Industry News: President Obama Proposes A $4.7 Billion Dollar Plan For Alternative-Fuel Vehicles

[William Maley]

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William Maley

Editor/Reporter - CheersandGears.com

March 8, 2012

Yesterday, President Barack Obama announced a new proposal that would make alternative-energy cars and trucks more attractive to buyers.

Part of his proposal calls on Congress to change the current tax credit for plug-in vehicles into a point-of-sale rebate. Also he is calling for an increase in the maximum credit from $7,500 to $10,000.

But plug-ins won't be the only vehicles getting a tax credit. Obama said he would like to see a tax credit for buyers of electric and natural gas powered commercial trucks, including semis.The credit would be 50% of the additional cost for a electric or natural gas truck over a conventional one.

Obama also talked about a "Race to the Top" challenge that would give a billion dollars to 10 to 15 communities "to invest in the necessary infrastructure, remove the regulatory barriers, and create the local incentives to support deployment of advanced vehicles at critical mass." The challenge allows "communities to determine if electrification, natural gas, or other alternative fuels would be the best fit."

Finally, the White House also announced a new "EV Everywhere" plan. The plan was described as "a clean energy grand challenge to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade." Also, the "EV Everywhere" plan "will invest in breakthrough R&D for advanced batteries, electric drivetrain technologies, lightweight vehicle structures, and fast charging technology."

"Here is the truth. If we are going to control our energy future, then we've got to have an all-of-the-above strategy. We've got to develop every source of American energy – not just oil and gas, but wind power and solar power, nuclear power, biofuels. We need to invest in the technology that will help us use less oil in our cars and our trucks, in our buildings, in our factories. That's the only solution to the challenge. Because as we start using less, that lowers the demand, prices come down. It's pretty straightforward. That's the only solution to this challenge," said Obama to workers at the Daimler Trucks North America Mt. Holly Truck Manufacturing Plant in Mt. Holly, NC.

Source: Automotive News (Subscription Required)

Press Release is on Page 2

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Fact Sheet: All-of-the-Above Approach to American Energy

The White House

Office of the Press Secretary

For Immediate Release

March 07, 2012

President Obama Announces $1 billion National Community Deployment Challenge to spur deployment of clean, advanced vehicles and expansion of advanced vehicle tax credit

During the State of the Union Address, the President laid out a blueprint for a new era of American energy – an economy fueled by homegrown and alternative energy sources that will be designed in America and produced by American workers. Today, the President will visit Daimler Trucks North America Mt. Holly Truck Manufacturing Plant in Mt. Holly, NC to deliver remarks on American energy. While at the Daimler Plant, the President will tour the assembly line, see several of the alternative fuel models built there, and discuss the importance of taking a sustained, all-of-the-above approach on energy, responsibly expanding domestic production of natural gas and oil, which is currently at an eight year high, improving the efficiency of our cars and trucks, and making the long-term investments in alternatives to oil to provide American families the choices we all deserve. This strategy is a win for the economy, a win for energy security, and a win for national security.

In Mt. Holly, the President will announce a new $1 billion National Community Deployment Challenge to spur deployment of clean, advanced vehicles in communities around the country. The President will also announce a set of incentives to help consumers and businesses purchase new, advanced cars and trucks, including increasing and expanding the current tax credit for advanced vehicles, from the $7,500 credit that currently exists up to $10,000, while allowing the credit to be applied to additional types of technologies, not currently covered. In addition, the President is announcing a new research challenge that invests in breakthrough technologies to make electric vehicles as affordable and convenient to own and operate as gasoline-powered vehicles by the end of the decade.

Today the President will also highlight Daimler's commitment to increasing fuel economy standards and manufacturing vehicles that will increase fuel economy and reduce oil consumption. Taken together, the Obama Administration's standards for cars and light-duty trucks span model years 2011 to 2025 and represent the first meaningful update in over three decades. Under this program, average fuel efficiency will reach a performance equivalent of 54.5 miles per gallon by 2025 and will save consumers $1.7 trillion at the pump overtime – or roughly $8,200 per vehicle and slash oil consumption by 2.2 million barrels a day by 2025. The Administration has also finalized the first-ever national fuel efficiency and greenhouse gas (GHG) emission standards for heavy-duty trucks, vans, and buses spanning model years 2014-2018, which will reduce oil consumption by over 500 million barrels, and save truck owners and operators more than $50 billion in fuel costs.

Daimler Trucks North America is a partner in the Energy Department's SuperTruck initiative, which is focused on increasing the fuel efficiency of long haul trucks, or 18-wheelers, by 50 percent by 2015. While long-haul trucks represent only 4 percent of the on-road vehicles in America, they are responsible for almost 20 percent of the country's on-road fuel consumption, with this class of vehicle currently consuming more than 30 billion gallons of gasoline a year. To achieve this goal, companies like Daimler are developing and improving vehicle technologies in engine efficiency, aerodynamics, waste heat recovery, and hybridization, among other approaches. Through these types of improvements, the Energy Department estimates fuel economy increases could save long-haul truckers more than $15,000 per truck per year in fuel costs.

The President's New Initiatives to Support Advanced Vehicles

Launching a "Race to the Top" challenge for communities to encourage advanced vehicle adoption: The President is announcing a new $1 billion National Community Deployment Challenge to catalyze up to 10 to 15 model communities to invest in the necessary infrastructure, remove the regulatory barriers, and create the local incentives to support deployment of advanced vehicles at critical mass. This proposal embraces a strategy similar to that outlined by Senators Merkley and Alexander in their Promoting Electric Vehicles legislation. This proposal, however, would be 'fuel neutral', allowing communities to determine if electrification, natural gas, or other alternative fuels would be the best fit. Deployment Communities would serve as real-world laboratories, leveraging limited federal resources to develop different models to deploy advanced vehicles at scale. The program would also support the development of up to 5 regional Liquefied Natural Gas (LNG) corridors where alternative fuel trucks can transport goods without using a drop of oil.

Making advanced vehicles more affordable: The President proposes to improve the current tax credit for electric vehicles by

• Expanding eligibility for the credit to a broader range of advanced vehicle technologies;
  
• Increasing the amount from $7,500, making it scalable up to $10,000;
  
• Reforming the credit to make it available at the point-of-sale by making it transferable to the dealer or financier, allowing consumers to benefit when they purchase a vehicle rather than when they file their taxes; and
  
• Removing the cap on the number of vehicles per manufacturer eligible for the credit and, instead, ramping down and eventually eliminating the credit at the end of the decade.
  

Accelerating deployment of alternative-fuel trucks: The President is proposing a new tax incentive for commercial trucks that provides a credit for 50% of the incremental cost of a dedicated alternative-fuel truck, including trucks powered by natural gas or electricity, for a five-year period. This incentive – paired with support through programs like the Energy Department's National Clean Fleets Partnership, which provides technical assistance to large company fleets interested in moving toward vehicles that rely on little or no oil – will not only drive down domestic demand for oil, but also drive up demand for the sorts of vehicles built at Freightliner's Mt. Holly Plant and, in turn, spur job creation in the American manufacturing sector.

Launching 'EV Everywhere', a clean energy grand challenge to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade: This national effort is the second in a series of Clean Energy Grand Challenges designed by the Department of Energy to bring together America's best and brightest scientists, engineers, and businesses to work together to solve the most pressing energy technology challenges of our time. EV Everywhere will enable companies in the U.S. to produce electric vehicles at lower cost, with an improved vehicle range and an increased fast-charging ability, so average American families will be able to own and drive an electric vehicle as affordable and convenient as today's gasoline-powered vehicles. The savings from using lower-cost electricity instead of gasoline, roughly $100 per month for the average driver, combined with the reduction of upfront vehicle cost, will lower energy costs for American consumers and businesses. The President's FY13 Budget includes $650 million to advance vehicle and battery technologies at the Energy Department, including investments that support this new grand challenge. EV Everywhere will invest in breakthrough R&D for advanced batteries, electric drivetrain technologies, lightweight vehicle structures, and fast charging technology.

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[Drew Dowdell]

In other news, auto manufacturers raise the prices of natural gas vehicles 25%

[G. David Felt]

While I do hate to add to our national debt. I think some sort of gov incentive program will have to be done like this to get society to move over to cleaner alternative technology.

I for one love the CNG option or even an LP option.

[FAPTurbo]

Reforming the credit to make it available at the point-of-sale by making it transferable to the dealer or financier, allowing consumers to benefit when they purchase a vehicle rather than when they file their taxes.

Precisely what they should have done ages ago. Better late than never.

Me likey!

[G. David Felt]

Reforming the credit to make it available at the point-of-sale by making it transferable to the dealer or financier, allowing consumers to benefit when they purchase a vehicle rather than when they file their taxes.

Precisely what they should have done ages ago. Better late than never.

Me likey!

I agree this is the right thing to do. Think about the people who would be more willing to purchase a vehicle when they get an instant 10K rebate.

Do this along with GM's new CNG trucks and SUV's and sell those auto's with a CNG filling kit for your Garage at home. Just fill up your auto with Natural Gas and go.

This could easily build up the infastructure for alternative fuel fast.

[Camino LS6]

Moves in the right direction, but more needs to be done.

Please, Mr. President, take a hard look at EPA roadblocks to converting existing vehicles to alt fuels - then remove those roadblocks.

[Drew Dowdell]

Have you actually written anyone?

[Camino LS6]

Not yet, just spreading the word so far.

[dwightlooi]

I am not interested in "green" and exhorbitant energy. I am only interested in cheap and plentiful energy. I am especially furious about my tax dollars going towards sponsoring somebody else's decision to buy a "green" vehicle. It makes my blood pressure hit 200 everytime I get look at look at my pay check or file my tax returns.

The US is sitting on 1.4 trillion barrels of potentially recoverable oil reserves -- 3 times as much as Saudi Arabia. The only problem is that we refuse to allow exploration and extraction. I say lets tap it all, keep fuel prices in the USA the lowest in the world, grow our economy and let the market decide when "alternative" fuel and "green" energy becomes a viable and competitive alternative. If it's "never", I am fine with that too.

[dwightlooi]

Congress better block every single last cent in this 4.7 billion boon doggle.

[loki]

i would vote against this $4.7billion dollar tax.

people aren't always stupid, the ones that are[stupid], i don't want to be giving my taxes to to pay for those decisions.