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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 Da W on 2/3/2011 11:44:34 AM , Rating: 0
I'm a free market economist too, but the government have a role to maintain a competitive/innovative free market.
In this case particularly, the government has a role to boost supply, to fund research so EV will come to market sooner than they are supposed to, and subsidies supply (not too much) so they can be sold cheaper and adopted faster, if that is the goal.

However, the same adoption rate can be acheived by taxing gazoline much much more. I would prefer that option.


RE: Okay here we go...
By acer905 on 2/3/2011 12:44:00 PM , Rating: 4
A Gas tax would only serve as a barrier for many people. Consider those who are forced to buy 5-10 year old used cars because they are in an income level that simply cannot afford new. They already pay a heavy premium, with Auto Loan interest rates for them much higher. However, a bank simply would not give money to them to buy a new car.

There are many reasons why the banks won't give out the money, most important simply being income to debt ratio. A student then, having lots of debt and working part time or full time at low wage, would be considered a bad candidate for a new auto loan.

The ratio they use looks at the general cost of living, housing, food, and transportation for the area they live in. So, if Gas was taxed to $5.00 a gallon, as some people have wanted, it would alter the ratio that Banks will give new auto loans to. This would cause a person who could have sold their old car and purchased a new more fuel efficient car to no longer be able to.

This person would then begin to lose money, having been denied a more fuel efficient car, and having their gas expenses go up. Potentially, millions of new fuel-efficient cars would go unsold because Banks will not accept fuel savings from buying a more fuel efficient vehicle into the debt to income ratio. It is too variable, and too high risk.

Ultimately, the only solution would be for the Government to force the banks to give auto loans to the high risk people (who only became high risk when the Gas tax was initiated), which after the Housing loan fiasco, nobody will do.

A Gas tax will only hurt the economy, and the citizens of the country


RE: Okay here we go...
By bjacobson on 2/3/2011 7:47:11 PM , Rating: 2
well then we just need another government run program for those students!


RE: Okay here we go...
By ebakke on 2/3/2011 2:43:59 PM , Rating: 2
quote:
In this case particularly, the government has a role to boost supply, to fund research so EV will come to market sooner than they are supposed to, and subsidies supply (not too much) so they can be sold cheaper and adopted faster, if that is the goal. However, the same adoption rate can be acheived by taxing gazoline much much more. I would prefer that option.
So...you're not a free market economist then?


RE: Okay here we go...
By Kurz on 2/4/2011 11:40:07 AM , Rating: 2
You are not a free market economist.
Free Market is much more efficient at providing technologies on its own.

Gas will be displaced by other technologies as the cost of it goes up and the cost of the newer tech comes down. It wont happen before.

In fact pushing for government taxes and subsidies will slow down the process since dollars will inherently be wasted in taxes and subsidies to inefficient tech.


RE: Okay here we go...
By The Raven on 2/4/2011 3:01:10 PM , Rating: 2
Very true. There can be other negative affects as well. Take EVs for example. The gov't talked them up so much in the 80's when I was a kid. They pushed them and there were charging stations at libraries and gov't institutions and everything. And now they are now even used. I know some of them have been torn up. But what is clear is that the public has an increased weariness of EVs because of this failed attempt to get them selling.

It's like the boy who cried wolf.


RE: Okay here we go...
By Kurz on 2/5/2011 9:53:10 AM , Rating: 2
I love electric cars they are going to be definitely going to be an interesting advancement for transportation.

The question is when? Every energy transition in history was because the economics of it was sound. Or there was some benefit to using the source even though it was more expensive.

Wood>Coal>Whale Oil>Kerosine>Crude>Gasoline>Natural Gas (Most likely)>Electricity from multitude of sources (I hope Nuclear)

Each step there was economics behind it. So why force technology that isn't there yet? Why force it if the economics aren't there? These are my biggest beefs with Green Nuts and People who push for Government funding.

Knowledge takes time to accue so let it accue and it'll make sense to change how we get our power down the line.
People (I didn't say government) are still are going to invest in the latest tech since there is always the hope that your investment will pay massive dividends when you invest right.


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