Obama to tout auto turnaround
President Barack Obama will use his sixth State of the Union address Tuesday to tout the resurgent auto industry.
Obama, who has been marking the end of the six-year, $85 billion auto bailout, invited a worker from Warren at Chrysler’s Jefferson North assembly plant to attend the speech.
Last year, Obama repeatedly mentioned the auto rebound, but didn’t talk about the government’s exit from General Motors Co. in December 2013 or even mention the automaker by name. Instead, he spoke about the need to boost fuel efficiency of medium- and heavy-duty trucks and called on Congress to spur the use of natural gas in vehicles.
Obama in his 2011 State of the Union Address renewed a call he made as a candidate in 2008: to get 1 million plug-in electric vehicles on the road by 2015. But sales have been far slower than expected — about 280,000, including 120,000 in 2014 — according to insideevs.com, which tracks EV sales. The numbers show that even with dramatic increases it could take at least four more years to hit the mark. And gas prices below $2 a gallon in more than half of the country are likely to be a big drag on EV sales in 2015.
Congress hasn’t agreed with calls by Obama to hike the tax credit for electric vehicles to $10,000 and convert it to a point of sale rebate. His call for dramatically boosted research into electric vehicle batteries to reduce costs and extend range has gone unheeded. Congress also has spurned repeated calls to trim oil industry tax breaks to fund additional electric vehicle research.
In April 2013, Obama said he wanted to hike the Energy Department’s vehicle research budget 75 percent to $575 million and create a $2 billion trust fund to fund research into getting the country off foreign oil over the next 10 years. Congress didn’t approve that, either.
In recent years, Obama had a change of heart after promoting incentives early in his administration primarily for exclusively electric vehicles. In early 2012, Obama sought to broaden a government tax credit that was created to support electric vehicles. He now wants to include other types of advanced vehicles, including those that run on fossil fuels like compressed natural gas.
“One of the reasons why is natural gas — if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change,” Obama said in his 2014 State of the Union address. “Businesses plan to invest almost $100 billion in new factories that use natural gas. I’ll cut red tape to help states get those factories built and put folks to work, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.”
Auto policy has been a regular part of the annual addresses for a decade.
At the State of the Union Address in 2007, President George W. Bush called for a dramatic increase in auto fuel-efficiency standards. Bush called for an overall 20 percent reduction in America’s use of gasoline before 2017 — primarily through the expanded use of ethanol and other alternative fuels, which automakers sharply opposed at the time.
Congress quickly took up Bush’s plan. By the end of 2007, Congress approved legislation ending the ban on higher fuel-efficiency standards for passenger cars. And it dramatically boosted the amount of ethanol used in vehicles.
Obama reached a deal early in his presidency to hike standards to 34.1 mpg by 2016, and then reached a second agreement to boost requirements to 54.5 mpg by 2025. The agreements will cost the auto industry about $200 billion but save $1.7 trillion at the pump, the White House said in 2012.