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.”