U.S. Electric Vehicle Problem

Brian Hicks

Written By Brian Hicks

Posted February 22, 2013

Thursday, the U.S. Department of Energy was singing a different tune in the effort to put more electric vehicles on the road.

Originally stated in the President’s 2011 State of the Union Address, the goal was to have 1 million EVs on the road in the U.S. by the year 2015.

That goal may have been a bit lofty; even then, auto experts had serious doubts that American consumers would purchase that many EVs.

Reuters reports:

Last year, nearly 488,000 hybrids, plug-in hybrids and electric cars were sold in the United States, accounting for 3.3 percent of the overall auto market, according to green-car website Hybridcars.com.

For the administration to meet its 2015 goal, electrified vehicles would have to double their market share to roughly 6 percent of the U.S. auto market, which automotive consulting firm Polk estimates will reach 16.2 million vehicles that year.

Now, focus shifts to a more realistic goal: lowering costs and advancing technologies over a nine year period. It is not the number of units that will drive the EV market up, but rather these two factors that will entice buyers to consider an EV as a viable option.

This marks the first step in U.S. auto policy during Obama’s second term. His first saw many auto industry initiatives, most notably the bailouts of General Motors Co. (NYSE: GM) and Chrysler Group LLC.

The Congressional Budget Office estimated U.S. federal policies directed at EV initiatives will cost $7.5 billion through 2019. Included in that number is $2.4 billion in grants to lithium-ion battery research and various EV projects, Reuters reports. It also includes loans to auto companies worth $3.1 billion to promote fuel efficiency.

Perhaps the single biggest problem in making the EV a success in the U.S. is the life of the lithium-ion battery. They don’t last long enough, and if a consumer takes a long trip, it can’t be relied upon.

As part of the new policy, the DOE is initiating battery research in hopes that results will lead to cost effective materials and better fuel economy.

From Reuters:

The DOE also confirmed its goal to lower the cost of lithium-ion batteries to $300 per kilowatt hour by 2015 from the present $650. The department eventually hopes to get the cost down to $125 per kilowatt hour.

The DOE estimates that there are already 5,000 public charging stations nationwide, the Baltimore Sun reports. They’re found where hordes of people tend to congregate, such as universities and public garages.

The workplace is the next logical place to introduce charging stations. The DOE’s goal is to have 500 companies offer workplace charging over the next five years.

Several are already on board, including Google Inc. (NASDAQ: GOOG), 3M (NYSE: MMM), Verizon (NYSE: VZ), General Electric Co. (NYSE: GE) and Eli Lilly and Co. (NYSE: LLY).

It’s a natural fit. People spend more time at work than anywhere else, except for their place of residence. And an EV typically takes 6 to 8 hours to fully charge—equivalent to a normal work day.

It’s important to stand apart in today’s business world; that’s what workplace charging stations do. They give a business good publicity, send a message to competitors, and show that the company’s environmentally friendly, all while keeping current employees happy.

To provide an extra push, the Energy Department started the Workplace Charging Challenge, the Baltimore Sun reports. The plan stems from the government’s EV Everywhere program.

The city of New York is slowly getting into the act, as Mayor Bloomberg has endorsed an electric car charging parking plan. The goal: 10,000 parking spaces for EVs over the next seven years. And 20 percent of all new public parking spaces in private developments will have EV charging access, NY Daily News says.

The Mayor also wants to incorporate EVs into New York’s fleet of taxis and have one third of the entire fleet run by electric by 2020.

The United Kingdom gives a good indication of the success a nation can have with EVs. It offers subsidies.

The government will pay for 75 percent of the cost to have a charging point installed for private citizens in garages and driveways, a roughly $1,900 process, reported the BBC.

An EV is great economy car and a great way to cut down on fuel costs in the long run. Most importantly, though, an industry of this magnitude can bring many opportunities to saturate the job market; it helps the economy thrive and cuts down on pollution at the same time. With time and innovation, the electric vehicle movement is only going to get bigger.

EV sales tripled last year, and Americans are starting to become informed and take notice. For a quarter of the cost of gas, it’s a worthy notion.

Because of this, the auto industry will continue to make strides and improvements, and in the next two years consumers will see 15 new electric and hybrid vehicles.

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