President Obama's call for higher subsidies for electric vehicles is likely to boost sales and help educate the market, but experts question whether it will do much to address the battery dilemma that continues to plague the cars.
Obama's pitch, made at a Daimler truck plant in North Carolina last week as part of a $4.7 billion energy proposal, calls for $2 billion of additional subsidies for EV buyers. The incentives for those purchases would jump from $7,500 per vehicle to $10,000. More importantly, the subsidies would come in the form of point-of-sale rebates, rather than tax credits.
President Obama announced a plan last week that calls for $2 billion in additional subsidies for buyers of electric cars. "We just can't rely on fossil fuels from the last century," he said. (Source: The White House)
"We need to invest in technology that will help us use less oil in our cars and our trucks, in our buildings and our factories," Obama told the autoworkers at the plant. "That's the only solution to the challenge."
The EV aspect of the proposal may be the most important single piece. It was unveiled less than a week after General Motors announced it was temporarily halting production of the Chevy Volt due to flagging sales. Government agencies say higher subsidies are likely to motivate EV buyers, which in turn would enhance economies of scale. A White House press release said economies of scale would make "electric vehicles as affordable and convenient to own and operate as gasoline-powered vehicles by the end of the decade."
Industry experts said the proposed subsidy increase would likely boost sales. The biggest reason for that involves public misconceptions about EVs.
"Our research has shown that, on average, people expect to pay about $24,000 for a plug-in vehicle," Dave Hurst, senior analyst at Pike Research, told us. "Clearly, that's a big difference from what they really cost. So an additional $2,500 incentive is going to help."
Yes, ttemple, you make a good point about battery replacement costs.But that would be directly akin to a new engine replacement in a regular car.No-one mentions engine replacement costs in discussions surrounding new car purchases because engines are generally accepted to last at least 150,000 miles before they would need an extensive rebuild such as that.So, what is the typical industry warrantee offered on these EV batteries-? Do they need a full replacement after ~600 charge/discharge cycles, like mobile device (laptops & phones) LiIon batteries-?
Batteries are a consumable (like gasoline!). They have a finite life, and that life is VERY subjective.
The marketing hype is just so much hot air until we see some realistic cost/mile numbers. Not MPG, please. What gallon goes into a plug-in vehicle? The subject is not worth discussing until car manufactuters can provide that number.
If they will provide a cost/mile, based on a national average cost of a kilowatt, we can begin to have some reasonable discussions.
I want to wait and see what the total cost of ownership is before I get excited about never again gas, even with a $10k rebate. (If the rebate were on a $24k purchase, it would be more of a no-brainer.)
Even $10 per gallon gas might look cheap if you end up with $10k per year in battery maintenance/replacement costs. I think there are still a lot of uncertainties about the life cycle of EV's, and total cost of ownership, etc.
Given all the things we as Design Engineers know and have debated about the drawbacks of EVs (Primarily the shortened range and high cost) ,,, If the Fed offers a $10,000 point of sale rebate, I'm going to be very tempted! For the working stiffs like me who are forced to make daily commutes under 50 miles round trip, a $10,000 rebate and "never-again" gas are very attractive.
I agree wholeheartedly, William. Dave Cole has a lot of common sense. I addition to that, he's the former head of the automotive engineering program at the University of Michigan and one of industry's most respected consultants. Our leaders would do well to listen carefully to him.
I don't think that many people believe that electric vehicles will succeed overnight. It will take years. But I do believe that electric vehicle manufactures are missing out by not finding some way to lessen the upfront cost of the battery, which is responsible for much of the cost. There must be some way to "lease" the battery over it's expected lifetime.
David Cole, Chairman Emeritus of the Center for Automotive Research for President in 2012. "Everybody who's capable of engineering batteries is already working overtime. When it becomes economical, it will take off. But you can't force it to go any faster than it already is." "We can justify the concept of tax credits over a short period of time with the idea of helping create a bridge to a new technology. But any tax credit is always going to be temporary. You can't base a business case on a tax credit." -- be prepared to never hear from David Cole again... he has too much common sense.
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