While many GOP leaders bang the drum against government subsidies for both makers and buyers of advanced-powertrain vehicles, the Carnegie Endowment has just put out a new report that says more federal and local incentives will be needed to ensure electric-drive vehicle sales gain momentum.

As it stands, plug-in vehicle battery costs will need to fall from about $700 per kilowatt hour to something like $325 in order for battery-electric vehicles to become price-competitive with conventional vehicles, the study said. The report also listed about two-dozen U.S. "vanguard cities" for plug-in vehicle progressiveness, including usual suspects San Francisco, Boston and Austin, as well as cities like St. Louis, Atlanta and Columbus, OH.

When it comes to cleaning the vehicle fleet, in addition to the stricter fuel-economy standards already proposed, the government will have to consider expanding policies that provide more incentives to plug-in vehicle makers while encouraging alt-fuel vehicle purchases in regions with cleaner electricity sources. President Obama has proposed increasing customer incentives, but that idea has not gained traction yet. Last year, plug-in vehicles accounted for about one in every 700 new light-duty vehicles purchased.

Want to read more from Carnegie's findings? Grab yourself a cup of coffee and check out the 53-page paper here.


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    • 1 Second Ago
  • 22 Comments
      brotherkenny4
      • 22 Hours Ago
      For vehicles that receive the entire $7,500 incentive, the cost to tax payers for the incentivisation of a single vehicle can be about 3.75 billion dollars over the period it takes to sell 500,000 units. For the $24B that Marc mentions below, we could commercialize 6 or 7 highly efficient vehicles, and do it over a period of several years. So, say we take the 24B that the oil companies get in one year and spread it over 5 years and incentivise 6 EVs, and then cut that 24B permanently. We would reduce the deficit by $20B per year, and end up with vehicles that use american made energy. The federal budget is now at about 3.7 trillion dollars. Incentivising 10 EVs would cost 37.5 billion, and if done over 5 years would be 7.5 billion per year, or about two tenths of one percent of the budget. So let's say you don't want to cut into the profits of the oil companies, because they are just barely surviving as it is, we could take money from the following too. The commerce department, which is responsible for economic development (they seem to be under achievers) is funded to 11 billion annually. The department of interior responsible for federal lands and resources (and works with native americans, and also leases land to oil companies- side note, these were the guys doing coke and hookers with the oil companies a couple years ago) 13 billion annually. Agriculture, 27 billion annually to subsidize corporate farms. And my least favorite, ATF - why the heck has the federal government created an organization specifically to pick on my hobbies! http://en.wikipedia.org/wiki/2012_United_States_federal_budget Anyway, you get the picture, and sure true fiscal responsibility will require sacrifice by all, but despite the rhetoric, no one, and I mean no one has ever proposed a fiscally responsible budget. So when the GOP whines about the cost of EVs they cannot be taken seriously. Experience tells us that they will say anything to get elected, and sure the DFL does the same, it's just that the DFL has passed a few things that do support EV commercialization, which makes a difference to me.
      Rotation
      • 22 Hours Ago
      Where did Columbus, St. Louis and Atlanta come from here? They seem kind of arbitrary. Good luck with Atlanta, it has some of the longest commutes due to massive sprawl, no vehicle other than a Tesla will cut it right now, especially when you consider the A/C use in the summer.
      Levine Levine
      • 22 Hours Ago
      Wrong. More government incentive in the form of rebates only lead to higher EV prices. When auto dealers realize the taxpayer is paying the rebate, they will add an additional price to the bottom line equal to the rebate. For example, when the first Prius were first introduced, they were eligible for a taxpayer rebate. Dealers raised prices to account for the taxpayer rebate. The first generation Prius back then were several thousands higher than today's much better Prius which no longer qualify for any taxpayer rebate. Moral lessen: government rebates enrich the seller, doesn't benefit the buyer or taxpayer.
        Spec
        • 22 Hours Ago
        @Levine Levine
        Yeah . . . it doesn't really work that way. The EVs have to compete with the gas/hybrid cars, so even though they get a $7500 tax-credit the car makers can't just add $7500 to their price or people will just opt for the convention gas/hybrid. The $7500 merely makes the EVs somewhat competitive. Of course the real joke here is that I bet you've complained in the threads about the Volt being a money losing car . . . and now you are talking out the other-side of your mouth saying the auto companies are just going to dupe us for more profit. How do they get more profit when there is no profit!
        Rotation
        • 22 Hours Ago
        @Levine Levine
        That's the economic principle and I agree it generally holds. But when you are trying to jumpstart a technology/business it isn't necessarily true. Yes, you are enriching the seller, so they invest more in developing the product and making it better. Meanwhile it also becomes more popular, which increases sales and also reduces cost of production. This increase in sales and development in the business and market of hybrids is why Priuses cost less now than the first gen did. And they're trying to replicate this with EVs and EREVs.
      EZEE
      • 22 Hours Ago
      Great job slipping in a GOP dig there Danny Boy..., or you could open it with... 'With governments across the planet collapsing under huge debt loads, and the United States debt growing at an amazing $1.3 trillion a year, democrats still insist on giveaways to well heeled auto buyers, while ignoring the fiscal disaster the nation is heading towards.' Or, you could ignore gratuitous digs on either side, and simply write a story about.....oh I dunno.....cars with green technology. Just sayin'
        throwback
        • 22 Hours Ago
        @EZEE
        Unfortunately the days of just presenting stories are long gone. Virtually everything that is written is written with a political bias baked in. Have you ever read some the "reviews" in the NY Times? Take a read some time of their restaurant, books, movies etc. It's almost comical.
        Tysto
        • 22 Hours Ago
        @EZEE
        So, in your opinion, Autoblog *Green* should "teach the controversy"? Interesting how you had to change the subject of the article from the Carnegie Foundation to Democrats, use inflamatory language, and make an unfounded assertion about the future in order to try to create an inverse version of the article's opening. If you want balance, you should campaign for articles on GOP "giveaways to well-heeled" oil companies.
          EZEE
          • 22 Hours Ago
          @Tysto
          Oh exactly correct! I am not disagreeing with you at all. On this article thought they had the GOP slam. You could open an article anyway you wanted using this methodology. You could say, 'while children starve in Africa, democrats want more giveaways to well heeled car buyers.' Or, 'while the environment is being destroyed, the GOP still obstructs...' The point is, why not just report carnegie's study?
      Rick
      • 22 Hours Ago
      Get Helicopter Ben to print some more phoney Fiat money, then you could all have one for free. That alt to kick start the EV revolution.
        Levine Levine
        • 22 Hours Ago
        @Rick
        Wrong. Helicopter Ben would make your Tesla S cost a million dollar, while your saving worthless and you penniless. Instead of the EV revolution, you'll get a political revolution.
      MarcCBR
      • 22 Hours Ago
      Since the GOP is so against "giving away money" lets stop giving incentives to people that buy oil as well. Take away the $24 billion in tax breaks the oil companies get, stop using our military budget to defend the oil fields and start charging a carbon tax for all the medical expense my taxes have to pay for the people that get sick from breathing in all the gas fumes. Then we will really even out the playing field. Gas will sky rocket to $10 or more and then we will see which form of transportation wins out. So stop whinning about a $7500 tax credit when you guys are getting much more to use oil.
        throwback
        • 22 Hours Ago
        @MarcCBR
        The tax breaks aren't just for oil companies. They are corporate tax breaks, even Tesla can use them, if they turn a profit.
          EZEE
          • 22 Hours Ago
          @throwback
          People want to make it one side against the other. I would just call them out on it and say, 'fine, no incentives for anyone.' Corporatism is practiced by both sides, doesn't make it right (smiling now....wondering if anyone will get what I just said....)
          EZEE
          • 22 Hours Ago
          @throwback
          Sigh.... No one got it....
          Spec
          • 22 Hours Ago
          @throwback
          That is BS. There are oil drilling specific tax breaks. That doesn't help Tesla.
      Mart
      • 22 Hours Ago
      Are there any manufacturer's still reporting battery costs as high as $700/kwh? Everyone seems to be halfway to the stated $325/kwh target already.
        DaveMart
        • 22 Hours Ago
        @Mart
        It depends what you are counting in. Here is Bob Lutz, who seems to be talking straight AFAIK: 'The Volt “variable cost” (labor and materials, without revealing any confidential GM information), looks very roughly like this: A Li-Ion battery today runs about $350 per KWh. The Volt’s is 16KWh, so that’s roughly $6000. Add $4,000 for the battery pack structure, the cooling, the high-voltage wiring, the motor and the power electronics. So, that’s the electric portion. Add about 20 hours of assembly labor which we’ll round to a very generous $1000.' That comes to $625kwh. Of course the Leaf does not have an expensive liquid cooling system, but as we have seen recently, that can cause it's own problems.
          Rotation
          • 22 Hours Ago
          @DaveMart
          Yarp: It's definitely a union shop, but the union benefits packages were severely cut back right before the bankruptcy. Getting under $50 probably is doable unless you are counting the costs of retirees, which you really shouldn't in this case.
          Yarp
          • 22 Hours Ago
          @DaveMart
          $1000 dollars for 20 hours isn't being generous at all. Its likely underestimating the total cost to the company. That's only $50/hr fully loaded, and surely that's less than the true cost when you factor in salary, employee taxes paid by the company (SS and unemployment), medical and fringe benefits, 401K matching, etc. If it's a union shop with a defined benefits program, then the overhead goes even higher.
          Spec
          • 22 Hours Ago
          @DaveMart
          "That comes to $625kwh."? No, it is $350/KWH for the cells. $625/kwh includes the electric motor, charger, motor controller, etc. . . . the entire electric powertrain!
          DaveMart
          • 22 Hours Ago
          @DaveMart
          http://www.forbes.com/sites/boblutz/2012/09/10/the-real-story-on-gms-volt-costs/
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