CBS News says he won’t get anywhere near his US pledge
By Will Dron on June 7, 2012 11:48 AM
U.S. President Barack Obama’s goal of putting 1 million electric vehicles on U.S. roads by 2015 has come under fire from CBS News. The organisation's report highlights vehicle sales to date that are much lower than predicted, and suggests projections for the next few years are greatly overblown.
The Obama administration is attempting to dramatically reduce the U.S.A.’s dependence on foreign oil through investment in biofuels and electric vehicles. CBS says the White House backed 11 cars to achieve the target, but several of their makers have since closed down, despite the government funding.
“Our CBS News investigation found that six of the 11 – Ford Focus [Electric], Ford Transit Connect [EV], Fisker Nina/Atlantic, Tesla Model S, Tesla Roadster and Think City – either haven't made their first delivery, [have] stopped production, or are already out of business. Others aren't even close to the government's 2015 projections,” the report claims.
While it’s true that both Think Global and Azure Dynamics (maker of the Ford Transit Connect EV) both filed for bankruptcy last year, many of the cars listed above were always going to be low-volume vehicles. Ford only expects to produce 10,000 Focus Electrics in 2012, and 20,000 units will be produced each year from 2013. Tesla, meanwhile, always planned a limited production run of Roadsters – in fact, more than 2,100 units have now been sold in 31 countries rather than the CBS figure of 1,000. And Tesla is bang on target for larger-scale production of the Model S sedan (5,000 units this year followed by 20,000 per year from 2013).
The picture at Fisker is less rosy, however, with the company indicating that its next model, the Atlantic, may not be built in the United States as planned, after the government froze its $529 million line of credit.
But reaching the 1m car target will ultimately rest on the success of the larger-scale production electric vehicles, such as the Nissan LEAF and Chevrolet Volt. CBS, which has used “actual production numbers where possible, and consulted with automakers and industry analysts for projections through 2015”, claims production of the extended-range electric Volt will reach just 62,700 units in 2015 – an eighth of the Department of Energy’s estimated 505,000 units.
Image credit: CBS News
Doubt over whether vehicle production will meet initial expectations is nothing new, but recent speculation comes off the back of the news that A123 Systems, which supplies battery packs to GM and Fisker, is uncertain of its future too. In May, A123 said it made a first-quarter loss of $125 million – up from $53.6 million a year earlier – because of a product recall on the Fisker Karma’s battery pack, along with the need to replenish inventory.
In a filing with the U.S. Securities and Exchange Commission on 30 May, the company said: "These matters along with the Company's historical net losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern.”
Following the failure of Azure Dynamics and Think, amongst others, the troubles at Fisker and slower than expected vehicle sales, A123’s recent difficulties have contributed to the assertion that Obama’s 1 million vehicle goal is way off target and that the EV industry is floundering. However, on Tuesday A123 said it plans to hire as many as 400 workers in coming months for its manufacturing plants in Livonia and Romulus in Michigan, U.S.A. — a move that is said to fulfil promises made for its state and federal subsidies.
In May U.S. Energy Secretary Steven Chu continued to back electric vehicles despite the rocky start. “Investing in the U.S. electric vehicle industry will help us reduce our dependence on foreign oil, create jobs for U.S. workers, and provide American families and businesses with alternatives to protect them from future spikes in gas prices," said Secretary Chu. "Building energy-saving electric cars and trucks, and the infrastructure to power them, will help Americans save money at the pump and improve the nation's energy security."
Main image: Walter G Arce