The Department of Transportation’s budget has been released [PDF here], and it includes (among other things):

a six-year, $556 billion surface reauthorization plan to modernize the country’s surface transportation infrastructure, create jobs, and pave the way for long-term economic growth. The President will work with the Congress to ensure that the plan will not increase the deficit.

But, the WaPo’s Ezra Klein points out

Traditionally, the underlying law — the Surface Transportation Assistance Act — was funded by increasing the gas tax. And when I say “traditionally,” I mean beginning with Ronald Reagan in 1982… if the administration is going to duck the fight on reconnecting the Surface Transportation Act and the gas tax, it’s hard to see this proposal getting funded and passed. The House GOP isn’t lockstep against infrastructure investment, but they do seem to be lockstep against new revenues. Plus: The gas tax was a sensible and smart way to fund improvements in transportation infrastructure. That’s why even Reagan signed onto it. It’s disappointing to see Bush’s irresponsible and ideological rejection of it become bipartisan policy.

Hear, hear. One of the reasons raising the gas tax is “sensible”: it makes the market more likely to play ball with President Obama’s goal to get a million plug-in electric cars on the road by 2015. Another: it makes CAFE wrangling far less fraught with drama. In fact, the only downside to raising the gas tax is that it’s unpopular. Oh well…

The EPA’s National Clean Diesel Campaign and the Department of Energy’s Hydrogen Energy Program have both been defunded in President Obama’s proposed 2012 budget, as the White House focuses on the much–debated goal of putting one million electric cars on the road by 2015. Bloomberg reports The NCDC budget was cut from $80m in 2010 to zero, even though Obama only just reauthorized $100m per year of grants through the program ten days ago. According to Senator Tom Carper, one of the  sponsors of that re-authorization, the program

leverages federal dollars so efficiently that for every $1 invested, we get over $13 in health and economic benefits in return

Oh well. Meanwhile, fans of the oil-burners imported by the German brands can relax: the NCDC focused on improving diesel emissions from freight, ports and fleets rather than subsidizing Euro-phile sports sedans. Besides, diesel isn’t the only loser in the rush to push plug-in cars to market: hydrogen is also losing out.

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While EVs are slowly, very slowly  – catching on would be exaggerated, people are starting to think about the finer points. For instance: Electric vehicles and plug-in hybrids are powered by high-voltage batteries of up to 400 volts, possibly more. What happens if one crashes and first responders have to attack the vehicle with power cutters? Will the responder die from electrical shock? This is a hot topic amongst first responders, right up there with dealing with explosive airbags, belt tensioners and other surprises. (Read More…)

The attentive reader of TTAC is not surprised by the news provided by Automobilwoche [sub] that Toyota will introduce a plug-in version of its iQ by 2012. It had been on Toyota’s green roadmap for months. The (not really) surprising news is: You won’t be able to buy the EV iQ when it gets launched. (Read More…)

In an apparent response to a report detailing the challenges facing President Obama’s goal of getting a million plug-in vehicles on the road, the DOE has released its own report [in PDF here] arguing that the goal is, in fact, achievable. The main thrust of the argument is encapsulated in the table above,

Reaching the goal is not likely to be constrained by production capacity.  Major vehicle manufacturers have announced (or been the subject of media reports) that indicate a cumulative electric drive vehicle manufacturing capacity of over 1.2 million vehicles through 2015.

Ipso-freaking-facto. Done deal, right? Er, no. After all, GM has not confirmed that it will try to build 120k Volts starting next year. In fact, the Bloomberg story cited by the DOE actually says

GM now is working with suppliers to raise 2012 capacity from an earlier target of 60,000. It may not build that many if parts aren’t available or demand isn’t strong enough… Randy Fox, a GM spokesman, declined to comment on production plans. He said he didn’t know how many people have ordered a Volt or how long they will have to wait.

But hey, that sounds good enough for, well, government work. What with Obama’s policy apparently relying on the Volt to make up about half of the volume of plug-ins needed to meet his million-by-2015 goal and all. Meanwhile, Fisker has delayed production of its first car already, and has no in-house manufacturing experience, making its leap from 0-50k units over the next two years more than a little improbable. As for the prospect of Think’s City EV (proud recipient of NHTSA’s first EV recall) selling 20k units considering it’s starting pricing at $34k-$40k (for a tiny, 100-mile-range BEV), well, we wouldn’t bank on it. EV production numbers have consistently been optimistic, and are continually being revised (typically downward). Using them as evidence of the attainability of a political goal seems like a recipe for a one-way trip to “the trough of disappointment.“

Senator Debbie Stabenow has introduced S. 3715, known as the Charging America Forward Act, which would extend tax credits for plug-in vehicles until 2014 and “front load” the credits, to create a dealership-level discount, among other provisions. Though inspired by President Obama’s call to put a million plug-in vehicles on the road by 2015, Stabenow’s website plays up a single, all-important angle to the bill

Michigan is already a leader in emerging hi-tech battery and electric car production. Other countries are acting to develop their own advanced vehicle markets because they realize the tremendous economic potential this new technology represents.  These initiatives will allow Michigan innovators to continue to out-compete the world and create new jobs here

Though the full text of the bill hasn’t hit Govtrack yet, the DetN reports that it’s chock full of plug-in subsidies, so it seems that Stabenow’s proposa is considerably more dramatic than the recent plug-in credit extension introduced by Rep Sander Levin. And that’s not necessarily a good thing…

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So, what really happened when two of the three hydrogen fuel-cell cars on Mercedes’s F-Cell World Tour ran out of fuel on an early leg? Previously we’d only heard the German perspective on events (not to mention Daimler’s non-telling of the story in the video above), but now TTAC Alum Jonny Lieberman has posted his extended take on the trip over at Motor Trend. Yes, you’ll have to give MT ten page-clicks to read the whole thing, but Lieberman goes into far more detail than any account of the mini PR fiasco yet published. Do give it a look.

The DetNews points us to a Treasury Inspector General for Tax Administration report [full document in PDF format here] that reveals

Approximately $33 million in credits for plug-in electric and alternative-fueled vehicles credits were erroneously claimed by at least 12,920 taxpayers through July 24, 2010, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

That means about 20 percent of the $163.9 million in credits claimed by taxpayers from January 1, 2010 to July 24, 2010 for plug-in electric and alternative motor vehicle credits were claimed in error.

The erroneous claims TIGTA identified resulted from inadequate IRS processes to ensure information reported by individuals claiming the credits met qualifying requirements for vehicle year, placed in-service date, and make and model. TIGTA’s review of electronically filed tax returns identified individuals who erroneously claimed the same vehicle for multiple plug-in electric and alternative motor vehicle credits or claimed an excessive number of vehicles for personal use credits.

Zoinks!
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Surprised? Don’t be. President Obama’s goal of getting a million EVs on the road by 2015 is headed nowhere without some serious changes, as the OEM EVs are stuck with high prices in the short term and capacity ramp-ups in the middle term. Making progress on either the price point or the production numbers (both of which are necessary to punch EVs into the mainstream) isn’t going to happen unless gas prices skyrocket or, as Nissan CEO Carlos Ghosn puts it, government “jump starts” the market. Now, Automotive News [sub] reports that an Indiana University study argues that Obama’s million-EV goal might not be accomplished by 202 without further government assistance. On the other hand,

With increased government intervention and perhaps a global surge in oil prices, electric vehicles could capture as much as 15 percent of the U.S. market by 2025-30

By which point, the CAFE standard could well be 62 MPG combined (unadjusted)… making the argument for EVs even tougher. But now we’re getting ahead of ourselves…
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With California’s Air Resource Board and the EPA set to unleash new 2016-2025 CAFE standards, the Alliance of Automotive Manuacturers, which represents foreign and domestic automakers, is lashing out, telling Automotive News [sub]

We all want to put the most fuel-efficient vehicles as possible on the road, but for the 2017 rulemaking, policymakers still need to gather and analyze much data to determine the maximum feasible fuel economy standards that avoid negative impacts on affordability, safety, jobs and vehicle choice. No one knows what the 2025 target should be yet, and the data needs to drive the rulemaking.

But not everyone in the industry is on board with the AAM’s CAFE-skepticism. Already, Hyundai Motors USA CEO John Krafcik tells TTAC his firm plans to “Overcomply” with the coming CAFE standards, and now Toyota is joining Hyundai in breaking ranks, with Jim Colon, VP for Product Communications saying

The administration is engaged. That’s the direction Toyota is already going. Whatever goal they establish, Toyota will be prepared to meet. If it’s 62 miles a gallon, we’ll be able to achieve that.

Rep Sander Levin (D-MI) has introduced legislation which would increase the cap on consumer tax credits for plug-in electric vehicles.The current subsidy allows consumers to take a $7,500 taz credit, but caps the number of qualifying credits at 200k per manufacturer, but Levin’s bill would raise that to 500k units. Said Levin in a statement

Green vehicles represent the vanguard of automotive innovation, but they have to be economical for consumers and profitable for manufacturers. Raising the cap on this credit will help carmakers reach the demand and production scale necessary for long-term viability.

To which, his brother Senator Carl Levin, adds

The U.S. auto industry is poised for a technological explosion that promises to fundamentally change transportation here and around the world. But if we fail to support this revolution, workers in China, India, South Korea and our other competitors will build these vehicles instead of American workers.

The call to raise the cap for EV consumer tax credits was first publicly raised by GM’s Tom Stephens, who argued that 200k units was inufficient government support to keep the Volt viable until the second generation comes out. At the time, Rep Debbie Stabenow argued that credits should be “front-loaded” and deducted from the price of the vehicle at the dealership, but that proposal seems to have fallen b the wayside.

GM has just dropped a press release [in .docx format here] announcing that it has withdrawn its request for $14.4b in low-cost government retooling loans through the Department of Energy’s “Section 136” or ATVM loan program. Says CFO Chris Liddell

This decision is based on our confidence in GM’s overall progress and strong, global business performance. Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet. Our forgoing government loans will not slow our aggressive plans to bring more new vehicles and technologies to the market as quickly as we can. We will continue to make the necessary investments to assert our industry leadership in technology and fuel economy.

Color us stunned. The “136” loan program was nearly used as a slush fund to bail out GM and Chrysler before President Bush ruled that the automakers qualified for TARP relief. Shortly after the bailout, GM said that the loan program was “one of the sources of liquidity GM is factoring into its plans in order to meet its capital requirements in the future.” More recently, it seemed that the loan program was on hold while GM and Chrysler were qualifying for loan requests that would have drained the program of funds. Now, with GM’s request dropped from the queue, there could be as much as $10b left for other manufacturers. Plus, by turning down cheap government loans, GM has made its first major (voluntary) step towards beating back the Government Motors moniker. Good for them.

Volkswagen’s 2002 “One Liter Car” was a classic project of the firm’s legendary chairman Ferdinand Piech. The grandson of Ferdinand Porsche was taken to setting staggering tasks for his engineers, who dutifully turned out such mechanical wonders as the world’s fastest car (Bugatti Veyron), the first car to achieve 1 liter per 100km fuel economy (the so-called “One Liter Car”), and the world’s most unnecessarily expensive Volkswagen (the Phaeton). Though it was never introduced for production, the One Liter Car convinced VW that diesels could be as efficient as any hybrid, and became a point of great pride for the company. A few years ago, there was even a rumor that a limited number would be made for sale to the public, but only an updated concept and vague talk of 2013 production ever materialized. And now, VW has introduced a new One Liter Car, called the XL1, in Qatar of all oil-rich places.

This time, the XL1 seats two side-by-side and has a plug-in hybrid drivetrain featuring a two-cylinder diesel making 47 HP and a 26 HP electric motor hooked to a Li-ion pack with up to 22 miles of EV range. The concept can reportedly hit 62 MPH in 11.6 seconds and has a top speed of 99 MPH. A 2.6 gallon tank gives the XL1 a 341 mile range, thanks in part to the low overall weight of 1,753 lbs. And with its larger, more conventional layout, VW isn’t being shy about the fact that this One Liter car represents a step closer to production.

Hard on the heels of yesterday’s story on Hyundai’s preparation for CAFE standard ramp-ups comes this counterpoint, courtesy of the Detroit Free Press. Walter McManus, director of automotive analysis at the University of Michigan’s Transportation Research Institute, did his own study on a possible 43 MPG 2020 standard and his findings, as presented at a Citi Investment Research conference call, seem quite positive for American-based automakers. McManus’s research took several  basic assumptions for granted in order to reach his conclusions, namely that

• Gas prices will average $4 a gallon between now and 2020.

• Industry sales will be 16.3 million vehicles in 2020.

• Every manufacturer complies with 2016 CAFÉ standard.

• Plug-in hybrids and electric vehicles will be less profitable than gas-engine vehicles.

Now, right off the bat it’s possible to take exception to some of those assumptions. If gas doesn’t crack four dollars per gallon before 2020, for example, this blogger will be one confused student of history. Also, predicting over 16m units of new car sales is by no means a sure thing. Though a comfortable industry assumption based on the “old normal,” there aren’t many indications that 16m+ annual new car sales was a sustainable level for the US economy. Still, Mr McManus has been doing this for a while, so we’ll give him the benefit of the doubt. So, given his assumptions, what does he foresee for Detroit as it moves to meet a 43 MPG standard by 2020? In two words: great success.

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Remember how the government bailout team forgot to make sure its “Irrevocable Ecological Commitment” from Fiat was measured in “adjusted” Miles Per Gallon, using the EPA test cycle that provides your window sticker number? Well, the same “unadjusted” MPG number Sergio Marchionne used to his advantage is used to calculate the CAFE ratings that have the industry in such an tizzy. Well, the official lobbying parts of the industry, anyway [see also, here]. Hyundai has been saying for some time that it is targeting a 50 MPG fleet average by 2025, although CEO John Krafcik said as recently as August that he didn’t know how the automaker would reach that goal.  Now, however, it looks like he’s found a way to bring 50 MPG within reach: use CAFE’s “unadjusted” standard. Just like Sergio. Follow along as Hyundai shows that 50 MPG isn’t as far off as many seem to believe.

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