Panel says U.S. must do more to spur EV sales

David Shepardson
Detroit News Washington Bureau

Washington — A new report says the U.S. government must offer a new range of incentives to boost lagging electric vehicle sales.

The National Research Council — an arm of the National Academies of Science — said in a report Wednesday that the government should take other steps to boost EV use including eliminating "the proliferation of incompatible plugs and ensure that all drivers can charge their vehicles and pay at all public charging stations using a universally accepted method, just as conventional vehicles can be refueled at any gas station."

Other issues include vehicle cost, current battery technology, and inadequate consumer understanding. "Developing less expensive, better performing batteries is essential to reducing overall vehicle cost, and a market strategy is needed to create awareness and overcome customer uncertainty," the report said.

But the report urged the federal government refrain from additional direct investment in the installation of public charging infrastructure "until more research has been done to understand the role of public infrastructure in encouraging broader adoption and use of plug-in electric vehicles. Specifically, the government should fund research to determine how much public infrastructure is needed and where it should be sited to persuade more people to purchase and use such vehicles. It should continue to invest in fundamental and applied research to expedite the development of low-cost, high-performance batteries to increase the all-electric range and reduce vehicle cost."

The $7,500 federal tax credit for electric vehicles and plug-in vehicles — and after an automaker sells 200,000 EVs, it is phased out over a 12-month period. The report says the tax credit "should continue beyond the current production volume limit. The federal government should consider converting the federal income tax credit offered to purchasers of plug-in electric vehicles into a point-of-sale rebate, and should work with state governments to adopt a policy in which plug-in vehicles remain free from special roadway or registration surcharges for a limited time. The government should re-evaluate the case for incentives after a suitable period, considering advancements in vehicle technology and progress in reducing production costs, total costs of ownership, and vehicle emissions."

For the last four years, Obama has called for an increase in the federal tax credit for EVs from $7,500 to $10,000, and for making it an instant rebate — rather than making buyers wait to file their tax returns. But Congress has taken no action on President Barack Obama's repeated calls to hike incentives for electric vehicles.

The federal government should also do a better job of advertising the credit "in key markets, to provide accurate information about federal tax credits and other incentives and the value of vehicle ownership," said the report.

Roland Hwang, one of the authors of the report and director of the Energy and Transportation program at the Natural Resources Defense Council, said the tax credits "could expire as early as 2017 or 2018 for the EV market leaders, potentially stalling the market just as it is poised to hit its tipping point."

Despite lagging sales, automakers are moving full-speed ahead building electric vehicles to meet government zero emission vehicle mandates.

"I don't know how you can meet the regulations in terms of emissions without electric vehicles. I think it is going to get stricter and stricter — I don't think it's going to get looser," said Renault-Nissan CEO Carlos Ghosn earlier this month in New York. "Zero emission is here to stay."

Many of the dozens of new EVs that have gone on sale have been sold in very low numbers — and often only in California — and other states that have required automakers to sell a growing number of zero emission vehicles. Automakers have been forced to cut prices and offer heavy discounts to sell EVs, even with $7,500 federal tax credits and state incentives.

Energy Secretary Ernest Moniz told The Detroit News in January the United States will not meet President Obama's goal of getting 1 million electric vehicles on the road by the end of this year, and said hitting the target could be a few years away. "We're going to be a few years after the president's aspirational goal of the end of 2015, but I think that we are within a few years of reaching that goal," Moniz said.

Plug-in hybrid and full electric vehicle sales were up about 25 percent to 123,000 in the United States last year and are up about 3 percent in the first three months of the year, largely because of strong Tesla Model S sales.