New Business Group Launches to Push Regional Electric Vehicles

Washington's love affair with electric vehicles continued today with the launch of the Electrification Coalition, an alliance of 13 companies hailing from the auto, shipping, and utility industries that have endorsed a $130 billion pitch for a region-by-region transition to battery-powered cars.

The Coalition's proposal was developed by consulting firm PRTM and Securing America's Future Energy, a group with ties to Obama administration national intelligence director Dennis Blair that was formed to highlight the national security risks of oil dependence. It calls for 75 percent of the nation's vehicle miles traveled (VMT) to be replaced by electric cars by the year 2040 -- while assuming that U.S. VMT will climb.

In order to encourage more charging infrastructure and consumer demand for electric vehicles, the Coalition wants to see government incentives targeted at a group of six to eight regional "ecosystems." These areas would be competitively selected, based on local enthusiasm and private-sector support for electrifying vehicles.

The 13 CEOs who lead the Coalition share a business interest in promoting the widespread use of electric vehicles, which emit less than conventional gas-powered autos but often rely on the burning of coal as their primary power source. Nissan chief Carlos Ghosn has made a significant bet on the U.S. market with his electric Leaf model; A123, another Coalition member, won $249 million from the Obama administration earlier this year to accelerate the development of its electric vehicle batteries.

Asked about the environmental questions raised by relying on dirty power sources for electric vehicles, Coalition policy director Sam Ori told Streetsblog Capitol Hill in an interview that "even if you're charging an EV entirely with coal-fired [power], it still reduces emissions. These vehicles are in an environmentally friendly position regardless of where the ecosystems would be."

As for the Coalition's estimate of no slowdown in U.S. VMT growth, a possibility that Transportation Secretary Ray LaHood has said would be a significant setback to nationwide pollution reduction, Ori said the group "wanted to be conservative" by assuming that the status quo would hold.

The Coalition takes a similar status-quo approach to the gas tax, which likely would lose value at a greater rate if electric cars take off. From its proposal (plugged in the TV ad featured at the top of the page):

A higher, equitable, and sustained gas tax is arguably the most transparent and direct policy path to assist [EV] market penetration ... However, the substantial likelihood of a rapid repeal of such taxes in the early years after enactment for political reasons, as well as the political difficulties of enacting a gas tax increase at a level that would have a dramatic impact, argue for a [EV] deployment plan that assumes gas taxes at the current level.

Underestimating lawmakers' will to sustainably price gasoline consumption, while it accurately reflects the current state of play, casts some doubt on Congress' appetite to press on with a complex electric-vehicle pitch. Especially when the Coalition's report includes handy charts like this one:

chart_electric.png(Chart: Electrification Coalition)