The federal government has been urging automakers for years to craft alternative drive train vehicles, especially cheaper electric cars. However, they are also cognizant of the high cost, as Steven Chu, the Secretary of Energy, recently gave a speech imploring car makers to come up with cost-effective electric cars.
New initiative aimed at conquering opportunity costs
Despite the amazing technology and gas-free operation of electric cars, they still have drawbacks. Aside from limited range and lengthy recharge times, they are also more expensive than the normal family sedan. Many are close to $30,000 even after the $7,500 federal tax credit and those are the cheaper models.
However, the federal government, a key supporter of electric car development through subsidies, is well aware of this. To that end, the Obama administration and the Department of Energy have created an initiative, called the “EV Everywhere Challenge,” tasking engineers and scientists to concoct electric car technologies that will bring the cost down, according to USA Today. Energy Secretary Steven Chu has emphasized the need to bring electric cars down to prices that make them comparable to normal passenger cars.
Battery of development programs
The EV Everywhere Challenge was announced in March, according to AutoBlog, allocating $4.7 billion in subsidies to engineering firms and universities to develop electric car power trains. The goal is to have the electric car payback period, or the length of time the gas savings pay for the premium of buying an EV, down to five years of less by 2022.
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Dr. Steven Chu, Nobel Laureate in physics and the Secretary of Energy, recently appeared in Dearborn, Mich., to pitch the idea to a group of engineers and scientists, according to USA Today. He stressed the need for battery development, with special attention to increasing battery efficiency and charge, the ability to replace individual battery cells and also increased production. The more that are made, the less they cost and thus, electric vehicles would come down in price. He believes a three-fold increase in the charge a battery is achievable.
Cheaper Electric Cars Current events
Long payback periods presents a strong argument against buying a hybrid or electric car. A report by True Car, according to the New York Times, found payback times can stretch from a few years to more than a decade. Buying a Ford Fusion Hybrid instead of the normal Fusion would take 6.5 years for gas savings to pay back the premium with gas at $5 per gallon, 8.5 with $4 per gallon gas.
Buying a Nissan Leaf instead of a Versa would take 6 years to pay off with $5 a gallon gasoline. Gas at less than $4 per gallon extends it to almost 9 years. The Chevrolet Volt is worse; if regularly driven beyond it’s all-electric range, with gas below $5 per gallon, the Volt takes 27 years to pay off, compared to the Chevrolet Cruze. With $5 per gallon gas, and the driver confining the car to electric-only, it only takes 8 years. However, True Car found the Toyota Camry, Kia Optima and Hyundai Sonata all paid themselves off in four years or less.