Government Advocacy & Public Policy
With Partisan Gridlock in Washington, Chances for Energy Legislation Are Limited But May Include Electric Vehicle Development
Thomas J. Spulak, Allison F. Kassir
As negotiations over the federal debt limit illustrate the difficulty of reaching bipartisan agreement in Washington on any issue of significance, the issue of electric vehicle development may be one of the few areas where it could be possible for the congressional majority and minority to find common ground.
To be sure, electric cars are a presidential priority. President Obama, in his 2011 State of the Union Address, called for putting 1 million electric vehicles on the road by 2015. The Obama Administration's efforts to support this goal include purchasing electric vehicles for the federal fleet and allocating funding for community and local projects to facilitate the installation and deployment of electric vehicle charging stations. The U.S. Department of Energy (DOE) has partnered with industry to develop the National Clean Fleets Partnership, to reduce the fuel use and environmental impact of their commercial fleets. Participating companies include The Coca-Cola Company, General Electric Company, and UPS Inc.
Other countries are promoting investment in electric vehicle technology. China, through its New Energy Vehicle Development Plan, intends to spend $15 billion between now and 2020 on electric vehicles, setting a goal of 1 million hybrid vehicles and 500,000 plug-in and all-electric vehicles by 2015, increasing to 5 million plug-in and electric cars by 2020.
In the U.S., we will not soon see the scale of U.S. investment made in the 2009 American Recovery and Reinvestment Act (ARRA), which funded over $2 billion in electric battery production as well as expanded tax credits for infrastructure development. ARRA also expanded tax credits for electric vehicles, up to $7,500. This tax credit will begin to phase out for each electric vehicle manufacturer based on number of vehicles sold. Given fiscal constraints and the fact that tax credits previously available for hybrids, clean diesels, and natural gas vehicles were allowed to expire on December 31, 2010, it is unlikely that the electric vehicle tax credit will be expanded or extended in this Congress in its current form.
However, there is still congressional interest in promoting electric vehicle manufacturing, infrastructure, and consumer use. In mid-July, the Senate Energy and Natural Resources Committee approved two bipartisan bills designed to promote electric vehicles and agreed to work further on a third bipartisan bill designed to create a Department of Energy (DOE) grant competition to encourage communities to deploy electric car recharging systems. During the markup, the strongest bipartisan support came when spending on new or reauthorized programs was fully offset and was technologically neutral. During hearings in May on the House Republican “American Energy Initiative,” members of the House Energy and Commerce Committee also emphasized the need for fiscal restraint and avoiding the government interfering in the marketplace. Although there is bipartisan electric vehicle legislation pending in the House, it has not yet been acted upon by the committees of jurisdiction.
Several states as well as the private sector have enacted their own incentives, ranging from tax credits, fueling infrastructure grants, high occupancy vehicle lane exemptions, rebates for installing infrastructure equipment, discounted pricing for charging vehicles during off-peak hours, and even free electric vehicle supply equipment in certain cities and states. Recently, Illinois Governor Pat Quinn signed two bills into law to promote electric vehicles and make Illinois the “electric vehicle capital of the United States.” Maryland, Missouri, and North Carolina have also passed legislation this year promoting electric vehicles, with similar efforts pending in other states.
While many lament the seeming inability of Congress to legislate, there are issues that are being advanced because they share a bipartisan base of support. Electric vehicles are in that class. As a result, companies with an interest in the area should closely monitor congressional action.