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Why “Overcharged” Misses the Mark

 

The editorial published in the January 2 edition of the Washington Post titled “Overcharged” made several arguments against electric vehicles that deserve rebuttal, both on the grounds of accuracy and their importance to our national and economic security. The Post failed to consider the primary reason for federal support of electric vehicles, namely, the outsized influence that volatile oil markets have on the U.S.

This oversight is especially glaring when considering that the lead story on the Post’s front page that day—“Iran seeks closer ties in Latin America”—shows Iran to be engaged in aggressive diplomacy in Latin America in an effort to counter U.S. and United Nations sanctions being placed on the Iranian economy in response to the Islamic Republic’s plans to develop nuclear weapons. It is within the context of nuclear research and sanctions that Iran has recently threatened to close the Strait of Hormuz, through which more than 15 million barrels of oil travel each day. While it is important for U.S. policy makers to consider more domestic drilling and continued strong fuel economy standards when crafting future U.S. energy policy, the Post’s claim that a shift to electric vehicles will not benefit U.S. energy security enough to justify federal support seems to ignore much of the recent news coming out of the Middle East.

Several other issues from the editorial also deserve attention and we’re not the only critics of the piece.

Independence From Oil

  • The editorial argues that fuel-economy innovations in clean-diesel and advanced gasoline vehicles show more promise than electric vehicles as a solution to America’s dependence on foreign oil. This statement is easy to disprove, since only 1 percent of electricity produced in the U.S. comes from petroleum. This means electric vehicles are ultimately being powered by natural gas, coal, nuclear fission, solar and wind power—which are almost entirely domestic resources.

 

  • Due to the fungible nature of the global oil markets, any technical gains in fuel efficiency—such as a doubling of fuel-economy standards by internal-combustion (IC) engines in the coming decades—will not fundamentally change the way volatile oil markets can hurt the U.S. economy. A shift to electric vehicles, however, would both lower the amount of petroleum imported into the U.S. and negate the influence of price volatility on U.S. consumers in a way that more efficient internal-combustion engines simply cannot. It’s worth noting that every U.S. recession in the past 40 years has been associated with an oil price spike.

Consumer Availability

  • The editorial criticizes the federal government’s $7,500 tax credit as a giveaway to upper income consumers, but the tax credit was created to make the cars more affordable to the general public. New technologies are inherently expensive, and early adopters are generally better off than the general population. But an examination of the past 25 years of automotive technologies shows that the development of anti-lock brakes and air bags were first available only in the most expensive luxury auto brands. Now they are standard on many inexpensive vehicles sold to first-time car buyers. The key question is how to move from early adopters to the mass market in a rapid manner. The point of the tax credit is to drive the scale of production for electric vehicles in a way that would help speed the industry toward self-sufficiency.

More Demand than Supply

  • The editorial suggests that U.S. sales of electric vehicles were disappointing in 2011 but doesn’t offer readers much in the way of comparisons to measure success or failure. Total U.S. sales are expected to surpass 15,000 vehicles in 2011, and there continues to be more buyers looking to purchase electric cars than available cars. Both GM and Nissan have plans to expand production of the Volt and Leaf brands in 2012, while more than 20 additional all-electric or plug-in hybrid models will be launched this year by automakers like Toyota, Renault, BMW, Daimler and others. Electric car purchases during their first year in the market will likely be more than 50 percent higher than the first full year of hybrid car-sales, and experts suggest critics must wait until 2013 to know what the real demand for electric cars will be.