Obama Administration Favors Additional Spending for Development of Electric Vehicles

The Obama administration has voiced its support for new legislation that would lead to billions of dollars in additional aid to promote the development of electric auto technologies.

The Electric Vehicle Deployment Act of 2010, which was introduced by Senators Jeff Alan Merkley (D-OR) and Byron Dorgan (D-ND), calls for up to $10 billion in additional federal aid to promote the adoption of electric cars. In a press release, the senators said the funds would also be used to establish between five and 15 “deployment communities” which would “help demonstrate rapid market penetration and determine what best practices would be helpful for nationwide deployment of electric vehicles.”

The deployment communities would receive financial assistance of up to $250 million each. The funds would be used for construction of charging stations and other infrastructure improvements. A similar bill has also been introduced in the House of Representatives.

The federal government has already invested billions of dollars in programs designed to promote the development of plug-in hybrid vehicles like the Chevrolet Volt and all-electric cars like the Nissan Leaf. Consumers who purchase such vehicles will also receive federal tax credits of $7,500. Over $27 billion in federal aid has also been extended to auto and battery makers. Automakers have received approximately $25 billion in aid to be used in retooling their existing production facilities and developing more fuel-efficient vehicles. An additional $2.4 billion has been spent on the development of advanced battery technologies.

On Tuesday, the Senate Energy and National Resources Committee held a hearing on the Electric Vehicle Deployment Act of 2010.

Automakers have lobbied for additional federal assistance as consumers remain concerned about the lack of charging stations and the higher cost and limited operational range of all-electric and plug-in hybrid vehicles.

The Alliance of Automobile Manufactures has voiced its opposition to the bill on the grounds that it does not provide research and development funding for other alternative energy technologies including diesel hybrids, biofuel and hydrogen cell vehicles. The alliance has also recommended expanding the scope of the proposed bill to include more U.S. markets than is proposed in the current bill.

The organization’s spokesman Charles Territo said, “We are opposing it [the bill] because we are concerned that it is narrow in scope in the number of communities that it targets.  We believe if the technology is going to survive, it needs to be available in every market. The worst thing that can happen is that consumers believe that these types of vehicles are only available in certain markets.”

Research Director for the alliance Kathryn Clay also said the proposed legislation does not address the issue of U.S. dependency on overseas component manufacturers. She said, “Almost all of these critical components continue to be manufactured overseas and imported into the U.S. — trading our dependency from foreign petroleum to critical electric-drive components. We need legislation that focuses on long-term investment in the U.S. to adequately compete with developing countries for the production of these components.”

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