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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 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.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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