Transition to electric cars meets roadblocks

In August 2008, then-Sen. Barack Obama set a lofty goal: get 1 million electric cars on the road by 2015.

Nearly six years later, the country still has a long way to go, with about 198,000 electric vehicles sold in the United States as of April, according to the Electric Drive Transportation Association (EDTA).

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The Obama administration concedes that it is not likely to reach sales of 1 million electric vehicles by next year, but says important strides have been made in making the technology more widely available.

“Whether we meet the president’s goal or not in that timeframe isn’t really as important as that we’re on the right path to growing the market,” said Pat Davis, director of the Department of Energy’s (DOE) vehicle technologies program. “I don’t think there’s any doubt we’ll get to a million vehicles. More importantly, we’ve got to get the cost where it needs to be so you can truly access the market.”

Forecasting firm Navigant Research, which uses different methods than the EDTA, predicts that the U.S. will have 172,304 electric vehicles sold by the end of next year. The firm doesn't project hitting the 1 million mark until sometime beyond 2025, when its forecasts end.

The administration’s work on electric cars was more prominent during President Obama’s first term, when there was talk of sales goals and new incentives.

Now the administration is emphasizing ways to increase energy efficiency and reduce carbon dioxide emissions through regulation, such as new carbon limits for all vehicles and power plants.

But the change in emphasis also reflects the reality that consumers have been slower to adopt electric vehicle technology than Obama had hoped.


“I think the reality of the number of cars that could be deployed quickly has caught up with the rhetoric,” said Daniel J. Weiss, director of climate strategy at the liberal Center for American Progress. Weiss thinks the 1-million-car goal is more realistic for 2020.

Weiss attributed the slow adoption to the short range of the vehicles. The Nissan Leaf, for example, can travel 84 miles on a charge, while the Honda Fit EV can travel 82 miles.

Weiss said more federal spending on public charging stations is needed to ensure people can travel longer distances.

“That would be a very important step, because the biggest problem with pure electric vehicle is range anxiety,” he said.

The administration has tried to spur wider use of the vehicles with a $7,500 tax breaks for purchases, a tax credit for charging stations and by providing funding for research and development (R&D).

The 2009 stimulus law also gave money directly to electric vehicle and parts manufacturing projects. The DOE’s Advanced Technology Vehicle Manufacturing (ATVM) loan program has backed about $8 billion in loans, including a guarantee to Fisker Automotive that became a source of controversy last year when the company went bankrupt.

The DOE recovered $53 million of the $192 million loan it gave to Fisker and lost only a small fraction of the total value of the program, but it still put a bruise on the loan program and opened it to criticism.

Battery developer A123 Systems and the Vehicle Production Group also went bankrupt after receiving ATVM loans.

“The federal government thought these were great investments and they turned out to be terrible investments,” said Dan Simmons, director of regulatory affairs at the conservative Institute for Energy Research. His group generally opposes government incentives for certain forms or uses of energy, and wants all electric vehicle incentives to be repealed.

“It’s not necessarily that the government has to make bad decisions,” he said. “But you get better results when the people making the decisions have money on the line.”

Bryan Wynne, president of the industry-backed EDTA, disagrees. He said industry investment drives the development and deployment of the cars, but the federal support helps propel it forward.

“We’ve gotten quite a bit of policy support in reinforcing private-sector investment, beginning with R&D,” he said. “The tax credits have been helping particularly on the consumer side and the fleet operator side to reinforce the investments that have already been made. Those have been very important, especially at these initial stages in the market.”

The tax credits for charging infrastructure expired at the end of last year, and the EDTA wants to see them renewed.

But beyond that, the EDTA is pleased with the current policies regarding electric vehicles. Tax credits to purchase the cars will sunset as each manufacturer sells 200,000 cars, which Wynne supports.

The DOE’s loan program has been very important for the electric vehicle industry, Wynne said.

“From my perspective, there are vastly more successes in the loan program than failures,” he said. “The failures have gotten a lot of attention from people who want to focus on that.”

While Obama and administration leaders have not been as vocal about electric cars, the government is still very active in promoting the technology.

The DOE’s Davis said the administration’s main involvement in electric vehicles has been funding or conducting battery research.

“The major barrier to electric drive technologies remains cost, and the good news is that the cost is coming down,” he said. “That’s mainly due to research and development that’s been highly successful in the last few years at lowering the cost of batteries.”

The DOE has also worked to encourage consumers to use electric vehicles in ways that cost less money for the government. It has developed a mobile application for locating charging stations, a website for calculating the cost difference between gasoline and electricity and worked to help employers install charging stations for employees.

“We think if you get the technology right and the cost right, that consumers will embrace this technology,” Davis said.