EV Purchase Incentives Are Under Fire In Many US States

With the early introduction of affordable, long-range EVs like the Chevy Bolt (with 238 miles of range) and the Tesla Model 3 (slated to move into production in July with 200+ miles of range), 2017 is expected to see banner sales of electric vehicles.

However, the transition to EVs also represents a drastic change from long-established global business models that have grown accustomed to generating billions of dollars of profit each year from the legacy automobile industry and the fossil fuels they consume.

While the fossil fuel industry has resisted EVs over the years, the war is only beginning. As the Tesla Model 3 production ramp up hits its stride and the Early Adopters give way to the Early Majority in the EV adoption curve, Big Oil will start to feel the pain as gasoline consumption drops and erodes demand of an already unstable commodity.

With these changes on the horizon, 2017 is shaping up to be a big year for Big Oil in the fight against EVs, and it is taking the fight to the states. Increased fees levied on EVs is not just about Big Oil pushing back on the new guy on the block — many states have built taxes to fund road construction and repair into the price of gas and are looking for new mechanisms for recouping these costs.

Is a new annual fee on EVs the best way to pay for roads? How about a tax on tires, which has a more linear relationship with actual road wear incurred by the vehicle? These new taxation models are colliding with and being combined with the untimely elimination of state EV purchase incentives for a come-along effect on EV sales.

Georgia, for instance, went from having a $5,000 EV incentive to now having an extra $200 fee on EVs to help recoup taxes lost from EV drivers not having to stop at the pump.

Hiroko Tabuchi noted in a recent New York Times piece just how broad the attack on EV credits is:

Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.

…

In Colorado, a bill that would end income tax credits for owners of electric and alternative-fuel vehicles is working its way through the legislature. In Utah, lawmakers voted this month against extending the state’s tax credit for electric cars.

The measure in Colorado has been backed publicly by Americans for Prosperity, an advocacy group founded by the conservative billionaire brothers David H. and Charles G. Koch, whose wealth is founded on their petrochemicals empire.

While the elimination of purchase incentives is happening for a variety of reasons under dozens of guises across the nation, it is clear that Big Oil is scared, and for good reason. EVs are poised for liftoff on the new technology adoption curve that we have seen with so many disruptive technologies in the past.

The change will not go down in the history books as a peaceful transition, but with billions on the line, the petrochemical industry is gearing up for war and the fight is going to get ugly.

But all is not lost. EV purchase incentives still exist in 16 states, with new local incentives coming online to support the cornerstone federal tax credit almost every day. Get involved. No matter what country you live in, whether you’re in a Red or Blue region, whether the power comes from coal or solar, or whether you can even afford a car or not, get involved.

The push towards the electrification of personal transportation is a key stepping stone in the journey toward a low-carbon and even a zero-emission society, and it’s going to take decades. The faster the transition, the higher the chance we as a species have of averting the extreme effects of climate change on our planet and on the people of the world.

The Tama EV Was Japan’s Answer To Oil Scarcity - A Look Back

Following the Allied victory over Germany and Japan in 1945, both loser nations required massive rebuilding effort that were hampered by a serious lack of oil. Japan in particular lacked easy access to oil, and in the years following World War II creative mobility solutions were required, which included the Tama electric car.

Tama, which merged with the automaker now known as Nissan in 1966, stood out as the best of a bad bunch of electric cars in post-war Japan. Top speed was just 35 KPH, or just 21 MPH, though a driving range of about 95 km, or 60 miles actually isn’t much less than the current crop of EVs. One unique feature that actually made the Tama somewhat practical though were the wheel-equipped batteries, which made swapping an empty pack for a full one fairly easy.

The Tama was produced in limited numbers from 1947 to 1950, serving mostly as a taxi and utility vehicle while Japan’s devastated infrastructure was rebuilt. Germany had a different response to oil scarcity, instead rely on ultra-efficient small cars like the BMW Isetta to get from Point A to Point B. Other solutions to a lack of oil included “gas bag” vehicles powered by natural gas stored in inflatable fuel bags attached to the top of the vehicle.

Humanity can be incredibly clever when we’re forced to be…too bad ideas like electric cars and efficient compacts took another 60 years to really catch on with the general public. That’s the march of progress, I suppose.

DOE Green Loan Program is Back, Focused On Suppliers

The controversial Department of Energy green loan program is back after an extended hiatus, with a renewed focus on the supplier side of the equation. The program has also been revamped to clarify the application process, and decrease the time it took to respond to applicants.

This revamp is in response to the many criticisms leveled at the Advanced Technology Vehicle Manufacturing (ATVM) loan program. The program provided funding for five companies; Nissan, Ford, Tesla, Fisker, and Vehicle Production Group. Two of those companies, Fisker and VPG, went bankrupt, though both are back on the road to recovery.

With a fresh face at the Department of Energy comes a fresh look on an old idea with good intentions, but mixed results. The newly revamped program is shifting the focus from automakers to suppliers of fuel-efficient technologies, including “advanced engines and powertrains, light-weighting materials, advanced electronics, and fuel-efficient tires.” There’s also a renewed application process, which better informs potential applicants of the requirement, and improves response time to applicants, a major sticking point for many would-be green automakers.

There are still plenty of critics of the program, which was launched under President George W. Bush, and with two out of five companies ending up in bankruptcy, and other applicants with great ideas left to wither on the vine, the program obviously needed an overhaul. But the success of Tesla Motors, which repaid its government loan ten years early, should not be underestimated. With Nissan Leaf sales gaining some steam, the battery plant the ATVM loan financed is finally being put to use, creating decent-paying American jobs.

Even as we pumped billions into Big Oil tax subsidies, there are those make it their political platform to take issue with funding alternatives to pollution. That said, starting with a blank slate and an all-new program might have been a better idea in a warmer political climate, but I doubt such a program could pass through the current Congress. So we got what we got.

The DOE program survived another day, and hopefully we’ll see more Tesla-esque success stories, and absolutely no Fisker-like failures.

Source: The Department of Energy

Big Oil Tells More Lies About Ethanol, Only Idiots Believe Them

In a move that should surprise no-one, the whining cry-baby rich-boys at Big Oil are butt-hurt over the latest federal court ruling that upholds the EPA’s E15 mandate. In a legal brief filed with the US Supreme Court, the American Petroleum Institute – a powerful, well-funded lobbyist group that represents more than 500 oil and natural gas companies – insisted that transportation fuels containing 15 percent ethanol (E15) could damage cars and trucks.

Should we believe them?

Obviously, the answer is a resounding “Hell no!”

Let’s get one thing clear: the oil industry does not give one fat rat’s ass about the health, safety, future, or security of you, me, or anyone else. The horrible people involved in the oil industry have proven, again and again – from Washington DC to Canada to Saudi Arabia to the Mississippi Gulf – that lining their own pockets with cash is more important to them than the your continued health or your children’s clean drinking water. Still, that hasn’t stopped them from faking a concern for your safety.

That’s right kids, Big Oil would now have you believe that E15 is downright dangerous! Bob Greco, API’s director of downstream and industry operations said that a switch to E15 “could also put motorists in harm’s way when vehicles break down in the middle of a busy highway. We are asking the Supreme Court to step in and protect consumers by striking down EPA’s dangerous E15 mandate before it’s too late.”

Too late? Too late for what? OMG … they mean we might die! This scare-tactics-scumbag Bob “Greasy Pete” Greco is actually implying that switching to E15 is more likely to get you killed than toxic drinking water.

The worst part of all this is that there’s a bunch of 70-80s out there who probably believe this nonsense … and at least one or two of those idiots are already on the Supreme Court. *ahem* Thomas and Scalia *cough-cough*

Big Oil, in the guise of the API and GOP puppet groups like the AAPS, is spending untold millions and billions to fabricate whatever evidence they can to keep them from having to compete with any other fuels. They’re clearly running scared, since – even with petroleum’s massive government subsidies, many times more than ethanol – they’re not exactly winning the hearts and minds of young Americans.

For those of you interested in reading things on your own and forming your own conclusions, I’ve included a number of links throughout this article, and the original text of the story is quoted, below. Enjoy!

The U.S. oil and gas industry on Tuesday bolstered its argument for the Supreme Court to strike down the Environmental Protection Agency’s decision to allow a higher blend of ethanol in newer automobiles.

In a legal brief filed with the high court, the American Petroleum Institute, which represents 500 oil and natural gas companies, insisted that transportation fuels containing 15 percent ethanol could damage cars and trucks.

The U.S. Court of Appeals for the District of Columbia ruled last August that trade groups representing the automobile, food and other industries did not have sufficient grounds to challenge the use of the new blend known as E15. In response, API appealed to the Supreme Court in February. The high court could make a decision about whether to hear the case soon.

“E15 could leave millions of consumers with broken-down cars and high repair bills,” said Bob Greco, API’s director of downstream and industry operations. “It could also put motorists in harm’s way when vehicles break down in the middle of a busy highway. We are asking the Supreme Court to step in and protect consumers by striking down EPA’s dangerous E15 mandate before it’s too late.”

API’s brief was filed as a response to assertions by ethanol backers who have asked the Supreme Court to let the previous ruling stand.

The EPA, which approved the new blend in January 2011, gave the OK for it to go on sale last June. The blend, which has been approved for use in cars and light trucks built since 2000 but is banned from older vehicles and light equipment, has been slow to get off the ground. Only a few stations in the Midwest, including a half dozen in Iowa, have sold the E15 blend.

Ethanol groups said appeal to the Supreme Court was the latest sign of desperation by the oil and gas industry.

“API is basically presenting evidence to prove they will do whatever they can to keep from having to compete with any other fuels,” said Ron Lamberty, senior vice president for the American Coalition for Ethanol. “Big Oil will take any approach available to delay E15 implementation while continuing its public smear campaign against it.”

Source: DesMoines Register

Could the oil companies kill the electric car again?

Guest Post:

By Ray Sweha

Yesterday’s GM-Volt post reminded me of a post I made in the forum making similar observations about the world price of oil, and why the electric car is a needed solution to U.S. energy independence.

I also just happened to re-watch “Who killed the electric car?” and “Revenge of the electric car” and a couple of ideas popped into my head that I want to share and get your feedback on.



But first, I’ll note this will just be some issues I’ll throw out there for your consideration, having looked at them myself for a while now. I’ll qualify my outlook and say I cannot account for all potential intellectual rabbit trails one could also run down given complex geopolitical and macroeconomic variables, so just call this a friendly conversation starter, and I’m open to your views as well …

I’ll start by asking a a question: What controls the price of a barrel of oil?
The short answer is oil prices are dictated by the economic law of supply and demand. Following is a chart that indicates that the price of oil in the year 2000 was around $30 per barrel.



Why is it around $100 per barrel now?

The product didn’t change and the cost of producing oil didn’t change dramatically to justify a 300 percent increase in price. So why the change in price?

Answer: Because oil has had a monopoly over transportation – i.e. for a given level of supply, the price keeps going up as long as demand exists. And as we know, the demand persisted because people had to use gas to power their car; there was no other alternative.This is evident if you look at the profits of Exxon-Mobil is the last 10 years which shows its profits being multiplied by a factor of 2.5.



At the end of the day, oil producers (mainly OPEC countries) control the amount of supply to ensure the maximum amount of profit. Every now and then, they are bullied by the U.S. and other big consumers to increase the supply to ease the pressure at the pump.But ultimately, it is their natural resource and they have the right to control it the way they want!

From the data around Y2K, we know that a $2 per gallon would keep oil companies profitable. I hate to say it, but Gingrich was right to say that $2 per gallon is a possibility. His method is wrong though.The way to bring the price of oil down is not by producing more of it, but by creating competition to it. Once there is a financially viable alternative to gas, its prices will fall. And they can fall all the way to $2 per gallon.

The second question – and leading to my main point in this article – is how will the mass adaptation of EVs affect the price of oil? And, I’ll ask further, what will the oil companies do about it? Linked here is a really good article in the Washington Post blog about the anticipated reduction in the price of batteries.

“New research from analysts at the McKinsey & Company suggests that the price for lithium-ion batteries could fall by as much as two-thirds by 2020,” says the WaPo. “Instead of $600 per kilowatt-hour today, batteries would cost just $200/kwh in 2020 and $150/kwh in 2025. And that, the report suggests, would upend the entire automobile industry.”

For the purpose of this article, this graph is the most informative one:



The above chart tries to estimate at what value of battery price per kwh that EVs can viably compete with internal combustion vehicles.
The graph predicts mass adaptation of EV’s when the price of gasoline hits $5 per gallon – in relation to the current generation of battery technology ($500-600 per kwh).

Fuel prices are predicted to hit $5 in a couple of years when the global economy begins to recover. The question – again – is what will the oil companies do? Knowing that there is about $100 trillion worth of oil still left to excavate, oil companies won’t wait for EVs to put them out of business. What can they do? They can lower the price of oil.

Now, to the sad part of this analysis: even at $150 per kwh battery (today we are around $500-600 per kwh) an ICE is more economical at $2 per gallon, which is still profitable for oil companies.

So the final question is, could the oil companies kill the electric car again? The answer is, probably yes, by keeping the oil price down thus discouraging consumers from buying EVs. This will force companies to stop producing EVs due to lack of demand.

How can we save the EV? For starters, by better educating the public about our dependence on foreign oil and that we will never have energy security as long as we are addicted to the troubled Middle East oil. Remind them that a gas monopoly over cars leads to an ever increasing gas prices. Giving them examples from history that an armed conflict in an oil-rich region could cause a spike in oil prices throwing the economy into recession and leading to the unemployment of millions of Americans. Ask them how many wars we need to send out troops to to guarantee the flow of oil to global markets?
IMHO, the best case scenario is that EVs and ICEs will co-exit for a while, the existence of EV’s will keep oil prices in check, preventing oil companies from racking record profits relying on the fact that they have a monopoly over personal transportation.



Source: GM-Volt.com

A Tale of Two Directions: Ford Reports Record Losses and Exxon Reports Record Profits

Ford has released their P&L statement for 2008 and it is Unpretty, as TLC would say. They have closed the books on a brutal year that saw the company lose a record $14.6 billion. It took Ford 105 years to get to this point. At this rate, Ford will have to ask for government assistance to get through these abysmal economic times. The real question is, "Does Ford have a plan that will help them succeed in these difficult times and ride out the storm?" Are they going to be able to survive and bring to market vehicles that the public wants? They do have a great product in the Ford Fusion so hopefully the auto icon will make it.

Now, let's look at the flip side of this coin, namely the big oil company, Exxon Mobil. Because of the outrageous gas and oil prices we saw in the spring and summer of last year, Exxon was able to post record profits, to the tune of $45.2 billion. These numbers are hard to comprehend and can only be dwarfed by the US Government and their economic stimulus packages and banking bailouts. What will these big oil companies do if the automakers fail? Isn't it in their best interest to see major auto manufacturer's succeed?

Here's a good idea; Let's have Big Oil donate half of their enormous profits directly to the auto manufacturers. This way, the US citizen does not have to bear the brunt of the bailout and the oil companies can do something constructive with their profits.

What will Exxon Mobil do with all their extra cash? Are they going to help with research of alternative energy or will they continue looking for more ways to rape the earth in search of that last drop of oil? I am betting on the latter.