WASHINGTON -- The era of free-flowing federal funds for electric vehicles is over, so President Obama is returning to an old strategy to advance their cause: research.
Under a plan the White House unveiled in March, electric vehicles and other oil alternatives would get $200 million in annual r&d funding from oil drilling revenue.
That's small change compared to the $2.4 billion in stimulus funding the Obama administration secured from Congress in its first term for battery manufacturing plants and the billions more loaned out under a separate program approved during the George W. Bush administration to help EV makers start production.
But in an era of budget cuts, it is the funding the White House thinks it can get.
At this point, the stimulus funding for the construction of EV and battery plants has been spent. It drew a backlash from Republicans on Capitol Hill when recipients such as the battery manufacturers A123 and Ener1, as well as solar panel manufacturer Solyndra, went into bankruptcy.
That has left the White House with virtually no chance of getting the Republican-controlled House to authorize more funding for advanced-vehicle and battery manufacturing plants.
"If a lot of these grants had worked out, then they'd probably still be giving out money," said McKie Campbell, the former Republican staff director of the Senate Energy and Natural Resources Committee, which oversees many vehicle programs.
To get approval for the research program, the White House would need to strike a deal with congressional Republicans. They have been cool to President Obama's initial bid but might go along if the program gets them something they want: expanded domestic oil drilling.
Meanwhile, last month the Department of Energy said it is "not likely" to use the remaining $16.6 billion in the Advanced Technology Vehicles Manufacturing program, which provided more than $8 billion in loans to Ford Motor Co., Nissan North America, Fisker Automotive and Tesla Motors in 2009 and 2010.
It originally was thought that the Advanced Technology Vehicles Manufacturing program, created under President George W. Bush, could loan money to General Motors and Chrysler to help them develop EVs and fuel-efficient cars after they emerged from bankruptcy.
But these days large automakers are not applying for the loans, partly because of the political backlash and partly because of the conditions that the Department of Energy places on its loans, sources say.
In order to make a loan, the government must be first in line for repayment. That is something that automakers were willing to accept when the financial system locked up in 2008, but not today, since other sources of capital, with low interest rates, have become available.
The applicants that remain are small startups, which are too risky to be attractive.
According to a March report by the Government Accountability Office, the Energy department has received seven applications for a total of $1.48 billion, but considers them "inactive," in some cases because the companies lack outside financing and in some cases because the technology is not ready.
"If you had companies lined up for loans, then I think you'd see a different response. But there's nobody waiting," said a source close to the DOE loan program. Officials are "caught in a weird place where they have money to give out, and no companies that want it," the source added. "It's very odd."
White House officials are not pulling the plug on programs that promote the sale of electric vehicles.
Buyers of plug-in hybrids and EVs still get a $7,500 credit, and there is no indication that will change. Meanwhile, the new fuel economy standards that ramp up to 54.5 mpg in 2025 give double credits to companies that build electric vehicles.
But the money from President Obama's proposed Energy Security Trust would also go toward hydrogen fuel cells, biofuels and natural gas. Some consider that a recognition that batteries alone are not destined to replace the gasoline engine.
"The change I see in the administration is that they're becoming open to a broader set of technologies," said John German, a senior fellow at the International Council on Clean Transportation. "They're still gung-ho on EVs, but they're at least acknowledging that there are other solutions."
Andy Karsner, an assistant secretary at DOE during the Bush administration and now a consultant, said the research plan has limited potential, like earlier pushes by the Bush and Clinton administrations. That is because a single large corporation -- such as a major automaker or supplier -- spends more on vehicle r&d than the entire DOE.
But Karsner said there are areas where these companies will not spend the money needed to develop the next generation of cars. That includes developing better anodes and cathodes for batteries and improved natural gas storage tanks.
"There's a lot the federal government can do that the market won't," Karsner said. But through the years, there has been little genuine focus on replacing oil, he added, though "we've spent a lot of funds and we've had a lot of photo ops."