DOE – One Million Electric Vehicles by 2015

The U.S. Department of Energy today released One Million Electric Vehicles by 2015 (pdf – 220 kb), an analysis of advances in electric vehicle deployment and progress to date in meeting President Obama’s goal of putting one million electric vehicles on the road by 2015. The analysis shows that while the goal is ambitious, it is also achievable based on steps already taken as part of the Recovery Act and additional policy initiatives proposed by President Obama — including improvements to existing consumer tax credits, programs to help cities prepare for the growing demand for electric vehicles, and strong support for research and development to continue reducing the cost of electric vehicles.

"President Obama’s goal of putting one million electric vehicles on the road by 2015 represents a key component of our strategy to dramatically reduce America’s dependence on foreign oil and ensure that the U.S. leads the world in the growing electric vehicle manufacturing industry," said DOE Assistant Secretary for Policy and International Affairs David Sandalow. "This is a race America can win — if we answer the President’s call to out-innovate, out-build, and out-compete the rest of the world."

One Million Electric Vehicles by 2015 details DOE investments in electric vehicle infrastructure, research and development, and demonstration projects nationwide that are laying the groundwork for achieving the President’s goal. These projects include support for nearly 50 manufacturing facilities and demonstration projects nationwide. These efforts are helping to reduce the costs of advanced batteries and electric vehicles and gathering real-world data for consumers and local communities that will inform future deployment efforts.

The Department’s analysis of the current market outlook indicates that manufacturers are planning to produce in the range of one million electric vehicles by 2015. While industry-wide, manufacturing capacity is not likely to be the limiting factor in reaching the President’s goal, additional policy steps are needed to further drive innovation, reduce costs, and spur consumer demand.

The Obama Administration is proposing a three-part strategy that supports electric vehicle manufacturing and adoption through improvements to tax credits in current law, investments in research and development (R&D), and a new competitive program to encourage communities to invest in electric vehicle infrastructure. This plan will drive demand and position the United States as a global leader in manufacturing and deploying next-generation vehicle technologies. The strategy includes:

* Make electric vehicles more affordable with a rebate up to $7,500: The President is proposing to transform the existing $7,500 tax credit for electric vehicles into a rebate that will be available to consumers immediately at the point of sale, instead of having to wait for tax returns to be filed.
* Advance innovative technologies through new R&D investments: Building on Recovery Act investments, the President’s FY2012 budget proposal will include enhanced R&D investments in electric drive, batteries, and energy storage technologies.
* Reward communities that invest in electric vehicle infrastructure through competitive grants: To provide an incentive for communities to invest in EV infrastructure and remove regulatory barriers, the President is proposing a new initiative that will provide grants to up to 30 communities that are prioritizing advanced technology vehicle deployment.

Combined, these policies will help achieve the President’s goal of one million electric vehicles on the road by 2015 while creating new jobs and strengthening U.S. leadership in the growing EV market.

The U.S. Department of Energy’s Vehicle Technologies Program funds research and development for energy efficient and environmentally friendly vehicle technologies.

President Obama’s goal of putting one million electric vehicles on the road by 2015 represents a key milestone toward dramatically reducing dependence on oil and ensuring that America leads in the growing electric vehicle manufacturing industry. Although the goal is ambitious, key steps already taken and further steps proposed indicate the goal is achievable. Indeed, leading vehicle manufacturers already have plans for cumulative U.S. production capacity of more than 1.2 million electric vehicles by 2015, according to public announcements and news reports.

While it appears that the goal is within reach in terms of production capacity, initial costs and lack of familiarity with the technology could be barriers. For that reason, President Obama has proposed steps to accelerate America’s leadership in electric vehicle deployment, including improvements to existing consumer tax credits, programs to help cities prepare for growing demand for electric vehicles and strong support for research and development.

In his 2011 State of the Union address, President Obama called for putting one million electric vehicles on the road by 2015 – affirming and highlighting a goal aimed at building U.S. leadership in technologies that reduce our dependence on oil.
Electric vehicles (“EVs”) – a term that includes plug-in hybrids, extended range electric vehicles and all- electric vehicles — represent a key pathway for reducing petroleum dependence, enhancing environmental stewardship and promoting transportation sustainability, while creating high quality jobs and economic growth.

To achieve these benefits and reach the goal, President Obama has proposed a new effort that supports advanced technology vehicle adoption through improvements to tax credits in current law, investments in R&D and competitive programs to encourage communities to invest in infrastructure supporting these vehicles.

While several high profile vehicle market introductions such as the Chevrolet Volt and the Nissan Leaf have been initiated, questions remain regarding the potential to reach the 2015 goal. Production capacity must be established, and technology, vehicle cost and infrastructure barriers must be addressed to achieve large-scale market introduction. This report provides a progress update toward
achieving the goal:

• The status of vehicle sales and future production volume estimates
• Current federal government policies, investments, research and development, and demonstration efforts supporting the deployment of EVs
• EV consumer demand

This is an exceedingly dynamic and competitive field. Major announcements by companies and governments worldwide are made on a frequent basis. The plans of global companies and the policy initiatives of governments will surely change and shape the development of technology and markets during the next five years.

Where We Are Today

In 2010, the U.S. economy continued recovery from recession. As part of that recovery, sales of U.S. light-duty vehicles rebounded to approximately 12 million in 2010 from less than 10 million in 2009. Historically, U.S. sales of new light duty passenger vehicles ranged from 15-16 million per year from 2005-2008.2 Conventional hybrid electric vehicles (HEVs) have been on sale in the U.S. for over ten years, and today sales have grown to almost three percent of total light-duty vehicles. Over 1.6 million HEVs have been sold over the past six years.3 To reach the one million vehicle goal, EVs will need to average just under 1.7 percent of sales through 2015 (assuming sales of 12 million lightduty vehicles per year).

With increases in the Corporate Average Fuel Economy (CAFE) standards, vehicle manufacturers are required to increase fuel economy through 2016, with further increases beyond 2016 under consideration. On March 30, 2009, the National Highway Traffic Safety Administration (NHTSA) published the final rule raising CAFE standards for both cars and light trucks. These new standards will encourage the expanded market entry of electric drive technologies.

Market for Electric Drive Vehicles Expected to Increase

Over the past few years, interest in EVs in the U.S. auto industry has surged, with manufacturers beginning to introduce new generations of EVs. For example, in 2010 General Motors introduced the Chevrolet Volt extended range electric vehicle into the U.S. market. The Volt can travel up to 40 miles using power from its lithium-ion battery pack.

After that, the Volt can travel up to 375 miles in extended range using its internal combustion engine electric generator. GM has announced plans to build 15,000 Chevy Volts in 2011 and 45,000 in 2012. Based on news reports, the company is working on plans to increase its production target for 2012 to 120,000. (See Table references.) In late 2010, Nissan introduced the Leaf, a 100-mile range all-electric vehicle that incorporates an advanced lithium-ion battery as its sole power source.