Feds should pick goals, not technology
 | Dave Guilford is enterprise editor of Automotive News. |
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The Obama administration's tilt toward electric vehicles as a solution to global warming and dependence on foreign oil has always produced some grumbling.
The general complaint has been that the administration should focus on desired results -- lower fuel use, lower emissions -- and not pick favored technologies. Why not fuel cell EVs? Compressed natural gas vehicles? Diesels? Improved petroleum-powered vehicles?
That criticism looks valid today, as advances in internal combustion engine efficiency make EVs a tough sell.
Case in point:
• A base Hyundai Elantra costs $17,590, including shipping. It gets a federal fuel economy rating of 29 mpg city/40 highway/33 combined. Annual fuel costs, according to fueleconomy.gov, are $1,750.
• A base Nissan Leaf costs $36,050, including shipping. Deduct the federal tax credit of $7,500 and it's $28,550. Its fuel economy equivalents are 106 mpg-e city/92 highway/99 combined. Annual fuel costs, according to the feds, are $600.
At a fuel savings of $1,150 annually, the Leaf buyer would need about 9.5 years to work off the $10,960 price difference. That tells you a lot about the slow sales of EVs.
So it was interesting to read a recent Congressional Budget Office report on incentives for EVs. It noted the basic problem, that larger batteries for longer range add cost. The $7,500 tax credit can't bridge the gap, the report says: "A larger tax credit is needed to make electric vehicles cost-competitive with higher-fuel-economy conventional vehicles."
The report mentions what is probably the most effective, and most politically unlikely, way to cut gasoline use and emissions, saying that "Raising gasoline taxes -- which currently average 49 cents per gallon ... -- would have an immediate effect on fuel use and greenhouse gas emissions, because consumers would drive less in the vehicles they already own."
You can reach Dave Guilford at dguilford@crain.com. -- Follow Dave on 
