The Great EV Race

The electric vehicle is the next "killer app. "

That's the belief of James Billmaier, a former software executive and author of "Jolt! The Impending Dominance of the Electric Car and Why America Must Take Charge." In the book, Billmaier asserts that EVs hold the promise of "a technology and economic revolution bigger than the computer and Internet revolutions combined. "

"The question is, will the technologies that sustain the explosive new EV economy -- the coming 'electriconomy' -- be made in the USA, or will they be made in China?" Billmaier asks.

It's a fair question.

James Billmaier:
If China wins the electric-vehicle race, the "risk to our national security is as dangerous as our current reliance on foreign oil. "
The Chinese government has made the electrification of its transportation system a national priority, and -- consistent with its dogged determination to create global champions in various industries -- recently issued a decree that the country will be the world leader in the EV space within five years.

And China isn't the only foreign economy with designs on establishing a homegrown EV industry.

"Indeed it's a global competition," says John Graham, dean of Indiana University's School of Public and Environmental Affairs.

In the area of advanced-battery R&D and manufacturing capability, Graham believes that "the Japanese and Koreans have a substantial leg up on China, Europe and the United States." However, Graham adds, the United States "has taken a significant step forward in the last five years" and has lapped Europe and China in that arena.

In terms of "creating an environment where electric vehicles can rapidly be commercialized," though, Graham believes China clearly has the upper hand.

"And that's because the structure of their government allows the kind of czar-like decision-making that can enable you to do things like designate communities as the places for demonstrations of electric vehicles," Graham says. "And the people in those cities get the big tax credits if they buy an electric vehicle, and those tax credits aren't provided to people in other cities until the first wave of demonstrations occur. Whereas in the United States, that kind of approach would seem very top-down."

As for why the specter of China becoming a dominant player in EV manufacturing should be on our radar, Billmaier asserts that it's not just an economic threat -- it's a matter of national security.

"In and of itself, China's goal of an electrified transportation sector poses no threat to the United States," Billmaier says. "But dependence on China or any other nation for EV technology -- from the vehicles themselves to the components that power and support them -- simply replaces one vulnerability with another, still leaving us open to massive economic disruption. That risk to our national security is as dangerous as our current reliance on foreign oil. "

The good news: Billmaier believes the United States is uniquely positioned to be a leader in EV manufacturing, citing our rich history of technology innovation as well as our universities and research institutions, robust investment environment and manufacturing capability.

But with China pouring an estimated $100 billion a year into alternative-energy initiatives, he says "we're going to need to move fast to become the undisputed market leader."

"Right now it's our game to lose," Billmaier tells IndustryWeek. "We're ahead relative to the technology we have within the boundaries of the country and our innovation. But the trend lines are not looking real good. Because as a country, we're not investing as heavily as the Chinese in this next big wave."

See Also:
• Sowing the Seeds of the 'Electriconomy'