Governor George Pataki Calls for 40% Penetration of Electric Drive Vehicles in US by End of Decade
27 January 2010
In a talk at the opening plenary of the Electric Drive Transportation Association (EDTA) conference in Washington, DC, former New York Governor George Pataki called for a 40% market penetration of electric drive vehicles in the US by the end of the decade.
Asserting that the over-reliance of transportation on foreign oil was “one of the most devastating policy failures of our time”, Pataki said that if electric drive penetration reaches only 3% to 7% by the end of the decade as many forecasts suggest, “we will have failed”.
To achieve 40% penetration by the end of the decade, Pataki said that we needed to focus on A, B, and C (times two): automobiles; batteries; customers and charging infrastructure.
Incentivize the market on all three of these spaces and the market will change consumer behavior. The consumer is ready to go, but they have to have the product and the ability to use the product.
—Governor Pataki
Pataki suggested some approaches:
Autos. Incentivize auto manufacturers, for example, by exempting the profits resulting from the sale of the first 10 million vehicles that deliver more than 75 mpg from any corporate taxes.
Batteries. Incentivize the battery makers.
Consumers and Charging. The current $7,500 tax credit for purchasing an advanced vehicle is wonderful if you have a great accountant or tax lawyer, Pataki said, “but if you are an ordinary consumer, what do you do?” Pataki suggested converting the tax credit to a rebate, for three years or for five. “Incentivize the consumer and you will see demand spike.”
On infrastructure, you have to have the infrastructure, and we have to change the regulatory requirements. We need an interactive grid to make this work. We have to change the regulatory requirements to recognize the investments in the smart grid that have to be made. Right now we are operating with a grid that was not adequate at middle of the last century.
In a subsequent plenary talk, Mary Ann Wright, VP and Managing Director, Johnson Controls Business Accelerator for Advanced Energy Storage Solutions, said that the significant investments in the electric drive and battery industry made last year through ARRA were a great first step, but that those investments needed to be leveraged with ongoing supportive policies, particularly in demand creation.
The challenge is demand creation. If you build it, they aren’t coming. Gasoline is too cheap.
—Mary Ann Wright
If you add up all the US battery capacity planned between now and 2015 announced as a result of ARRA funding, Wright said, you find about 4 million units of capacity.
Demand is about 2 million. That’s a problem. Almost 70% of that is in Michigan, but only 40% of demand [is projected to be] in North America. We have a catywumpus market equation going now.
—Mary Ann Wright
Wright also called for ongoing support for R&D investment, as “the Pacific Rim is not standing still.”
Methinks Ms. Wright is on to something.
Demand won't be there; gasoline is too cheap. So why not do this -- why not change gasoline from $/gal to $/CO_2 output, and charge it for liquids and for electrons. It's not hard to measure how many electrons we put in autos. You can meter at the location of the plug (OK), or you can meter in the vehicle itself and include it on state taxes (better). Inspections, vehicle for service, and other snapshots will deter fraud.
What's nice about this plan is that it encourages a push to renewables everywhere. 100% coal is only a smidge better than 100% petrol; as more and more renewables come online, motorists pay less in tax. That stimulates demand for both electric autos and for more renewables for the home electricity market as well.
Posted by: stomv | 27 January 2010 at 07:33 AM
No what it would do is stimulate demand in canning all the politicians.
The fact is most people wont have a solid use for an electric car well into 2025 and this decade many people are going to hold onto thier old cars for longer then ever before.
Posted by: wintermane2000 | 27 January 2010 at 08:05 AM
It is more effective to tax the price of non-electric drive vehicles and use the proceeds to subsidize the price of electric drive vehicles such as HEV, PHEVs and EVs.
The problem with incentives through higher gas taxes is that it assumes that people are rational and can discount the savings in operating costs from buying a more expensive but fuel efficient vehicle. They can’t. Most people are very shortsighted and this is also why a product like a printer is sold below costs because the producers knows they can make back the money from subsequently selling expensive printer ink.
The justification for making gas-guzzlers more expensive than fuel-sippers through tax distributions should be that gas-guzzlers are not paying the real cost related to their consumption, such as, the cost from 1) higher emissions that make people sick, 2) national security for imported oil, 3) global warming and 4) the destabilization of the economy through varying oil prices.
Mary Ann is right. Demand creation should be a very high priority in any energy policy to be made. Without demand the policy will simply fail.
Posted by: Account Deleted | 27 January 2010 at 08:09 AM
"Calls for 40% Penetration"
He can "call" for anything he wants, but it will not happen. What was the former governor doing to make this happen when he was governor?
All new cars being FFV and M85 in all major cities will do more than this, cost less and have more utility. But that does not go over well at an electric car conference.
Posted by: SJC | 27 January 2010 at 10:22 AM
"On infrastructure, you have to have the infrastructure, and we have to change the regulatory requirements. We need an interactive grid to make this work. We have to change the regulatory requirements to recognize the investments in the smart grid that have to be made. "
Apparently Mr. Pataki has fallen for the utilities whine that they need a "smart grid" to be able to handle EVs. Baloney. We do need to upgrade grids, we do need to convert coal to NG or new tech nuke. A smart grid?? V2G?? Unnecessary.
While it is laudable that Pataki wants more EVs - he needs to rethink some of his his strategy. Points A & B are good. Exempting EV profits from corp taxes will cause more automakers to step up production faster. SJC is correct that moving to FFV and alcohol/EM85 blends now can lower demand for imports immediately.
Demand for the first EVs far outstrips production. The key now is to spread that enthusiasm to the general populous. This is done by focusing on the cost benefit of going PHEV/EV. Never having to buy gasoline again is good for Economy, security, environment, domestic jobs, etc.
As for taxes - maybe New York would be willing to try a gas tax to test its efficacy on EV sales. They might be able to push such a tax through their legislature. Trouble is it becomes highly unfair. Majority of people in NY metro area don't own garages and cannot recharge overnight. An EV-based gas tax unfairly favors home owners and will only increase sales of ICE vehicles - not Ptaki's goal.
Posted by: sulleny | 27 January 2010 at 11:01 AM
It is the old saying that "if we had ham, we could make ham and eggs...IF we had eggs". There are lots of enablers on the critical path and most project managers will tell you that is less viable.
It is like hydrogen, IF we had H2 stations we could have fuel cell cars, if we had fuel cell cars. Instead of trying to change the world over night, lets go for something that will work right away and then continue working on those other ideas.
Posted by: SJC | 27 January 2010 at 11:15 AM
By electric does he mean electric only (i.e a BEV) or does he include hybrids with a looser meaning of electric.
I can't see 40% pure EVs for a long time - not this side of a battery breakthrough, but I could see considerable penetration for hybrids (of all kinds) IF fuel got expensive.
Which it currently isn't (in the US).
Even in Europe, where fuel IS expensive ($7/ US Gal ish), we have very few EVs and hybrids. Instead, we have diesels and smaller petrol engined cars.
Only Japan has really taken to hybrids.
Some degree of electrification is clearly the way to go, but it will take more than 10 years.
Posted by: mahonj | 27 January 2010 at 11:21 AM
FCV's are also electric-drive vehicles, and so are PHEV's, and they were left out of the equation. The advantages of FCV's are that they only require only HEV-size battery pack, and they offer quick fill-up, and major automakers are promising to mass produce them by 2015. Gov. Pataki has good intention, but he should be talking about H2 infrastructure as well. With even much less than 40% market penetration by BEV's or PHEV's, we may see escalation of lithium prices that will stall further growth.
Posted by: Roger Pham | 27 January 2010 at 11:31 AM
Who pays for the lost road tax revenues (from gasoline displaced by electricity)? Just wondering....
Posted by: Jim | 27 January 2010 at 12:31 PM
You could sell M85 for under $3 per gallon even WITH a 50 cent state/federal tax. Since you would sell more gallons of M85 you would get more tax revenue to make up for all those EVs.
Posted by: SJC | 27 January 2010 at 12:36 PM
sulleny, good point about NYC not a good place for EV's. Too many apt. dwellers. Also, that smart grid not necessary.
Jim, good point on who pays the road tax with EV's.
Could install radio transponders in all vehicles, as some toll roads do now, and charge per use. No stopping at toll booth...auto bills to your credit card.
Posted by: danm | 27 January 2010 at 02:03 PM
Lots of good comments bringing up multiple issues. I support the requirement to make all new gas powered vehicles sold in the U.S. (foreign and domestic) to be flexi-fueled. That costs about $140 a piece – a small price to pay for reducing imported oil and reducing our current $300 to $400 billion a year Foreign Oil Trade Deficit, money leaving the country. Instead, we need to keep this money circulating here at home - Stimulating the economy, fast-tracking domestic biofuels and blender pumps, and creating jobs on our own soil – money back in your pocket.
Battery EVs are Not going to penetrate 40% of the market in just 10 years. Someone needs to get back to reality. Realistically, it’s going to be 10% or less EV market share - sometime between 2020 and 2025 - and 10% or more market share for PHEV in the same time frame.
Patacki’s concept is too narrow. I agree with previous comments – That the other “Biggie” in the equation is Plug in Hybrids (PHEV) with range extender engines. Run them as much as possible on cheap electric power, and when you must, run them on domestic biofuel.
“Autoblog Green” conducted a survey on their website recently:
Would you buy a battery only EV?
Or would you buy a PHEV when they become available?
The Results:
Over half voted for the Plug-in Hybrid with a range extender engine. That’s because you have two different kinds of drivers, who live in different environments – Urban vs Suburban vs Rural:
EVs are more practical for “urban dwellers” where everything is closer together. PHEVs are more practical for Rural use, where everything is spread-out. And in between these extremes, you have suburban range anxiety. Then people who like to travel or visit relatives. You also have cold climates where batteries are less efficient, resulting in a decrease in the range. And you have hot desert climates where batteries wear-out sooner.
The other big factor is - You have people with occupations that require them to do much more driving, such as a real estate agent or a sales person who travels. An EV would not be practical for them. They would opt for the PHEV. So anyone advocating a radical shift to battery only EVs is Not grounded in reality. The other half of the equation is PHEV.
People don’t want the Government cramming EVs down their throat, or taxing them, when they would rather have a PHEV or keep their conventional vehicle on the road until it wears-out. Everyone should have a choice. Tax Incentives work just fine to promote new technology.
I believe that we should optimize local grids and integrate them into HUBS. However, a National Grid is Trouble with a Capital “T”. First of all, it’s cost prohibitive – in the Trillions. The payback would take decades – if ever. And it would be obsolete by then. Energy technology is evolving fast. Second, the ulterior motive of Centralizing electric power is to put control of it into the hands of a few, in order to create a monopoly for them. So they can milk you. Instead, keep your electric power Localized, and maintain Local control. You’ll pay the lower price.
Posted by: Aureon Kwolek | 27 January 2010 at 05:04 PM
incentives that he proposes are nowhere close to what we need to reach the goal he is claiming. nowhere, as said in posts above, gas is too cheap and ICE powered cars have a large margin for improvement. Without a heavy gas tax EV will stay a niche market just as HEV today.
Posted by: Treehugger | 27 January 2010 at 06:25 PM
Stupid.
I assume he is basing the "call" to throw big bucks at any and all EVs on the fact that we are trying to enter bankruptcy at warp speed and this can accelerate that.
Posted by: ToppaTom | 27 January 2010 at 08:31 PM
Is it just me or does sometimes the comments on GCC experience deja vu? It seems like multiple copies start appearing.
Posted by: Jim | 28 January 2010 at 07:54 AM
I believe that the range extended design will be popular. It just makes sense, people can understand it and it does not require them to make sacrifices. Take a lesson from New Coke, never take anything away from your customers.
Posted by: SJC | 28 January 2010 at 11:22 AM
A good initiative. 2/3s of NYC residents do not commute by car, so those that do can benefit from EVs.
US Census Data: % Total Non-Car Commuters
A smart grid would be highly beneficial in helping to charge cars in an orderly manner, and to help people take advantage of the least expensive night time rates. It would also be helpful as storage for managing generation variation in some renewable energy systems.
Posted by: Will S | 28 January 2010 at 02:19 PM
In N.Y. city, L.A. and other big cities EVs may make lots of sense. You don't travel far and there is traffic so why not electric? There is a place for EVs and one place I would like them is in rental fleets and Zip cars at airports and train stations.
Posted by: SJC | 29 January 2010 at 11:20 AM
A common sense national energy policy would arrive at the same conclusion.
It is sad to say, but by the time all powerful lobbies and special interest groups have had their say, the new national energy policy will not mean much and may not really promote the use of more energy efficient or electrified vehicles.
Elected Congress members and Governors are no longer really running the country. They have foresaken that role a long time ago. We are living in another type of democracy than our forefathers imagined 230 years ago. One can wonder what it will be like in another 30 to 50 years?
Posted by: HarveyD | 29 January 2010 at 04:28 PM
That is why I favor Public Money for Public Office to offset corporate influence. If the courts are going to declare it free speech, it is time the people had their say.
Posted by: SJC | 29 January 2010 at 04:53 PM
Kwolek,
Excellent post. EREVs (Series-PHEVs) are most suited to suburban driving. Many short all-electric runs (<50 miles). Only a few longer drives.
Posted by: mds | 30 January 2010 at 12:43 AM
40% in 10 years. Ambitious.
Could be necessary if billions in China and India need more fossil fuels and we don't want world war.
Feasible for WW2 scale conversion of USA auto plant to produce EREVs. Smaller battery and no range anxiety.
1. Cut fuel use in half by reducing weight and drag.
2. Cut fuel use by 3/4 using EREVs, based on 78% of USA drivers traveling less than 40 miles per day.
TOTAL REDUCTION IN FUEL USE 7/8 = 87.5% with all of fleet converted. 35% reduction if only 40% of fleet is converted. I could support this.
Posted by: mds | 30 January 2010 at 12:54 AM
sulleny, LAME point about NYC not a good place for EV's. Many NYC cars are parked on lifts. Electricity is right there. Small matter to modify and charge the vehicle at the same time. Easy extra few bucks for the car park operator. Also, there is already a company installing sidewalk chargers.
Smart grid is not necessary but sure would help by allowing vehicles to charge at off-peak times.
Jim, LAME point on who pays the road tax with EV's. What say we get reasonable market penetration before taxing them out of existance. Sheesh.
Roger Pham, Please build your own H2 infrastructure. There's plenty of lithium. Any shortage will be short lived. H2 is neither cost effective nor energy efficient. Maybe this will be different in a decade or two. ...or maybe batteries will improve significantly by then and H2 will never make sense. Re-evaluate later. No H2 now.
Posted by: mds | 30 January 2010 at 01:10 AM
Here is something I came across, lithium batteries in D and DD size for under 50 cents per watt hour in quantity.
http://shopping.microbattery.com/s.nl/sc.2/category.3851/.f
Just a point of reference on what they are selling for.
Posted by: SJC | 30 January 2010 at 07:17 PM
Never mind, those are primary non rechargeable, should have known 25 cents per watt hour was a bit cheap.
Posted by: SJC | 30 January 2010 at 07:31 PM