We’re in the Fast Lane of the Electric Vehicles Movement

Editorial by Paul Mitchell

On May 6th, President Obama visited Indianapolis and spoke at Allison Transmission, which is investing nearly $150 million in private capital and federal grants to expand its hybrid transmission line, creating 250 new jobs in the process.

President Obama, Vice-President Biden, and senior Department of Energy officials have come to the Hoosier State repeatedly to emphasize the administration’s clean technology agenda, for a simple reason – it’s in their interests to celebrate success, and Indiana is at the vanguard of this movement.

In electric vehicles (EVs) in particular, the state’s assets are enviable. Manufacturers like THINK, Bright Automotive, and Navistar, major hybrid component producers like Allison, Cummins, and Remy, advanced battery developers like EnerDel, automotive electronics leaders like Delphi…the list goes on.

Through Central Indiana’s Project Plug-IN initiative, we’re also on the cutting-edge of deploying these vehicles.  This effort has already placed 100+ EVs with commuters and in fleet operations along with charging infrastructure; working with local utilities and other partners, we’re gathering data from these vehicles that will help hasten deployment in other communities.

Governor Mitch Daniels has also been a vocal proponent of the EV industry as a growing force in Indiana’s economy. His economic development team has been aggressive in supporting the growth of EV companies and suppliers, and the State of Indiana was the first customer for EVs in its fleets through Project Plug-IN. Support for EVs is a bipartisan proposition, as it should be: These advanced technology vehicles represent many of our shared interests, as Hoosiers and Americans. From an economic standpoint, the sector is a source of innovation and new jobs – high-tech engineering and manufacturing positions that are more resistant to outsourcing and offshoring.

Vehicle electrification also addresses a major national security issue, reducing our dependence on foreign oil, and an environmental one, cutting a major source of carbon emissions from fossil fuels.

For consumers, EVs represent the wave of the future. We love our cars, and EVs are quickly evolving to meet our needs and wants as drivers. As hybrid and plug-in technologies have advanced, the size and performance of the vehicles have changed – just compare the first-generation Toyota Prius to the current third-generation model in terms of legroom, cargo space and power. Options are multiplying, as most major automakers are offering hybrid or fully-electric models. For those who don’t want to make any sacrifice in terms of luxury, BMW recently announced that a plug-in hybrid 5 Series will be available by 2013.

Some critics say that the EV market is being propped up by government subsidies, a product of federal rebates and tax credits that distort the natural forces of supply and demand. As an enthusiast of free markets, I’m sympathetic to this argument but believe it only tells one side of the story.

In fact, there are few industries as heavily supported by the federal government as the oil and gas sector. Oil subsidies cost U.S. taxpayers more than $4 billion a year – significantly more than the tax breaks and grants designed to put more EVs on our highways. But while the EV industry is relatively new, the oil industry has employed armies of lobbyists for decades with the single-minded purpose of cementing their various loopholes and allowances into the tax code. Singling out public sector incentives for electric vehicles ignores the federal largess that has flowed to oil and gas companies for generations.

It would be a principled position to argue for an end to all federal subsidies for transportation platforms – fossil fuels and electric vehicles alike, creating an even playing field. It’s estimated that stripping all government subsidies from the oil and gas industries would cause the price of a gallon of gasoline to soar to at least $10 a gallon. Under this scenario, electric cars would clearly be competitive in the marketplace, paying for themselves out of the avoided fuel costs.

Indiana’s – and the nation’s – opportunity is to build an industry ecosystem that can thrive with or without government support, where companies across the electric vehicles and alternative energy supply chain can collaborate to advance new technologies and breakthroughs to make these cars more affordable and more practical for the average American commuter.

The Energy Systems Network is working to make this vision a reality – both to encourage new jobs and investment for the Hoosier economy and to lead the nation towards a future of energy independence and cleaner, less costly commutes.

Mr. Mitchell is President & CEO of the Energy Systems Network, an Indiana-based initiative focused on clean technology development. He previously served as Policy Director to Indiana Governor Mitch Daniels.

You can view this letter to the editor as printed in the Indianapolis Star today by visiting indystar.com.