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"Always with you, what cannot be done"

Most would agree that U.S. President Barack Obama's goal of having 1 million electric vehicles on the road by 2015 is ambitious.  But with the first modern electric vehicles like the 2011 Chevy Volt and 2011 Nissan LEAF EV selling out their low-volume of pre-orders, and with competitors like Ford and Tesla Motor Company waiting in the wings with upcoming offerings, it seems possible.

However, a panel of government, industry, and academic experts opines that despite that optimism, the goal is likely impossible to be reached without major changes.  The panel was held at Indiana University's School of Public and Environmental Affairs in Bloomington Indiana. 

The panel's report is entitled "Plug–In Electric Vehicles: A Practical Plan for Progress" [PDF].

John D. Graham, Dean of the School of Public and Environmental Affairs at IU sums up the report's sentiments, stating [press release], "President Obama’s dream is appealing and it may be achievable, but there are big barriers to overcome before the mass commercialization of electric vehicles will occur."

To put things in perspective, at expected 2015 volumes, 1 million electric vehicles would likely be around 0.4 percent of the vehicles on American streets, at most.

Some environmental groups were quick to attack the report.  Roland Hwang a San Francisco-based blogger [blog] with the National Resources Defense Council's Transportation Program is cited by The Detroit News as stating that the figure is feasible.

Whether or not environmentalists like Mr. Hwang realize it, the report is likely less of an effort to knock EVs, but more of an effort to appeal to the government and public for more funding.  That is evident by the fact that the panel responsible for the report contained representatives from Ford (who is preparing an EV), from the Center for Automotive Research (an industry group whose reports have argued that the government needs to provide greater funding to meet fuel efficiency targets), and the International Council on Clean Transportation (a global warming advocacy group).

Many of the panel's members seem designed towards this end; take the panel's chairman, former Ford Motor Company executive Gurminder Bedi comment -- "A successful national program for electric vehicles will require an unusual degree of cooperation between industry and government, and a clear focus on the needs and concerns of consumers."

The report does offer some seemingly accurate insight into some of the critical problems/challenges facing EVs -- namely high costs and the question of consumer confidence (resale value/reliability).

Regardless of the accuracy of the pressing need for more government funding of EVs, these groups are walking a dangerous tightrope.  As the saying goes "the squeaky wheel gets the grease" and if they don't lobby, they will likely miss out on a promising business opportunity.  On the other hand, if they lobby too hard, they risk alienating the U.S. public and facing backlash from the U.S government.

The report comes at an opportune time, when President Obama and Vice President Joe Biden are trying to push a new EV incentives bill through U.S. Congress, which would, among other things, change the $7,500 tax credit to an instant refund and expand the quota of EV refunds per automaker.  The bill, sponsored by Michigan Senator Carl Levin (D) would cost taxpayers $19B USD over 10 years.

In that regard, what on the surface might appear a report running counter to the Obama administration's vision, is likely a calculated effort on the administration and auto industry's behalf to try to sell the need for more funding for "green vehicles" to members of Congress and to the public.

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RE: Okay here we go...
By mmcdonalataocdotgov on 2/3/2011 11:18:24 AM , Rating: 1
In general I have to admit I'm a free market guy and don't think it should be tampered with as the results are generally unseen and catastrophic (i.e. allowing unqualified lenders to buy houses they can't afford, default on loans, and crash the industry. I know there were other factors but you get the point).

Not to be a provocateur (and take the business away from Jason,) but isn't the deregulation of the financial industry, or the "free-marketization" of it, the very thing that led to its collapse? It wasn't the government getting involved, as you assert, it was the government getting un-involved that was the problem there.

RE: Okay here we go...
By The Raven on 2/3/2011 11:34:15 AM , Rating: 2
I admit that I don't fully understand what exactly caused the great recession as no one does, so I won't argue with you on that, but what you are implying is that things are better when the gov't gets involved. How about since you think that way, you can follow the gov't's advice in everything you do (choosing a ISP, software, cars, how many kids you have, TV shows to watch, etc.).

I on the other hand have my own brain, my own opinion and my own belief about the future of my transportation. And yes I said "my" transportation because I shouldn't be making decisions about "your" transportation.

I also wouldn't like "my" money taken to encourage people to live so far away from their work places or to encourage people to use coal powered cars.

Wait, have I said too much? It is so hard to tell these days now that the gov't got un-involved with speech regulation.

RE: Okay here we go...
By mmcdonalataocdotgov on 2/3/2011 12:00:39 PM , Rating: 3
I merely asked a question.

And because I happen to believe (I have mine, as well) that government regulation is helpful in some cases, for example, no lead in gasoline, controls on lending, doesn't therefore mean that I am a blind idiot that does not question the wisdom of the people we elect to make these decisions for us (it is a democratic republic, after all).

I didn't know the government regulated ISP choice, or how many kids I have. Now those are problems. I'll have to look into that... wait, do you think we're in China?

I don't understand the rest of your rant, but you seem to think your money would give other people the freedom of choice to move out to the burbs?

RE: Okay here we go...
By Nutzo on 2/3/2011 12:24:01 PM , Rating: 4
That government is best which governs the least, because its people discipline themselves.


RE: Okay here we go...
By mmcdonalataocdotgov on 2/3/11, Rating: 0
RE: Okay here we go...
By Nutzo on 2/3/2011 12:40:26 PM , Rating: 2
Nothing on daytime (or even most evenings any more) worth watching.

At least I still have the occasional movie on DVD.

RE: Okay here we go...
By Schrag4 on 2/3/2011 5:13:40 PM , Rating: 2
Daytime television? Aren't a lot of the people who watch daytime television only able to do so because they're supported by the government? I think you may be supporting the position opposite from what you're intending to.

RE: Okay here we go...
By bjacobson on 2/3/2011 7:50:35 PM , Rating: 2
our people no longer discipline themselves, why are we surprised that our government grows?

RE: Okay here we go...
By Kurz on 2/4/2011 11:44:50 AM , Rating: 2
Its a cycle of dependence, people throw up their hands and demand handouts for doing nothing. Government grows to supply the need by taxing other parts of society that are productive.

The only way to end the cycle is to cut off the supply.
In this case is the government.

RE: Okay here we go...
By The Raven on 2/4/2011 2:52:26 PM , Rating: 2
You didn't merely ask a question...
Not to be a provocateur (and take the business away from Jason,) but isn't the deregulation of the financial industry, or the "free-marketization" of it, the very thing that led to its collapse? It wasn't the government getting involved, as you assert, it was the government getting un-involved that was the problem there.

You asked a question and then answered it yourself.

No, you are not simply an idiot for following the advice of the people that you elect. You are an idiot for voting for someone who thinks you are an idiot who can't make your own decisions. (And Republicans have this elitist outlook as well, mind you.) And I say that assuming that you think these sort of subsidies are a good thing.

I didn't say that the US gov't regulates ISP choice, etc. I was saying that I take it you think the world would be a better place if they did.

The rest of my rant translated for people who think EV subsidies are a good idea:
I shouldn't be making decisions about "your" transportation.
I shouldn't elect people who make laws that make you choose to do certain things with your money when it comes to transportation.
I also wouldn't like "my" money taken to encourage people to live so far away from their work places...
Homeownership subsidies + EV subsidies...
...or to encourage people to use coal powered cars.
Electric cars.
Wait, have I said too much? It is so hard to tell these days now that the gov't got un-involved with speech regulation.
See 1st amendment.

As for your examples of good gov't intervention (which BTW I am not totally against):
Gov't controls on lending? We need those? If I (or a bank) lend money to someone who probably won't be able to pay it back, then I shouldn't be expecting to get it back, right? It is it's own control. What problem I think you are referring to is that the gov't (in an effort by politicians to buy votes from consumers and housing industry lobbyists) promised to back all of those loans that banks gave out so that people could buy houses that they normally wouldn't be able to afford. Natural control removed by gov't. Inevitable chaos.

I wasn't around for the whole leaded gas thing, but from what I know people became aware of the ill effects of the lead and voted to put limits on it and eventually ban it in 1996.

As with everything it seems, the majority of people became aware that something is bad/good and then they make it law
that everyone follow suit. Well if that were the case, then why would we need a law since everyone has determined that something is bad or good already. If you can convince me that buying an electric vehicle is good then why would we need a subsidy that essentially makes my decision for me?

I mean is it better to inform people of why you think a certain way or is it better to force them to live in line with your beliefs? I'd rather convince people, because I am not always right.

Personally, I buy "organic" when possible because I believe that it is good for me and the environment. I believe that so much (based on reasearch that I have done) that I pay extra when I shop. It may turn out to be a waste of money (same with EVs), but at least it is a waste of my money.

RE: Okay here we go...
By Iaiken on 2/3/2011 12:59:30 PM , Rating: 3
The problems that dragged down the US (and other) financial sectors were numerous, but the banks that wound up in trouble had many aspects in common that were not shared by banks that managed to remain solvent. These aren't mom and pop shops that will go unnoticed if they go tits-up. The banks have demonstrated that unless mandated to do so, they will put as much money at risk as they possibly can in an effort to maximize profits.

The fact is, there still need to be some enforceable ground rules in the financial sectors as well as proportional fiscal assets set aside by the banks to offset the risks they undertake. The bigger the risk, the more capital reserve they should set aside. This creates a natural limitation on how much risk a bank can undertaken by removing the additional amount that needs to be apportioned to the reserve from the risk equation.

How many rules should their be? Well that's hard to say, I'm of a mind that there should be as few rules as possible, but that those rules should have a reasonably high enough impact as to achieve the desired effect. Ideally such rules would have already been in place in other nations so that their impact can be analyzed and the fewer the rules, the easier it is to ascertain their individual and synergistic effects.

Something like the electric car subsidies to encourage buyers is completely different as it is difficult-to-impossible to gauge the affect the subsidy has. Especially considering the costs of the vehicles which are priced out of the range of the "average consumer". The average cost of a new car in the US last year was ~$28400 and this number was slightly skewed higher because of "cash for clunkers" and is an after tax figure.

The Leaf ($32,780), Volt ($41,000) and upcoming Model S ($57,400) are all significantly out of the reach of the overwhelming majority. The cheapest of which would leave you with monthly payments of $637 (60 months at Nissan 4% Financing) or $460 (60 month at Nissan 0% lease). These payments have to be carried by the owner until they receive their tax credit.

This is also why Tesla's current strategy is going to play out better. They are competing against the Lexus IS350, the BMW 335/528 and the Mercedes E-series. It aims to offer comparable size, performance and luxury as these cars at a price point that is only helped by the $7500 credit for people who didn't otherwise need it.

For these buyers, a $7500 tax credit is not the difference between buying a Tesla Model S or not. They can afford to buy the car either way and so it's just $7,500 + the interest that they didn't have to pay on it over the term of the loan in their pocket. In this regard, the subsidies are a huge swing and a miss as they don't help anyone who would actually need the help.

RE: Okay here we go...
By hathost on 2/6/2011 4:17:39 PM , Rating: 2
RE: Iaiken

There are ground rules in place for lending. Its called going bankrupt and closing up shop. Bank takes too many risks and looses all of it's money then it goes out of business and the people involved have learned an important lesson about appropriate risk management. When the government with nearly unlimited amounts of money and the power to tax and print money decided to bail out these irresponsible lending practices (which they forced through regulation) then you have government causing problems in the market and having to then institute new programs to fix the problems with their old ones.

Next, susidies are only going to push up the cost of an EV because the companies making them are going to be under less constraint to hold down costs and be able to take the subsidies as extra profit. I'm all for making profits by companies but not when they are skipping over the competition to WIN my business and just getting the government to TAX me and then give it to them.

RE: Okay here we go...
By wolrah on 2/3/2011 9:06:01 PM , Rating: 2
How about this: It's not black and white!

When there is both funding and competition for an industry, in general it's best for the government to stay out of things. Not always, but most of the time, to the point that the default option should always be government inaction.

That said, there are problems that we would be better as a society if we could solve them, but the required investment is large and has an unknown time period before a return is seen. I believe alternative energy in general is one of those problems.

Liking that the government is trying to give the auto industry a push in a race they're far behind in doesn't immediately mean we want to use all government-approved media.

RE: Okay here we go...
By wolrah on 2/3/2011 9:27:21 PM , Rating: 2
To be clear though, I think the goal of 1,000,000 EVs by 2015 is absurd. They're barely practical as a second vehicle and only an idiot would have one as a primary vehicle. Battery technology has gone a long way since the GM EV1 experiment, but the range is still too short and the charge time too long. That's what we need investment for though, to work away at those problems until they're solved enough for these vehicles to become viable replacements for combustion-powered vehicles in more than just big city commuter conditions.

RE: Okay here we go...
By hathost on 2/6/2011 4:22:19 PM , Rating: 2
Don;t forget to mention that we have been seeing an increasing number of blackouts and brownouts in the US and if we were all driving EV's the entire power grid would basically collapse. It takes something like 3KwHr for 20hours to charge a Leaf and for example if you wanted to quick charge it in 20 min it was estimated to take 63KwHr at like 60A or more. hen think about waiting 30min and a "Fueling Station" and how much time that would take with everyone lining up to charge their cars.

RE: Okay here we go...
By Nutzo on 2/3/2011 11:55:55 AM , Rating: 5
That's the spin the left would like you to believe, however there was no real deregulation. A few regulations where relaxed, but were accompanied by even more new regulations. In fact the banks that took advantage of the relaxed regulations and diversified where much more stable than the ones who didn’t.

Every time the government tampers with the market, there are unintended consequences. What we saw with the housing market was the result of multiple programs/regulation turning into a perfect storm.

The Community Redevelopment Act was used to pressure banks to make loans to low-income (risky) people. Not making the loans would result in lawsuits (Acorn), denial of expansion plans, and harassment by regulators.

Fanny May and Freddie Mac (i.e. government run/backed companies), then bought up these loans, removing the banks risk and placing the risk on the taxpayer. If you can make money and offload the risk to someone else, what do you think will happen?

Other banks, mortgage and investment companies then joined in on the feeding frenzy, something that would never had happened without the first 2 issues. This is the underling cause of the housing/mortgage bubble. As usual, the government will NEVER admit they made a mistake, and will just slap even more regulation on the market, resulting in even more problems.

RE: Okay here we go...
By mmcdonalataocdotgov on 2/3/2011 12:10:17 PM , Rating: 1
If you remember that Greenspan kept interest rates artificially low for a number of years while the bubble was inflating (government regulation) but didn't ADD regulations as banking institutions took advantage of easy money, and then consider this:

New York Times columnist and Nobel Laureate Paul Krugman: "Regulation didn't keep up with the system." In this view, the emergence of an unsupervised market in more and more exotic derivatives—credit-default swaps (CDSs), collateralized debt obligations (CDOs), CDSs on CDOs (the esoteric instruments that wrecked AIG)—allowed heedless financial institutions to put the whole financial system at risk. Financial innovation + inadequate regulation = recipe for disaster is also the favored explanation of Greenspan's successor, Ben Bernanke, who downplays low interest rates as a cause (perhaps because he supported them at the time) and attributes the crisis to regulatory failure. (From Slate)

I guess there are different ways to look at it.

RE: Okay here we go...
By Nutzo on 2/3/2011 12:38:21 PM , Rating: 3
Yes, artificially low interest rates also where part of the problem, as they allowed people to qualify for larger mortgages.

The CDS’s and CDO’s where an outgrowth of the schemes Fannie Mae and Freddie Mac started.
They where created due to deregulation, it was because they where not covered by the existing regulations.

This is the fallacy of government regulations. They are always playing catch-up with new regulations, because the market will find and exploit any loop holes. It’s like closing the barn door an hour after the horse already left.

This is why the government should never remove risk from the market place (like Fannie Mae and Freddie Mac did). Let the companies fail or file bankruptcy. Send the management to jail if they broke the law. Don’t bail them out.

RE: Okay here we go...
By nolisi on 2/3/2011 12:25:41 PM , Rating: 2
The Community Redevelopment Act was used to pressure banks to make loans to low-income (risky) people.

I've heard this line of BS about the CRA before. The only thing the CRA did was have banks make loan programs available in low income areas- NOT risky lendees. Complete difference.

The problem was that banks were taking deposits from low income areas and using them to back loans/credit in highly developed/upscale areas- resulting in a shortage of loans/credit in underdeveloped areas. They were denying loans to people with good credit in underdeveloped areas (bear in mind, good credit doesn't necessarily mean you have tons of money).

It is *always* up to the LENDER and CREDIT UNIONS to determine the risk involved in a loan, how much the loan should be, etc. There is no law that I'm aware of (particularly NOT the CRA) that says banks *have* to make loans to people low credit/high risk. This never happened.

RE: Okay here we go...
By nolisi on 2/3/2011 12:40:10 PM , Rating: 2
By the way- it bears noting that the majority of subprime loans were NOT originated under the CRA. It was independent banks not bound by federal regulations such as the CRA that made the riskiest of loans.

More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts. Although reasonable people can disagree about how to interpret the evidence, my own judgment

RE: Okay here we go...
By Starcub on 2/5/2011 10:25:30 PM , Rating: 2
"Unintended consequences"? I think you'd be hard pressed to support that statement. The consequences were certainly foreseen. Long ago various credit rating agency employees complained that that their employers were engaging in questionable rating practices; they were told to shut up and do their jobs as they were instructed to do them.

This financial boondoggle had been over a decade in the making. Congress and the SEC could have prevented this disaster if they had been doing their jobs as the taxpayers would have wanted them to had they been wise to the problem. Instead you have corrupt irresponsible republocrats being put in charge of the resources of a selfish public incapable of seeing the forest from the trees, some even after the fact.

The assertion that more regulation wouldn't help, and that an unregulated market would correct itself, is pure fantasy. There are good people in this country going without responsible accountable government and regulatory agencies. All the while joe and suzy sixpack play political ping-pong putting the same republocrat jokers in office as they vow to throw out the baby with the bathwater.

RE: Okay here we go...
By Hulk on 2/3/2011 1:53:47 PM , Rating: 2
That is a myth, saying it nicely, that the liberal media outlets (MSNBC, ABC, NBC, CBS, etc..) put forth to protect the Democrats from the disaster that they had a huge hand in creating. It's scary to me that most people think this way.

Barney Frank and the rest of the gang about 10 years ago imposed on banks that they had to reduce their normal lending standards so people that normally couldn't get a mortgage could. Or if they could they could get a larger one. This artificially drove up housing prices because a house is worth what you will pay and when you can artificially pay more the house is artificially worth more.

For a while it worked since if someone couldn't pay the bank would sell the house for more money then it was worth 6 months earlier. Then Wall Street got in the act and started bundling these loans and trading them like commodities.

Eventually the whole thing crashed when too many couldn't pay AND the real estate prices dropped.

Now it would be nice to think that regulating the banks and Wall Street would have prevented this but that is putting the horse before the cart.

The government started the mess and in an effort to save face blamed it on deregulation. Why would banks suddenly change time honored lending practices? In addition government backed sub prime loans only inflamed the situation.

Again, sometimes it's better to let the free market be free because for every action there is an equal and opposite reaction. Any tampering with the market has to be very carefully considered. Including subsidizing electric vehicles since no one really knows if this is the right time for them.

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