Analyzing the transition to electric drive vehicles in the U.S.

• Transitioning to sustainable energy for transportation poses new challenges for public policy.
• The transition process is characterized by network external benefits that create tipping points.
• Analysis of future transitions must address deep uncertainty about technology, markets and policy.
• If technological progress continues, transition benefits will likely exceed costs by an order of magnitude.

Scenarios of the transition to electric drive passenger cars and light trucks are created using the same model, technology and market behavior assumptions used in the recent National Research Council study, Transitions to Alternative Vehicles and Fuels. The transition is assumed to begin in California and the other U.S. states that have adopted California's Zero Emission Vehicle (ZEV) requirements. Five years after the ZEV standards take effect in 2015, the rest of the U.S. adopts polices strongly supporting the transition. After roughly a decade of net costs, market adoption of electric drive vehicles becomes self-sustaining. In the long run, the model implies that social benefits exceed excess costs by approximately an order of magnitude. Analysis of major energy transitions is characterized by deep uncertainty due to the long time constants for energy system change, the unpredictability of technological change and government policies, inadequate understanding of market processes, and the many important positive feedback mechanisms that create tipping points.