The Political Push for Plug-in Hybrids

By · June 10, 2008

On June 11 and 12, the Brookings Institution and Google.org will host a conference entitled “Plug-in Electric Vehicles 2008: What Role for Washington?” The event represents the biggest gathering of national powerbrokers discussing the role of government regarding plug-in hybrid and electric vehicles. The list of attendees includes Senator John Kerry (D-Mass.); Representative John Dingell (D-Mich.); New York Times columnist Thomas Friedman; Jon Wellinghoff, commissioner, Federal Energy Regulatory Commission; and CEOs and top executives from Ford, General Motors, Federal Express, and Southern California Edison.

On the eve of the conference, HybridCars.com’s Bradley Berman spoke with David Sandalow, energy and environment scholar at Brookings, about hybrid technology, oil politics, and the responsibilities—and limitations—of government in changing how we power our cars. Sandalow is the former assistant secretary of state and senior director on the National Security Council in the Clinton Administration. He is also the author of Freedom From Oil: How the Next President Can End the United States’ Oil Addiction.

Picking Technology Winners

HybridCars.com: What role could technology have in breaking our national addition to oil?

David Sandalow: Technology plays a central role. We already have the technology we need to break our dependence on oil. The main challenge is getting out into the marketplace. Start with plug-in hybrid electric cars. We already have the first wave of these on the road with plug-in conversions of today’s conventional hybrids. In a couple of years, we’re going to see major manufacturers rolling these off the production line, and they are going to be bought like hotcakes. I think someday my grandkids will look at my kids and say, “What do you mean? You couldn’t plug in cars when you were young?”

Even with the most aggressive timeline for plug-in hybrids, we could be decades away from plug-in hybrids having any significant impact on oil use.

There’s no question. This change does not happen overnight. That’s been one of the challenges in the political arena. We expect quick fixes. But if we get going right now, we can solve this problem in a generation. That doesn’t mean no gasoline in our cars 25 years from now. But it means that car buyers will be able to purchase cars that take a variety of different kinds of fuels. Not just gasoline, but also electricity and biofuels. That’s transformational.

Is it government’s job to choose winning technologies, especially considering all the various corporate interests that influence the selection and the resulting legislation?

That’s a key question. No. Government should not pick technologies, but government can send signals to the market with respect to broad types of solutions. I think connecting vehicles to the electric grid is the broad type of solution that government should be promoting.

Government certainly shouldn’t get into mandating lithium ion batteries over nickel metal hydride batteries, or anything like that. But something as fundamental as the technology that will connect our vehicles to our enormous electric infrastructure, that’s a direction that government should head. I think they should do it with tax incentives, with federal procurement policies, and a variety of other tools.

So, your feeling is that government should not choose technologies, but aren’t plug-in hybrids a specific technology?

I think it’s a broad approach to connect cars to the electric grid to help power our vehicles.

Incentives and Taxes

Is it fair to look at the Clinton Administration’s Partnership for a New Generation of Vehicles (PNGV) as a model? [Editor’s note: In the 1990s, $1 billion was spent to produce a vehicle that exceeded 80 mpg. The three Detroit companies each produced a successful hybrid prototype, but did not further develop the models.]

I think looking forward makes more sense.

Are there lessons to learn from the billion dollars that was spent on PNGV?

You know, it’s been a while since I thought about that. I don’t really have a comment about that. It’s a good question. To the extent that we can do this with tax incentives, that’s a helpful way to go. To the extent that we can do this with federal purchases, drawing on the model of World War II and the Apollo Project. I think those are useful approaches. Potentially the government picking up the risk of some battery obsolescence is a useful way to go.

The excitement over this plug-in technology is really strong. This is going to be pulled forward mainly by consumer excitement and interest. The rate of hybrid take-up has been more supply limited than demand limited. That’s a real constraint. It takes a while for suppliers to retool and get ready.

You recommend an $8,000 consumer incentive for the purchase of a plug-in hybrid. Today, the incentive for a Toyota hybrid has been phased out, but the Prius is selling like hotcakes. Is that really a smart use of government money, especially when people want hybrids so badly in an era of $4 gas?

I said up to $8,000. Something in that range. We certainly shouldn’t be providing more of an incentive that is needed to move the market. The plug-ins are going to come at an additional cost beyond the hybrid cost. We could use some type of incentive program to help get the plug-ins out to market. The costs will come down as volume goes up. Sometime federal support in order to get the cost down and volumes up quickly will be helpful.

You wrote that raising gas taxes is simultaneously the most effective thing government can do, and the most unpopular idea. With $4 gas, GM practically overnight said that it would cancel production on a set of factories that produce SUVs. Yet, raising gas taxes, and high gas prices in general, are politically toxic. How do you overcome that?

It’s a reality of our political culture. We live in a democracy. Whatever sensible policy arguments are made, the reality is that you are not going to see big gas tax increases in the United States. If you want to affect change, you have to look at all available policy measures that are achievable in a democracy.

And raising gas taxes is not achievable?

As I note in the book, Ronald Reagan supported a five-cent a gallon gas tax increase, but failed to get it passed. By and large, the resistance is deep and widespread.

Driving with Technology

Do you think we can break our oil addiction without changing our lifestyle?

I do. As I’ve been out talking about Freedom from Oil in the past six months, I found this to be one of the most controversial points of all. I don’t think that we need to drive in cramped and uncomfortable cars. Or limit our mobility in ways that are deeply antithetical.

In fact, there are ways to improve life to help solve this problem. Like telecommuting and smart growth. Transit-oriented development with people living near subway stations can enhance life dramatically. Those types of changes happen even more slowly than the turnover of the vehicle fleet. But to the extent that we can improve quality of life with measures that cut down on traffic and enhance access to mass transit in livable ways, that plays a role.

I don’t think the solution depends on discomfort. Interestingly, I have found a number people who fundamentally disagree. They think that this is about learning to do with less.

How about learning to drive less? Vehicles miles traveled keeps going up—certainly on a global level with adoption of private cars in Asia.

That trend is continuing. It’s incredible. The solution is certainly not having Chinese and Indian citizens stop buying cars in the next decade or two. That’s not going to happen. The solution to this has to be the development of technology that will allow us to drive and to minimize the footprint on the planet and our dependence on this one commodity that so shapes international relations. I think plug-ins are as potent as any technology for doing that.

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