President Obama’s goal of having a million plug-in vehicles sold in the US by 2015, like almost every other political goal these days, has become a divisive issue. For ever American who sees it as a courageous step away from oil addiction or ecological disaster, another sees it as market manipulation or a fool’s errand. But like most political debates, the row over government encouragement for plug-in vehicles serves more as a venue for other political cold wars (typically global warming and fiscal policy) than as a way to move towards a sane, equitable strategy. And, argue to the authors of a report that points out the poor chances of success for Obama’s goal, the political discussion over EV subsidies will stay stuck there until we figure out a lot more about who buys EVs and why. The problem: there is no national demonstration program to collect the data on which a real conversation about EV subsidies could be based.
Now, for anyone versed in the language of Washington DC, “demonstration program” sounds a lot like a synonym for “symbol.” But, as John D. Graham and Natalie Messer argue in Yale Environment 360,
At first glance, the market outlook for electric vehicles seems bright; when compared on an energy-equivalent basis, electricity prices are 60 to 80 percent lower than gasoline prices. Yet the future of electric vehicles is far from assured. Will the high price of batteries come down sufficiently as economies of scale kick in? Will oil prices fall again as new reserves and drilling technologies are discovered, as has happened with natural gas? Will other technologies — such as hybrid cars or vehicles powered by natural gas, ethanol, or hydrogen — win the competition against electric cars?
Such questions may not be answered in the near future, but a well-planned national demonstration program for electric vehicles can help determine the promise, limitations, and costs of this technology. And once the demonstration is over and the facts gathered and disseminated, electric cars should be forced to compete in a technology-neutral marketplace where other promising alternatives are also considered.
The old chestnut about “shooting first and asking questions later” seems germane here. Why spend billions on subsidies if there’s no proof that the industry can even be weaned off government support? The case of ethanol seems instructive here, as ramping-up government blending mandates are requiring around $6b per year in additional blending subsidies simply because the market won’t support the mandated volumes. The dangers of creating a large but inevitably subsidy-dependent “alternative” energy sector are fairly clear. But, according to Graham and Messer, there’s more to demonstration programs than just the data to make intelligent stimulus possible.
As a nation, we do not need to use more taxpayer dollars to persuade technological enthusiasts and green consumers that they should buy an electric car. Tens of thousands of them will purchase a Leaf or Volt, despite the high price and a shortage of public recharging stations. But for sales of electric cars to achieve critical mass in any single community, the sales must expand to fleet buyers and mainstream retail purchasers. In the absence of government incentives, these buyers are unlikely to be convinced that the benefits of electric cars justify changing their driving behavior and paying a high sticker price. So instead of expending more public money in all communities, the existing public commitments need to be concentrated in a few.
A national demonstration program, coupled with community information programs, can reduce the risk to manufacturers and suppliers of making high-volume production commitments. The demonstration will also let the public see how this technology operates in the real world — its benefits, costs, and complications. Once the demonstration is over, all public subsidy of electric vehicles — except for basic R&D into new battery chemistries — should be terminated.
And as eminently sensible as this already sounds, there’s another reason why this localized approach makes sense: EVs make relatively more or less sense, from both a cost and environmental perspective, depending on where you happen to live. As I wrote a month ago,
natural gas cars are a viable option in many areas, and they highlight the real issue with federal EV credits: they don’t recognize the importance of locality. Here on the banks of the dam-draped Columbia, the electric car makes a far more compelling “green” case for itself than the natural gas car; in Oklahoma, Wyoming or Texas, the calculation might be quite different.
If a national demonstration for EVs is based in communities with the most potential for success, it’s only appropriate to test natural gas vehicles too, in the areas where they make the most sense. Ultimately, the move away from oil will create more localized markets for transportation, each with their own unique needs and opportunities. The better governments understands which technologies make the most sense in which areas, the more likely we are to not only get sane clean-car stimulus policies, but also develop the diversity of alternatives required to replace as ubiquitous an energy source as gasoline. Whether we get a million plug-in cars on the road in the process doesn’t even matter.