In talking about the reasons to support electrification of the short-haul transportation system, we frequently hear advocates explain how it will reduce dependence on oil by diversifying our fuel supply, how it is cleaner than gasoline, and prices are not volatile among other benefits. We hear less about how it is an important means to maintain technological and industrial leadership as a nation.

For the reasons stated above, and because electrification is far superior to all other alternatives to oil, it is inevitable that we will eventually electrify our transportation system. The open question is when.

We can seek to accelerate this transformation or we can wait a decade or more for it to happen, which is what many people believe is the time frame over which it is likely to occur. The problem that we face in waiting is that the Europeans and Chinese have less reason to wait. The cost-effectiveness of electrification necessarily requires a comparison of the cost of alternatives. Because fuel is so much more expensive in Europe due to high taxes, electrification will be cost-effective there long before it will be cost effective here. Looking to the Chinese, they have several advantages over us. First, the average Chinese household has no car and there is no “car culture” in China similar to our in the United States. With no preconceived notion of what performance a car should offer, there is less likely to be disappointment with some of the current limitations of grid-connected vehicles. Stated differently, if you are moving from public transport, a bicycle or even an electric bicycle, the fact that a car may have a range of 100 miles is not nearly as limiting as it is to the average American who already relies on a car with a range exceeding 300 miles. Second, the Chinese government can more easily mandate a shift to electrification than we can here. Having recognized that they cannot compete in the production of internal combustion engines which we, the Germans, Japanese and others have perfected over 100 years, they appear to be choosing to promote electrification where any head start their economic competitor have is much smaller.

If our economic competitors develop this industry first, instead of buying grid-connected cars made in the United States, we might be importing them from abroad, losing yet another industry to foreign competition along with the jobs and technological progress that accompanies the growth of a leading industry.

Last fall, Applied Materials, a leading manufacturer of materials and equipment necessary for manufacturing computer chips, flat panel displays, solar photovoltaic cells, and other electronic equipment, opened one of the largest Western owned energy-related R&D centers in China, an advanced solar research and demonstration facility in Xi’an, which is reportedly the largest non-government solar energy research facility in the world.

In recognition of the growing importance of China to its business, it then held its annual shareholders meeting in Xian, China, last week and its chief technology officer moved to Beijing.

In 1980s Chrysler commercials, Lee Iacocca used to say that it was time to “lead follow or get out of the way.” If the United States fails to make the commitment to lead, it seems like we are destined to follow or be left behind.

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