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OTHER VOICES: Is state ready for e-mobility?

Article published on Crain's Detroit Business website. Antonio Benecchi and Nauman Syed are electric mobility professionals with Roland Berger Strategy Consultants in Troy, Michigan.

“Green” mobility is coming to America. A number of factors — including massive investments and volatile fuel prices — ensure that the era of electric vehicles is inevitable. Detroit's automakers have realized this and are investing accordingly.

Cities across America must eventually accommodate electric mobility. But this presents a “chicken and egg” paradox — EVs and a recharging infrastructure are prerequisites for each other. Therefore, it is of vital interest to companies and the public to understand where e-mobility will initially emerge and what the first target markets for EVs will be.

Building upon e-mobility experiences from serving clients around the world, our company has developed a readiness index to indicate where e-mobility will emerge. Unfortunately, Michigan trails most other states, including the leaders on the West Coast.

On the supply side, Michigan has unmatched readiness. Detroit has the engineering talent and expertise to develop EVs. Also, its local manufacturing know-how is now focused on batteries and other enabling technologies. Furthermore, the state and local governments have made a clear commitment to green energy and technologies that are needed to fuel e-mobility.

But Michigan is relatively unprepared for e-mobility on the demand side. Despite its hometown industry's massive investment in EVs, Detroit is a relatively unattractive market for the initial introduction of these vehicles. In spite of countless tax incentives and recruiting trips Lansing uses to attract green business, Michigan's overall regulatory environment remains rather inhospitable for e-mobility. The state lacks the policies, incentives and infrastructure to support local demand.

The state is sending mixed signals if it is not among the first to buy green Detroit metal — if Michigan won't, why should others? Indeed, Detroit should provide critical initial volumes and economies of scale for its champion industry. A higher level of participation and engagement by Michigan in the rollout of EVs will help accelerate the rise of e-mobility.

Michigan can still lead in the future. Several measures to improve readiness for EVs are already under consideration around the state, but we now need decisions and action.

For instance, the state should consider various incentives (e.g., preferential parking) to spark interest. More importantly, Lansing could enact tax credits to subsidize the local purchase of EVs. Furthermore, Michigan could directly incentivize automakers to sell in-state, perhaps through fleet purchases or by looking into how to offer valuable California Air Resources Board zero-emissions vehicle credits for in-state EV sales.

Michigan should also collaborate with local utilities to roll out a recharging infrastructure. A proper regulatory environment will help Michigan become a leader in driving green.

Decisive leadership and supportive policies will determine whether Michigan will pave the way or choke on the proverbial exhaust of the coastal states.
OTHER VOICES: Is state ready for e-mobility?
Jan 10, 2010

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