How will White House get 1M electric cars on road by 2015?

Rebates, investments, rewards part of White House plan to bolster clean-fueled autos

The White House has outlined a wide-ranging plan of putting 1 million what it calls advanced technology vehicles on the road by 2015. Most observers would say that is a good start, but is it reasonably doable?

The next White House budget will include a number of investments and enticements to make the goal achievable in theory. Of course, not all of the provisions are likely to make the cut.

FOR MORE: Seven advanced car technologies the government wants now 

The highlights from the White House proposal, though, are intriguing:

• Making electric vehicles more affordable and accessible for American consumers: A transformation of the existing $7,500 tax credit into a rebate will give consumers the ability to receive this benefit at the point of sale, similar to "Cash for Clunkers." The current individual credit will be reformed into a tax credit claimable by dealers or financers with clear transparency requirements to ensure the benefit of the credit is passed on to consumers.

• Advancing innovative vehicle and battery technologies through increased R&D: Increased investments in R&D will be critical to the deployment of new technology. ARRA and prior year investments are already making progress on advanced technology vehicles through research initiatives, for instance, an ARPA-E grant to develop a battery that will go 300 miles on a single charge. This year's budget will significantly broaden R&D investments in technologies like batteries and electric drives -- including an over 30% increase in support for vehicle technology R&D and a new Energy Innovation Hub devoted to improving batteries and energy storage for vehicles and beyond.

• Rewarding communities for leadership in reducing regulatory barriers and developing comprehensive electric vehicle-friendly infrastructure: The Department of Energy is beginning a competitive program to help communities across the country become early adopters of electric vehicles through regulatory streamlining, infrastructure investments, vehicle fleet conversions, deployment of EV incentives (e.g., parking, HOV access) partnerships with major employers/retailers, and workforce training. The FY 2012 budget will expand this initiative so that up to 30 communities across the country would receive grants of up to $10 million each on the basis of their ability to demonstrate concrete reforms and use the funds to help catalyze electric vehicle deployment.

The government also said it is preparing an initial purchase of 100 plug-in hybrid electric vehicles that are anticipated to be delivered in 2011 together with more than 40,000 alternative-fueled and fuel-efficient vehicles that will replace aging and less-efficient sedans, trucks, tankers and wreckers for federal agencies across the country. GSA's investments in cleaner vehicle technologies help to spur growth in the emerging domestic plug-in hybrid electric vehicle market.

Decreasing cost and increasing convenience would go a long way toward helping the electric car market. IBM recently conducted a pair of studies of consumer attitudes and auto industry executives toward electric cars.

On the positive side, the IBM study noted there is a potentially large market for electric vehicles:

• 19% of drivers surveyed said that they were either "very likely" or "likely" to consider purchasing an electric-only vehicle when shopping for a new car. This is notable, given that 42% of drivers know only "a little" about EVs or have even "only heard of them."

• 30% of drivers surveyed said that they would consider switching to an electric car that got 100 miles or less per charge. Current electric vehicles get about 50 to 100 miles per charge.

The concerns included:

• The price of the home charging installation often required to support an EV could pose an obstacle to EV adoption. Only 13% of drivers said they would consider spending more than $1,000 to retrofit their residence to support recharging of an electric vehicle. According to industry estimates, retrofitting to a 240 volt outlet accessible to vehicles averages between $1,000 and $2,000.

• In addition, two-thirds of consumers expect a price discount on their electricity for charging at home overnight. This expectation could place increasing focus on utilities for time-based pricing to encourage home charging, or more public charging will be required if an electricity discount is not available.

• IBM said the auto executives were skeptical of consumers' willingness to pay a premium for green vehicles. Responses for the driver survey were similar across urban, suburban and rural areas -- with some notable exceptions. For example, rural respondents were the most likely (59%) to say they would pay nothing more for an electric-only vehicle compared with a similarly featured gas-, diesel- or hybrid-powered vehicle.

• Home charging is considered important to the success of EVs. Of the drivers surveyed, 83% said they park their primary vehicle in the driveway or garage of their private residence, as opposed to in a parking lot, on the street, in a shared garage or in some other location.

• Infrastructure needs to make charging electric vehicles easier. When deciding where to put charging stations, retail hubs like malls and shopping centers are good locations. Partnering with large employers in target regions to create charging infrastructure in the workplace also makes sense, said Kal Gyimesi of IBM's Institute for Business Value group, which conducted the studies.

Follow Michael Cooney on Twitter: nwwlayer8


Copyright © 2011 IDG Communications, Inc.

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