Administration's Electric Car Initiative Speeding Ahead

By ColumnsFOXBusiness

As gas prices continue their upward march, all eyes turn to the White House, as consumers look to the president, to come up with a solution that would alleviate that added pain at the pump. Although President Obama has been slow to offer a short-term fix for the spike in gas prices, his long-term plan to curb America’s dependency on oil is well underway.

President Obama has voiced his support for electric vehicle technology, and is attempting to jump-start wider plug-in electric vehicle (PEV) adoption, with lofty targets, urging the country to “break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015,” as he said in his State of the Union address last January. All of this momentum is exciting for those who stand to gain from an PEV boom, but there are a lot of unanswered questions. Studies show the country is still a long way from a meaningful switch to all-electric. Electric vehicles have yet to be proven as a hit with consumers, and it is unclear whether or not automakers are even capable of meeting President Obama’s 2015 goals.

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“The consumer is really going to be critical to determine the evolution of this market,” said Caroline Narich, a clean energy consultant for Accenture, and a lead on the consulting firm’s latest study of plug-in electric vehicles pilot programs. “There are so many questions in terms of when consumers want to charge and how much they want to pay for charging, so we need to better understand consumer preferences.”

The Accenture study, which examined the habits of electric vehicle drivers in pilot programs, identified substantial challenges posed by the cost of public charging infrastructure and difficulties in terms of effectively managing additional grid demand. Despite those challenges, a rapid roll-out of the infrastructure that will support electric vehicles is already underway in the US in order to meet the administration’s targets. Charging stations are popping up nationwide, and public incentives like the EV Project, a program sponsored by the U.S. Department of Energy, will roll out 15,000 Level 2 chargers in 16 major cities.

Grid strain is another issue that was cited as a challenge for the adoption of electric vehicles in the Accenture study. The study showed, surprisingly, that drivers found it wasn’t necessary for them to plug in their vehicles each night at home, since they were driving well within the electric vehicle’s range. While this fact argues against perceived problems such as “range-anxiety,” or the fear that a car will run out of charge while a driver is out on the road, the drivers’ infrequent charging patterns proved to be a bigger strain on the grid as charging became more unpredictable.Another report, put together by a special transport electrification panel at Indiana University, found that electric vehicle production itself might not be able to meet demand set by federal targets.

“If you add up all of the commitments made by the various car companies, it doesn’t add up to a million vehicles by then [2015],” said Gurminder Bedi, an automotive industry executive who chaired Indiana University’s expert panel. “Having said that, having put the focus and the goal out there we’ll certainly have more than we were going to have and it’s something that’s good for the country.”

The Indiana University report cited a need for substantive government assistance in the form of PEV educational programs, special privileges like priority parking and access to high-occupancy vehicle lanes for PEV drivers, and infrastructure and vehicle subsidies to help spur further build out and vehicle adoption.

Despite the challenges posed by both studies regarding the nascent electric vehicle market, the Obama administration is charging ahead. In the federal budget proposal released last month, the White House announced it would divert funding that was allocated for fuel-cell and clean-diesel research toward a program that would make the current $7,500 tax credit for electric-car buyers a rebate at the dealership, meaning consumers don’t have to wait to claim a credit on their tax return.

This policy is crucial in spreading PEV adoption beyond the crowd of eager early-adopters, who have clamored onto manufacturer waitlists by the thousand. No one doubts the fashionable appeal of green technology among early adopters, but whether the cars are practical for the rest of the populace is up for debate.

Still, the real question is not whether or not we can physically manufacture one million electric vehicles for America’s roads, but rather whether one million American auto-buyers actually want to buy and drive those vehicles.

“Stable, sustained consumer demand is what’s really needed,” Bedi said. “If that’s there, the industry will clearly find the way to supply them.”

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