Electrification: A Closer Look

During the 1930s, "electrification" meant extending electrical service to remote areas of the United States to replace traditional fuels like kerosene. Today, "electrification" refers to developing the technology and infrastructure necessary to replace traditional oil-based vehicle fuels with electricity.

This concept is not new: The first vehicles to run on electricity were manufactured more than 100 years ago. But a set of factors (described below) is converging to raise interest in vehicle electrification to the highest level since then.

• The volatile cost of oil. The cost of gasoline and diesel fuel has been on a roller coaster the past several years. The price of U.S. light sweet crude oil rose rapidly from about $85 per barrel at the end of 2007 to more than $147 per barrel in July 2008. It then fell even more rapidly, ending the year at about $32 per barrel. Motor fuel prices followed a similar pattern, providing a vivid reminder of consumers' and businesses' vulnerability to events in global oil markets and renewing interest in the search for alternatives.
• Improvements in battery technology. Batteries have historically limited the widespread use of electrified vehicles (EVs), because of issues with battery size, capacity and cost. While all of these factors continue to present challenges, the technology has improved, and newer batteries – especially the lithium-ion type used in cell phones and laptops – offer advantages for use in EVs.
• The need to reduce greenhouse gas emissions. Improving the fuel economy of gasoline- and diesel-fueled vehicles can reduce greenhouse gas emissions, but only so far, since gas and diesel are fossil fuels. To achieve the level of reductions called for by the U.S. Climate Action Partnership and others, alternative sources of energy, such as renewable fuels and electricity, are needed (see WTW Fossil CO2 Emissions for 2010 Compact-Size Vehicle).
• Concerns about energy independence. Electricity can be generated from a number of energy sources, so electrification can help oil-importing countries reduce their oil use.