This article was written by Benjamin Bosis, Brown ’20. It is one of two Intercollegiate Finance Journal (IFJ) articles co-published this fall under a new partnership between the DBJ and the IFJ. To find out more about the IFJ and the partnership, please click on the author profile below.

The Transport Revolution is Coming

When Russia successfully launched the first satellite, Sputnik, into space, the whole world suddenly became invested in the progress of completely new technologies – and Americans had some serious ground to regain. John F. Kennedy knew that setting a goal would be half the battle, so he urged congress that “This nation should commit itself to achieving the goal, before the decade is out, of landing a man on the moon.” It was only with the drive to achieve that aim that America did just that.

Technology has long been a means to power, but in today’s world we often see such battles between corporate entities rather than political ones. According to Elon Musk and other business leaders, the future lies in self-driving cars, and, like JFK dictating the mission to the moon, Musk is now conveying his vision of automated driving to the American people. Already, many of the biggest companies in the U.S. have broken into a full-on sprint to be on the right side of the coming transportation revolution.

A Battle Between Giants

Google, General Motors, Uber, Mercedes-Benz, Tesla, and Lyft have made huge strides in automated vehicle (AV) development. Even Apple, who leads America’s technology sales by a whopping $200 billion a year, is reportedly planning to get in on the corporate rush. These important players come from one of two completely different perspectives and corporate incentives. The tech giants who started the movement towards unmanned vehicles are secure in other products, but see autonomous vehicles as a new and potentially huge source of income. The auto giants, on the other hand, have an almost existential dependence on cars, and face much higher stakes in keeping their brands relevant.

Despite their decidedly distinct backgrounds, members of each side have begun to choose partners across the aisle, sharing their knowledge in an attempt to get ahead. GM recently invested $500 million in ride-sharing service Lyft, and announced plans to equip an autonomous Lyft fleet with GM cars. The same partnership exists between Volvo and Uber, which use each other’s technology exclusively in their pursuits; whereas Google and Daimler, focusing on more limited aspects of the AV market, remain independent. Though most thoughts on Apple’s efforts are largely speculative, they would most likely also avoid any significant partnerships in order to control their long time vision, which at this point remains unclear.

Your Mission, Should You Choose to Accept it

All of the competitors agree that automation will shape the next era of transport, but opinions differ on how driverless cars should be implemented in the new age. Uber and Lyft envision the disappearance of car ownership entirely. In particular, Lyft plans to market each of its products as part of a larger network of vehicles that, instead of belonging to any one individual, operate 24/7 to carry customer after customer from point A to B. Transportation would become an exclusively service phenomenon, eliminating the need for anyone to actually own a car. Perfectly suited to urban environments, the plan for driverless cities could lead to larger sidewalks and an often-fantasized-about end to traffic jams. The interconnected fleet would vastly decrease the overall number of cars, which would in turn decrease pollution and make almost all parking lots obsolete.

Despite all the excitement for AVs in the tech world, Tesla founder Elon Musk is betting that Americans won’t give up the freedom of car ownership so easily. As the first company to actually place semi-driverless technologies in the hands of individual consumers, Tesla has demonstrated a commitment to autonomy not only for the car-driving-software, but for the car owner as well. Ultimately, the vision that will triumph is the one most adaptable to American life. Individually owned cars could be more suited to America’s huge expanses; as cell providers have shown, ‘nationwide coverage’ often leaves out many people in rural communities. And for most, having a car means not only being able to go wherever you want, whenever you want, but more importantly, knowing that no one can stop you. That quintessential ‘American’ quality may give Tesla’s plan for the future a bit of an edge.

Anxiety and Fear — Obstacles to Adoption

Legislators across the country have reacted very differently to the prospect of self-driving cars their public roads. California, usually the center for this kind of tech development, has driven some companies’ efforts elsewhere by considering significant regulations. Their potential laws would require all autonomous vehicles to have brakes, accelerators, and a steering wheel as cautionary measures inside the car, which would also necessitate a human operator in all test vehicles. The federal government, clearly hopeful for what the industry could do for the American manufacturing economy, has remained extremely lenient and supportive, necessitating only minimal safety precautions and reserving the right to require reports of all tech failures from any company.

Consumer enthusiasm, on the other hand, is another animal entirely. Many Americans have safety concerns about vehicle automation. Robots may not make mistakes, but programmers can, and the idea of having no recourse whatsoever in the case of a tech malfunction is not something to be taken lightly. Investors are particularly wary, as seen when Tesla’s stock dropped 3.2 percent only hours after their first fatal crash was reported. The reputations of companies hoping to put fully driverless cars on the road are proving paramount to their ability to do so.

Pittsburgh: A Case Study for Acceptance

In the face of growing hesitance, Elon Musk has insisted that it would be “morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.” While some seem to agree with his logic, that may not have been a good thing for Tesla. Across the country in Pittsburgh, Uber in particular has taken advantage of commercial testing allowances. Pennsylvania lawmakers, who clearly have more to gain than those in a state already home to some of the biggest companies in the world, have made no signals toward any major regulation so far. This leniency is largely a continuation of America’s laissez-faire industrial tradition. Not only is the ability to test in Pittsburgh catapulting Uber’s project forward, but the jobs and attention that came with Uber are helping to rejuvenate the long industrial legacy of the city.

Through steel, Pittsburgh became of the biggest economic powerhouses in the United States, and helped to lift the U.S. to the wealthiest nation in the world; but since leaving the industrial frontier it has fallen into relative obscurity. Now Uber’s entrance, catalyzed by the harsher regulating in California, is giving many of the students at Carnegie Mellon University a reason to stay. Their high volume of robotics talent will prove to be key to both Uber and Pittsburgh as they blaze a trail in the automation industry; for Uber, it has already meant taking the lead in the development race. That lead may continue to grow if other companies cannot find testing grounds of their own.

They’ll Get Here When They Get Here

Nevertheless, in all the excitement of the current flurry of AV activity, companies have declared decidedly optimistic timelines – typically ranging from 3 to 6 years – for their progress toward commercial production. Tech analysts at McKinsey, however, have taken stock of expert opinions and constructed a more realistic one.

The initial process leading up to product release may finish as early as 2019, as companies predict. Most experts believe, however, that there will be a much slower adoption of the cars lasting until 2030, while safety data accumulates and customers uncertainty decreases. Any state of 100 percent implementation – such as an eventual outlawing of human drivers – would not likely come before 2050. So for those of you hoping to own a completely autonomous car, that hands-free commute might not be so far off; Lyft CEO John Zimmer’s vision of the intelligent, interconnected, super-efficient fleet is a far less likely eventuality. But whether they’re Teslas, Volvos, or anything else, self-driving cars are coming; and a brighter, cleaner future is coming along with them.

The repercussions of the alleged “diesel dupe” from last September are still evident in the global market economy, now that information is revealing just how short Volkswagen fell of its promised objectives from last autumn to completely repair all of its vehicles affected by the emissions scandal. As new specifics reveal the depth of the scandal, it is difficult to anticipate a way for the company to make a full recovery in either its U.S. or European markets. However, by utilizing the shift in marketing approaches outlined in its recently released “Strategy 2025,” the company has the potential to transform its brand capital and write a new chapter in its corporate history. Volkswagen can potentially exfoliate its tainted reputation by calling attention away from diesel and emissions altogether and embrace its marketing of electric cars instead, thus redefining its company’s mission statement entirely.

The high costs that have stemmed from both legal compensation and falling sales revenue have crippled Volkswagen’s market brand. As of last August, the German corporation reported as much as a 56 percent drop in post-tax profit. Exposed in September of last year, the German auto-making company exploited software modules, referred to as “defeat devices,” to manipulate the results of a diesel vehicle’s emissions test. The modules would display a vehicle as operating within the legal limits of the United States Environmental Protection Agency’s (EPA) guidelines when in reality it was emitting as much as 10 to 40 times the approved amount. Government agencies were prompted to pursue an investigation after the EPA began to question the results produced by Volkswagen’s emissions tests. Once exposed, Volkswagen issued statements admitting to the manipulation of the engines of over 11 million vehicles, 600,000 of which were sold in the U.S.

“We’ve totally screwed up,” said Volkswagen President and CEO Michael Horn in response to the scandal’s exposure. “Our company was dishonest.”

In the wake of the exposé, Volkswagen diesel owners have faced a median of a $1,500 decrease in the resale value of their cars. To offset this, consumers can bring their cars into a Volkswagen dealership to have the emissions deficiency corrected. However, this leads to a sharp drop in fuel efficiency, an asset that had been promised in return for a higher price of a diesel vehicle. The Federal Trade Commission ordered Volkswagen to begin a mass-recall of all of its EA189 diesel engine vehicles built between 2009 and 2015. The company also agreed to receive all affected vehicles and repair them free of charge in a year’s time, as stated by Volkswagen UK’s managing director, Paul Willis. However, the year deadline has been exceeded and the German automaker has yet to attain even 10% of their alleged goals. Fewer than 110,000 affected vehicles have undergone remedial action.

Volkswagen’s failure to comply with its promises was deemed “simply unacceptable” by the UK’s Labour MP and chair of the Transport Select Committee, Louise Ellman: “One year on from the Volkswagen emissions scandal, nine out of 10 drivers are still waiting for their car to be recalled. Time and time again, Volkswagen’s schedule has slipped… People deserve to know when they can expect their vehicles to be corrected and returned to them. It’s time Volkswagen came clean with its customers. If it refuses to do so, the government must act.”

A statement made in June claimed that the automaker had been ordered to buy back or fix affected vehicles by December of 2018 and fork over nearly $15 billion to settle U.S. claims. Consumers can also expect to receive between $12,500 and $44,000 for Jettas and Audis respectively, as promised by the Federal Trade Commission. However, Volkswagen’s greatest threat to recovery is located on the opposite side of the Atlantic, where European consumers are frustrated that the same compensation has not been guaranteed to them.

“One year [later] and Volkswagen customers in the UK will be questioning why US consumers are getting compensation while nothing is on the able for the 1.2 million owners affected in this country,” stated Alex Neill, director of policy and campaigns at a UK consumer group. “The Government has had a year to address this issue, they now need to urgently ensure that UK customers are treated fairly.”

The company’s argument states that UK consumers have no need to be compensated, as repairing their cars will not negatively affect the performance of their vehicles. However, the Department for Transport spokesman stressed that the government is continuing to push for Volkswagen to take action to protect and compensate their customers in the UK. Volkswagen has claimed that the majority of European consumers can expect to have their cars repaired by the end of this year, but that quite a few will have to continue to wait until mid-2017.

Manfred Bort, Volkswagen’s European manager, stated to their consumers that the company will “inform all affected customers in Germany by the end of the year that the technical solution is available.”

What else is at stake for the car-making company? In the past year, Volkswagen has faced a drastic shift in leadership. As a consequence of the scandal, many of the upper level executives faced suspension and expulsion, including the chief of engine development, the head of American operations, their control executive and several other high-ranking employees. The company has also been hit by a crippling drop in sales revenue and stock prices — not to mention the money spent to combat legal challenges. In 2015 alone, Volkswagen lost as much as $18 million, while class action lawsuits continue to plague the German manufacturer’s funds as they navigate these murky waters.

However, an opportunity to turn around the fate of the company has been presented in Strategy 2025. This marketing strategy outlines the details of the company’s divisional financial targets and its goals to reform and improve upon their fatal flaw. Among the list of topics that covered, the report addressed potentially merging with other component-making companies. Since Volkswagen makes almost all of its parts, it faces more cost-cutting pressures. However, by taking part in joint-unions with other companies, Volkswagen can share the burden of part-making and realign its business apparatuses.

CEO Matthias Müller stated in a comment regarding Strategy 2025 that “the Volkswagen Group will be more focused, efficient, innovative, customer-driven and sustainable — and systematically geared to generating profitable growth.”

To alleviate some of the sting from the diesel disaster, the company’s basic SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) has shown that it can transform its core business by rallying behind the distribution of their electric cars. The electric car market has grown by 13 percent since last August alone. By keeping up with the rapidly growing trends of today’s most attractive market segment (electric cars) Volkswagen can tap into an entirely different stream of sales revenue while shifting the focus away from their diesel line and consequently the emissions scandal. By changing their targeting and positioning strategy, Volkswagen can capitalize on their 3.5 percent market share of electric car sales, chasing down leading competitors (Chevy and Tesla) and using those profits to counteract the debt from the scandal’s legal compensation procedures.

RBC’s most recent survey of consumer perceptions found that favorable views of Volkswagen have dropped by 33 percent since May, but most related that in context to diesel vehicles. If Volkswagen can successfully detract away from this image by exploiting their electric car sales, they can foster the loyal customer satisfaction they still have and take advantage of the relatively low drop in customer satisfaction.

Strategy 2025 also detailed that the company will be streamlining its international relations by investing in more associations with the Asian market and its development of the self-driving vehicle. This could improve Volkswagen’s strategy to get back on track in two ways: it will allow the company to expand from its currently problematic relationship with the European market while also rallying behind a state-of-the-art product that holds great potential to transform the future of auto-making.

“We’re working to make things right,” stated President and CEO of Volkswagen, Michael Horn, in over 30 newspapers across the US. “We sincerely hope you see this as a first step toward restoring your invaluable trust.”

It is critical that Volkswagen utilizes its potential marketing opportunities while concurrently reconstructing its reputation, as it would not only provide more sources to recover their losses but also prove to the public that the company is still holding strong. A year has passed and Volkswagen has fallen short on its recovery goals, but by focusing their energy on the future of their market, the German automaker can work towards transforming its culture and establishing preventative measures to prevent future scandals.

Roughly two months ago, the U.S. Environmental Protection Agency (EPA) accused Volkswagen of deliberately using special software to cheat emissions tests.

According to Cynthia Giles of the EPA, since 2009, special software had been installed in over 11 million Volkswagen diesel-powered cars to pass emissions testing and to maintain the illusion that the diesel-powered vehicles were more environmentally safe than they truly were.  Chris Ziegler of The Verge reported the company’s diesel engines were performing so poorly on emissions tests that Volkswagen engineers employed special devices to efficaciously champion the appeal of diesel.  Ziegler described the devices as working by “only turning on emissions control when undergoing emissions testing, but not when the car is actually being driven normally and pollution is at its peak.”  According to Aaron Morrison of International Business Times, the defeat devices in the diesel cars enabled the vehicles to release from 10 to 40 times more nitrogen oxides than permitted by U.S. environmental regulations.

Volkswagen has already seen out its CEO, Martin Winkertorn, and while the scandal will have devastating effects for the company itself, the scandal will have massive repercussions for Europe and the automobile industry as a whole.

The once-lucrative Germany car company now faces catastrophic financial troubles.  Volkswagen may have to pay fines of up to $18 billion, with civil penalties accumulating to roughly $37,500 on each vehicle, according to Timothy Gardner of Reuters.  Roughly a week after the emissions scandal surfaced, the market value of Volkswagen dropped 30 percent, Rocky Newman of Fortune Insider reported. Newman concludes that the accumulation of fines will put a “conservative estimate of the cost to Volkswagen and its shareholders in the vicinity of at least $54 billion, given fines outside the U.S. and lost sales that result from the scandal.”

The financial burden may not be limited to Volkswagen.  The revelation of Volkswagen’s use of special software to beat emissions tests will likely prompt stricter oversight of all automakers and emissions testing processes.  Greg Archer, a former UK government adviser, claims there is “lots of anecdotal evidence about the use of defeat devices to disguise environmental impacts and that the scandal could spread beyond diesel and into Europe, where tests are more prone to abuse.”  Evidently, Volkswagen may be representative of a larger problem within the automaker industry and emissions testing.

The implications of Volkswagen’s emissions scandal will extend beyond the confines of the company.  Germany and Europe as a whole will undoubtedly be affected by the crisis; the scandal’s far-reaching effects can be explained by the mere size and reach of Volkswagen.  The automaker employs over a quarter million Germans alone.  According to Kevin Roose of Fusion, Volkswagen cars “account for one of every ten passenger vehicles in the world.”  In addition, Germany has the largest economy of any European country, and relies heavily on exports with approximately 45 percent of the country’s total gross domestic product coming from exports.  Given the EPA’s fine that could amount to over 18 billion, Volkswagen will undoubtedly have to make employment and salary cuts that will heavily damage the export-based Germany economy.

Prior to Volkswagen’s scandal, diesel engines had been increasing in popularity in both the United States and Europe.  After all, many of diesel’s benefits over gasoline are indisputable:  according to Allen Schaeffer, director of the Diesel Technology Forum, diesel has on average “30 percent greater energy efficiency than a comparable gasoline engine.”  Volkswagen had been persistently advertising the notion of clean diesel in the United States with notable success.  During the first half of 2015, Volkswagen overtook reigning sales leader Toyota as the sales leader for diesel vehicles.  EPA’s revelation in early September will likely halt the automaker’s progress, however.

Opinions regarding diesel vehicles have already reversed following the scandal.  According to US News, “Major European cities such as Paris and Birmingham are already calling for a crackdown on diesel and the FT has suggested that Europe, where 53 percent of 2014 engines sold used diesel, might switch “virtually overnight” to petrol.” As Leonid Bershidsky of the Bloomberg View explains, “diesel-powered vehicles popularized as a result of lower excise taxes on diesel than gasoline throughout most of Europe, and relatively loose environmental standards for diesel engines that permitted higher levels of nitrogen oxides and other unsafe particles.”

Many drawbacks of diesel fuel that were previously overlooked have come to light as a result of VW’s emissions testing scandal.  Diesel fuel is noticeably more expensive than gasoline; according to Alex Davies of Wired, the price of diesel in September was $2.501 per gallon compared to the national average of $2.289 per gallon for regular gas.  In addition, Davies claims that diesel “cars are typically several thousand dollars more expensive than the equivalent model with a gas engine, because scrubbing the exhaust gas of nitrogen oxide and other particulates takes know-how and hardware.

Now, buyers of Volkswagen diesel-powered vehicles will pay:  According to Newman, “VW owners of “clean diesel” vehicles will incur lost resale value as high as $5,000 per vehicle.”

Volkswagen’s emission scandal has and will continue to weaken support for the diesel industry.  Diesel sales were in excess of 2.4 million in 2013 for Volkswagen, accounting for a quarter of the company’s factory output, according to U.S. News.  In addition, the company had nearly twice as many diesel-powered vehicle sales as its closest competitors.  Bershidsky asserts that the scandal is “the result of Europe backing the wrong emissions-reducing technology on a regulatory level.”  The Volkswagen scandal has undoubtedly put a dent in the diesel engine industry and will prove to difficult to reverse.  As Bershidsky alleges, “There will be only two paths for them to take: making sure the emissions performance of all new diesel cars is irreproachable—which isn’t easy in the real world—or shifting production toward hybrid and electric vehicles, as Japanese companies did when they decided diesel was on its way out.” Evidently, the Volkswagen scandal may carve the way for the rise of hybrid and electric vehicles around the world; only time will tell.

Volkswagen’s emissions scandal has reverberated all over the globe.  The revelation of Volkswagen’s use of defeat device has negatively impacted not only the German economy but the European economy altogether.  In addition, the emissions-cheating scandal has devastated the company itself and will call for increasingly intense regulatory oversight on all major car companies.  Most importantly, Volkswagen’s crisis has given the hybrid and electric car industry the opportunity to rise to prominence.  Although the German-based car company with survive, Volkswagen’s scandal and the EPA’s catastrophic fine in its own should serve as noteworthy lessons to automakers around the world: Companies ultimately pay the price for their wrongdoings and should never test the boundaries of regulatory oversight.

Green cars that are widely available, reasonably priced and profitable to build? A Tokyo dealership is where to find them. To meet the demand for clean‐air vehicles, Japanese car companies across the board are accelerating production of their fully electric concepts. The goal: electric vehicles available to the public by 2010, just over a year away.

Over the past few years, the increase of consumption in the emerging economies of China and India, combined with higher extraction costs, have contributed to skyrocketing prices of fossil fuels in the US and abroad. There are a few diverging opinions about the concept of “peak oil,” but everyone agrees that oil production will decrease steadily over time. Even taking into account the recent drop in crude oil prices, the cost of fuel has grown more than 560% over the past ten years, which has left consumers itching to find a better, budget‐friendly alternative to current transportation. Clearly, every car company wants to be the first to provide a solution. The race to an ideal state of energy efficiency has begun, and at the moment, the contenders at the forefront are all based in Japan.

The idea of the fully electric vehicle, or EV, is not a new one in Japan. In fact, Keio University has been experimenting with electric technology for several years. The university’s work culminated in the development of Eliica, a fully electric concept car powered by a long‐lasting battery, which can reach speeds up to 240 mph. The Eliica was introduced at the Tokyo Motor Show in 2005 as the first “high performance” fully electric vehicle. At the time, the Eliica team saw their work as a step towards the creation of a commercial line of similar vehicles.

Mitsubishi is clearly one of the major players in the push for electric vehicles. The company is working on completing their “iMiEV,” a fully electric model reminiscent of a Smart Car, on track for the projected launch date of 2010. Initially, the release will be limited to the Japanese market, but Mitsubishi has plans to sell the car in the US and Europe as well. The price for this vehicle, which runs 93 miles per charge and reaches a top speed of 90 mph, will be equivalent to roughly 19,000 USD. The technology and lithium ion batteries used to power the car will be supplied by Lithium Energy Japan, a joint venture set up by Mitsubishi itself.

Nissan, also at the forefront of the race to spearhead the EV market, plans for fleet sales of its car in the US and Japan to commence in 2010, with worldwide marketing beginning in 2012. “The first production vehicles will be for regional areas like California,” Nissan’s Manager of Advanced Vehicle Engineering Masahiko Tabe explained. “We will later expand the EV all over the world.” This tall, boxy four‐seat vehicle, modeled on the gasoline‐powered Nissan Cube currently for sale in Japan, will have a daily range of 100 miles, a top speed of 75 mph and a recharge time of just 8 hours. Automotive Energy Supply Corp, a joint venture set up by Subaru, Nissan and electronics mogul NEC Corporation, will provide the battery pack to power the car. Nissan officials have high aspirations for the car’s success, hoping that its release will bring them “zero emissions vehicle leadership.”

The automotive designers of Subaru share a similar vision. Subaru has scheduled the release of Stella, a four‐seat lithium‐ion battery‐ powered electric for 2009. This vehicle, traveling only 50 miles on an 8‐hour charge, is much less heavy duty than its rival counterparts and caters most directly to the needs of city commuters. However, Subaru currently has no plans to market the car outside Japan. The batteries for this EV will also be provided by Automotive Energy Supply Corp.

Lastly, Toyota is also preparing for the release of its own version of an electric vehicle. The ultra‐compact E‐Com which has been on the drawing board since 1999, will seat only 2 passengers and feature a small gasoline engine to recharge the battery. According to Toyota President Katsuaki Watanabe, the car will be adequate for limited distance travel only.

With so many Japanese companies producing electric vehicles, it is easy to see that anyone who demands an energy‐efficient car worldwide will look to Japan. But why is Japan, of all places, the birthplace of this new market?

First of all, strong economic motives will encourage consumers to consider the purchase of an EV. In a country where gasoline pump prices average 150% higher than in the US, a $19,000 MiEV will be in high demand.

In addition, Japanese companies are known to have a strict reverence for customer satisfaction. In recent years, this convention of serving the customer in the best possible way has become closely associated with “having a developed sense of social responsibility and valuing environmentally friendly practices.”  For instance, the Daily Yomiuri reported in July that Toyota was publically funding reforestation endeavors in the Philippines to augment its image as a “green” business.

Another important factor that has contributed to Japan’s primary role in the budding EV industry is the availability of the complex technology required to efficiently manufacture lithium‐ion batteries for automo;ve use. This technology, which was largely referred to as “untested” and “unproven” as recently as five years ago, was assumed to be expensive and impractical. Today, however, each major Japanese car company has its own in‐house produc;on of EV batteries, with the exception of Subaru and Nissan, which share the same technology.

Lastly, the Japanese people and market have a profound willingness to accept the electric car into their lifestyles. With the knowledge that fully electric cars will be launched in Japan as early as 2009, Japanese supermarket chain Aeon Co. is preparing to install car‐charging ports at prime loca;ons in its shopping malls. The ports Aeon plans to set up will be powerful enough to charge EVs in just an hour, a fraction of the time employed using a household socket.

Together, high fuel prices, Japan’s cultural mores, the availability of advanced technology and the enthusiasm for a more environmentally conscious lifestyle have created the perfect situation for the rise of the EV market. This constitutes a positive step for Japan and the world as a whole, but are EVs really the ideal answer to pollution that environmental advocates play them up to be?

First of all, if a large fraction of the cars that used to run on gasoline start running on electric power, power systems might not be able to cope with the addi;onal demand for energy, especially if the switch happens too quickly, and the capacity margin for electricity genera;on might disappear.

Secondly, electric cars are only as green as the kind of generating capacity used to charge them up. If the power does not come from wind or nuclear sources and instead comes from oil or coal, then EVs might be even bigger pollutants than gasoline cars. So if electric cars do result in increased demand on power grids, governments and power companies will need to focus on creating low carbon generating capacity in order for these cars to be a blessing rather than a curse.

The world will have to wait a few years before the true effects of the EV can be fully observed. What is clear today, however, is that the electric car’s debut into the global market is as much a question as an answer.