The massive economic stimulus bill gives President Obama an opportunity to make progress on his promises about buying plug-in hybrids or electric cars for the federal fleet.
Signed by Obama on Feb. 17, the stimulus package includes $300 million to buy more "high efficiency motor vehicles" for the federal fleet. That includes hybrids, hybrid plug-ins and all-electric cars.
Remember, though, Obama's promise is not just to convert half the federal fleet purchases to hybrids, but to the ultra fuel-efficient plug-in hybrid electric vehicles (PHEV's) or all-electric cars — cars that are still largely on the drawing board.
PHEV's are a combination of the conventional hybrids on the market today, such as the Toyota Prius, and battery electric cars that need to be plugged in and recharged. Some prototypes of these cars get upwards of 100 miles per gallon.
One example of a PHEV is the Chevy Volt, scheduled to hit the market in late 2010. The way these cars work, it would run purely on electricity, without emitting exhaust, for up to 40 miles. Then it would switch over to a gasoline motor, which would also recharge the battery (much as a standard hybrid works today). If you only use the car in a 40-mile range, you never need gas. But there's a combustion engine if you do, so you won"t get stuck on the side of the road should you run out of electricity.
Given that the cars still aren't commercially available, Obama's promise is still a long roadtrip away.
In a joint statement released by House and Senate leaders about the stimulus package, the conferees stated that they "remain hopeful that domestically produced plug-in hybrid-electric vehicles will be commercially available in sufficient quantities before September 30, 2010, such that these funds could be used to acquire this technology for the federal fleet."
In other words, there's a leap of faith here that the industry will be making cars for the government to buy.
Toyota plans to offer a plug-in version of its Prius for fleet sales later this year, said David Sedgwick, editor of
Automotive News
. And the Chevy Volt, as we said, isn't scheduled to hit the market until late 2010.
Other automakers have said they plan to offer plug-in hybrids or all-electric cars, but whether those will be available soon enough to tap into the stimulus money remains a big question mark.
Furthermore, it's doubtful that $300 million would get Obama anywhere near his goal. Undoubtably, the White House would have preferred the $600 million originally proposed in the House version of the stimulus plan. And here's another wild card: No one really knows yet how much these plug-in or all-electric cars might cost.
"Here's the problem," said Sedgwick. "The Volt could cost as much as 40 grand. Do the math. You could spend a lot of money on the Chevy Volt and not get to half."
Here is the math: $300 million would only get you 7,500 cars at $40,000 each.
In 2008, the General Services Administration purchased 22,827 new passenger vehicles. So that's way short of funding half the new purchases, as Obama promised.
The plug-in version of the Prius may sell in the high 20's, Sedgwick said. At $28,000 per car, we're talking 10,700 cars for $300 million. That comes close to funding half the new purchases as plug ins, but only for one year. The stimulus funding is for two years. Any way you slice it, the $300 million alone just doesn't get Obama to his goal.
Sedgwick is skeptical that he can achieve the goal given the uncertainties. "You're buying a pig in a poke," he said. "No one is selling plug-in hybrids right now. No one has announced their prices yet."
Jay Friedland, legislative director for Plug In America, a nonprofit that advocates for plug in cars, acknowledged that fulfilling the promise will be challenging for Obama.
"It relies on the automakers to come through," Friedland said.
But the stimulus money represents a significant commitment from the Obama administration, he said. "The stimulus gets you halfway there with the federal fleet. He has certainly put the down payments there."
The hope with the stimulus money is, of course, that by converting much of the federal fleet to high-efficiency cars, it will provide a carrot for automakers to more aggressively pursue such vehicles for sale to the general public, and that it will help convince the public to buy them. If a significant portion of the federal fleet is converted to plug in hybrids, that also provides a significant built-in market for automakers.
And there's plenty of other money in the stimulus to encourage automakers to ramp up their plans for plug-in hybrids and electric cars.
According to calculations by Plug In America, there's as much as $12.5 billion in the Democratic-backed stimulus for plug-in hybrids and all-electric cars through tax incentives, grants to automakers, hybrid car rebates and advanced battery manufacturing, a key ingredient in the success of plug in hybrids.
"This creates a big carrot in front of the automakers to get it done," Friedland said.
But if Obama is to reach his goal to convert half the federal fleet to plug-in hybrids or electric cars by 2012, it will require significant investment in coming years' budgets to make it reality, Friedland said.
In other words, Obama has made a significant progress toward fulfilling his promise through the stimulus package, but there's still a lot out of his control — like how fast the auto industry can make such cars commercially available. And the promise will require a lot more federal money in future years. But there's enough in the stimulus for us to move this one to In the Works.