Apr 20, 2010 - washingtonpost.com
PRESIDENT OBAMA has called for 1 million plug-in electric vehicles on U.S. roads by the year 2015. This sounds ambitious, until you consider that there are 241 million vehicles in operation, according to the R.L. Polk automotive information service. Yet even Mr. Obama's modest goal -- boosting plug-ins' share from zero to less than half a percent of the huge U.S. auto fleet in five years -- is looking increasingly impractical and, for taxpayers, expensive.
At least that's how we interpret a letter that the Alliance of Automobile Manufacturers, which represents the Detroit 3 plus large international companies such as Toyota and Volkswagen, sent the Obama administration's auto czar, Ron Bloom, on April 7. The 10-page document, titled "Proposed Elements of a Federal Initiative to Promote Electric Vehicle Deployment," was the lobby's follow-up to a meeting with Mr. Bloom on March 25, in which they aired concerns about official support for new car technologies, according to the Wall Street Journal.
The document details the many obstacles -- technological, regulatory and economic -- to widespread adoption of advanced electric propulsion vehicles and proposes federal policies to overcome them. Among these are continuing a $7,500 tax credit for purchasers of such cars and extending a $2,000 credit for installation of home charging stations, which expires at the end of 2010. The manufacturers also seek regulatory relief and government support for a new infrastructure of public charging stations to address "range anxiety" -- i.e., the fear of potential buyers that they'll find themselves out of juice miles from home.
The theory here is that with such government support eventually manufacturers can achieve economies of scale, bring prices down and achieve mass sales on their own. It strikes us as a convoluted method of achieving cuts in gasoline consumption and greenhouse gas emissions that could be achieved sooner at lower cost -- and with less risk to taxpayers that other technologies may ultimately win the competition anyway. In terms of economic fairness, the plug-in electric push is highly regressive as well. All of these proposed tax credits and other government investments would facilitate the purchase and operation of small vehicles costing between $35,000 and $40,000, for General Motors' Volt, and $33,000 for the all-electric Nissan Leaf. In short, we're talking about the general public subsidizing a minority of upscale motorists.
And, of course, demand for electric vehicles is hostage to the vagaries of oil and gas prices -- unless and until the U.S. commits to a pro-conservation fuel price policy. In that regard, the Obama administration delivered a predictable but disappointing message last week when it knocked down rumors that a gas-tax increase might be part of a climate-change compromise in the Senate. "The Senators don't support a gas tax, and neither does the White House," the statement said. Until that changes, the administration's policy on cars and energy cannot make sense.