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Jan 5, 2012

Why So Many Critics After 17,000 EV Sales in First Year?

 

Figures this week showed that the first mass-produced electric cars in the United States, the Nissan Leaf and Chevrolet Volt, had total sales of 17,345 in 2011, the first year in which they were available. Compared with sales of 9,350 gas-electric hybrids in 2000, the first year the Honda Insight and Toyota Prius were offered in the U.S.—where total hybrid sales have now topped 2 million—17,000 might seem like a decent start for EVs.

Instead, they are under fire—even as gas prices jumped because of Iran’s threats to close the Strait of Hormuz, a chokepoint in global oil trade.

The Washington Post on Sunday called for elimination of the $7,500 tax credit for EV purchases, and Mike Kelly, a congressman from Pennsylvania who is a car dealer, has introduced legislation to end the credit.

Rocky Mountain Institute sees EVs as a crucial step in moving the United States away from fossil fuels for reasons of national security, human health, environmental protection and durable economic advantage. EV benefits go beyond fuel economy. Reinventing Fire, RMI’s new, peer-reviewed book backed by 30 years of Institute research, shows that EVs—ultimately made of ultrastrong, ultralight materials that dramatically speed energy savings—can become energy storage vessels that feed electricity back into a revamped, more-secure electrical grid.

A great deal of difficult work on how we generate and distribute electricity stands between today’s reality and that vision, extending far beyond EV sales and incentives. Recognizing that Washington is all but paralyzed by partisan gridlock, Reinventing Fire calls for no new acts of Congress. Business must lead this ambitious transition to a safer, cleaner, stronger America, with rational state-level regulatory changes.

Of course people respond to incentives, and the EV tax credit—written to phase out when a manufacturer’s sales hit 200,000—is a proven way to spur a socially desirable change. Governments have long subsidized transportation, directly and indirectly, from granting rights for oil drilling to building our vast network of roads with tax dollars. Because Congress has approved tougher fuel economy standards, creating an incentive for EV buyers similar to the hybrid incentive that was phased out as sales grew would seem like consistent policy.

These calls to repeal the EV credit show both that the nation can’t necessarily count on Congress to guide its energy future (though, in fairness, Congress is a long way from acting on this) and that the nation’s media are adopting a flawed narrative about EVs. It is becoming pro forma that news stories about EVs say that Volt and Leaf sales disappointed this year and that the Volt is under investigation for battery fires. (General Motors on Thursday announced a fix to strengthen the Volt battery case, a day after niche EV maker Fisker, which has had no fires, recalled 239 cars to study similar issues.) Most EV media pieces—the Post editorial being no exception—lack context about early hybrid sales and the fact that two Volt fires started under extreme conditions in a laboratory, unlike the tens of thousands of real-life fires each year in gas-powered vehicles.

The Post editorial (which incorrectly said the Volt fires occurred in “road tests,”) took this tilted narrative to a new level, saying, “The Obama administration says that the credit helps build a market for EVs, which helps create jobs. Given the price of eligible models, like the $100,000 Fisker Karma, that rationale sounds an awful lot like trickle-down economics. …” The piece cherry-picked the Fisker's price tag as an example of overpriced EVs, but made no mention of the best-selling EV, the Leaf, which lists for about $32,000 before the tax credit.

Despite criticism, experts believe EV sales will grow. LMC Automotive, which doesn’t count the Volt as an EV because it has an onboard generator that kicks in when battery gets low, projects pure EV sales of 95,000 by 2016. (GM plans to produce about 60,000 Volts worldwide next year.) “The Volt fires and the Fisker battery issues may scare some people off, but so far no one has been hurt or injured so I don't think the market will collapse,” said Mike Omotoso, senior manager of Global Powertrain Forecasts for LMC. A survey by Pike Research found that 40 percent of Americans—a very sizeable market but down from 48 percent two years ago—are “extremely” or “very interested” in owning an EV.

Federal policy aside, tax credits can be driven at the state level. For instance, Colorado has had a tax credit that goes up to $6,000, depending on the price differential between the EV and a comparable internal combustion vehicle. RMI’s Project Get Ready, which works with partner cities and private business to help prepare the nation for EVs, has seen growing movement toward incentives at the state and city level.

RMI has long advocated carefully designed, revenue-neutral “feebates” that can be enacted at the state level. (In fact, the California Legislature passed such a program in 1980, but it was pocket-vetoed by Gov. George Deukmejian.)

A feebate system, which is agnostic toward vehicle technology, levies a fee on the least efficient models in each vehicle class to finance a rebate for the most efficient vehicles in the class. The more efficient the auto, the bigger the rebate. In this way, the government doesn’t pick winners or steer consumers away from, say, crossover vehicles that can carry four children, a dog and some sports equipment. Feebates provide a powerful price signal that influences auto-buying decisions the instant they’re made and maintain a continuous incentive for automakers to innovate.

Here, the Post editorial, in its short-sightedness, helps make RMI’s case:

“Electric cars are not likely to form a significant part of the solution to America’s dependence on foreign oil, or to global warming, in the near future,” the Post says.

This is not a near-term battle that can be won by whipsawing manufacturers between tougher fuel economy standards and repealed consumer incentives. If we as a nation view it that way, we will continue to wring our hands when madmen threaten to close the Strait of Hormuz and will continue to tie our security to the stability of Saudi Arabia and its royalty’s ability to manage the oil market.

We can aim high, striving to end America’s fossil fuel dependency by 2050 by engaging our ingenuity and private enterprise engine to claim a $5 trillion prize and lead in the world’s clean energy race. An alternative to that is to bicker over short-term incentives and outcomes and to put innovation in a shooting gallery because it didn’t take over the U.S. vehicle market in its first year.

Join the Discussion


Showing 11-20 of 23 comments

January 19, 2012

I want to believe. Certainly humans must reduce our depletion and pollution- our throughput, our emissions. However, what do the authors say in response to the recent Nat'l Academy of Sciences study that concluded:
1)" The findings in this study suggest that, using US average estimates, damages from life-cycle emissions of BEVs and PHEVs with large battery packs may be larger than damages from HEVs and PHEVs with small battery packs due largely to GHG and SO2 emissions from electricity and battery production."
2) "BEVs have the potential to offer the greatest reduction in air emission and oil premium costs at a competitive cost of ownership if vehicle costs drop substantially, gasoline prices rise, emissions from power generation are reduced, and batteries are improved to last the life of the vehicle. As such, continued research to reduce battery cost and policy to reduce emissions from power generation are warranted. However, there is no guarantee that the necessary technical, economic, and political factors will align to achieve this optimistic future, and, in a pessimistic case, BEVs could cause more damages at substantially higher costs. In con- trast, HEVs and PHEVs with small battery packs provide meaningful reductions in emission damages and oil premium costs at low (or no) additional lifetime ownership costs compared to conventional vehicles. These vehicles offer a more robust strategy to reducing emissions in the short term at lower cost and lower risk of paying high cost only to end up increasing life-cycle damages."

I do think that technology can lead us to greater efficiency and lower footprint. But at what cost? To whom? BEVs seem to create a larger footprint overall compared to HEVs and are dependent on highly volatile (price) rare metals for the batteries and electronics. Yes, we need to reduce our emissions and footprint. No, BEVs as configured are not the answer. Yes, clean energy is the future. No amount of EVs can reduce the enormous footprint of our dirty electricity generation. Yes, we must reduce our footprint. No, we cannot continue to drive comfy hi-tech electric cars while importing carrying capacity from other lands. We must not fiddle around the edges in an incremental approach when the world is burning. IMHO.


January 19, 2012

With rapidly accelerating climate change, civilization is racing to crunch time to stop this daunting crisis at wartime speed and the heavy machine human mobility model, electric or otherwise, makes no sense; it is impractical, wasteful, expensive, uses a huge amount of energy, directly and indirectly (structurally) violent -- also, structurally directly violent like the $4bn Iraq War -- and will ultimately, not work.

Declared a global crisis by the World Health Organization, road accidents kill 3300 people per day (more than 9/11) accumulatively killing over 1.3 million and gravely injuring 50 million people per year.

Where NYC streets comprise 80 percent of public space, heavy machine transport is a virtual monopoly by virtue of being over-sized and life-threatening where other much more practical methods would normally dominate.

It's been estimated that replacing the one-half billion cyclists and 1.5 million electric bike riders in China would take roughly the same space used to grow rice there.

Maybe there's nothing wrong with continuing current climate-politically-pragmatic policies toward transitioning to electric vehicles, except that it's not the quickest most efficient way to achieve the ultimate goal -- no doubt, rapidly reducing major revenue streams to the all-powerful oil industry hindering responsible action -- as long as it's understood net-zero and near net-zero mobility solutions will be the key transportation technologies capable of bringing climate change under control fully capable of extremely rapid positively disruptive large scale deployment.

Just imagine instantly moving one-half billion Chinese cyclists and 1.5 electric bike riders into automobiles, electric or otherwise, instead of advanced net-zero and near net-zero vehicles. Under current trends and rapidly emerging circumstances that is not a rational solution.


January 19, 2012

It's high time we develop a "Manhattan Project" to derive our power needs way far away from fossil fuels and nuclear. Electric vehicles and effective green sustainable energy solutions through solar, geothermal, hydraulic, and wind power are necessary to try to counterattack the warming environmental changes, if it's not too late already. Discouraging EV purchases by removing government cost incentives and saying that EVs are of minimal use given our problems is a BAD mindset.


January 19, 2012

When I drive down into the Basin around Salt Lake from my foothills home and I see the soup that we live in, I am thrilled that my Leaf and I do not contribute to any of the crap in the air. We are killing ourselves with internal combustion, and I do not exaggerate.

I am madly in love with my Leaf!!! And I have needed my hybrid exactly once in the last three months. And we have no charging infrastructure here.

The most powerful point is that I have my Leaf plugged into my solar. So, she runs on sunshine!!!! And offsetting gasoline instead of coal makes solar pay out in some 7 years---even at this price of gasoline.


January 31, 2012

I'm with Briggs. Appreciate the information.


February 6, 2012

I have 295,000 miles on my 2001 Toyota
Prius. I have driven it over a hundred miles a day, six days a week, on mostly country roads while doing my mail route. I live in Minnesota where the weather is not always nice. If it's really awful I switch to a 4 wheel drive pickup...so I can get home when I should have stayed home. I have saved enough in gas to pay for the cars and repairs I have done over the last ten years. Best mail car i have ever had.


February 6, 2012

I own a Volt. It is an amazing machine. I am disappointed, though, in GMs marketing. No mention of the Volt's superior efficiency, relative to a comparably sized gas car, is made. It costs me about $3.50 to drive 100 miles, compared to a gas car (assuming 25mpg and $3.50 per gallon), which costs $15 to drive the same distance. I previously owned one of the first Honda Insights, which averaged 62mpg over the eight years I drove it. But compared to the Volt, the Insight is a gas guzzler. So far, over the first 6 months, I have averaged 181mpg in the Volt. That average will climb, since probably 95% of my driving is all-electric.

So GM could do itslf a big favor and begin to emphasize efficiency in its ads. I think that's a legitimate selling point.


March 1, 2012

With a $7,500 tax credit the federal government paid $127.5 Million to subsidize those 17,000 electric cars in 2011. This seems to be a lot to pay to switch from gasoline to a mixture of coal and natural gas. There is no subsidy a all for switching directly to natural gas as a motor fuel, which should use fewer BTUs of natural gas per mile than it takes to generate electricity with natural gas (which is currently cheaper than coal, as well as being cleaner), especially when you consider the losses in transmiting it to a charging station, and recharging the vehicle. Also, electric vehicles don't pay any road use tax. They are sponging off the highway tax paid by gasoline (and natural gas) vehicles.


August 23, 2012

The real issue, which is supported by Reinventing Fire, is that the current materials (steel) is too heavy and therefore much larger motors and batteries are required. When composites become feasible EV will take off in a big way.

There is an adage about pioneers taking all the arrows and settlers taking the land, right now EVs are going to take the arrows.


December 20, 2012

Lighter vehicles, yes. Electric? Seems the answer is still out. "Mileage" claims are at best fraudulant, ignoring source energy costs of electricity. See Pat Murphy's excellent analyses. Also look at his interesting "jitney" proposals

Let's be consistent - compare BEST gas and electric to each other. VW in Europe 75+mpg. How many existing 100+mpg cars are not let into US?????

I don't see any SINGLE answer. Golf carts are legal in our community on the roads.

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