Getting to 2025 – By Any Means Possible

Bloomberg News

Plug-in vehi­cles may not be the option of choice as automak­ers strive to com­ply with fuel econ­o­my reg­u­la­tions set to kick in dur­ing 2025, as more alter­na­tives arrive.

The Oba­ma Admin­is­tra­tion tried to make EVs the favorite, but it may not hold up.

With U.S. sales of plug-in elec­tric vehi­cles on pace to reach half of Pres­i­dent Barack Obama’s goal, reg­u­la­tors are fol­low­ing cus­tomers and automak­ers to vehi­cles pow­ered by oth­er fuels, from hydro­gen to diesel.

Cal­i­for­nia, which leads 10 states that require automak­ers to sell zero-emis­sion vehi­cles, may alter its sys­tem of trad­able cred­its to stop favor­ing plug-ins over hydro­gen-pow­ered cars. That would hurt Tes­la Motors Inc. while help­ing Hon­da Motor Co.

Oba­ma, who tout­ed elec­tric cars in his first State of the Union address and gave $5 bil­lion in U.S. loans, grants and tax breaks to spur their devel­op­ment, hasn’t men­tioned them in pub­lic since July. His admin­is­tra­tion halt­ed loans for their devel­op­ment and reversed moves to de-empha­size fuel cells.

“I don’t think they should just pick tech­nolo­gies that they say or feel may be bet­ter,” Audi of Amer­i­ca Pres­i­dent Scott Keogh, who’s seek­ing more favor­able reg­u­la­to­ry treat­ment for clean diesel, said in an inter­view.

Automak­ers that sell vehi­cles in the U.S. must dou­ble their vehi­cles’ aver­age fuel econ­o­my by 2025 under rules Oba­ma adopt­ed. The tar­get is con­sid­ered impos­si­ble to achieve just by improv­ing the gaso­line engine.

Auto-indus­try exec­u­tives sur­veyed by Booz & Co. and Bloomberg LP pre­dict­ed vehi­cles run­ning on elec­tric­i­ty and oth­er alter­na­tive pow­er­trains would account for 20 per­cent of sales by 2020 — unless the gov­ern­ment stopped its sup­port, in which case their pre­dict­ed share fell to 12 per­cent.

“They’re broad­en­ing their scope,” ana­lyst Baum [Alan Baum, an ana­lyst at Baum & Asso­ciates in West Bloom­field, Michi­gan] said of reg­u­la­tors. “It’s kind of an all-hands-on-deck strat­e­gy, which includes the inter­nal com­bus­tion engine, too.”

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