DOE Bet on EV Charging Technology Puts Taxpayers in Reverse

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Volt recharging photoOn Friday NLPC reported that the Department of Energy may have made a bad bet on Ecotality, the car-charging company that is heavily dependent on $115 million in government grants to deploy stations for electric vehicles through its EV Project. It turns out that DOE may not only be gambling taxpayer funds on a shaky company, but may also have dumped a bunch of money into a technology with a questionable future.

Last week seven automotive companies – General Motors, Ford, BMW, Audi, Daimler, Porsche, and Volkswagen – announced they would adopt a single standard, established by the Society of Automotive Engineers, for fast charging the electric vehicles (a speedy re-boost is what every EV owner wants, right?) they produce in the future. Sound good?

Unfortunately this new zip-charging standard is not compatible with the one used for the current No. 1 electric vehicle on the U.S. market – Nissan’s Leaf – which is also the one used by fellow Japanese company Mitsubishi, which will soon bring its own EV to the U.S. The Chevy Volt, which uses a gas engine to additionally charge once its battery has been drained, has a smaller battery and is not conducive to a “fast” charge. So the technology would be for future, purely electric vehicles produced by the seven automakers.

That presents a problem, as the DOE has already poured millions of dollars of subsidies into the fast-charging units that work with the Japanese vehicles, which were conceived by the Tokyo Electric Power Company. As EV expert John Gartner of Pike Research explained, “Charging stations with more than one port could be upgraded to offer both cable types once the SAE standard is released, but who’s going to pay for the retrofits? Having two fast charging standards could slow the spread of fast charging.”

It remains to be seen whether DOE has wagered on the equivalent of VHS or Betamax, but in today’s world where government is funding everything “renewable,” it doesn’t matter. Almost certainly the answer to Gartner’s question is that taxpayers will cover the retrofits, just like they have mostly paid for the chargers to date, as well as the cost of development of the Volt, the retrofit of a Tennessee auto plant to build the Leaf, etc., etc.

Ecotality, which is deploying the Leaf-friendly fast chargers, doesn’t care whether the Japanese technology or the new SAE standard is ultimately adopted.

“The (EV) Project will be getting data back,” said Don Karner, president of Ecotality North America, to the New York Times. “So within the EV Project we are indifferent to what standard is being used and much more attuned to how fast-charging affects how people use their vehicles, where are the best places to put fast charging, how can we most effectively deploy a fast-charge infrastructure.”

Meanwhile taxpayers fund a project with millions of dollars that has suffered from glitches like locked display screens, dropped connectivity, and outright system crashes. These are chargers and systems that are being installed as a significant “investment” in EV infrastructure, with 14,000 stations to be set up in 18 cities across six states and the District of Columbia. Yet Ecotality doesn’t care if the blueprint ultimately has to be torn up and restarted – they will probably benefit financially from it anyway with future DOE grants.

Worse, Gartner of Pike Research believes the EV charging market is “about to get ugly.” He reports that because of increased competition, new technologies being introduced that support Toyota’s coming Prius Plug-in, and providers who bundle service contracts with equipment, that “the prices of chargers are about to go down rapidly – in some cases to zero.” Gartner also notes the slow rollout of electric vehicles informs his prediction, although he mistakenly chalks up that problem to “supply constraints” rather than weak demand, which NLPC’s Mark Modica has debunked over and over again.

Buttressing Modica’s evidence of EV apathy is a global survey by Deloitte of 13,000 consumers from 17 countries. As reported by online technology Web site ZDNet, “no more than 4 percent of consumers are satisfied with what electric vehicle manufacturers have made available.” Among the expectations respondents said they would want in order to consider the purchase of an EV:

·      A range of at least 300 miles (current EVs have a maximum range of approximately 100 miles under ideal conditions, that is, without use of air conditioning, heaters, and temperate outside climate)

·      No more than a 30-minute recharging time

·      Similar pricing to gas-powered vehicles

Indeed, significant percentages of the purchasers of EVs have been utilities, governments, and companies involved in the rollout like General Electric. Taxpayers also subsidize those transactions, and as if that wasn’t enough, the effect of a network of chargers and EVs on the electrical grid has a significant impact on the overall populace as well. The Tennessee Valley Authority, the largest public power company in the country, explains:

It is important to note that costs associated with charging infrastructure are in direct correlation to hardware standards….

Utilities are constantly planning and implementing upgrades to their individual systems. Knowing what potential opportunities and challenges the electric vehicle market offers is critically important. Estimating who will purchase these vehicles as they become commercially available, in order to plan system upgrades, is, at the present, extremely difficult.

Learning about current circuit hardware is an effective way to get ready for future upgrades. Unfortunately, many power distributors are at a disadvantage because without detailed paper records, they do not know which assets are where and how long they have been in place….

Careful planning of the charging networks will help utilities encourage market development of electric transportation and lower the risk of unpredicted consequences.

And how do you think the costs associated with upgrades to the distribution network will be recovered? It will be another hidden tax on your electric bill.

Meanwhile DOE has rewarded Ecotality’s substandard track record (only 3,300 chargers installed so far in a project that required 14,000 deployed by 2012, plus the aforementioned technological problems) with another $26.4 million contract to test “advanced vehicles.” Nearly everything that is to be studied is related to EVs, so whether that is truly “advanced” is in the eyes of the beholders. As ZDNet reported:

Right now, there is a big disconnect between electric vehicle consumer expectations and the realities of the technology. Which brings us back full circle to that charging technology cooperation announcement from earlier this week. The automakers are smart to get together on research and development whenever they can, as it relates to alternative transportation technologies. Or electric vehicle adoption will be permanently stuck in neutral.

More realistically, as seen in how government has funded ever-changing technologies, “reverse” is the best result that taxpayers can ever hope for.

Paul Chesser is an associate fellow for the National Legal and Policy Center and is executive director of American Tradition Institute.