Plug-in cars goal will be hard to hit

WASHINGTON, D.C. - President Barack Obama's campaign pledge to put 1 million plug-in hybrid cars on the road by 2015 is fraught with difficulties, from technical and engineering hurdles to the realities of the economy and the price of gasoline.

It took eight long years to get 1 million hybrids on the road in the United States, and even a White House task force says one of the leading new plug-in cars being developed is too expensive to gain popularity any time soon.

Obama's goal could help revitalize the struggling U.S. auto industry and begin shifting motorists away from the gas pump. But to many, it's overly optimistic.

"The economics won't make sense for the majority of Americans in the next several years," said Brett Smith, who studies plug-in hybrids at the Ann Arbor, Mich.-based Center for Automotive Research.

Plug-in hybrids allow motorists to drive a limited number of miles on battery power before the engine switches over to run on gasoline or other fuels. A driver can plug the car into a conventional wall outlet at night and be ready to go electric again in the morning.

The cars could dramatically reduce gasoline use because many commuters drive less than 40 miles a day.

Obama last month toured a California electric car facility where he announced $2.4 billion to develop advanced batteries and electric cars. The administration has said the vehicles would play a role in its goal to reduce dependence on foreign oil, cut greenhouse gas emissions and create "green" jobs.

"Even as our American automakers are undergoing some painful adjustments, they are also retooling and re-imagining themselves into an industry that can compete and win," Obama said in Pomona, Calif.

During his campaign, Obama promised $4 billion in tax credits to automakers to revamp their plants to build plug-ins, and a $7,000 tax credit for consumers who buy early versions of the cars. He even pledged to convert the White House vehicle fleet to plug-ins within a year, as security permits, and require half of the cars bought by the government to be plug-in or all electric by 2012.

To automakers, battery makers and utilities, the pledge was akin to one made by President John F. Kennedy generations ago. "That's a 'Go to the moon' kind of goal," said Nancy Gioia, Ford's director of hybrid vehicle programs. She said it would demand "unparalleled collaboration" among the government, the industry and academia.

Automakers are already committed to plug-ins and electric vehicles. Toyota Motor Corp. will produce a few hundred plug-in Prius hybrids later this year as a test fleet, General Motors Corp. plans to release an extended range electric plug-in called the Chevrolet Volt in limited numbers in late 2010, and Nissan Motor Co. is planning to sell an all-electric car next year. Chrysler LLC, Ford Motor Co. and Daimler AG are all developing plug-ins and electric cars.

But numerous questions remain about the cars. One of the biggest hurdles is whether their large lithium ion batteries are ready for mass production. Some analysts have pegged the cost of the batteries at $1,000 per kilowatt hour, which could add about $16,000 to the cost of a first-generation Volt and thousands of dollars to a plug-in Prius.

Lithium ion batteries have been used commonly in cell phones and laptop computers, but the auto industry needs to ensure that the batteries will remain long-lasting and safe. Automakers have partnered with utilities and universities to develop recharging stations and a common way of communicating between the vehicles and the electric grid.

None of the major automakers has made a firm commitment on the mass production of plug-ins — building 100,000 vehicles a year or more — that would be required to meet Obama's goal.

"It certainly is a difficult challenge to achieve that goal," said Tony Posawatz, GM's vehicle line director for the Volt. GM has not released production figures for the Volt, but Posawatz estimated it would be in the "tens of thousands" of vehicles by 2015.

"It's not readily obvious, based on the product plans that have been communicated, that the 2015 objective aligns with what is currently on the books," he said.

Conventional gas-electric hybrids account for less than 3 percent of the car market and it took about eight years to get 1 million hybrids on the road in the United States, according to automotive consulting firm R.L. Polk & Co.

Obama's own auto industry task force, which is trying to help GM and Chrysler emerge from the crisis that left them needing $17.4 billion in government loans, casts doubt on the Volt in a March 30 report which says while the car "holds promise, it will likely be too expensive to be commercially successful in the short term." GM has not announced pricing for the Volt, but it's expected to cost between $30,000 and $40,000.

Current fuel prices also are an issue; $2-a-gallon gas gives consumers few incentives to spend thousands of dollars extra for a hybrid or even more for a plug-in. It would take years for the fuel savings to outweigh the price premium.

The industry will also need a smooth transition for plug-ins to take off. Any hiccups along the way could hurt the vehicles' image.

"They've got to be commercial-ready," said Tom Stricker, Toyota's director of technical and regulatory affairs. "You do risk having a negative response from the consumer if the technology doesn't meet their expectation in terms of durability, cost and performance."