Thursday, April 03, 2014

Sales of Electric Vehicles... and Concerns With Buying the Fuel for Them

If you've been following the papers and some parts of the blogosphere, you're likely familiar with the difficulty that Tesla is having in implementing its direct to consumer sales model.  Those of you on LinkedIn may want to visit a discussion a few of us have been having in the Colorado Renewable Energy Network user group on this topic here.  

I don't intend for this post to debate the pros and cons of electric vehicles aside from one particular concern that I've always had.  No, it isn't the range anxiety, or the time it takes to recharge batteries, or even the cost of the batteries.  My biggest concern is the supplier of the fuel.

In my opinion, electric utilities -- and especially investor owned electric utilities -- already have too much power.  Do we really want to extend their hegemony into the transportation sector too?  Do you want your ability to get to work to now depend on that same monopoly electric utility whose rates constantly escalate and are totally inelastic?  You might say it is a catch 22 between Big Oil and Big Monopoly Electric Utility, but gasoline prices have at least been shown to be somewhat responsive to supply and demand and there is at least some competition in the marketplace.  In most states, however, the price you pay for electricity is established in a rate case that is decided by a public utilities commission or similar agency.  In my experience that is less comforting than letting supply and demand regulate the price of fuel. 

I love the idea of electric vehicles although I am less optimistic than many advocates about their market potential in the near term.  But frankly, my biggest concern is being held hostage by that monopoly fuel provider. What do you think?