WASHINGTON -- Federal incentives to spur purchases of battery electric and plug-in hybrid vehicles need to continue, as the high cost of batteries remains a barrier to sales of electrified vehicles, a new study concludes.
The study, conducted by the National Research Council and commissioned by Congress, looked into the barriers facing the proliferation of plug-in vehicles and recommended that the government do more to encourage their adoption, including funding research into better batteries and establishing industrywide standards for charging infrastructure.
“Vehicle cost, current battery technology, and inadequate consumer knowledge are some of the barriers preventing widespread adoption of plug-in electric vehicles,” the National Academy of Sciences, the NRC’s nonprofit parent organization, said in a statement. “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.”
Among the study’s key policy recommendations:
The government-funded study found that high cost of electrified vehicles relative to gasoline-powered vehicles remains a primary sales challenge.
That pressure has been highlighted recently by several moves to cut the prices of EVs and plug-in hybrids. General Motors, for example, recently cut the price of the Chevrolet Spark EV by $1,650 and slashed the sticker of the Cadillac ELR PHEV by $10,000 to $65,995, including shipping, after it posted low sales in its first 18 months on the market.
In a period of low gasoline prices, automakers are striving to make their electrified vehicles attractive in other ways. The Hyundai Sonata Hybrid was selling for an average of 20 percent less than its sticker price in April, the largest average discount of the month, according to TrueCar.com. According to KBB.com, some of the best new-car deals available this month are on the Spark EV and the Nissan Leaf.
Roland Hwang, director of the transportation program at the Natural Resources Defense Council and a co-author of the National Research Council’s study, points out that cars like the Leaf and Chevrolet Volt -- pioneering electrified vehicles for the mass market -- are nearing the end of their first-generation lifecycles, and successors are on the way.
More new EVs and PHEVs are coming soon too, such as the Tesla Model X and Chevrolet Bolt. Hwang said that transition from first- to second-generation electric vehicles places the industry at a key juncture, where federal incentives must continue to support EVs that will offer better range and lower costs.
“The danger here is that as soon as these new products arrive that will take us to another level … that the tax credits get removed and we stall the market,” Hwang said. “We’re at kind of a dangerous tipping point.”
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