President Obama clearly has a thing for electric cars. He wants to see them driven by everyone, everywhere – including himself. Speaking in 2011 to United Auto Workers in Detroit, he said he fully intends to drive a Chevy Volt when he leaves office one day. What’s good for him, naturally, must be good for everyone else. So it’s not surprising the Prez has also made it the policy goal of his Administration to have one million of them on the road by 2015.
“If we want to reduce our dependence on oil, put Americans back to work and reassert our manufacturing sector as one of the greatest in the world, we must produce the advanced, efficient electric vehicles of the future,” Obama said.
Toward fulfilling his quest of transforming a “chicken in every pot” into a “Chevy Volt in every lot,” the President has doled out some $5 Billion in government monies to improve battery technology, transportation infrastructure, and to furnish rebates of up to $7,500 as an incentive for motorists to purchase them. But so far, the public isn’t hitching a ride.
As noted in a recent Investor’s Business Daily editorial, “America’s highways are not going to be struck by a flood or even modest trickle of electric cars by 2015.” Motorists aren’t taking well to the limited ranges, inconvenient recharges, and expensive costs EV’s entail.
According to IBD, last year Nissan sold a mere 9,819 of its Leaf EVs in the U.S., an increase of 1.5% over 2011. “Sales of the Chevrolet Volt, the most popular EV, hit 23,461 in 2012. That’s more than three times the total sold in 2011, but still not significant.” So far the President, despite spending $5 Billion, has reached about 5% of his goal. If current trends continue, he might reach 20% – but then again he may not.
The reason is because, as noted in a CBO report in 2011, the rebates aren’t likely to spur more consumer demand. As the report states:
The costs of electric vehicles — fully electric and plug-in hybrid electric — are much higher than similar-sized gasoline vehicles, and the federal tax credit of $7,500 per vehicle is not enough to bridge the gap.
An average plug-in hybrid vehicle with a battery capacity of 16 kilowatt-hours is eligible for the maximum tax credit of $7,500. However, that vehicle would require a tax credit of more than $12,000 to have roughly the same lifetime costs as a comparable conventional or traditional hybrid vehicle.
The CBO report also noted that the government will have to spend about $3-$7 for each gallon of gasoline saved by motorists driving EV’s. While this might seem like a bargain for Harry Reid and faithful Greenpeace supporters, it’s unlikely to escape the notice of some House Republicans intent on cutting wasteful government spending programs. Unless there’s a change in direction, expect the President’s EV initiative to continue driving down a very rocky road.