Thursday, January 31, 2013
U.S. backs off goal of one million electric cars by 2015
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By Ayesha Rascoe and Deepa Seetharaman

WASHINGTON/DETROIT (Reuters) - The U.S. Department of Energy on Thursday eased off President Barack Obama's stated goal of putting 1 million electric cars on the road by 2015, and laid out what experts called a more realistic strategy of promoting advanced-drive vehicles and lowering their cost over the next nine years.

Since Obama announced the goal in his 2011 State of the Union speech, auto analysts and executives have doubted American consumers would buy a million electric vehicles by 2015.

"Whether we meet that goal in 2015 or 2016, that's less important than that we're on the right path to get many millions of these vehicles on the road," an Energy Department official said, in advance of remarks by Energy Secretary Steven Chu in a speech at the Washington D.C. auto show.

The proposal to lower electric vehicle costs represents the first look at how U.S. auto policy may take shape during Obama's next four years. His first term saw a flurry of initiatives related to the auto industry, beginning with government rescues of General Motors Co and Chrysler Group LLC.

Chu told reporters after his speech that he was excited by the advances in vehicle technology.

Asked about the 1 million electric vehicles goal, Chu said: "It's ambitious, but we'll see what happens."

Promoting plug-in hybrids and electric vehicles has been another long-running focus for the White House, which has also pushed for more stringent standards on fuel economy. Overall, U.S. federal policies to promote electric vehicles will cost $7.5 billion through 2019, the Congressional Budget Office said in September.

That includes $2.4 billion in grants to lithium-ion battery makers and projects to promote electric vehicles as well as $3.1 billion in loans to auto companies, intended to spur production of fuel-efficient vehicles.

But demand for hybrids and electric vehicles has been weaker than expected. Last year, nearly 488,000 hybrids, plug-in hybrids and electric cars were sold in the United States, accounting for 3.3 percent of the overall auto market, according to green-car website Hybridcars.com.

For the administration to meet its 2015 goal, electrified vehicles would have double their market share to roughly 6 percent of the U.S. auto market, which automotive consulting firm Polk estimates will reach 16.2 million vehicles that year. Continued...

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