06/06/2011 11:08 am ET | Updated Aug 06, 2011

Is the Electric Car Finally Here?

Because of America's decentralized pattern of residential development, this country will always be heavily dependent on personal rather than mass transportation. While I am lucky enough to live in Manhattan and do not need a car to get to work or for daily use, most people in this country drive everywhere. Over the next several decades we will see the revival of some towns and cities and some additional development of mass transit, but in this country the auto is here to stay. To reduce both costs and the pollution generated from motor vehicles, we will eventually turn to electric cars. Hopefully, these cars will be powered by electricity generated from renewable sources of energy. Electric cars may seem like a vision of the future, but clearly, a great deal of progress has been made in the past few years to make this vision real. The arrival of the Nissan Leaf, an all-electric car designed for the mass American market, is a sign that the electric car may finally have arrived.

Recently, Bill Marsh of the New York Times compared the cost of a hundred miles of driving in a Nissan Altima to an electric-powered Nisan Leaf. The Leaf cost $2.64 for fuel compared to $14.25 for the Altima, and its power needs generated 63.6 pounds of greenhouse gasses compared to 90.5 for the Altima. It's true that electric car owners face the inconvenience of charging the car, and the fear that they could end up on the side of the road without juice for the battery. Still, the electric car seems to have crossed the cost threshold and is closer than ever to becoming a real option.

Last semester, students I worked with in Columbia University's Masters of Public Administration Program in Environmental Science and Policy conducted an analysis of the feasibility of electric cars in New York City for the Mayor's Office Long Term Planning and Sustainability. While enhancing mass transit is the main method employed by the city to reduce the energy used and greenhouse gasses emitted from transit, most people in New York City live outside of Manhattan and are nearly as dependent on the auto as folks living in the rest of this country. For these New Yorkers, the electric car may be an important way to improve their transportation sustainability. In examining the issues of electric car implementation in New York City, my students observed that:

...the City faces unique barriers that may prevent its widespread adoption. Auto-manufacturers market electric vehicles to homeowners with access to personal garages and driveways for recharging, but nearly half of New York City drivers depend on street parking. Additionally, New York City's electricity rates are among the highest in the nation, reducing the savings offered by an electric vehicle.

To address these problems, they proposed that New York's electric utility, Con Ed, adopt and promote a lower evening rate for charging cars and that the city's government look into the feasibility of establishing or encouraging commercial charging facilities in neighborhoods where homes lack private garages.

It is possible that the issue of charging batteries may soon be solved technologically. As battery technology advances, it may someday be possible to simply drive into a convenience store and drop off a used up battery and pick up a charged one to replace it. While that type of battery technology is still being developed, when it is in place, the fear of running out of juice will be eliminated. Shai Agassi, an Israeli entrepreneur, has begun implementing such a system in Israel. This past May, his company, A Better Place, introduced the Renault Fluence ZE, the first all-electric car offered for sale in Israel. One of the most interesting elements of Agassi's business model for the electric car is the way his company approaches the pricing fuel. As Agassi recently wrote in the Atlantic:

Why then have we not seen the market tip toward the electric car? Because the acquisition cost of the car plus the battery is still too high for most consumers and the lack of wide spread infrastructure means the range of an electric car with a bolted battery inside is not enough to satisfy most drivers accustomed to refueling once a week, every 300 miles. At Better Place, our answer to this challenge lies with the infrastructure, not the battery. By separating the ownership of the car and the battery and providing consumers with the network and infrastructure to conveniently charge the battery when parked -or switch the battery in less time than it takes to refuel on longer drives - convenience is attained. Price the car without the battery at purchase, and the rest as you drive and the electric car enjoys the same buying model as a gasoline car - and the electric car proves cheaper today and progressively cheaper to own and operate with time. As an electric car is mostly a consumer electronic device, we know the trend line on its cost, much like we know where oil is headed. They are headed in opposite directions in favor of electrons.

Businesses and governments are beginning to view this new technology as a practical reality. The pace that electric car technology is adopted and gains acceptance will in part be a function of its reliability and cost. These factors will be influenced by public policy. The diffusion of new technologies into a society and economy is very difficult to predict. For example, who would have guessed that there would be 5 billion cell phones on the planet by 2011? Similarly, who would have thought that we all needed to carry around 3,000 songs in our pockets at all times?

There is enough petroleum on the planet to power our cars for another century, so why switch from gasoline to electricity? Maybe for the same reason the horseless carriage replaced the horse and buggy: It was more convenient, less expensive, and didn't leave the streets ankle deep in manure. The electric car is cheaper and cleaner to run than the gasoline-powered car. As Agassi indicates, this price distinction will become greater in the future. The question for the electric car may be -- when? Not if. The issue is how long will it take to overcome the momentum of sunk costs and old habits. Perhaps the cell phone provides a good model. Ask young people if they ever plan to own a landline phone. Look at the declining price per minute of phone time, and the increased use of phones, text messages and e-mail. These changes have been quite rapid and were not predicted by anyone. While an auto is far more expensive than a phone, and represents a major household investment, people seem open to new thinking about cars. I suspect that the transition to electric vehicles will happen suddenly and unpredictably; perhaps sooner than we think.