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Record Sales of Electric Cars Drives Revival of Loan Program

Roland Hwang, Transportation Program Director, San Francisco

With sales of electric and other fuel-efficient cars hitting new highs in the U.S., the timing for DOE to restart its auto retooling program couldn’t be better. Electric vehicle sales in the U.S. hit a new high of 11,361 units, and average fuel efficiency for new passenger vehicles hit a new record high of  24.9 mpg. By jump starting the auto retooling loan program, DOE can put the U.S. auto industry in the best possible position to compete for the growing market for clean cars.

Electric Car Sales and Average Fuel-efficiency Hit Record Highs

August was a record-breaking month for the electric car market, setting a sales record in August of 11,363 units, a 50% increase from the previous month. The Volt, Nissan LEAF, the Ford Fusion Energi, Toyota Prius PHEV and RAV4 EV all set new records. Year-to-date sales of plug-ins of 59,537 have now well passed 2012, when 52,581 EVs were sold.

EV Sales Aug1`3.png

According to the University of Michigan, the average fuel efficiency of new passenger vehicles sold in the U.S. hit its highest level ever, 24.9 mpg, up 0.1 mpg from July and 1.2 mpg from August 2012. Importantly, U.S. auto sales also were the highest since May of 2007, with some experts citing more fuel-efficient car and pickup models helping to boost sales by making new vehicles more appealing.

Thumbnail image for UMich MPG Aug13.png

Getting DOE’s Auto Retooling Loans Back on Track

Strong consumer demand for clean cars bodes well for Secretary Moniz’s vow to revive the DOE’s advanced auto loan retooling program, knows as the Advanced Technology Vehicle Manufacturing (ATVM) program. Despite its critics, by most objective measures, the program has been a clear success.

Of the five loans that DOE has granted, only two have failed, but the total losses to government amount to less than 3 percent of the $8.4 billion in loans approved. The loan to Tesla has been a stunning success, with Tesla repaying its $465 million loan five years in advance and has a market capitalization of $20 billion. In Smyrna, Tennessee, Nissan is producing battery packs for its U.S.-made all electric LEAF cars in a factory made possible by a $1.4 billion DOE loan. And Ford was able to modernize thirteen factories to build more fuel-efficient versions of its most popular models, including the Focus, Fusion, Escape and F-150, thanks to a $5.9 billion DOE loan.

DOE should move as fast as possible to ensure the U.S. auto industry is in the best possible position to take advantage of the strong consumer demand for clean, advanced cars. The auto loan program already has helped create or save thousands of jobs, reduced oil dependency and air pollution, and has been a key factor in keeping the U.S. auto industry on the cutting edge of manufacturing clean car technologies.

Vocal critics of the program conveniently turn a blind eye to the clearly wasteful annual $8 billion in direct taxpayers subsidies to the oil industry.  If the auto retooling loan program has one major failing, it’s that it has not been sufficient to overcome the partisanship in Congress around clean energy.

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John Miller's picture
John Miller on Sep 8, 2013

The recent increase in electric (EV) and other more efficient vehicles is very good news towards reducing U.S. petroleum consumption and associated carbon emissions, but only a very small step.  Rather than continuing to try and pick winners and losers through another deficit funded Government loan guarantee program such as the described ‘auto retooling program’, the Federal Agencies need to focus on regulatory strategies that have historically been much more successful in reducing U.S. petroleum consumption.  Increasing U.S. CAFE standards up to 100 mpg is such as reasonably successful regulatory approach.  Refer to the last section of a recent TEC post on this subject.    To substantially reduce most U.S. petroleum consumption  over the next 20-30+ years will require monthly EV sales to increase from the current 11,000/month up to about 500,000/month.

Josh Nilsen's picture
Josh Nilsen on Sep 8, 2013

That damn Obama, making me save money and stuff.

John NIchols's picture
John NIchols on Sep 8, 2013

Read here for the truth about TESLA.

Take away the revenue sources that are a byproduct of Model S sales–both enabled by legislation, as a testy OpEd in the Wall Street Journal points out–and the financial adjustments, and the company lost $91 million on building and selling its cars (along with building and selling powertrains for so-called compliance cars to other automakers as well).

Just remember, it is dirty coal that provides the electricity to charge the dirty electric batteries.

Steve K9's picture
Steve K9 on Sep 10, 2013

EV’s + Nuclear Power = Clean prosperous World

Steve K9's picture
Steve K9 on Sep 10, 2013

My favorite car, the Chevrolet Volt (which is probably the leading plug-in electric) just never seems to get any love.  Don’t know why.

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