How Consumers and Federal Stimulus Might Revitalize the Electric Car

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Stimulus Revived EV

The return of the electric car to the United States can perhaps be lauded as one of the Obama administration’s successes; the rebirth of the electric car here—and it is a rebirth—is well under way. While the first electric cars were on the roads right alongside the first gasoline cars, only now are they regaining some sort of prominence, and it’s largely due to the federal stimulus package.

This Started in the 90s

California was the first state to try to put electric cars on the road; in the mid-90s, after state laws demanded zero-emissions vehicles. But since gas was still cheap (remember gas prices in the 90s? I do), no one wanted an electric car for all the same reasons that skeptics spout today, without the high price of gas as a counter-argument. Fast-forward to 2007, which saw steeply increased gas prices paired with federal policy mandating stricter fuel efficiency standards.

At this point, the only American company making an electric car was Tesla—and while the Roadster just oozes cool, its price is well out of range for the average driver. But with $2 billion in federal grants and a matching amount from private investment, the field was open for other automakers and parts suppliers to come play.

It Really Got Going in 2009

The only U.S. lithium mine—Chemetall Foote Corp.—got money to increase production, as well as a company called Honeywell, which became the first domestic supplier of a conductive salt for lithium ion batteries, and so on. Tax credits became available for buying an electric car—$2500 plus up to an additional $5000 according to battery output. Part of the funding was set aside to set up charging stations, and some cities even made it possible to get home chargers for free. Electric delivery trucks have hit the road, as well as other commercial vehicles, including the iconic Ford Transit Connect.

Lower emissions—none from the car itself and fewer still if the car is powered by renewable sources—and cheaper operating costs looked like they would make EVs a perfect fit for the ecologically-minded buyer (which should be everyone, right?). But then the electric car revival hit another snag—namely, the consumer. The Government Accountability Office saw it coming in 2009. Batteries are still too expensive and gas is still too cheap, they said. Two years later, an extensive survey confirmed these results—consumers are leery of electric cars.

The Consumer Is Killing the Electric Car

Electric cars don’t go far enough, the consumers say. ‘Even though a 90 mile range is perfectly sufficient for nearly all daily routines, what about that weekend trip that we might take.’ Consumers complain about not having access to outlets where they park their vehicles (some even citing how their garage is too full of other stuff to fit a car).

And of course, electric cars are still expensive. While a fraction of the price of a Tesla Roadster, the upfront cost of most electric vehicles is still too high to be offset by years’ worth of fuel savings.

The end result—so far—is that while manufacturers are building batteries and parts in the United States as part of a green initiative, rather than going overseas for cheaper manufacturing, the jobs it brings seem to be short-term at best. Stimulus money alone isn’t enough to guarantee success. A prime example of stimulus money going nowhere is the Think electric car plant in Elkhart, Indiana and its main battery supplier Ener1, both of which filed for bankruptcy this month.

But Maybe the Consumer Can Still Save It

In the end, it comes down to the consumer and whether or not electric cars are actually bought. Increasing battery life and vehicle range would go a long way toward making electric cars palatable to the general public, as the tax credit already does. Designing the cars just to be comfortable to sit in and look decent is also important (Mitsubishi and Chevy, I’m looking at you here—both the i-MiEV and the Volt were incredibly disappointing when I actually got in one), as is getting consumers to fall in love with them and make that first purchase.

Electric cars as they are today are a fairly new product, and the price of technology drops over time. The only question is whether or not electric cars will be able to hang on until they’re inexpensive enough and have enough range to be as popular as their gasoline-driven counterparts. I really hope so.

Source: ecopolitology | Image: Chevrolet

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5 thoughts on “How Consumers and Federal Stimulus Might Revitalize the Electric Car

  • For a lot of people it comes down to dollars. If I drive 10k a year and the EV car cost X more to by. And gas cost $3.50 a gallon….

    Say gas moves to $8-10 a gallon, you would see a lot more people wanting that EV.

    So if you drop all Government give aways to oil. Added a carbon tax. And raise the gas tax (to help cover roads and EV charging stations)

  • Before you start throwing around phrases like “cosumers are afraid to buy” and “range anxiety”, let’s wait until supply has exceeded demand. OK?
    Currently sales of the Leaf have been limited by production numbers, nothing sits on dealers lots, and the market hasn’t fully opened to all across America.
    So before you start declaring ANY kind of market reluctance, wait until sales numbers are limited by SALES.

  • GM BLEW THE OPPORTUNITY OF A LIFETIME! GM had to be the stupidest company in the universe when they forced the return of the EV1’s, etc. just before gasoline prices skyrocketed. These cars were absolutely loved by their drivers and from all indications GM was in a position to completely profit from the gasoline price spikes. It probably could have avoided the company’s subsequent meltdown — but instead they blew it big time and missed an opportunity that comes along very rarely in any industry. At that time consumers were ready to buy anything that looked remotely viable and GM had an alternative — the limited window of opportunity made consumers quite willing — even despite the fact that it looked like a science project.

  • What’s worrying is that even if we continue to stave off market manipulation by the incumbent interests long enough for a decent new 40-mile runabout to come out under $10k, we won’t have a back stop against recidivism. Oil prices will go back down. We are looking at a demand peak for oil and other fossil fuel in the near future. When we crest that, prices will fall, and efficiency and better technology will be priced out faster than innovation can drive those prices down. The only way to ensure non-fossil energy and efficiency in the long run is to put a floor, a rising floor, on the fossil carbon price.

  • Pingback: Mia Rox - The Convertible Electric Microvan

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