EV Stimulus: Knowledge Is Power And We Don't Know Squat

Edward Niedermeyer
by Edward Niedermeyer
ev stimulus knowledge is power and we don t know squat

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.

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  • Philosophil Philosophil on Mar 17, 2011

    That's a very well written, nicely balanced article. I would have to agree with many of your points, especially your observations about EV's having variable viability depending on region (as highlighted in the effects of climate on battery life and so on). Still, don't forget that individual preferences and buying choices are not static things, but can be shaped, altered and so on through shifts in accepted cultural norms (which happens all the time), marketing, and other social and environmental forces. As a result, it may be short-sighted to project future preferences and buying choices relating to EV's based solely on currently accepted norms, practices, and purchasing decisions.

  • DC Bruce DC Bruce on Mar 17, 2011

    I agree with your overall point, but I don't think lumping the Leaf and the Volt together makes much sense. Personally, I find the Leaf a whole lot more questionable -- from every perspective. From an environmental perspective, depending upon where it's operated, the Leaf could be much dirtier than a gasoline-powered car. Here in metro DC, electricity is generated by burning coal, for example. The Leaf's ability to operate in other than ideal weather environments (i.e. coastal California) is untested. Battery efficiency is affected by weather -- either hot or cold; and non-mild weather will require the battery to power climate control for the cabin as well as propulsion. Being a limited-range vehicle, the Leaf will always have to be a second car. I could not even use a Leaf to visit my father for a weekend dinner in Annapolis, 40 miles away. And, of course, the cost of the Leaf has to include the cost of building a 220V charging station, so the thing can be fully charged overnight . . . as well as requiring the owner to have off-street parking and own his own dwelling. Apartment owners, renters, condominium residents need not apply. The Volt actually makes a lot of sense for the way I use a car, which is mostly a short commute to work, and driving around town. It looks like my typical use would require very little use of the gasoline engine. And I could drive the Volt to have dinner with my father in Annapolis, although it probably would use as much gasoline doing that job as any number of conventional gasoline cars, and more than, say a Prius or perhaps a VW TDI. But, at $40,000, the Volt is $15,000 too expensive, because for $25,000 or less, I could get a Prius, which doesn't cost that much more to operate for a guy who drives 6,000 miles a year. Which is probably why Volt unit sales are well under 1,000/month.

  • SCE to AUX This is good news, as long as the Tesla plug can deliver the kind of power needed in the future. I'm not sure that's a settled matter.
  • SCE to AUX Hyundai/Kia/Genesis, if we're talking mfrs of consequence in the EV space.But to their credit, they've tried to remain distinct from the Tesla approach to everything. They've been quick to respond to the Biden IRA domestic content stuff for EVs (by building more US plants), so maybe they'll jump on this NACS bandwagon.
  • FreedMike I guess it's good to hear they finally made the third row livable - the one on the old RX was a joke - but, man, is this generic-looking.
  • Alan I read the front wheels are driven by the engine and the rear wheels by electric in the hybrid. I also find it odd it isn't offered as the 2.4 hybrid with 250kw on tap.
  • KOKing That base hybrid system must be something other than the normal Toyota Hybrid Synergy Drive, since that uses the two electric motors as the ('CVT') transmission without a separate transmission of any kind.