Obama: Pay for Increased Electric Car Funding By Cutting Big Oil Subsidies

By Nick Chambers · January 26, 2011

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With a bunch of new faces in the crowd last night—and with a clearly unenthusiastic new Speaker of the House sitting behind him—President Barack Obama spent a significant portion of his State of the Union Address talking about the United States' energy challenges. And, as opposed to last year's address, the electric car was featured prominently.

"We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo projects of our time," said Obama. "With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015."

While we've heard Obama's one-million-electric-cars-on-the-road-by-2015 statement before, within the last year it was a point of discussion that seemed to disappear into the background—leading many to believe the White House had let go of that goal. But given that EVs enjoy broad bipartisan support, it makes sense for the President to be redoubling his concentration on the topic now.

Hand in hand with electric cars, Obama also set a new goal for the country, challenging Congress to come up with a plan so that "by 2035, 80 percent of America’s electricity will come from clean energy sources." Lest you think Obama is only talking about renewables, his message was clear: "Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all—and I urge Democrats and Republicans to work together to make it happen."

End the Handouts to Big Oil

And, in an act that drew what seemed to be highly partisan laughter and applause, Obama said he wanted the country to pay for this renewed push by cutting the handouts to oil companies. "I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies," he said. "I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s."

According to the Detroit News, last night's elevation of the electric car to State of the Union prowess was just the beginning of a broad push to increase funding for their saturation of the market. The new plan calls for increasing funding for next generation clean energy technologies to $8 billion—up from its current $6 billion. While not all of that will go to electric car research, development and incentives, the White House on Tuesday indicated a significant portion of it would be tagged for them.

EV Tax Credit to Become Instant Rebate?

Today, on a tour of the Ener1 battery facility in Indiana, Vice President Biden revealed a bit more detail on how the White House will get one million electric cars on the road by 2015. Biden said that they will push to convert the current $7,500 federal tax credit for electric cars into an instant rebate that everybody could claim at the time of purchase—regardless of tax liability. At this point, the only way you can fully benefit from the tax credit if you purchase an EV yourself is if you have more than $7,500 in tax liability—and even then you have to wait until you get your tax return back.

In addition to the $7,500 instant credit, Biden also revived a proposal that fizzled at the end of last year to provide increased funding for deployment communities. Under the plan up to 30 communities that showed a commitment to advancing plug-in cars would be able to get grants of up to $10 million dollars (total program funds would be capped at $200 million). The grant money would be used bring EVs to market quicker—hopefully resulting in market saturation several times higher than communities without the money. The chosen communities would act as guinea pigs for what strategies work best.

Sources: White House, Detroit News

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About the author

Nick is a tireless and passionate next generation car enthusiast. Since 2007 he has written hundreds of posts for outlets such as The New York Times, Motor Trend, Scientific American, Popular Mechanics, AutoTrader.com, The Daily Green, HybridCars.com, and Gas 2.0.

Follow Nick on Twitter @ecochambers

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Comments

· EdA · 1 year ago

I just hope this speech isn't Obama's "switchgrass".

/Ed

· spicoli · 1 year ago

Well, it's nice to hear all of these things voiced by the President...voiced being the key word. However, these are all good things and at least he didn't rip the solar panels off the roof of the white house on day one (if there had been any). Incidentally, whats up with the spray tan Boehner's been rockin lately? It's really weird.

· Christof Demont... · 1 year ago

Good news, generally.

However, a short memo to the President -- There is no such thing as "clean coal", except in a PR sense. It's too bad that he's aiding the PR machine behind the "clean coal" charade.

· Smidge204 · 1 year ago

It would be a miracle if they even get petroleum subsidies onto the congress floor, let alone passed. That's extremely ambitious and I'm cynical the current political climate will even entertain the idea. Slightly off-topic but if you haven't caught it there's a laughworthy word cloud based on post-SOTU impressions from viewers... It's pretty telling;

http://www.npr.org/2011/01/26/133211131/the-state-of-the-union-in-your-w...

The rest of this is good news, it seems. it cannot be overemphasized that "clean energy sources" is not the same as "renewable energy sources" so I'm glad that was pointed out. No doubt that will come up from those opposed to actually doing anything. Case in point: Christof Demont's post above. Yes, there is such a thing as "clean coal" - the problem is the scope of the word "clean" and how different people use it.

@Christof Demont - What does (or should) the word "clean" in "clean coal" mean to you?

@spicoli - Since Mr. Steele is out, the GOP needs a new token "not-old-and-rich-white-guy" figurehead. I guess orange is the best they could manage. ;)

· abasile · 1 year ago

Trying to end petroleum subsidies is a nice gesture, and definitely the right thing to do. Still, they amount to only a drop in the bucket of our gargantuan federal budget. I maintain that we need substantial, stepwise, predictable increases in gasoline taxes, but unfortunately that would probably amount to political suicide on both sides of the aisle. On a more general note, *something* big needs to be done unless we want our government to go bankrupt...

· Miss Electric · 1 year ago

This is INCREDIBLE news! This is the most historic move to date in the policy field for clean tech and clean cars. Let's hope that Obama and team can frame this the right way to move the rest of Congres on it. Remember the mantra that has got us this far - electric cars and electricity as a energy source are "cleaner-cheaper-domestic."

· spicoli · 1 year ago

@ Smidge....HAHAHAHAHA! Actually, you may be right, his handlers may have suggested it for subliminal effect. He went alittle extreme though. Reminds me of those Japanese girls in Harijuku district that have that weird spray tan look and white lipstick. He makes an even odder sight paired up with that other bespectacled weirdo, I dont even want to know what these guys are into...

· Nick Chambers · 1 year ago

Smidge, that NPR word cloud is very telling. The 1st comment there (by anonie moose) says it all:

"The awful truth is what the average American took away from this speech, which goes something like: 'HUH HUH! HE DUN MADE A FISH JOKE!'"

So sad that the word cloud doesn't even appear to contain anything about electric cars or energy in it. The closest thing in there seems to be reference to "innovation."

· DrBerkie (not verified) · 1 year ago

Besides the cost and weight of the battery, an e- car should cost little. Four electric motors on four wheels, an electronic allocation pack, and a plastic body should give a car price of $ 5000. I expect this will not happen in the USA because of regulatory compliance costs and public inertia. China will take the lead.

The second step will be an electrified roadway for Interstate highway travel that would end the need for both large battteries and fossil fuel vehicles. Also more likely in China as they are just starting to build out their infrastructure.

· JamesDavis · 1 year ago

Yeah, Boehner sure does hate black people. He thinks they are not smart enough to be president and neither does McCain. When a president, especially a black one, comes out with something that will benefit the American people - like electric cars - Boehner becomes Wille Coyote. I think President Obama should take all incentives away from coal, oil, natural gas and wars and direct it to electric cars and health care.

· Yegor · 1 year ago

First Obama tramples down the opposition values in the first two years of his term and now after he lost the election he turns to bipartisan issues to avert the heat.
This is so hypocritical! :(

· Canucnik · 1 year ago

The Presisent should have directed the Florida Neo-Cons to National Trucks just outside of Orlando to pick up their free AK47 machine gun when they buy their next SUV.

Love Obama, he never had a chance...the Tea Party and that person sitting to the President's (blind spot) back right will cancel the Electric Car Rebate quick and early...it's been the story of the North American Auto Industry since 1970!!

· spicoli · 1 year ago

@ DrBerkie: It would be nice if you could sign a waiver to state that you are over 18 and accept the risk of driving a vehicle that is not crash tested (and won't be carrying passengers). Then you would see highway capable EV's for under $10,000. And your right, 4 in wheel motors, an off the shelf battery bank and a laptop, done. And actually, forget the IN wheel motors for now but nonetheless, a car should be looked at as a device, not a machine. I went to a couple of the LEAF test drives (one in one city was simply to show a pro-ice anti-ev Friend of mine the car...he loved it) and it is defiantly what I would describe as a device.

As for China and India, you get one chance to build out your infrastructure. After that the business interests surrounding that infrastructure will work (lobby) for self preservation forever more and as we can see for ourselves, thats a tough nut to crack.

· Caleb (not verified) · 1 year ago

Isn't is ironic. Obama took away everyone's incentive to succeed and innovate and now he wants innovation. So now the only way to get it is subsidize it. This guy is a complete joke!

· Mo (not verified) · 1 year ago

@Caleb

"Obama took away everyone's incentive to succeed..." Say what???? You mean by NOT raising income taxes? by showing that everyone, even a poor black kid can get to the top? by being an incredible role model to young people? by preventing a second great depression and bringing confidence back? leading the biggest stock market run-up in half a century? helping corporations amass record profits?

Sorry bud, I think you're the joke. Keep watching your up-is-down Newspeak News.

P.S. Everyone else: sorry to feed the troll. Just had to.

· Chris · 1 year ago

@spicoli Tata, an Indian company already makes an ev-car for and sells it for $2500. The only problem is that they are now known for bursting into flames. Besides the safety issue cheap "disposable" ev-cars actually could be worse the environment then traditional ICE. At that price people might not even have a car repaired.

On another note I have to wonder if the oil subsides are stopped, what will be the oil companies reaction? Will they raise the price of gas and blame President Obama? That would be good to get more people off ICE but it might lead to an administration change since people are so resistant to change.

· ex-EV1 driver · 1 year ago

@Chris,
The Tata Nano is a gasoline ICE car for $2500, not an EV. Their Reva (or gWiz in the UK) isan electric but it goes for a whole lot more than $2500.
The Nano bursts into flames just like a lot of cheap gas carriers.
You're right that raising gas prices is political suicide.

· ex-EV1 driver · 1 year ago

@Mo,
Not everyone on this list is a liberal labelling us Trolls just because we see the world a bit more realistically isn't going to help anything. I'll thank you to stop making personal attacks and calling people names.
Liberal policies definitely do stifle innovation. People with everything provided aren't motivated to change.
We'll discuss the 2nd depression in a few years. I don't think that issue has been put to bed yet.
An all promising, nothing delivered person is not the kind of role model that I want our youth to follow.
Hopefully, if we can get off of our oil dependency, it will help us to remain strong enough to weather the storm but I don't believe that much else on Obama's agenda is going to help us much.

· Anonymous (not verified) · 1 year ago

liberal vs conservative... one is half glass full the other is half glass empty, both trying to sell their half as the better of the two. lol

· Alexei (not verified) · 1 year ago

Was there a mention of building massive energy storage units? Without these, renewable energy stations will require a nuclear or a carbon hungry station in a stand by mode.

· Samie (not verified) · 1 year ago

Putting politics aside I think it's important to remember that the global freight industry ie. world economic system needs to rely on a consistent supply of petroleum. I would have framed it that way, that is it is good for business to move more private vehicle owners away from petro.

Also, as I always say subsidies need to have a curve to them. Simply giving tax rebates to consumers for long periods of time makes producers lazy and less willing to offer their own incentives. Any federal subsidy must step up to greater advancement in technology over time and not a one size fits all approach.

ex-EV1 driver
"Liberal policies definitely do stifle innovation" I can't see what your definition of "liberal" is as it could be meant as poor policy and accountability through expanded government spending it is easily understood that this can come from either party. But I will say this, most often both parties use government to stifle innovation and increase barriers to compete in markets by rewarding certain businesses tax cuts, subsidies, or say regulations that help block market entry from competitors, or say selecting a hand full of business that can shield risk by spreading costs out to taxpayers.

· Chris · 1 year ago

@ex-EV1 driver thanks for the correction. My mistake. But very cheap cars still scare me.

· EVNow · 1 year ago

These proposlas are similar to the Senate bill that passed the committee - but died with the energy bill. I doubt it will get approved by the OPEC loving house majority.

· ex-EV1 driver · 1 year ago

@Samie,
Yes, I'm disappointed in the both parties. The Dems seem to want to forcibly take the money earned by people that work earn and give it to the bums who sit on the streets and can't be bothered work. The Reps seem to want to forcibly take the money earned by people that work and give it to the bums who sit in the penthouses and can't be bothered to work.

· ex-EV1 driver · 1 year ago

@Chris,
I'm more scared by super cheap cars that require oil, especially when there is no alternative. This is one of the main reasons I'm so strongly in support of EVs. Enough energy hits my roof to handle all of my EV driving - and I drive a lot of miles per day. This can be sustainable.
I can't blame the Indian and Chinese people for wanting cars so they can share our comfortable, healthy lifestyle though.

· Nick Chambers · 1 year ago

ex-EV1, it sounds like you are leaning towards a communist "worker-oriented" system ;) Sorry! You lobbed a softball.

Not to stop good discussion, but sometimes it feels like all this talk of political differences stop us from actually solving our issues. In reality we all want the same things, but we get hung up on issues that have nothing to do with solving problems.

· spicoli · 1 year ago

It's divide and conquer, or should I say divide and distract. I personally dont play the Republicrat game (newsflash! they are all golfing together at the end of the day) but rather plan for a more independent future for my family and work subtly to spread the EV/PV gospel to friends, coworkers and extended family. The trick is to not be like a religious group knocking on your door or getting in your face but to tread lightly and smartly while preaching. And it is hard to field the question "aren't you just transferring the pollution to the power plant?" question 573,000 times a month.

· Anonymous (not verified) · 1 year ago

We heard a lot of hot air from him before. I do not believe him because he defaulted on his promises to go line by line and eliminate pork from the bills. The best President since Jimmy Carter!

· ex-EV1 driver · 1 year ago

@Nick Chamber,
Regarding your lob of you are leaning towards a communist "worker-oriented" system
You're not too far off. I figure the best approach is not a Marxist (which I love philosophically, but like the Aptera, I just don't see how the business will work) approach which fails to take advantage of man's inherent greed but more of a Jeffersoniant/Hamiltonian approach of private ownership and responsibility without too many strings attached which also gives the worker the freedom to succeed or fail.

· John (not verified) · 30 weeks ago

"I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies,"....
They actually give this to the oil companies? Is this a joke?

· Tom Moloughney · 30 weeks ago

John, Yes, of course we do. That's why its such a joke when you hear people complain about subsidizing EV's and EV infrastructure saying "let the market decide which fuel wins, its not the governments job to pick winners" we've been subsidizing oil for decades, why shouldn't EV's get the same treatment if everyone is so worried about fairness?

· BrianS (not verified) · 30 weeks ago

"I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies,"
Since this conversation was revived, does anyone know if the president's wish has gotten anywhere, or is such a thing truly a fool's dream? (I.e. wouldn't it be political suicide for someone to vote for "higher gas prices"?)

(Bah, I should have registered ages ago, now somebody stole my name!)

· icore360 · 30 weeks ago

Pretty nice to hear. Thanks Obama!

· icore360 · 30 weeks ago

Pretty nice to hear. Thanks Mr. Obama.

· spicoli · 19 weeks ago

icore360, you fly paragliders?

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