Would a rebate -- instead of a tax credit -- help automakers meet the goal of 1 million electric cars on the road by 2015?Electric cars such as the Nissan Leaf and Chevy Volt have gotten a lot of attention for their novel and eco-friendly engineering. But will we see 1 million of electric cars on the road by 2015, a goal President Obama highlighted by during his State of the Union address last month?

The U.S. Department of Energy (DOE) issued a report Tuesday to convince the public that the goal is doable. According to the report, the government already has invested heavily in electric transportation in the past two years and has toughened fuel-economy standards to push automakers to develop electric cars. President Obama also plans to ask Congress to fund several programs aimed at boosting consumer demand.

One of the proposals is to turn an existing $7,500 electric-vehicle tax credit into a rebate. This idea, which DOE officials compare to the popular Cash for Clunkers program, would allow consumers to claim the incentive when they buy the cars, rather than waiting to claim it when they file their income taxes.

"There is an enormous enthusiasm domestically and around the world" for electric cars, David Sandalow, the assistant secretary for policy and international affairs at the DOE, said during a conference call with reporters Tuesday. "This is a real opportunity for the American industry and workers to position the industry for the future."

Keeping It Clean

The electric cars that the administration wants to see on the road include both plug-in hybrids, which run on electricity and gasoline, and "all-electric" models powered entirely by electricity. Plug-in hybrids' tailpipes emit less pollution than their all-gasoline counterparts, while all-electric cars produce no tailpipe emissions. And because these cars use little -- or no -- gasoline, more electric cars also would reduce the country's reliance on oil, a goal that many U.S. presidents have reiterated over the decades.

But electric cars also have plenty of speed bumps to navigate on the road to 1 million. For one thing, electric vehicles are expensive, primarily because of the cost of the batteries and because the cars are still being produced in small volumes. (Because of what's called the "economies of scale," prices tend to come down when volumes grow.)

General Motors's Chevy Volt, for example, has a sticker price around $40,280 (before any federal or state incentives), while the Nissan Leaf starts at $32,780. Buyers can claim a federal tax credit of up to $7,500, bringing the prices as low as $33,500 for the Volt or $25,280 for the Leaf. In comparison, the Toyota Prius, a regular hybrid that doesn't plug into a wall socket, starts at around $23,000.

And automakers are a long way away from selling 1 million electric cars. Nissan and General Motors only launched their electric cars late last year, after all, selling 106 Leafs and 650 Volts by the end of January. But car companies are ramping up: Nissan has taken reservations for about 20,000 Leafs -- and yesterday it said it plans to boost its production to "thousands" per month to meet demand -- while GM expects to sell some 10,000 Volts this year.

A Long Way to Go

These numbers would still make electric cars a tiny sliver of the annual auto market. But those car makers, along with others, do plan to accelerate their production enough -- over the next several years -- to produce 1 million electric cars from 2011 through 2015, the DOE says. The new report includes a table that lists the announced production plans from GM, Ford, Tesla Motors, Nissan, Fisker Automotive and Think. Other carmakers, such as Toyota, Chrysler, Honda and BYD, also plan to launch electric vehicles by 2015, the report notes.

The State of the Union wasn't the first time Obama has addressed electric cars. Back in 2008, before he took office, Obama said he wanted to work to get "advanced technology vehicles" on the road by 2015. And the stimulus package in 2009 included a lot of programs to promote electric car research, production and deployment.

The stimulus, called the American Recovery and Reinvestment Act, provided $2.4 billion in loans to build three electric-car factories in the past two years. It also allocated $2 billion in grants to make batteries, motors and other components in 30 factories. The government wants to see these new factories crank out 50,000 car batteries this year and 500,000 batteries annually by the end of 2014.

The stimulus package also included $400 million to install charging stations and to carry out electric-car field trials, both to collect data about driving experiences and electric cars' impact on the electric grid. Utilities are particularly interested to know if they will have to adjust their power supply at certain times of the day to meet demand from electric-car charging.

Will Congress Come Along for the Ride?

Fuel-economy standards that the administration put in place in 2009 also will prompt carmakers to focus more on developing electric cars, Sandalow says. The standards require carmakers to gradually improve the fuel efficiency of their cars through 2016. The government is now looking at regulations that extend beyond 2016 too.

"It reminds me of a famous saying from Wayne Gretzky: You skate to where the puck is going. In this industry, it means investing in advanced technologies, particularly electric vehicles," Sandalow says. "It already is making a huge difference in creating thousands of jobs around the country."

Aside from creating a $7,500 rebate for buying electric cars, Obama wants to give 30 communities grants of $10 million each to work on measures to promote electric cars, such as parking incentives. The president also wants more money for research and development of electric car-related technologies, although he hasn't revealed how much he will be asking for.

All of these ideas will require funding from Congress, however. Whether the president can get what he wants from lawmakers, particularly Republicans who have vowed to cut spending, remains a big question.

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Carol

Lol Lol yet nother mindeless, clueless remark made by the fastest failing (1)term adminstration in U.S history. 2012 cannot come soon enough. Wonder where Barry will be?? Hopefully he will have found a job he is qualified for.

February 23 2011 at 5:39 AM Report abuse +1 rate up rate down Reply
1 reply to Carol's comment
Carol

By the way, how is Barry doing with his self admitted illegal drug abuse. LOL LOL

February 23 2011 at 6:06 AM Report abuse +1 rate up rate down Reply
mullermugs32

Let them fund themselves! No tax credits either.

February 10 2011 at 11:33 AM Report abuse +1 rate up rate down Reply
rosugill

Eletric crs suck. They are losers and both the car companies and the Government know it, which is why the Government tries to bribe us to buy those turkeys.

February 09 2011 at 7:32 PM Report abuse +3 rate up rate down Reply
bggdg

Maybe Obammy was just hitting the bong too hard last night while listening to Janis Joplin. He thought she said, "Oh gooonnns won't ya buy me a Chevvvvvverolet Volt"

February 09 2011 at 4:32 PM Report abuse +2 rate up rate down Reply
jhoke12135

Taxpayers screwed again with another stemulas package.

February 09 2011 at 4:00 PM Report abuse +2 rate up rate down Reply
Gumby

Electric cars is great if owners can get a rate break from their own utility. My utility charges more per kilowatthour if I use more than first 400 kilowatthours per billing cycle. The first 400 kilowatthours goes for 11 cents each then 13 cents at between 400 and 700 kilowatthours then 29 cents after 700 kilowatthours. Utilities may vary in billing , I dont know. It is something to look at and discuss about.. I dont think utiilities has the technology to charge you less if you charge during nights because your meter is not clocked .. Journalists must have misunderstood what the utilites said about off peak hour costs.. It is the utilities that is anxious to sell you juice during off peak hours at same price so that they dont have to purchase juice from other utilities with spare juice to sell for outlandish prices .. Ratepayers pay same for juice at any hour of the day,. but in addition to cooking, watching TV, washing, electric heating , air conditioning the cost will soar as they add an electric car on the top of the billing cycle. Ratepayers will be floored to see their electric bills way thru the roof!!

February 09 2011 at 12:36 PM Report abuse rate up rate down Reply
kenneth

Why did GM produce only 650 Volts in January (an average of 27 per day)? Hell, at the end of World War II, Ford was producing 28 or 29 B-24 bombers per day (a four-engine airplane as big as a HOUSE!). This was, of course, before all the automated machinery used today. I suspect that the reason GM has priced them (the Volts) at $41,000 is that they have anticipated huge warranty costs when customers bring them back for fixing, as when the gasoline motor and the electric motors fail to work together properly.

February 09 2011 at 11:56 AM Report abuse +2 rate up rate down Reply
2 replies to kenneth's comment
ucilia

Kenneth,m GM sold 650 Volts from the time it launched it in late 2010 through the end of January. Also sales numbers aren't the same as production numbers. Automakers are cautious about expanding production too soon given that electric cars are new and more expensive. GM already has plans to boost its production this year. A big part of any electric car pricing is actually the lithium-ion battery pack.

February 09 2011 at 7:16 PM Report abuse rate up rate down Reply
bggdg

You mean GM bases their production of Volts on market demand for the product, and not on how many B-24 bombers Ford produced in the 40's?

February 09 2011 at 11:33 PM Report abuse rate up rate down Reply
kenneth

Why is Obama so timid? Why does he not simply order a Chevy Volt for every house-hold in the U.S.A. and commission his union buddies to install 220 volt chargeing stations in every garage (if you do not have a garage, then in your apartment, with a long wire running down to your assigned parking spot)? Oh, by the way, he could issue an executive order to ban the possession of gasoline or diesel fuel, so that no one could drive a conventional vehicle. To offset the loss to house-holds which lose the utility of their existing cars, he could institute a cash-for-gas powered cars equal to the market value lost. This guy is a joke!

February 09 2011 at 11:46 AM Report abuse +3 rate up rate down Reply
1 reply to kenneth's comment
conquestsvision

How can he force everyone to drive an electric vehicle. People have expensive vehicle already. Let's say I owe 15,000 on my Suv. Now he should make me buy another vehicle and pay for that one. Also how can he force apartments to take on the liablity of running long *ss cords to assigned parking spot. That is ridiculous. Every city is different and everyone situation is different so we can't force one's hands. Cash for gas powered cars humm really how much will these cars be worth if he demands one to drive an electric one. And I'm curious to where all the gas powered cars will go when they are are confiscated. I don't believe he is timid. I believe he likes to think things through and look at things from the mirror view. Maybe he should be like Bush and do what he wanted to do despite what the people of lower and middle (working class) thought about it. If Obama was timid he wouldn't defend him self or throw comment back to you Republicans, or who-ever the way he does. Obama has swag like no other Past PRESIDENT. No other President has has to defend him self like Obama. It is sickening. If we could vote Bush in another Term Obama deserves one. Obama came into a country in debt. We are still carrying the debt of Bush. Please..Timid. Bush a BULLY and the DEVIL in HUMAN FORM!!!
I do we agree we need to push for affordability on these electric vehicles. Maybe the first #0,000 vehicle at a unbelieveable price. That might up start it..

February 27 2012 at 9:37 AM Report abuse rate up rate down Reply
richperry05

it might help ---but this time only electric cars from american car companys, not foriegn like the stupid clunker program

February 09 2011 at 10:28 AM Report abuse +3 rate up rate down Reply
Trevor

"There is an enormous enthusiasm domestically and around the world" for electric cars, David Sandalow, the assistant secretary for policy and international affairs at the DOE, said during a conference call with reporters Tuesday...............That's great to hear. It means there is no need for government subsidies!

February 09 2011 at 8:50 AM Report abuse +2 rate up rate down Reply