Sales Of Electric Vehicles Fall Short Of President Obama’s Goals

January 22, 2016 0 Comments

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When gas prices averaged almost $4 per gallon in 2008, President Barack Obama set a goal to have 1 million plug-in electric vehicles on the road by 2015. Since that time, his administration has invested billions of dollars in electric vehicle subsidies for consumers and the industry.

However, with gas prices now at approximately $2 per gallon, only about 400,000 electric cars have been sold. Despite industry offerings of around 30 plug-in models, often at significant discounts, sales fell 6 percent last year over the previous year, down to about 115,000.

Energy Secretary Ernest Moniz said that the country may reach the 1 million goal in the next three to four years, with continuing improvements in battery technology, but explained that low gas prices have had a negative impact on sales.

President Obama has been a major backer of electric vehicles while in office. At the Detroit auto show, he noted that he got a look at some “plug-in hybrids and electrics and fuel-efficient cars that can protect our planet, save people money at the pump.”

Moniz stated his view that lowering battery costs is “absolutely critical” to increasing the sales of electric vehicles, as well as noting that the administration’s goal is to make electric vehicles as affordable to own and operate as gas-powered vehicles by 2022. He said the future for electric vehicles “remains extremely bright.”

Despite slow sales, auto manufacturers continue to roll out new models in response to government mandates as well as the desire to create brands that are known for positive environmental innovation.

The primary obstacles for electric vehicles sales are their high cost and short driving range. While the upcoming Chevy Bolt promises a 200-mile range and a price starting at approximately $30,000, this is still more expensive than increasingly efficient gas-powered economy cars that can be purchased for under $20,000.

“If gasoline was $8 a gallon, consumers would amortize the costs of an electric vehicle pretty quickly,” said former GM vice chairman Bob Lutz, who led the development of the original Chevy Volt, a pioneering plug-in hybrid. “But at $1.50 a gallon, who is going to be willing to pay an $8,000 or $10,000 premium?”

At the same time, GM chairman and CEO Mary Barra said that she is convinced that customers want EVs and that gas prices will not remain low forever.

“Long-term electrification is part of the solution,” said Barra.

Lutz believes that automakers have no choice but to build EVs, due to government mandates, saying that, “Electric vehicles are going to have to be crammed in the market at way below what it costs to make them.”

Although Obama was clearly overly optimistic about the time frame, there’s chance the million car mark is achievable in the not-too-distant future. Both the upcoming Chevy Bolt and Tesla Model 3 offer a reasonable price tag as well as a practical range, and automakers are increasingly stepping up to the challenge by launching more EV models. Additionally, consumers can get a federal tax credit of up to $7,500 for buying electric vehicles and plug-in hybrids, with the Obama administration having repeatedly proposed increasing the credit to $10,000.

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