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.”