Obama Administration Unlikely to Achieve Goal of 1 Million EVs by 2015

While the Obama administration pursues its goal of putting a million gas-electric hybrid and all-electric vehicles on U.S. roads by 2015, many automakers have begun on more traditional technologies to comply with more stringent fuel efficiency standards in the short term.

Mark James is the director of engineering at UK-based Lotus Engineering.  He says the question largely comes down to economics.  Advances in traditional combustion engine technology have allowed automakers to offer consumers more fuel efficient vehicles at a lower price point.

“Everybody rushed toward EV vehicles and hybrid vehicles,” says James. “Now, they’re going back, and saying, ‘actually, we need to look at engines’.”

Demand for EVs and plug-ins has not increased as quickly as automakers or the administration had expected. Even with government subsidies for manufacturers and consumers, the lack of infrastructure and the limited battery range have kept sales low.

Last year combined sales of the Chevrolet Volt plug-in hybrid and Nissan Leaf all-electric vehicle accounted for only 0.1 percent of all light vehicle sales in the U.S.  In March, industry-wide sales of EV’s and plug-in hybrids in the U.S. totaled 4,148 units.

To prevent overproduction, automakers are limited their marketing to EV enthusiasts in certain areas of the country. Ford’s new Focus Electric model is initially being sold only in California, New York and New Jersey. The company hopes to sell the model nationwide by year’s end.

Toyota Motor Corp. plans to limit sales of new RAV4 EV to California when it is launched in the U.S. this summer before making it available nationwide. Toyota expects to sell approximately 800 units this year. Toyota spokesman John Hanson said, “Toyota is being realistic about it. We’re taking a very measured approach and we’re going to see what the market wants.”

In contrast to the cautious approach being taken by automakers and consumers, the Obama administration continues to push hard. In March it announced that it wants to increase the federal tax credits available to consumers who purchase alternative-fuel vehicles from $7,500 to $10,000.

Most dealers oppose the administration’s proposal to expand the range of point of sale products that qualify for tax credits on the grounds that they must then wait for reimbursement from the government.

The administration’s proposals have also come under fire from Republican lawmakers focused on cutting federal spending.

LMC Automotive auto analyst Kevin Riddell is doubtful that the administration can reach its 2015 goal of selling 1 million alternative-energy vehicles by 2015. Riddell said, “It would take a lot of work to achieve that goal. You’re going to need a major breakthrough — a vehicle that can do more than 100 miles in range.” LMC Automotive predicts annual sales could potentially reach as many as 250,000 units by 2015.

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