Jump-starting the plug-in electric vehicle market

There is a lot of buzz around Washington these days that plug-in electric vehicles (PEVs) are the answer to our energy security and climate problems. In the recent State of the Union, President Obama restated his goal of having 1 million PEVs on the road in the United States by 2015, and the U.S. Department of Energy (DOE) recently released a report projecting that we will meet the goal. Meanwhile, a panel I sat on for Indiana University’s School of Public and Environmental Affairs (SPEA) said the data indicates we won’t get quite that many PEVs on the road by 2015. The question is – does it matter if we precisely reach the President’s goal or not? The answer is no, so long as we are taking concrete steps towards jumpstarting PEV manufacturing and supporting infrastructure and learning from the experiences of early PEV adopters.

The estimates for future vehicle production levels used by DOE and SPEA were slightly different, which explains the conflicting outcomes. The DOE used a production level for Chevrolet’s Volt (120,000 in 2012) that is possible, but not the official target from General Motors, while SPEA chose to use the official target (45,000 per year in 2012). Importantly, whether or not GM will make that many Volts depends on consumer demand for it. (The fact that Motor Trend made the Volt the car of the year for 2011 certainly helps.) Both reports relied on public statements, and since nearly all automakers are working on PEVs and many have not made official announcements, the actual production levels could be much higher by 2015. It’s helpful to take a step back and look at why the President set this goal and what is happening as a result.

Sometimes, the most important outcome from setting a national goal is to bring attention to an issue and drive a discussion. In this case, the President is using his bully pulpit to tout the value of PEVs and their benefit to our economy, national security, and environment. We now consume 70 percent of our oil in the transportation sector. The benefits of vehicle electrification are clear: we can displace oil imports with domestically produced electricity (we produce nearly all our electricity within our borders), and PEVs will lower transportation’s carbon footprint and clean up our air. Both the SPEA and DOE reports highlight these benefits, and the fact that the leadership in Washington has been critical to jump-starting this industry.

One of the critical takeaways from the SPEA report was that automakers are capable of producing many more of these vehicles –if consumers will buy them. We Americans relish a challenge. Getting 1 million or more PEVs on our roads by 2015 is a worthy goal that is driving innovation.

Nick Nigro is a Solutions Fellow