Electric vehicles featured prominently in the State of the Union speech last week. President Obama spoke of transitioning away from oil and toward electricity, reiterating his campaign goal of getting one million plug-in cars on the road by 2015. Further, he committed to supporting that effort by ending subsidies for oil, encouraging, “instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”
This declaration has since been followed by the announcement of several initiatives, including a call to change the current $7500 tax credit to a rebate available at time of purchase, as well as increase the allocation of credits per manufacturer from 200,000 to 500,000. Additionally, EV infrastructure could get as much as $200 million in additional funding. All told, a good start to backing up the speech with some substance.
But while this is not a new goal it seems many didn’t get the memo, and they’re tripping over themselves to contend first and loudest that it’s an impossible one to meet. There is no new information coming from these analysts and pundits, only the same dog-eared arguments we’ve been hearing for years: vehicles cost too much, not enough production, not enough demand. Cars are just starting to hit showrooms and even the companies making them only vaguely understand the market they’re aiming at, so any assertions about what will happen several years from now are little more than a damp finger in the breeze. It’s safe to say, however, that those of us who actually work with that market are more confident about it. Given that GM is more than doubling Volt production for 2011 and 2012, Ford is thinking that hybrids and plug-ins could comprise as much as 25% of their new car sales by the end of the decade, and Nissan’s Carlos Ghosn is known for audacious Leaf goals, it seems the industry sees it differently too.
However, while a million EVs by 2015 looks a lot more possible now than it did in 2008, it is by no means a slam dunk. These new initiatives are nice, but we need to get a lot more thoughtful about the details we’re prone to overlooking in our giddiness over being invited to the dance at all. The increase in credit allocation isn’t urgent; we’re at least a couple years away from any manufacturer getting 200,000 cars on the road. Should the bill pass, it’ll help bridge the gap between early adopters and mainstream, but the soonest it would matter is 2013- and it’s the time between now and then that will determine the success of this technology more than the time that follows.
The switch from credit to rebate would actually be very helpful, immediately reducing the effective price of these cars for consumers- though not so much if the financial incentive absorbed (and then some) by the dealers who are charging a $5,000-$10,000 or more over sticker for the vehicles in the first place. These federal rebates/credits should be made conditional on the vehicle selling at or below MSRP. It wouldn’t preclude dealers from charging more, and early adopters who can afford it and have to be first on the block can pay the premium and forgo the rebate- but taxpayers wouldn’t have to subsidize the egos involved.
And money for infrastructure is great- but I’ve some deep concerns about the $100+ million already allocated to infrastructure projects, as well as how some of the companies involved appear to be using their contracts to take advantage of customers. Meanwhile, there are other efforts that need attention and funding. We need nationwide training for electricians, city planners and inspectors, and a much more streamlined process for installing residential infrastructure. We need coherent, consistent consumer education conducted by a variety of stakeholders. We need a much more sane approach to the type and amount of public charging that will be deployed (and when), and we need to learn from mistakes already made so we don’t spend money and time repeating them. In short, we need to focus much more on the stuff that doesn’t make for a sexy headline.
But even with the challenges, the whole debate reminds me of a trip we took to DC in the Spring of 2009 for ROTEC, and an interview whose memory I’ve carried since. We spoke with about eight or nine different Congressmen over a couple days, and while the questions differed from person to person, there was one we posed to all: “What do you think about President Obama’s goal of getting 1 million EVs on the road by 2015?” For the most part, we got the same mushy, diplomatic answer from each, something along the lines of “well, it’ll really be a stretch, but it’s important to set goals even if we don’t reach them, mumble, mumble…” Not that they were wrong, most just weren’t very direct.
And then we sat down with Representative Ed Markey of Massachusetts. As our little crew crowded into a basement conference room on Capitol Hill, I folded myself onto an unoccupied patch of carpet in front of his feet, which created the endearing situation of him meeting my eyes every few minutes with this raised-eyebrows “am I doing ok? You guys getting what you need?” question on his face. Luckily, we’d met before (the first time, sharing a laugh in his office after he said to our group, “you know, there’s this movie- Who Killed the Electric Car?...you seen it?”) so it wasn’t nearly as awkward as it sounds- but a little surreal nonetheless.
Anyone who’s seen Representative Markey in action knows him to be unabashedly direct, a characteristic he treated us to in both serious answers and humorous but pointed asides. (Apparently, those who worked in the EPA during the last administration were unknowingly in the most effective witness protection program this country’s ever had.) In a variety of ways, it was probably the best interview of the trip even before we got to the million car question.
But when we did get there, he paused for a beat, acknowledged the ambitiousness of the goal as the others had, then answered in earnest. “You know”, he said, “I think that when we get to 2015 and look back, we’re going to wonder why we were ever so modest.” So refreshing was his conviction that we all furtively exchanged “did he just say what I think he said?” glances, simultaneously galvanized and humbled by the moment and slightly dubious it had taken place.
By my count, we have about 997,500 cars left to go- slightly fewer if we’re counting conversions. And it’s true that belief alone is not enough- but neither will we get there without it. So if we’re serious, we must allow for optimism- and then continue to dig in and do the work. There will always be armchair critics on the sidelines…but only those who join the game have the chance to win it.
Either way, betting against ourselves at the top of the first inning is just poor form.