Electrification Changes Everything

Electricity has been part of every American’s life for 60 years.  But we are now going through a punctuated equilibrium that will change everything.  The old way was big power plants with thousands of miles of distribution lines and massive capacitor stations tied to homes and offices.  The future is a distributed grid where we will have local solar and wind coupled with in-house batteries and EV batteries allowing for far cheaper, more reliable electricity with less footprint, less cost and less fire risk.  And, like the changes in telephone charges, moving largely toward free.

The EV has kicked off this punctuated equilibrium.  EVs are now 10% of all new cars sold in the USA, and share is growing.  Investment in EV plants have gone from $0 in 2018 to $75B in 2022.  Fifteen new battery plants, investing $40B, were announced in 2022 alone – each able to make up to enough batteries for 20K EVs per year.  While there are fire risks in batteries, they are improving every year and we will see a migration from LFP (lithium ion) batteries to cheaper and safer NMC (nickel, manganese, cobalt) batteries over time.  And this month Tesla made an agreement to make its network available to ALL EV owners by end of 2024 – 3,500 fast chargers and 7,500 charges in all.  Investment in the old has now stalled, and investment in the new is accelerating – driving the punctuated equilibrium.

This podcast explains that the change is here, and the future won’t look like the past.  It took decades to build out the land-line phone system with “long distance” and other high charges.  It was replaced with mobile telephony and near free communications in about a decade. It took decades to build out the postal system and overnight letter carriers, only to have email replace a vast quantity of those communications with its free technology in a few years.  Listen now to understand how this will impact your life and business in 2023 and beyond.

Thinking points:

• Are you ready for all yard appliances to be electric as small 2 and 4 cycle engines are outlawed?
• Are you prepared to use your vehicle as a back-up power source for your home and/or business?
• How will you behave differently if electricity is near-free?
• Are you investing in new technologies based on electrification, or are you stuck investing in technologies headed for obsolescence?