 86% of all new vehicle sales are electric, according to Car and Driver. OK, that’s Norway, you say. We Americans are slower about this particular innovation. Still, in 2021, about 13% of the new cars sold in California were electric, according to Autos Innovate. In the District of Columbia, the figure was 10.9%. In Washington state and Hawaii,7.7%, Oregon, 7.6%. Colorado, 6.2%. Virginia was further back at 4.16% – right about the national average. Yes, there were 17 states – mostly in the South and Midwest – at less than 2%. But all the trendlines are pointing upward. As gas prices rise, so do electric car sales. In the fourth quarter of 2021, electric vehicle sales edged up to 6% of the total (and Virginia kept pace, at 6.42%). Car and Driver reports that in the first three months of 2020, electric vehicle registrations were up 60%, regular car registrations were up just 18%. “It’s the latest indication that domestic EV acceptance may have turned some important but invisible corner recently,” Car and Driver reports.
There’s a lot standing in the way of more widespread adoption – recharging stations need to become more common, and those electric car batteries need to charge a lot faster. We live in a “gas and go” world; nobody wants to sit around waiting on their car to recharge. We also don’t have an electric grid built for electric cars. “If every American switched over to an electric passenger vehicle, analysts have estimated, the United States could end up using roughly 25 percent more electricity than it does today,” The New York Times reports. “To handle that, utilities will likely need to build a lot of new power plants and upgrade their transmission networks.” Given our current trends, more electric cars may lead to more solar farms and wind farms. But let’s not pretend that technology is static. As long as something is scientifically possible, all these things will probably get solved; market pressures will demand it.
That’s why I was so struck by the Volvo rollout this week – or, more to the point, the Wytheville logistics company that’s converting its fleet to electric. Yes, there were good words about the environment and all that, but ultimately, this was a business decision. And that seems important. Trucking companies aren’t really known for what some deride as “virtue-signaling.” And it’s not as if the general public has much say over which trucking company hauls their goods anyway. But if a trucking company in Wytheville – conservative Wytheville – decides that going electric is a good business decision, that’s probably a big signal that others are going to follow. Everybody can do the same math, and if their competitor is saving money by going electric, you can bet they will, too. The free market sometimes moves like a row of dominos.
We saw desktop computers move into the business world before we all decided we needed to have one at home. The same thing is likely to happen with electric vehicles: Companies with fleets will switch en masse long before most of us show up at a car lot and ask to test drive the latest electric model. Keep in mind that before Henry Ford tried selling mass-produced cars, he tried to sell delivery trucks. We’re already seeing governments start to switch out their fleets. Amherst County, Bedford County, Campbell County, Montgomery County and Washington County schools (and perhaps others) now have electric school buses. With the exception of politically divided Montgomery County, these are all conservative localities that probably aren’t interested in making some political statement. But as fiscally conservative counties, they all have a keen appreciation of the bottom line. Much like Camrett Logistics, they’re making business decisions and those business decisions come down on the side of electric.
All that made me think back to something Del. David Reid, D-Loudoun County, said last week when I interviewed him in Radford. He’s chair of the Commission on Manufacturing Development, one of those obscure but potentially important state commissions that few people pay attention to. He’s been traveling the state talking to manufacturers, to make sure they’re happy, and talking to local officials about what needs to be done to attract more manufacturers. He talked about how Pittsylvania County – specifically the Southern Virginia Mega Site – came close to landing the Hyundai battery plant that went to Georgia. Apparently one of the deciding factors was that the Georgia site was better prepared; Hyundai cited how the location near Savannah had better “speed to market.” Virginia’s fallen behind in site preparation – we’ve been spending $5 million a year, Georgia $66 million, North Carolina $80 million. Now it’s trying to catch up – the newly approved budget calls for $109 million over two years with the option to go up to $159 million if revenues allow. Reid thinks that’s still too low and too slow, but that’s for another day.
One thing he said sticks in my head. He talked about why Virginia ought to be more urgent about site preparation. “We’re at the beginning stage of an emerging new market that we need to get in on the ground floor of or it’ll pass us by,” he said. By that, he means the electric car market. The geography of the gasoline-powered car industry was drawn in 1896 when Henry Ford opened the Detroit Automobile Co. (which soon failed), in 1899 when Ransom Olds opened the Olds Motor Works and in 1903 when Ford started Ford Motor Co. The geography of the electric car industry is being drawn now, with all of these announcements that keep popping. Supply chains will spring up close to all these plants. The electric car industry is more geographically dispersed than the gas-powered one once was, but you’ll notice it’s mostly in the Southeast, probably for all the reasons that industries have been migrating out of the Midwestern industrial heartland and into the South for decades now – lower wages, fewer unions, more “business-friendly” political climates. Whatever their reasons for locating in the Southeast, these plants are huge scores for the communities that win them. Reid’s twofold point: Virginia needs to win one of these now before the market settles down, but it only takes one win to transform a community.
The electric event this week also underscores another point: We already have a transportation cluster, and Volvo is a big part of it. I wrote about this in an earlier column but some points bear repeating: The transportation cluster in this part of Virginia (this part is defined so broadly as to cover pretty much all of Southwest and Southside) is said to already employ 79,000 workers. And here’s the part that I notice: This began as a gas-powered transportation sector but is now in the process of transitioning to electric. That seems a good thing. We don’t have to re-invent the proverbial wheel, just the powertrain behind it.