Feds and Auto Industry Divided Over Plug-In Vehicles?

It’s no secret that the Obama Adminstration has been aggressively pursuing goals aimed at seeing 1 million plug-in vehicles on U.S. roads by 2015.

However, according to a report by Automotive News, a divide is emerging between the government and vehicle manufacturers. The report emphasizes that while many automakers recognize the importance of electric vehicles and plug-in hybrids as important in achieving long-term fuel savings and emissions reduction, over shorter time spans, the internal combustion engine still has a lot of potential.

Strategies by Ford Motor Company, which has pursued a somewhat low-key roll out of its Focus Electric, with no defined sales target and even Toyota, which is only planning to sell 15,000 examples of its new Prius Plug-In Hybrid this year, would appear to support the notion.

However, despite still marginal sales volumes and skepticism among many industry “experts” that plug-in vehicles won’t meet the government’s projections, sales and interest in plug-in vehicles has been increasing.

There are at least three new plug-in models on the market in 2012 and for those that were also on sale in 2011, sales have noticeably increased. The Chevy Volt, which sold 1,703 copies in the first four months of 2011, saw demand jump to 5,377 units in the same period for 2012. Nissan’s all-electric LEAF although not seeing as significant a jump, witnessed sales grow from 1,025 to 2,103 units during the same period.

Over the next few years more plug-in vehicles are expected to launch including both pure EV and range extending form, and should help contribute to automakers reaching aggressive Corporate Average Fuel Economy targets. And, in an effort to spur sales, the Obama administration is looking at further incentives, such as increasing the federal tax credit from $7,500 to $10,000 on some alternative fuel vehicles.

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  • Van

    Interesting topic. Rumors abound that OEM take a loss on every plug in sold because the battery costs way too much. So rather than using borrowed dollars and increasing the debt burden of the taxpayers, maybe we (those advocating plug-ins) should focus on bringing the next generation lithium car battery to production with its greater specific energy and lower cost per kwh of capacity?

    For example, the PIP only uses about 3 KWh of capacity in EV mode so its range is 11-15 mniles and costs $32,000. If the next generation battery would cut the cost in half, then 6 KWh of capacty could be used for a range of about 20 miles, but with the MSRP remaining at $32,000. Now if we put a $10,000 incentive on that car, we would sell hundreds of thousands of them!

  • pdgafan

    I’m all for electric cars, so don’t take this the wrong way. But putting a $10,000 incentive on a car is putting the burden on tax payers. That incentive has to come from somewhere. We need to get government out of this issue. If we stopped subsidizing the oil industry and the cost of gas increased then maybe alternative fuel vehicles would not need incentives because the fuel savings payback would be obvious. Just a thought.

  • DownUnder

    I believe every single car manufacturer loves to have a breakthru in batteries.

  • Modern Marvel Fan

    @ van,

    PIP is a scam. It is rated 6miles by the EPA. In fact, if you drive it “normally”, you won’t even get 2 miles in electric mode b/c the gas engine will come on whenever you depress the “gas” pedal half way down…

    Prius plugin is the biggest scam in the hybrid/EV/plug in market. You are better off buying a regular Prius, the Volt or the Leaf…

  • DownUnder

    What is your “half way”?