In his 2011 State of the Union address, President Barack Obama set an ambitious goal — for the United States to become the first country in the world with 1 million electric cars on its roads by 2015.
Energy specialists — and even former Secretary of Energy Steven Chu — had doubts about the goal. When asked in January of 2013 about the 1 million electric cars goal, Chu answered: "It's ambitious, but we'll see what happens." But the U.S. has actually not fared that badly.
In fact, the U.S. currently has the largest electric car fleet in the world. Since 2008, more than 170,000 plug-in cars have been sold. To reach its goal, the Department of Energy has set out key technical targets which are (as of 2013 for the coming five years):
- to reduce battery costs from their current $500/kWh to $125/kWh
- to eliminate almost 30 percent of vehicle weight through lightweighting
- to reduce the cost of electric drive systems from $30/kW to $8/kW
And promoting the achievement of these targets will cost the federal government about $7.8 billion through 2019. This includes $2.4 billion in grants to lithium-ion battery-makers and electric vehicle-makers as well as $3.1 billion in loans to car companies to develop fuel-efficient cars.
In addition, California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island and Vermont are planning to build out more charging stations and to educate more consumers about electric cars. The aim is to increase electric car sales to make up 15 percent of new vehicles bought.
But how successful are these measures in terms of money and environmental impact?
The problem with electric cars is that you basically try to create a completely new industry, and more importantly, you try to change consumption habits that have been in place for many decades.
In fact, while the U.S. might be leading the electric car fleet globally, sale shares have been low on a national level with electric cars having made up only 0.62 percent of new car sales during 2013.
A recent paper by the journal Energy Policy addresses this failure of the current federal electric car policy suggesting that the "mainstream consumer bias" has resulted in a slower-than-expected market penetration of electric vehicles and that the solution would be an alternative policy agenda with targeted R&D, incentives and loans.
Symbolic of this slow consumption pick-up has also been a series of bankruptcies of state-funded electricity vehicle and battery producers.
In November last year, luxury electric-vehicle producer Fisker declared bankruptcy, owing the federal government $139 million in loan repayments. In September 2013, charging station-maker Ecotality Inc, which won a $99.8 million grant from the U.S. Department of Energy in 2009, filed bankruptcy following the bankruptcy of the green car start-up Coda Holdings Inc in May of the same year.
Also, in environmental terms, the gains are not as straightforward. This is because electric cars are not necessarily the solution to the whole problem of emission. Their environmental footprint and viability depends on where the electricity is sourced from and a number of other factors such as whether the grid ready for a bigger share of renewable energy.
For instance, only 12 percent of U.S. energy is sourced from renewable energy. But as a considerable share of U.S. electricity is also made up of nuclear and natural gas (which cause much lower emissions compared to oil and coal). The emission of electric cars in the U.S. is on average about half as much as the one of a new car.
Accounting for the fact that only about 170,000 Americans currently drive plug-in electric cars, and the U.S. has in total 62 million registered cars, the amount of electric cars has to increase considerably more in order to achieve a significant environmental impact.
Now, assuming that the current U.S. renewable energy policies are promising, what about an increase in the amount of electric cars? Research shows that an increase in electric vehicles can lead to a rise in peak electricity demand of about 20 percent, putting a considerable strain on the electricity grid.
Nevertheless, technological development can allow that more renewable electricity could be consumed at the same time as more electric cars would drive on the roads — the magic word is "smart grid," the use of metering technology to communicate and enable efficient use of electricity in a way to reduce overdemand and oversupply during peak-demand and peak-supply cycles of the electricity grid.
Voila! — an environment-friendly and cost-efficient electric car policy is possible.
