FedEx’s Fred Smith says electric cars are the answer

The magnate of the one of the largest – if not the largest – transportation companies in the world says the solution to our climate and geo-political woes is simple:  electric vehicles.  Why he has even managed to electrify .04% of his own fleet so far.
Of course, like all of our business geniuses today (and Prez Obama), he has no understanding of the reality of the situation.
How are we going to replace a fleet of 250 million vehicles in any reasonable amount of time?
I think it is clear that our current grid cannot support 250 million vehicles needing power, so how are we going to create the electricity to power them?  Coal?  Natural gas ?  Nuclear?
How are we going to find ways to recharge slow charging batteries (as opposed to the simple and quick method of filling vehicles with gasoline)?   What about those people who don’t have convenient places to charge?
In the end, while all of those are potential challenges for innovators to tackle, the bottom line is this:  in an era of growing stagflation – high prices, lowe wages – how are most Americans supposed to buy an expensive new vehicle?  Especially since the vehicles they currently drive will have a trade in value of $0.  And remember, even electric cars are soaked in oil in their creation – from the parts that are used, to the plastics, to the tires.  As oil gets more expensive, any type of car will too.
This is an elitist, superficial vision developed by someone who has never really had to work to make ends meet (dont believe me, read his bio).  I sincerely hope that we are granted the time by nature and geo-politics to transform the way we live to keep some semblance of the system of today.  I just don’t think we should bet the bank on it.  And that’s what this is:  an all or nothing bet that the way we have lived in the past can be sustained into the 21st century with just a few tweaks here and there.  What is his Plan B?
I do give Fred Smith credit for the headline – THAT is at least an acknowledgement that we have to get off oil one way or the other.

FedEx CEO: Let’s end our need for oil

A member of FedEx’s all-electric delivery fleet
By Frederick W. Smith, CEO, FedEx

FORTUNE — Every day more than 285,000 FedEx team members deliver some 7 million packages to 220 countries. Every 24 hours our aircraft fly 500,000 miles, and our couriers travel 2.5 million miles. We accomplish this with 670 aircraft and 70,000 motorized vehicles worldwide — nearly every single one of which is fueled by oil, the lifeblood of today’s mobile, global economy. We are all dependent upon it, and that dependence comes at a significant cost. U.S. armed forces expend enormous resources protecting chronically vulnerable oil transit routes and infrastructure around the globe. Oil dependence influences U.S. foreign policy, requiring us to accommodate governments that share neither our values nor our goals. Every American recession over the past 35 years has been preceded by — or occurred concurrently with — an oil price spike. And petroleum was responsible for 43% of U.S. energy-related CO2 emissions in 2009.

We cannot continue down this path. There is, however, a solution that may become economically attractive sooner than most think: cars and trucks powered by electricity.

Frederick W. Smith, CEO, FedEx

Electricity is generated by a diverse, domestic, stable, fundamentally scalable portfolio of fuels that is almost entirely free of oil. With an electrified transportation system, no single fuel source — or producer — could hold us hostage the way just one nation can disrupt the flow of petroleum today. In addition, electric vehicles have better carbon-emission profiles than today’s gas-powered ones, an advantage that will improve over time as we charge more and more of our cars and trucks with low-carbon sources of power.

The technology is already here. People are rushing to buy the first all-electric Nissan Leafs and plug-in hybrid Chevy Volts. In fact, the real question about electric vehicles is not whether they will be built, but who will build them. European and Asian governments and businesses have shown a willingness to move forward aggressively. The U.S. cannot risk falling behind. The question, therefore, is how best to seize the opportunity that electric vehicles offer.

FedEx (FDX, Fortune 500) has deployed its first all-electric delivery vehicles and will have 31 in service by the middle of this year. Early results confirm that the costs of operating and maintaining electric vehicles are significantly less than those for traditional internal-combustion-engine vehicles. In some cases we’ve achieved savings of 70% to 80%. As the price of batteries continues to fall, mostly due to scale production, the economics will start to make real sense from a total-cost-of-ownership perspective.

So we are making a start at FedEx, but it is not enough when it comes to the question of combating our nation’s dependence on oil. What we need to protect our nation is the environment to create in a few short years an entirely new transportation system with millions, and then tens of millions, of electric cars and trucks.

And there is a way to make it happen — pass a bill to promote electric vehicles. Last summer Republicans and Democrats on the Senate Energy Committee voted in favor of a plan to assist the deployment of electric vehicles and infrastructure in the U.S. The bill, which still hasn’t passed, was based in part on policy recommendations by the Electrification Coalition, a group of which I am a member. It calls for the creation of electrification “deployment communities”: regions where incentives would support electrification at scale. It leverages constrained federal resources in a market-friendly way by encouraging communities to work with major employers, utilities, and other stakeholders to find the most cost-effective pathways to electrification.

I am not someone who tends to advocate increased government involvement in the private sector. But there is no free market for oil. This is not a market issue — it is a national security issue. Republicans and Democrats are talking about electric vehicles as a truly bipartisan solution to our oil dependence. We all must urge them to continue to move the ball forward. What is needed now is an urgent, national commitment to action


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