At a time when the U.S. government is under intense pressure, especially after the revelation that Fisker is experiencing significant financial troubles, President Obama has come out fighting. While some experts had expected him to reduce the amount of funding being made available to alternative energy sources, he has proposed an additional $575 million for research, as well as setting up a two billion-dollar trust fund to assist the U.S. in reducing its dependence on overseas oil supplies.
The authorities have also suggested changing the way in which financial incentives are paid to those who acquire electric vehicles and this could in itself have a major impact in the short to medium term.
Why is the U.S. government obsessed with alternative transport systems?
The U.S. government is under intense pressure from the green lobby to reduce ever-growing emissions, as well as the need to reduce the country's dependence upon overseas oil supplies. As a consequence the authorities are now prepared to throw billions of dollars at the transport research sector and indeed we should see the electric car industry benefit more than most in the short to medium term.
It will be interesting to see how this goes down with the U.S. public and the U.S. taxpayer because there have been significant cutbacks in the federal budget and many people are now starting to feel the pinch. Whether or not it is the right time to announce a 2 billion-dollar trust fund and an additional $575 million in funding is debatable.
Hiking the $7,500 electric car incentive
The U.S. government currently offers a maximum $7,500 electric car incentive to those looking to move to greener technology and a more efficient mode of transport. There are calls for this figure to be increased to $10,000 and, more importantly, the timing of the payment could well be amended.
Quote from ElectricForum.com : "The $193 million loan from the US government to Fisker Automotive is being called into question with the company now experiencing severe financial difficulties. It now begs the question as to whether it was a sensible move to give such a large loan to the company and indeed whether any of the other loans to electric car companies need to be reviewed?"
Currently, those who acquire an electric vehicle may need to wait up to 15 months before they are able to reclaim this payment when filing their federal taxes. The idea now is that car dealerships across the U.S. will be able to claim this financial incentive on vehicles which they sell which will therefore allow them to quote the price net of any financial incentives. When you also bear in mind that many states across America have their own individual incentive schemes, in relation to electric vehicles, this could be a significant change in policy.
The million plug-in target has gone!
Initially, back in 2008, the U.S. government had targeted around 1 million plug-in electric vehicles on U.S. roads by 2015. As we all know, this figure seems well in excess of current expectations and indeed some people believe it could be a decade before we see this magic figure. However, this has not stopped the Obama regime from pouring yet more money into the electric car industry, although ultimately there will need to be a return in the medium to longer term.
It is difficult to forecast with any confidence where electric car sales will be in 12 months, five years or even 10 years. The market is highly sensitive, motorists are proving difficult to switch over from traditional vehicles and indeed the pricing of the vehicles themselves IS proving to be a problem. Perhaps all governments around the world would be better advised to refrain from such headline grabbing targets as 1 million plug-in electric vehicles by 2015 and concentrate on promoting the electric car industry itself?