Are Obama's Million EV's Just Science Fiction?

Panel's Conclusion Ignites Debate

In politics and business forecasting -- as in life itself -- timing can be everything.

In early February -- less than a week after President Barack Obama set a bold goal of having 1 million electric vehicles on U.S. roads by 2015 -- a blue-ribbon panel issued a report saying that it was "unlikely" that such a goal could be attained.

That conclusion was seized on by various media outlets and blogs, and one big newspaper ran a story on the report with a headline saying Obama's goal was "undoable." That conclusion was immediately disputed by various environmental groups.

All of this caused a bit of a stir, from Washington to Detroit to Tokyo, and the general impression gleaned by readers of such stories and blogs was that the study was undermining the president's vision for an America that would be less dependent on foreign oil.

Who's Correct?

Like we said, bad timing. So, let's clarify a few misconceptions and point out some alternative perspectives.

The panel, sponsored by Indiana University, said it based its conclusion on the various carmakers' production forecasts for electric vehicles.

But Simon Mui, a scientist with the National Defense Resource Council (NDRC) who specializes in clean vehicles and alternative fuels, refuted the panel's findings, said it relied on only one of the available electric-vehicle production forecasts – the one prepared by Pike Research of Boulder, CO predicting that 840,000 electric vehicles would be sold by 2015.

"Meanwhile, other available production forecasts have projected that the 1 million figure is indeed attainable, such as a report prepared by Baum & Associates," of Bloomfield Hills, Michigan. "If you look at the Baum report, it projects that 1 million by 2015 is likely, and it's much more detailed -- they do a breakdown of every model planned for production over the next five years," said Mui.

That includes such entries as the Chevy Volt, Nissan LEAF, Ford Focus EV and Transit Connect EV, Fisker Karma, Fisker Nina, Tesla Motors Model S and Roadster EV, Navistar eStar EV and many others

The Baum forecast is also based on expectations that General Motors will boost production of the Chevrolet Volt, a plan that was proposed by GM CEO Dan Akerson.

Mui also pointed to a more detailed Department of Energy (DOE) status report that looked at the manufacturing capacity for the electric vehicles currently in production or in development and declared that having 1.2 million electric vehicles by 2015 was "certainly doable," he said.

It's also worth pointing out that the initial media reports that caused the hubbub -- and didn't get much follow-up -- only reported the panel's findings in cursory fashion, without digging into its overall conclusions. A closer inspection of the panel's findings shows that its conclusions were not so easily reduced to the "undoable" characterization it got in some media quarters.

Roadblocks for EVs

For example, John D. Graham, dean of the School of Public and Environmental Affairs at IU, said that Obama's goal of a million electric vehicles is "achievable," although he added that certain barriers needed to be overcome "before the mass commercialization of electric vehicles will occur."

Some of those barriers included the price of batteries, a general lack of consumer understanding of electric vehicles, and the lack of an infrastructure of electric re-charging stations. Mui, however, is not concerned about the battery-cost issue. "The older cost projections turned out to be too high," he said. "Manufacturers are very bullish on that cost issue, and costs have come down a lot faster than what people predicted two years ago."

Gurminder Bedi, the chairman of the IU panel and a former Ford executive, said that in order for Obama's goal to be achieved, "the technology needs a redoubled investment in time, energy and money from both government and the auto industry before PEVs become part of our automotive mainstream."

True enough. As it happens, the report was released right around the same time that the White House and Congress were stepping up their backing -- and funding -- for electric vehicle production and research. Not to mention pushing for more incentives that would entice consumers to buy electric vehicles. For example, the White House has proposed to almost double the DOE's vehicle research budget to $590 million, $200 million of which would be used to award up to $10 million to as many as 30 cities to improve their electric vehicle infrastructure. Sen. Carl Levin, D-Mich., and Rep. Sander Levin, D-Mich., have introduced legislation that would more than double the $7,500 tax credit consumers currently receive if they purchase a plug-in electric vehicle. If that measure becomes law, it would amount to a $19 billion commitment over 10 years. Those are substantial investments -- exactly the kind that Bedi called for.

"The emergence of these new clean-energy industries -- electric vehicles and the batteries that run them -- really has created a global race, and the U.S. has a chance to win this race," effused Mui. "Every major automaker, as well as some start-ups, have these electric vehicles coming to market.

"And, in some cases, it's because they have to -- because the governments in many countries are raising emissions standards. That's one great example of the role government can play in terms of providing incentives to carmakers to produce more of these vehicles, which in turn will decrease our dependence on oil."

Sanya Carley, an assistant professor in IU's school of public and environmental affairs who was one of the report's contributing authors, noted that the panel's recommendations also included things like government fleet purchases, and information and education programs for consumers.

"The report really does emphasize that electric vehicles are a very important part of the nation's economic development strategy," said Carley, "and that they represent an important new manufacturing sector that's poised to make a critical contribution to transportation in America. So now is the time to really ramp up investment, and to support this industry as an economic development mechanism."

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