President Obama’s goal of putting 1 million plug-in electric cars on the road within four years is unlikely to be met because automakers are not planning to make enough cars due to uncertain consumer demand, auto industry leaders concluded in a report being released Wednesday.
The finding is based on the manufacturers’ announced production numbers and an analysis of consumer demand.
The first two plug-in cars from major manufacturers, the Nissan Leaf and the Chevrolet Volt, went on sale recently, garnering widespread attention for the energy-efficient vehicles.
But the panel of industry experts who authored the report concluded that expanding sales within four years to meet the milllion-car goal is improbable.
“There is a big challenge in going from marketing the Leaf or the Volt to early adopters to selling them to mainstream retail car-buyers,” said John Graham, dean of the school of Public and Environmental Affairs at Indiana University, which conducted and funded the 80-page study. “Until then, the automakers’ production plans will be quite cautious.”
The study panel was made up of a Ford executive, a federal energy scientist and representatives from an environmental group, academia and an industry research group. Input was also received from Nissan and General Motors.
In his State of the Union address last month, Obama said he is aiming to get 1 million electric vehicles on the road by 2015.
“With more research and incentives, we can break our dependence on oil with biofuels and become the first country to have a million electric vehicles on the road by 2015,” he said.
The federal government is already offering incentives as high as $7,500 for consumers to buy plug-in cars and putting up $2.4 billion for battery and electric-car manufacturing.
But even with that encouragement, the public’s adoption of electric vehicles could be slow.
The $32,780 Leaf and the $41,000 Volt cost far more than a comparably sized car with a gas engine, which typically sells for $20,000. The battery range of the Leaf, which is all electric, is less than 100 miles, and places where batteries can be replenished are sparse at best. Also, it can take hours to recharge.
As a result, many automakers have balked at making the investments to mass produce plug-in vehicles.
“When you start to aggregate the automakers’ announced intentions, it’s difficult to get to 1 million by 2015,” Graham said.
The two leaders, by far, are GM and Nissan.
GM has announced it will produce up to 45,000 Chevrolet Volts in 2012.
Nissan has indicated it will sell about 25,000 Leafs in the United States this year and is building a Tennessee plant that it says can manufacture 150,000 a year.
But under existing laws, sales for both companies could drop after each one sells 200,000 plug-in cars, because at that point the $7,500 federal tax-credit incentive for purchases expires. New bills in Congress would lift the cap on the tax incentive from 200,000 to 500,000 per manufacturer.
Although skeptics of electric cars have questioned the value of the government’s role in encouraging their adoption, automakers and environmentalists have been pushing for more federal incentives for consumers and the construction of recharging stations.
Robbie Diamond, president of the Electrification Coalition, agreed that consumer demand under current federal policy will remain too weak to meet the goal.
“It’s hard to see how we get to 1 million vehicles with current policy,” he said.He added that new incentives will create more demand. “If 1 million want to buy electric cars, the automakers will make them,” he said.