The Obama administration is backing new legislation to spend billions in additional aid to promote electric cars as concern mounts on Capitol Hill over U.S. petroleum consumption and the catastrophe in the Gulf of Mexico.
A Senate bill proposes that the federal government spend up to $10 billion to encourage sales of electric vehicles. The bill introduced by Sens. Byron Dorgan, D-N.D., and Jeff Alan Merkley, D-Ore., would set up between five and 15 “deployment communities” in the United States.
The communities would receive incentives and funding to “help demonstrate rapid market penetration and determine what best practices would be helpful for nationwide deployment of electric vehicles,” the senators said in a release.
The communities would each receive grants of up to $250 million to build charging stations and other infrastructure for electric vehicles, according to the Senate bill called the Electric Vehicle Deployment Act of 2010. A similar bill has also been proposed in the House. The Senate Energy and National Resources Committee held a hearing on the bill yesterday.
The bills come on top of existing multibillion-dollar federal programs for pure electric vehicles, such as the Nissan Leaf, and plug-in hybrid vehicles, such as the Chevrolet Volt, and a $7,500 federal consumer tax credit. Automakers have tapped $25 billion in funds to retool plants to build more fuel-efficient vehicles, and Washington has doled out $2.4 billion for new battery development.
The auto industry has sought more support out of fear consumers will balk at the high price of plug-ins and lack of charging stations. Research indicates consumers are willing to consider electric vehicles but remain most concerned about their range.
The Alliance of Automobile Manufacturers said it opposes the Senate bill because it fails to provide funding for other technologies such as diesel hybrids, fuel cells or a hydrogen infrastructure. It would also limit aid to a small number of U.S. market areas.
“We are opposing it because we are concerned that it is narrow in scope in the number of communities that it targets,” alliance spokesman Charles Territo said. “We believe if the technology is going to survive, it needs to be available in every market. The worst thing that can happen is that consumers believe that these types of vehicles are only available in certain markets.”
Kathryn Clay, the alliance's research director, shared the concerns of manufacturers at the hearing and advocated additional and better consumer incentives.
“We believe that any strengthening of consumer incentives should be integrated into the existing program which currently provides up to $7,500 per vehicle and is based on key performance parameters related to battery size,” Clay said.
Clay said the bill also fails to provide funding for the production of electric-drive components, including electric motors, electric-drive transmissions, and advance battery components.
“Almost all of these critical components continue to be manufactured overseas and imported into the U.S. -- trading our dependency from foreign petroleum to critical electric-drive components,” Clay said. “We need legislation that focuses on long-term investment in the U.S. to adequately compete with developing countries for the production of these components.”