Concern for the environment and energy security is changing the way we think about energy. Grid-enabled passenger vehicles, like electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV) can help address environmental and energy issues. Automakers have recognized that electric drive vehicles are critical to the future of the industry. However, some challenges exist to greater adoption: the perception of cost, EV range, access to charging, potential impacts to the grid, and lack of public awareness about the availability and practicality of these vehicles. Although the current initial price for EV's is higher, their operating costs are lower. Policies that reduce the total cost of ownership of EVs and PHEVs, compared to conventional internal combustion engine (ICE) vehicles, will lead to faster market penetration. Greater access to charging infrastructure will also accelerate public adoption. Smart grid technology will optimize the vehicle integration with the grid, allowing intelligent and efficient use of energy. By coordinating efforts and using a systems perspective, the advantages of EVs and PHEVs can be achieved using the least resources. This paper analyzes these factors, their rate of acceleration and how they may synergistically align for the electrification of vehicles.