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59 States with incentives for EVs proposed or in place. Figure 35. State incentives for electric vehicles. credits for BEVs. These incentives are in addition to federal compared to a small number of recent forecasts prepared tax credits of $2,500 to $7,500 for EVs and PHEVs, depend- by industry. While some forecasts estimate ultimate hybrid ing on battery size. electric and EV penetration of the light-duty vehicle market The market success of EVs and PHEVs is also influenced by in the 8% to 16% range (Greene, Duleep, and McManus, regional differences in the prices of electricity and motor fuel. 2004), a study prepared by Becker and Sidhu of the Univer- As retail prices for electricity increase relative to the price of sity of California, Berkeley's Center for Entrepreneurship gasoline, demand for EVs and PHEVs would be expected to and Technology (2009) estimates market penetration rates decline. for the EV with switchable batteries of 64% to 85% by 2030. The low-end estimate relies on oil price data presented in the EIA AEO's reference case, while higher-end estimates use 3.4.5 The Current Status of the System the EIA high oil price case and assume operator subsidies in Based on U.S. DOE Energy Information Administration the form of tax credits. (EIA) data, the number of EVs operating on-road reached 26,823 in 2008, representing roughly 0.01% of all light-duty 3.4.6 Funding Sources vehicles in use. EV sales were small in 2008, representing less than one-tenth of 1% of the light-duty-vehicle market share The U.S. DOE encourages EV development through invest- (U.S. DOE, 2010a). Customer acceptance of the EV will be ments outlined in the American Recovery and Reinvestment put to the test in 2011 with the newly introduced Nissan Act and U.S. DOE's Advanced Technology Vehicle Manufac- LEAF and its 100-mile all-electric range. The Nissan LEAF turing (ATVM) loan program. Together, these programs are has an MSRP of as low as $32,780, or $25,280 after all federal supporting the "development, manufacturing, and deploy- tax credits. Tesla offers a premium sports car version of the ment of the batteries, components, vehicles, and chargers nec- EV called the Roadster, which is commercially available at an essary to put millions of electric vehicles on America's roads." MSRP of as low as $109,000, or $101,500 after federal tax The Recovery Act includes a $2.4 billion program designed to credits. establish 30 manufacturing facilities for electric vehicle batter- The number of light-duty EVs in use is forecast to decline in ies and components. For each dollar of federal funds invested future years to 4,177 by 2030; the projected decline in EVs in the program, private partners are investing at least one dol- in use does not reflect a trend away from alternative vehicle lar. U.S. DOE's Advanced Research Projects Agency--Energy technologies but rather a transition towards more competition (ARPA-E) is providing an additional $80 million to transfor- among alternative technologies, some of which have not yet mative research and development projects designed to advance entered the marketplace. battery and electric drive component technology beyond cur- The U.S. DOE forecast presented in the 2010 Annual rent frontiers. The ATVM loan program to date has provided Energy Outlook (AEO) is conservative (e.g., limited technology nearly $2.6 billion to Nissan, Tesla, and Fisker to establish elec- gains, moderate oil prices, conservative assumptions regard- tric vehicle manufacturing plants in Tennessee, California, and ing tax credits for consumers who purchase electric vehicles) Delaware, respectively. These investments in electric vehicle

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60 battery, component, and manufacturing technologies are fuels, hybrid and electric vehicle systems, energy storage, and designed to achieve a number of objectives: materials technology. The U.S. DOE supports the Freedom- CAR and Fuel Partnership with the goal of developing emis- Lower the cost of some electric vehicle batteries by 70% by sion- and petroleum-free cars and light trucks and supporting 2015, infrastructure. Toward the development of PHEVs, the U.S. Enable U.S. manufacturers to produce a sufficient number DOE has established several long-term goals designed to make of batteries and components to support the annual pro- PHEVs cost competitive by 2014 and ready for commercializa- duction of 500,000 electric-drive vehicles by 2015, and tion for volume production by 2016: Boost the production capacity of U.S. manufacturers to 20% of the world's advanced vehicle battery supply by 2012 $3,400 marginal cost of PHEV technology over existing and 40% by 2015 (U.S. DOE, 2010b). hybrid technology, 40-mile all-electric range, The U.S. DOE encourages the development of PHEVs in the 100 mile-per-gallon equivalent, and U.S. marketplace through its Vehicle Technologies Program. PHEV batteries that meet industry standards regarding The U.S. DOE supports research into advanced vehicles and economic life and safety (U.S. DOE, 2007).