Auto makers push for more electric car subsidies

Technology is expensive

Steve Hawley, Apr 22, 10.

American auto makers are pressing the federal government to provide more electric car subsidies, saying that without subsidies, the technologies may not be widely implemented, according to the Wall Street Journal.

The government has already provided billions of dollars to electric cars, including tax credits for buyers and financial aid for manufacturers. But auto makers say more is needed:

Industry lobbyists say more government aid is needed if the industry is to achieve President Obama’s goal of putting one million electric or plug-in hybrid vehicles on the road by 2015. Auto executives are concerned that unless the government offers more subsidies, electric-car sales could stall because consumers won’t have enough places to charge their cars, or will balk at the relatively high cost of the new technology.

Auto-industry lobbyists presented a list of proposals to Ron Bloom, a senior adviser to the president on industrial policy, that includes tax credits for homeowners to install electrical outlets, more money to build public charging stations, and additional tax incentives for battery makers and car buyers. Also on the list: Relief from U.S. rules that reduce the credit car makers get under federal fuel-economy standards for selling electric vehicles.

According to an electric car trade association, only a few hundred full-function plug-in vehicles are on US roads today. However, General Motors and Nissan are preparing to unveil electric cars this year, and other major manufacturers will follow suit in the next several years.

Almost one-third of all US greenhouse gas emissions are caused by transportation. However, some studies say that electric cars are not any better for the environment, since they rely heavily on coal-fired power plants. Others insist that electric and hybrid vehicles would substantially lower emissions.

In March, the Obama administration announced a 40 percent increase in standard fleet fuel economy, raising the national average to 35.5 miles per gallon by 2016. As part of those standards, auto makers will eventually have to include power plant emissions when evaluating electric vehicles.

The Wall Street Journal reports:

The lobbyists also criticized an aspect of the administration’s new fuel-economy standards, released last month, that will require auto makers to eventually score against electric cars carbon dioxide emitted from electric-power plants. The change will make it harder for auto makers to meet fuel-economy targets that call for a U.S. fleet-wide average of 35.5 miles per gallon by the 2016 model year.

And even if electric vehicles do reduce emissions, they do almost nothing to relieve congestion. Interstate 5, connecting Vancouver to San Diego and running through Seattle, Portland, Sacramento, and Los Angeles, is slated to be the first highway fully equipped for electric cars. The state and provincial governments will provide electric vehicle charging stations at rest stops, park and rides, and state-owned property, as well as shopping malls and other urban centers. However, the US Department of Transportation projects that in 25 years, 95 percent of the corridor - or 1,283 of its 1,350 miles - will be heavily congested without major intervention.