In Tuesday night's State of the Union, President Obama reiterated his goal of being the first country to put 1 million electric vehicles on the road by 2015, a plan he first put forth in 2008. And in the day since, the Obama administration started to expand on how it proposes to reach that goal.
Announcing more details of the plan Wednesday was Vice President Joe Biden who visited Ener1, Inc., a manufacturer of advanced batteries for electric vehicles and energy storage in Greenfield, Indiana. Ener1 added 120 employees in 2010 after receiving a $118-million Department of Energy grant, made possible by the $2.4 billion Recovery Act investment in electric vehicles.
Although likely to receive pushback from some congressional Republicans, Obama's proposal on how the program would be paid for will undoubtedly incite some populist support, perhaps even from newly-elected Tea Party-istas.
The Obama administration's plan to support Advanced Technology Vehicles would focus on three principle areas:
Transform the current EV tax credit into a $7,500 instant rebate
Like the Cash for Clunkers program, making the incentive immediately available to buyers at the point of sale can make electric vehicles more affordable. The rebates would then be turned into tax credits redeemable by the dealers. The new incentive structure would both make more people eligible for federal incentives and get them their money sooner.
New R&D investments in electric drive, batteries and energy storage
The president's budget, expected mid-February, would include an over 30% increase in support for vehicle technology R&D and a new Energy Innovation Hub devoted to improving batteries and energy storage for vehicles and beyond. The plan calls for a program like an ARPA-E grant to develop a battery that could go 300 miles on a single charge.
Community competitive grants to spur EV infrastructure investment
To incentivize community investment in EV infrastructure and encourage the easing of regulatory hurdles that stifle charging station buildout, the new initiative would provide grants of up to $10 million each to as many as 30 communities that are prioritizing plug-in infrastructure deployment
EV advocates like PluginCars' Nick Chambers writes that although this isn't the first time we've heard the 1 million EVs by 2015 proposal, it could be the right time for the Obama EV plan. "Given that EVs enjoy broad bipartisan support," Chambers writes, "it makes sense for the President to be redoubling his concentration on the topic now."
But the political reality of the Obama administration's ambitious, high profile EV proposal is that it will face a well entrenched opposition.
With a Republican-led House that came to power on the mantra of cutting spending, the central issue centers on money: where would the funding for these investments come from? President Obama did give one possible answer to that question during his State of the Union address. "I don’t know if you’ve noticed, but they’re doing just fine on their own," said Mr. Obama of the oil companies. "So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s."
As if it anticipated President Obama's plans to target subsidies and tax breaks to oil companies, the oil industry announced its own energy agenda at the beginning of January and is currently rolling out a campaign that highlights the job-creation and economic growth generated by the oil and gas industry.
"Natural gas and renewables are important components of our energy mix, but we will need our nation’s vast oil resources for decades to come," said American Petroleum Institute president Jack Gerard in a Tuesday response to the State of the Union.
"Producing more oil and gas at home, which most of Americans want, could create hundreds of thousands of jobs, reduce our deficit by billions, and enhance our energy security," Gerard said.
As popular as anti-oil industry populist rhetoric is, the Obama administration and the stakeholders that support electrification of the U.S. vehicle infrastructure, would not only need to successfully convince Congress to cut federal subsidies to oil companies, they'll have to get by the well-oiled political communications machine that is the oil industry to do so.
Photos: Official White House Photo by David Lienemann; Earth & Industry photo by Tim Hurst.