Will Obama Executive Action Build Momentum for Electric Cars?

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When historians look back at Barack Obama’s record, they won’t be able to say the 44th president was against alternative fuel vehicles. After setting the ambitious goal of getting 1 million EVs on U.S. roads and trying to increase the buyer’s incentive to $10,000 for an electric car, Obama has signed an executive order mandating 50% of government fleet vehicle purchases be zero emissions or plug-in hybrid by 2025. The writ means the government must ramp up its EV buying dramatically, and the effects will be substaintial for the green car industry at large.

40% reduction in emissions by 2025

The March 19 executive order issued by the White House calls for sweeping improvements in both fuel economy standards for government vehicles and in the percentage of renewable resources in the power mix. President Obama said government agencies can reduce greenhouse gas (GHG) emissions by 40% by 2025 from 2008 levels by following the guidelines in the decree.

This shift in vehicle use would mean great things for the budget as well. Energy savings stemming from the changes could exceed $18 billion in costs, the White House said.

Each of the changes would be implemented in increments. For new vehicle buying by federal agencies, 20% must be zero-emissions or plug-in electric by 2020 before increasing to 50% by 2025; for building power, 20% of energy used in federal offices must be renewable by 2020, increasing to 30% by 2025. Many large corporations, including General Electric and IBM, joined the White House in a March 19 press release announcing a commitment to save 5 million metric tons of emissions by 2020.

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Impact on EV segment

Putting the weight of the federal government behind green vehicles has the potential transform a niche segment of the industry into a force in as little as a decade’s time. In fact, it may take the clout of the U.S. government to put a real charge in electric vehicles, hybrids, and fuel cell vehicles. By the time the highest standards decreed by the executive order kick in, EV technology should be ready to deliver on Obama’s lofty goals.

You will already find numerous EVs and hybrids operating as municipal vehicles and police cars in the U.S., but numbers cited by The Detroit News indicate Obama’s directive will necessitate a massive upswing in green car purchases. According to the The Alliance of Automobile Manufacturers, less than 5% of 2014 federal agency vehicle purchases had electric or hybrid drivetrains.

Increasing the volume by 45% in the next 10 years will be a boon for manufacturers producing plug-in hybrid EVs (PHEVs) as well as pure electrics, and much of that increase could come from smaller companies. None of the major automakers has electric pickup trucks in the offering.

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Effects on electric vehicle adoption

Supporting such a vast network of electric government vehicles would require a massive boost in charging infrastructure as well as automobile production, and Obama’s executive order requires includes directives to make it happen. Agency heads must engage in “planning for appropriate charging or refueling infrastructure or other power storage technologies for zero emission vehicles or plug-in hybrid vehicles,” Obama wrote in the decree.

Having the government ramp up charging networks and fueling station for hydrogen fuel cell cars would mean an enormous boon for widespread EV adoption. By 2020, both General Motors and Tesla hope to have 200-mile electric passenger cars in high-volume production. Nissan, Volkswagen, and Ford are also expected to join the race to meet this benchmark in electric range.

When we outlined the reasons why electric vehicle adoption is inevitable in America, reducing emissions and paving the road to energy independence were two of the key points. The federal government has these goals on its agenda and, along with savings close to $18 billion with efficiency upgrades, the fiscal case is well made.

Come to think of it, the federal government’s zero-emissions vehicle charge may be the biggest reason EV adoption is inevitable in America.

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